IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA C.W.P. No.1332 of 2002 Judgment reserved on: 15.7.2008 Date of decision: 23rd July, 2008. Himachal Pradesh Tourism Dev. Corp. ....Petitioner -Versus- Shri P.C. Saklani and another ….Respondents Coram: The Hon’ble Mr.Justice Deepak Gupta,Judge. The Hon’ble Mr.Justice V.K.Ahuja, Judge. Whether approved for reporting? No For the Petitioner: Ms.Ranjana Parmar, Advocate. For Respondents: Mr.K.D. Sood, counsel for R-1. Mr.R.M.Bisht, Dy.A.G. for R-2. Deepak Gupta, J. This writ petition is directed against the order of the learned H.P. State Administrative Tribunal (hereinafter referred to as the Tribunal) dated 7.5.2002 passed in O.A. No.543-D/2002 whereby the petitioner Corporation has been directed to pay enhanced gratuity to the respondent employee alongwith interest @ 12% p.a. The brief facts necessary for decision of the case are that the respondent retired as Deputy General Manager of the H.P. Tourism Development Corporation (HPTDC) on September 30, 1997 after completing 23 years of service. Gratuity amounting to Rs.83,540/- was released in favour of the applicant on October 1, 1997. Thereafter, the pay scales of the employees were revised w.e.f. January 1, 1996 and the pay of the petitioner was fixed 2 at Rs.12,00/- as on January 1, 1996. After grant of one increment the respondent employee at the time of his retirement was deemed to be drawing salary of Rs.12,750/- per month. Thereafter, the HPTDDC passed an order on August 5, 1998 enhancing the gratuity payable to the employee to Rs.one lakh. The petitioner filed the O.A. claiming that in accordance with the provisions of the Payment of Gratuity Act, 1972 he was entitled to gratuity in accordance with Section 4(2) of the Act i.e. one month’s salary for every completed year of service. The stand of the petitioner was that as per the Regulation 20(1) of the Regulations of the HPTDC prior to 1st January, 1996 an employee was entitled to maximum gratuity equal to 18 months of his salary last drawn or Rs.50,000/- whichever is less. With effect from January 1, 1996 the Regulations were modified and the gratuity payable was equal to 20 months’ salary last drawn or Rs.one lakh whichever is less. In a nut shell the case of the Corporation was that as per the Regulations maximum gratuity payable was Rs.one lakh. It is not disputed by the HPTDC that the provisions of the Payment of Gratuity Act are applicable to it. The respondent employee had made a representation to the HPTDC that his gratuity should be revised to Rs.2,78,275/- in accordance with the provisions of the Act. This prayer was rejected by the Corporation. The learned Tribunal after taking 3 into consideration the provisions of the Payment of Gratuity Act as well as the letter dated 10th June, 1998 sent by the Managing Director of the HPTDC in which it has been clearly stated that the HPTDC is covered by the provisions of the Payment of Gratuity Act held that every employee of the HPTDC was entitled to gratuity not less than what is payable under the Payment of Gratuity Act. The learned tribunal therefore directed that the gratuity of the respondent be calculated by taking his last pay drawn of Rs.12,750/- and keeping in view the fact that he had rendered 23 years of service. The Tribunal also directed that the arrears would carry interest @ 12% p.a. This order is under challenge in this writ petition. We have heard Ms.Ranjana Parmar, learned counsel for the HPTDC and Sh.K.D. Sood, learned counsel for the employee. There can be no manner of doubt that the provisions of the Payment of Gratuity Act apply in the present case. In fact this is the stand taken by the Corporation itself. The only ground raised is that as per the Regulations of the Corporation the maximum amount payable at the relevant time was Rs.one lakh only and therefore this amount was paid. Section 4(2) & (3) of the Payment of Gratuity Act reads as follows: “4.Payment of gratuity: (1)xxxxxxxxx (2)For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at 4 the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account; Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days’ wages for each season. (3)The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees.” It is also not disputed that w.e.f. 24.9.1997 the upper limit of Rs.one lakh was enhanced to Rs.3,50,0/-. Therefore, as on 30.9.1997 when the respondent employee retired, in terms of the Payment of Gratuity Act the maximum gratuity payable to an employee was Rs.3,50,000/-. It is also well settled law that there can be no agreement between the employer and the employee providing for lesser gratuity than that payable under the payment of Gratuity Act. It is thus obvious that the decision of the learned Tribunal that the respondent was entitled to higher gratuity up to a maximum limit of Rs.3,50,00/- is strictly in accordance with law and calls for no interference. Faced with this situation Ms.Ranjana Parmar has vehemently argued that in this case interest should not have been awarded. She submits that the Corporation had already moved the Government on 18.6.1998 for enhancing the limit of gratuity to employees but because the Government did not 5 give its approval the Corporation was bound to pay the gratuity in terms of the prevalent Regulations. We are unable to accept this argument. It may be true that the Regulations were not amended and the maximum limit was kept at Rs.one lakh but why should the employee suffer for the inaction of the Government or the Corporation. In any event there was a vested right in the employee to claim gratuity in accordance with the provisions of Section 4 of the Act. Once the Original Application was filed by the employee, at least at that stage, the HPTDC could have been gracious enough to pay the gratuity in terms of the Act to the employee. They did not do so but contested the case. Therefore, we find no error in the order of the learned Tribunal awarding interest. In view of the above discussion, there is no merit in the petition which is dismissed. No order as to costs. ( Deepak Gupta ), Judge July 23, 2008. ( V.K. Ahuja ), PV Judge