TMI Blog2009 (12) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... e said judgment of the Allahabad High Court is impugned in this appeal. 2. A short question that arises for our consideration in this appeal is as to whether the retired employees of appellant bank are entitled to payment of gratuity under the provisions of the said Act? 3. The retired employees of the appellant bank having formed an association which includes officers and subordinate staff sent a legal notice to the appellant bank on 27.11.1988 requiring it to release the amount of gratuity to its members in accordance with the provisions of the said Act. The case set up by the Association was that its members were being illegally deprived of their statutory right to receive gratuity under the provisions of the Act on the pretext that they had opted for pensionary benefits in lieu of gratuity. It appears that on behalf of the Association applications were sent to the competent authority in the prescribed proforma for payment of gratuity in response to which the appellant bank made its stand explicitly clear that it was not possible to make payment of gratuity in addition to pension. Since the whole cause of action is based on the response of the appellant bank dated 10.01.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of any gratuity. The bank further asserted that the employees opted for the pensionary benefits which, admittedly, are better in terms as found by various Awards that pensionary scheme was really more advantageous to the employees than that of the gratuity. 5. We may at this stage notice that appellant bank did not succeed in its attempt to get the bank exempted from the operations of provisions of the Act. 6. Before adverting to the question as to whether the retired employees of the bank are entitled to payment of any gratuity, it may be just and necessary to notice the objects and reasons and the scheme of the Act. It was realised that there was no Central Act to regulate the payment of gratuity to industrial workers, except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. The Government of Kerala enacted legislation for payment of gratuity to workers employed in factories, plantations, shops and establishments. The West Bengal enacted an Ordinance on 3.6.1971 prescribing a similar scheme of gratuity. Gratuity was also being paid by some employers to their workers under Awards and agreements. Since the enactment of the Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 9. A plain reading of the provisions referred to herein above makes it abundantly clear that there is no escape from payment of gratuity under the provisions of the Act unless the establishment is granted exemption from the operation of the provisions of the Act by the appropriate Government. 10. Notwithstanding the subsequent improvements and embellishments the stand taken by the bank was and is before us that the members of the Association had accepted the Contributory Provident Fund Scheme and they opted for pension in lieu of gratuity which was being paid and therefore are not entitled to payment of gratuity under the provisions of the Act. 11. We shall proceed to examine the point urged by the learned counsel for the appellant. Remedial statutes, in contra distinction to penal statutes, are known as welfare, beneficient or social justice oriented legislations. Such welfare statutes always receive a liberal construction. They are required to be so construed so as to secure the relief contemplated by the statute. It is well settled and needs no restatement at our hands that labour and welfare legislation have to be broadly and liberally construed having due regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable to an employee on the termination of his employment after rendering continuous service for not less than 5 years and on superannuation or retirement or resignation etc. being a statutory right cannot be taken away except in accordance with the provisions of the Act whereunder an exemption from such payment may be granted only by the appropriate Government under Section 5 of the Act which itself is a conditional power. No exemption could be granted by any Government unless it is established that the employees are in receipt of gratuity or pension benefits which are more favourable than the benefits conferred under the Act. 15. In Union of India Vs All India Services Pensioners' Association And Another (1988)2 SCC 580, this Court explained that there is always a distinction between the pension payable on retirement and the gratuity payable on retirement. While pension is payable periodically as long as the pensioner is alive, gratuity is ordinarily paid only once on retirement. No decision of this Court which has taken a view contrary to the decisions referred to herein above has been brought to our notice. 16. In our considered opinion pensionary benefits or the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment of pension only after the introduction of the Scheme for the first time. DTC (supra), in our considered opinion, is not an authority for the proposition that an employee who receives the pension is not entitled to the payment of any gratuity. This decision is of no assistance to the appellant. 