1 S.B. CIVIL WRIT PETITION NO. 3005/2002. HAKAM ALI VS. STATE FARM CORPORATION OF INDIA LTD. AND ANOTHER DATE OF ORDER : 04.08.2008. HON'BLE MR. GOVIND MATHUR, J. Mr. J.S. Bhaleria for Mr. H.S. Sidhu for the petitioner. Mr. Sanjeev Johari for the respondents. The Board of Directors of the State Farms Corporation India Ltd. introduced a Voluntary Retirement / Voluntary Separation Scheme for its employees and same was circulated on 10.03.2000. As per the scheme referred above, certain benefits were extended to the employees seeking voluntary retirement and those are as follows: II) Benefits under the Scheme: A) Voluntary Retirement The terminal payments available to an employee who seeks voluntary retirement would be: i) the balance in his Provident Fund Account Payable as per the EPF regulation. ii) cash equivalent of accumulated earned leave as per the rules of the State Farms Corporation of India. iii)gratuity as per gratuity scheme applicable to the State Farms Corporation of India employees. iv)One months' / three months' notice pay (as per the conditions of service applicable to him). 2 In addition, an employee whose request for Voluntary Retirement is accepted would also be entitled to an ex- gratia payment equivalent to 1-1/2 months' emoluments (pay + DA) for each completed year of service or the monthly emolument at the time of retirement multiplied by the balance months of service left before normal date of retirement, who has put in 24 years of service and has got only one year of service for normal retirement will get ex- gratia payment of only 12 months' emoluments and not 36 months' emoluments. Further, the employee and his family would also be entitled to travel by the entitled class to the place where he intends/ settling down. An amendment in the scheme aforesaid was introduced by the State Farms Corporation on 29.08.2000. As a consequent thereto, the eligibility of ex gratia / compensation of salary was reduced from 45 days to 35 days for every completed year of service. The petitioner, who was in employment of the State Farms Corporation since 16.09.1996 in the capacity of daily paid worker and in the capacity of regular employee w.e.f. 13.05.1994, sought voluntary retirement under the scheme referred above on 26.03.2001. The request of the petitioner was accepted and while retiring him voluntarily, a sum of Rs.1,47,623/- as ex-gratia payment was given to him. 3 While disputing the amount granted under the category of ex-gratia, this petition for writ is preferred to re- determine the ex-gratia payment. It is stated that the respondents have computed ex- gratia by taking into consideration daily wages of the petitioner for a term of 27 years 5 months and regular pay scale for a period of 6 years 10 months, instead of determining the entire ex-gratia payment on basis of the last wages drawn by him. The respondents in their reply have accepted the mode of determination and have also given necessary details regarding computation of ex-gratia payment i.e. as follows: 1. Date of birth 2.3.1947 2. Date of appointment as daily paid worker 16.11.1966 3. Date of regular appointment 13.5.1994 4. Date of retirement under VRS 26.3.2001 5. Date of superannuation 31.3.2007 6. Total daily paid services (completed years) 27 yrs. 5 months 7. Regular services (completed yrs.) 6 yrs. 10 months 4 Exgratia amount payable for daily paid service: 27 years 5 months / 12 x 35 = 959.38 @ Rs.70.38 per day = Rs.67,381/- Exgratia amount for Regular service : 6 years 10 months @ 35 days per years = 239 days @ 206.22 per day (pay Rs.4150/- + DA Rs.1212/- = Rs.5362/26) = Rs.49,309/- Balance service 6 years @ 25 days per year = 150 days x 206.22 = Rs.30,933/- ============== Rs.1,47,623/- ============== On behalf of the respondents, it is urged that the ex- gratia payment is computed as per the provisions of sub-section 4 of Section 4 of the Payment of Gratuity Act, 1972 that provides “For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall 5 be taken to be the wages as so reduced”. As per the respondents, ex-gratia referred in the Voluntary Retirement Scheme is nothing but gratuity and, therefore, it is determined as per the Payment of Gratuity Act, 1972. Heard learned counsel for the parties. The Voluntary Retirement Scheme provides for ex- gratia payment equal to emoluments determined for each completed year of service. The term ex-gratia in the scheme concern nowhere refers the Payment of Gratuity Act, 1972. In general terms, ex-gratia is something that has been done voluntarily out of kindness or grace. In the instant matter, the State Forms Corporation, while introducing a Voluntary Retirement Scheme, offered ex-gratia to the employees seeking voluntary retirement prior to the actual date of actual term of service. The stand of the respondents that ex-gratia is required to be determined as per the provisions of the Payment of Gratuity Act is not at all supported by the Voluntary Retirement Scheme. The Payment of Gratuity Act, 1972 also nowhere refers the term “ex gratia”. The respondent No.3, therefore, were required to determine ex-gratia payment under the Voluntary 6 Retirement Scheme by taking into consideration monthly emoluments (Pay + DA) last drawn by the petitioner. The bifurcation of the term of service into the regular service and the service rendered as daily wager is perfectly unknown or stranger with the Voluntary Retirement Scheme extended under the Circular dated 10.03.2000 and as amended subsequently. The determination of ex-gratia by bifurcation of the service, therefore, is illegal. Accordingly, the petition for writ is allowed and the petitioner is declared entitled to get ex-gratia under the applicable Voluntary Retirement Scheme by taking into consideration the emoluments last drawn by him. The respondents, therefore, are directed to determine the ex-gratia payment relating to the petitioner by taking into consideration the last wages drawn by him and further to make payment of the same within a period of two months from today. The respondents shall also make the payment of interest on the arrears of the ex-gratia payment @ 6.5% per annum. (GOVIND MATHUR)J. Anil/