IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No.6905 of 2006 (O&M) Date of decision: 18.01.2010 Krishan Lal Aggarwal and others ....Petitioners versus State of Punjab and others ...Respondents II. Civil Writ Petition No.3759 of 1998 Hans Raj and others ....Petitioners versus State of Punjab and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. Vijay Sharma, Advocate, for the petitioners. Mr.Anil Kumar Sharma, Additional Advocate General, Punjab, for respondents 1 and 2. Mr.Arun Jindal, Advocate, Mr.Rishav Jain, Advocate and Mr.Parminder Singh, Advocate, for respondent No.3. Mr. Deepak Thapar, Advocate, for respondent No.6. (in CWP No.6905 of 2006). ---- 1. Whether reporters of local papers may be allowed to see the judgment ? Yes. 2. To be referred to the reporters or not ? Yes. 3. Whether the judgment should be reported in the digest ? Yes. ---- K.Kannan, J. (Oral) I. Civil Writ Petition No.6905 of 2006 1 The petitioners, who are employees under the respondents 3 to 7 seek for quashing the order issued under Annexure P-7 rejecting the Civil Writ Petition No.6905 of 2006 (O&M) - 2 - petitioners' plea for grant of gratuity. The representations yielded to the impugned order on the ground that the they had availed of the benefits of the pension under the Punjab Improvement Trust Employees Pension and the General Provident Fund Rules, 1994 and hence not entitled to gratuity under the Payment of Gratuity Act. Referring to the provisions of the Punjab Civil Services Pension Rules, Volume-1, Part-I, it is stated that as per Rule 2.45 except where the term “pension” is used in contradistinction to “gratuity”, pension includes gratuity also. The pension and gratuity are paid to the employees of the Government as well as the other local bodies because pension includes gratuity. 2. It must be noticed that the Punjab Civil Services Rules themselves could afford no guidance to us for determining the controversy. The petitioners are all governed by the Pension Rules that are applicable to local bodies and there are no rules similar to Rule 2.45 of the Punjab Civil Services Rules, Volume-1, Part-1 outlined above. Further it appears that the Government had applied for exemption notification from the payment of gratuity, while allowing for pension scheme to be applied to employees of the local bodies, only to persons who were appointed on or after 01.04.1990. Admittedly, all the petitioners have been appointed before the said date. The effect of this notification and the application of the provisions of the Gratuity Act as regards the persons, who had been employed before 01.04.1990 came to be decided by a Division Bench of this Court in Civil Writ Petition No.15423 of 2008 in Municipal Council, Pathankot Versus the Appellate Authority by the decision dated 22.09.2008. The Division Civil Writ Petition No.6905 of 2006 (O&M) - 3 - Bench has held that the exemption itself was sought only with reference to persons, who had been appointed on or after 01.04.1990 and it could not operate to exempt persons, who were appointed prior to the date. It had also observed that by virtue of the clause mentioned in the notification that it would not prejudicially affect the interest of persons as provided under Section 5(3) of the Payment of Gratuity Act, the persons, who were prejudicially affected by payments of sums through the pension which was lesser than what was granted under the Gratuity Act, could not be denied the benefit. 3. In the short reply filed by the Additional Secretary, Department of Local Government, it is averred that the said decision was rendered in the absence of the State of Punjab that exemption given to the department for payment of Gratuity Act w.e.f. 01.04.1990 was applicable to all those employees who had opted as per sub-rule (3)(i) and (3)(ii) of the Pension Rules, 1994 and also to those employees who were appointed on 01.04.1990. The relevant provisions is under Rule 3 (i) (ii) states that they shall apply to employees of the Committees:- i) who are appointed on or after the first day of April 1990 on whole time regular basis, and ii) who were working immediately before the first day of April, 1990 on while time regular basis and out for these rules. Provided that the employees who were working immediately before the first day of April, 1990 and who retired during the period between the first day of April, 1990 and the date of publication of these rules in the Official Gazette, shall have the option to opt for these rules within a period of four months from the date of publication of these rules, subject to Civil Writ Petition No.6905 of 2006 (O&M) - 4 - the condition that they shall have to refund the Committee's contribution made towards their Contributory Provident Fund including interest thereon received by them, together with simple interest on the whole amount at the rate of ten per cent per annum from the date of withdrawal to the date of repayment.” The above rule applies the pension to persons employed on or after 01.04.1990 as well as persons, who are employed before the date. The proviso contemplates a situation of persons, who were appointed before 01.04.1990 and who had also retired before 01.04.1990. Such class of persons have been given the option for application of the rules within a period of 4 months subject to the condition that they shall refund the Committee’s contribution made towards contributory provident fund including interest. If all these petitioners were persons who had retired before the 1st of April, 1990, by virtue of the proviso, they shall become liable to refund the contributory provident fund with interest. The rules cannot be understood as exempting the Payment of Gratuity also to which the Rule makes no reference. The interpretation canvassed through the reply affidavit, in my view, is not correct and it is irrelevant that the Government itself was not a party in the proceedings before the Hon’ble Bench in Civil Writ Petition No.15423 of 2008. 4. The decision of the Hon’ble Division Bench referred to above squarely governs the field and the petitioners are entitled to the claim to gratuity also under the Gratuity Act. The impugned proceedings are quashed and the writ petition is allowed, but under the circumstances, there shall be no directions as to costs. Civil Writ Petition No.6905 of 2006 (O&M) - 5 - II. Civil Writ Petition No.3759 of 1998 5. The additional fact in Civil Writ Petition No.3759 of 1998 is that by virtue of the impugned proceedings, the respondents had also effected recoveries of some amounts paid as gratuity. In the light of what I have observed stating that all the employees would be entitled to gratuity also under the Payment of Gratuity Act, the gratuity which has been paid to the employees, cannot be recovered and the payment of pension will be independently of the entitlement to gratuity under the Payment of Gratuity Act. If any amount has been recovered already, the same shall be refunded to the petitioners within a period of 6 weeks from the date of the receipt of the copy of this order with simple interest at 6% per annum. (K.KANNAN) JUDGE 18.01.2010 sanjeev