18. Learned counsel for the appellant has strenuously contended that under the Old Pension Scheme of the Bank, only two terminal benefits namely, Contributory Provident Fund and either gratuity or pension were required to be paid to the employees of the bank and not both. The bank in view of the Awards, circulars and statutory regulations is not under any legal obligation to pay gratuity as a third retiral benefit. The submission was that ever since the Payment of Gratuity Act came into force in 1972, no employee was paid both pension and gratuity till 1995, when the Pension Regulations came into force. It is the case of the bank that the optional scheme of pension prevalent at the relevant time was a better mode of payment and therefore was a better form of retiral benefit within the meaning of Section 4 (5) of the Act. In this regard, he relied on the decision of this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kmen. On the other hand, the scheme that was prevalent at the relevant time in clear and categorical terms provided that the gratuity will not be payable in case where a pension is granted by the Bank. But if a pensioned officer should die before receiving any pension payments an aggregate sum at least equal to the gratuity which he would otherwise have received then the Bank will pay the difference between such aggregate sum and gratuity to the officer's widow; if any, otherwise to his legal representative. Be it noted that in the counter affidavit filed in the High Court the Bank placed reliance on Shastry and Desai Awards which have taken the view that Allahabad Bank which had pension scheme of its own was more advantageous than the provisions of the gratuity to its employees. It is asserted that under the said Awards and the subsequent settlements an employee entitled to receive either the benefit of pension or gratuity at his own option but not both. The contention was that such of those Employees who had voluntarily opted for pension scheme were not entitled to receive the gratuity as well. The respective comparative figures under pension and/or gratuity, in terms of Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act. In the aforesaid premises, we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules (emphasis supplied). In the present case it is not the case of the Bank that its employees had claimed and received gratuity under the pension scheme. 20. The decision in the case of Workman of Metro Theatre, Bombay Vs. Metro theatre Ltd., Bombay7 in which this Court took the view that on true construction the expression `Award' occurring in sub-section (5) of Section 4 does not mean and cannot be confined to `existing Award' but includes any Award that would be made by an adjudicator wherein better terms of gratuity could be granted to the employees if the facts and circumstances warrant such grant. This decision cited by the learned counsel for the appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them to receive payment of gratuity. 23. There is no material placed before us that the employees while opting for the pension scheme at the time of their superannuation/retirement either expressly or impliedly waived their statutory right to claim payment of gratuity under the provisions of the Act. In the circumstances we find no merit in the submission made by the learned counsel for the appellant in this regard. For the aforesaid reasons we find no merit in the appeal. 24. During the pendency of the appeal this Court by its order dated 22.3.2006 directed the parties to appear before the Controlling Authority and the Controlling Authority was required to decide as to whether the benefits under the Allahabad Bank Employees Pension Scheme (Old) are more beneficial in comparison to that of the payment of Gratuity under the provisions of the Act. Following is the order passed by this Court: Though the order of the High Court speaks about the benefit of gratuity under the Payment of Gratuity Act, 1972 and a better Scheme, it does not indicate as to who is the Authority to decide which one of the schemes is better. According to the Bank, the employees concerned had accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of gratuity so determined and arrange to pay the amount of gratuity to the person to whom the gratuity is payable. The Scheme envisaged under Section 7 of the Act, is that in case of any dispute to the amount of gratuity payable to an employee under the Act or as to the admissibility of any claim of, or in relation to, an employee payable to gratuity etc. the employer is required to deposit with the Controlling Authority the admitted amount payable as gratuity. In case of any dispute parties may make an application to the Controlling Authority for deciding the dispute who after due inquiry and after giving the parties to the dispute, a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as result of such inquiry any amount is found to be payable to the employee, the Controlling Authority shall direct the employer to pay such amount to the employee. Sub-section (7) of Section 7, provides for an appeal against the order of the Controlling Authority. The Act, nowhere confers any jurisdiction upon the Controlling Authority to deal with any issue under sub- section (5) of Section 4 as to whether the terms of gratuity payable under any Awa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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