CWP No.7606 of 1990 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.7606 of 1990 DATE OF DECISION: March 30, 2011 MEWA SINGH ...PETITIONER VERSUS STATE OF HARYANA AND OTHERS ...RESPONDENTS CORAM: HON'BLE MR. JUSTICE K.KANNAN. 1. Whether reporters of local papers may be allowed to see the judgement? No 2. To be referred to the reporters or not? Yes 3. Whether the judgement should be reported in the digest? Yes ---- PRESENT: MR. J.P. SHARMA, ADVOCATE FOR THE PETITIONER. MR. S.S. GORIPURIA, DAG, HARYANA. MR. H.S. GILL, SR. ADVOCATE WITH MR. A.S. GILL, ADVOCATE FOR RESPONDENTS NO.2 & 3. K.KANNAN, J.(ORAL) 1. The petitioner prays for a direction that consequent on extension of service granted to him, he ought not to have been inflicted a reduction in gratuity which was payable at the rate of 1 month's salary for every completed year of service. The problem arose on account of the fact that subsequent to the date of his retirement on 31.12.1987, when he was allowed to continue by an extension of 2 years granted to him, the Payment of Gratuity Act had been applied to Haryana State Co-operative Supply & Marketing Federation (HAFED). The gratuity was sought to be worked at the rate of 15 days salary for every completed year of service in terms of the Payment of Gratuity Act. CWP No.7606 of 1990 -2- 2. Learned counsel appearing for the petitioner would state that his services with HAFED was from 3.6.1970 and the terms of his employment provided for payment of gratuity at the rate of 1 month's salary for every completed year of service. When an extension was granted to him it was under the same terms and any reduction in his entitlement could not affect the accrued right of gratuity at 1 month's salary for every completed year of service. Learned counsel refers me to the provision of Payment of Gratuity Act itself under Section 4(5) which reads as follows:- “(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award of agreement or contract with the employer.” Section 4 deals with payment of gratuity and the sub-Clause 5 referred to above protects the right of an employee to obtain a benefit through any particular term of contract which was more beneficial than what the Act prescribes. In other words, the Payment of Gratuity Act provides for the minimum gratuity that is payable and will not in any way be taken as going to the prejudice of an employee a right to gratuity that worked at a higher rate. Learned counsel also refers to the judgement of the Hon'ble Supreme Court in The Workmen of Metro Theatre Ltd., Bombay vs. M/s Metro Theatre Ltd., Bombay, reported as AIR 1981 Supreme Court 1685 that lays down as under:- “The scheme envisaged by the Gratuity Act secures the minimum for the employees in that belief and express provisions are found in the Act under which better terms of gratuity if already existing are not merely preserved but better terms could be conferred on the employee in future.” CWP No.7606 of 1990 -3- 3. Learned counsel appearing for the respondents No.2 and 3 states that termination from service must be taken only on the day when he has ceased to be an employee and when the employee had obtained an extension and during his tenure he has come by an application of some other statutory enactment which was applied to the institution. It should be only that enactment which will govern his rights. Learned counsel refers to a decision of a Division Bench of this Court in Ramsaruh Sehgal vs. The State of Haryana and another, reported as 1988(2) NLR 76 that held that applicability and the scope of the Payment of Gratuity Act would be only to persons who retired after the commencement of the Act. I would take this decision to hold that any benefit that goes to a person shall be worked under the scheme of Payment of Gratuity Act and that would be applicable to a person who retired after the commencement of the Act. The entitlement to gratuity itself is not the point in question in this case. The ruling of the Division Bench must be applied to examine the case where the issue is whether an employee is entitled to gratuity or not. In this case that is not the contention. It is accepted on both the sides that the petitioner is entitled to gratuity, but the question is the rate at which such gratuity is to be paid. The Gratuity Act itself protects the rights which are better than what an employee would get under the Act and that is that benefit which the petitioner seeks through this writ petition. The petitioner is definitely entitled to be protected at a higher rate of gratuity secured through the earlier term of employment. 4. It is admitted that the workman was afforded gratuity at the rate of 15 days salary for every completed year of service and paid `21,349/-. The contention of the workman is that he should have been paid full month's CWP No.7606 of 1990 -4- salary for every completed year of service which according to him would be `78,836/-. In the view that I have held the petitioner was entitled to the whole of the amount as per the previous terms of the employment and that would mean he would be entitled to `57,487/- being the difference between what he was entitled and what he was paid. This amount will also bear interest @ 7.5% from the date when he was ultimately superannuated to the date of its payment. 5. The writ petition is allowed to the above extent. March 30, 2011 (K.KANNAN) Gulati JUDGE