LPA N9. 351 of 2009(O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. LPA No.351 of 2009 (O&M) Date of decision 30 .8.2010 The Punjab Water Supply and Sewerage Board ... Appellant Versus Smt. Kamla Sharma and another ... Respondents. CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MS. JUSTICE RITU BAHRI Present: Ms. Sangita Dhanda ,Advocate for the appellants Mr. Som Nath Saini, Advocate for the respondents 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The Punjab Water Supply and Sewerage Board (for brevity 'the Board') has challenged the judgement of the learned Single Judge dated 3.2.2009 by filing the instant appeal under Clause X of the Letters Patent. The learned Single Judge has issued directions to the Board for payment of gratuity to the petitioner- respondent in accordance with Section 4 of the Payment of Gratuity Act, 1972 (for brevity 'the Gratuity Act'). There is further direction to pay the amount of leave encashment with interest @ 6%. The petitioner- respondent was employed with the appellant- Board and had rendered 22 ½ years of service. She was appointed to the service in the State of Punjab where she joined on 18.11.1999. She had made a claim for payment of gratuity and leave encashment for having rendered 22 ½ years of service which was not accepted. Accordingly, she filed a writ petition and the appellant- Board contested the petition on the plea that the petitioner- respondent had not retired nor absorbed in the LPA N9. 351 of 2009(O&M) 2 service of the State but had resigned. In such a situation, she was not entitled to gratuity and leave encashment. The aforesaid plea raised by the Board did not find favour with the learned Single Judge. The learned Single Judge held that the Gratuity Act was applicable to all establishment except the posts under the Central or State Government and therefore the petitioner was governed by the Gratuity Act. It was further held that under Rule 8.21(c)(i) of the Punjab Civil Service Rules, Volume 1, an employee is entitled to leave encashment. In so far as the issue of gratuity is concerned, it was argued before the Letters Patent Bench that the Board had adopted the Gratuity Rules which were applicable to the employees of the State Government being Rule 6.16A and therefore gratuity is payable under those rules which is permissible only on retirement. In other words, the argument was that the provisions of the Gratuity Act will not govern the payment of gratuity. The Letters Patent Bench after hearing learned counsel for the parties, in its motion order dated 14.5.2009 held as under: “6. As regards the gratuity, we find that under Section 4 of the Gratuity Act, gratuity is payable to an employee after rendering not less than five years of service, on retirement or ‘resignation’ or in situations stipulated therein. The term ‘employee’ is defined under Section 2(e) of the Gratuity Act, to mean a person employed in any establishment, except such person who holds a post under the Central Government or State Government and who is governed by any other Rule providing for payment of gratuity. Section 14 of the Gratuity Act gives overriding effect to the said Statute. Section 5 of the Gratuity Act provides for exemption where an employee may be in LPA N9. 351 of 2009(O&M) 3 receipt of gratuity or pensionary benefits not less favourable than under the Act. Admittedly, the writ petitioner was not an employee of the State or the Central Government. Though the State Government rules had been adopted, the same do not entitle the writ petitioner to gratuity on resignation, even after rendering 22 years of service. The benefit under Section 4 of the Gratuity Act is, thus, more favourable to the petitioner and in such a situation, Section 4 of the Gratuity Act will override any other Rule and the writ petitioner will be entitled to gratuity. We, thus, do not find any merit in the challenge to the order of the learned Single Judge, directing payment of gratuity with statutory interest. “ In respect of leave encashment the Letters Patent Bench held that this issue requires consideration and issued notice of motion. The order dated 14.5.2009 passed by the Letters Patent Bench was challenged before the Hon'ble Supreme Court in SLP No. 18564 of 2009 which was eventually dismissed on 27.8.2010. It is thus evident that the issue regarding payment of gratuity stands settled and no further orders are required. Accordingly, the petitioner- respondent is held entitled to payment of gratuity under Section 4 of the Gratuity Act which shall be paid to him with interest @ 6 %. The claim of the petitioner- respondent that she is entitled to payment of leave encashment under Rule 8.21 of the Punjab Civil Service Rules, no dispute is survived because the petitioner- respondent has already retired from service on 31.3.2010. Learned counsel for the Board states that her dues on account of leave encashment shall be paid to her within a period LPA N9. 351 of 2009(O&M) 4 of three months. She is also held entitled to interest @ 6% on the delayed payment of leave encashment as well. The interest shall be payable from the date amount was payable till the date of actual payment. The appeal stands disposed of in the above terms. (M.M.Kumar) Judge ( Ritu Bahri ) 30.8.2010 Judge okg