Case: Allahabad Bank  Vs. A.India Allahabad Bank Retired Emps.Assn

Controlling Authority was required to decide as to whether the benefits under the Allahabad Bank Employees Pension Scheme (Old) are more beneficial in comparison to that of the payment of Gratuity under the provisions of the Act. Following is the order passed by this Court: "Though the order of the High Court speaks about the benefit of gratuity under the Payment of Gratuity Act, 1972 and a better Scheme, it does not indicate as to who is the Authority to decide which one of the schemes is better. According to the Bank, the employees concerned had accepted the particular Scheme which had the option of either the pension or the gratuity. It is pointed out that the there was no challenge to the legality of the arrangement made or the Scheme itself. On the other hand, Mr. Trivedi, learned counsel for respondent no. 1 submits that whether the Scheme is better is relatable to the benefits available under the Act and nothing beyond it. The High Court has come to an abrupt conclusion that a Statute overrides an agreement. There was no plea in this regard in the writ petition. Be that as it may, we permit the parties to appear before the controlling authority who shall take a decision within three months. The parties are given liberty to produce copy of the order before the controlling authority so that it can fix a date for hearing. The parties are permitted to take all stands which are being raised in the present appeal. The matter shall be listed after four months." 25. The Controlling Authority held that the amount received by the employees under the said Scheme is much more than what they could have received under the Act. The benefits according to the Controlling Authority available under the Scheme are more beneficial than the gratuity payable under the Act.26. Being aggrieved by the order of the Controlling Authority two writ petitions were filed, one by All India Allahabad Bank Retired Employees Association and the other by the Allahabad Bank Retirees Association challenging the validity of the order of the Controlling Authority dated 25.9.2006.27. Section 2 (d) of the Act defines Controlling Authority as an authority appointed by the appropriate Government under Section 3 of the Act. Under Section 3 the Controlling Authority is made responsible for the administration of the Act and it further provides for appointment of different authorities for different areas. Section 7 deals with for determination of the amount of gratuity. Every person who is eligible for payment of gratuity under the Act is required to send a written application to the employer in the prescribed form for payment of such gratuity. Sub-section (2) of Section 7 provides once the gratuity becomes payable, the employer shall, whether an application has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the Controlling Authority specifying the amount of gratuity so determined and arrange to pay the amount of gratuity to the person to whom the gratuity is payable. The Scheme envisaged under Section 7 of the Act, is that in case of any dispute to the amount of gratuity payable to an employee under the Act or as to the admissibility of any claim of, or in relation to, an employee payable to gratuity etc. the employer is required to deposit with the Controlling Authority the admitted amount payable as gratuity. In case of any dispute parties may make an application to the Controlling Authority for deciding the dispute who after due inquiry and after giving the parties to the dispute, a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as result of such inquiry any amount is found to be payable to the employee, the Controlling Authority shall direct the employer to pay such amount to the employee. Sub-section (7) of Section 7, provides for an appeal against the order of the Controlling Authority. The Act, nowhere confers any jurisdiction upon the Controlling Authority to deal with any issue under sub-section (5) of Section 4 as to whether the terms of gratuity payable under any Award or agreement or contract is more beneficial to employees than the one provided for payment of gratuity under the Act. This Courts order could not have conferred any such jurisdiction upon the Controlling Authority to decide any matter under sub-section (5) of Section 4, since the Parliament in its wisdom had chosen to confer such jurisdiction only upon the appropriate Government and that too for the purposes of considering to grant exemption from the operation of the provisions of the Act. Even on merits the conclusions drawn by the Controlling Authority that the Pension Scheme (old) offered by the Bank is more beneficial since the amount of money the pensioners got under the Pension Scheme is more than the amount that could have been received in the form of gratuity under the provisions of the Act is unsustainable. The Controlling Authority failed to appreciate that sub-section (5) of Section 4 of the Act, protects the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer than the benefits conferred under the Act. The comparison, if any, could be only between the terms of gratuity under any award or agreement or contract and payment of gratuity payable to an employee under Section 4 of the Act. There can be no comparison between a Pension Scheme which does not provide for payment of any gratuity and right of an employee to receive payment of gratuity under the provisions of the Act. Viewed from any angle the order of the Controlling Authority is unsustainable. The order is liable to be set aside and the same is accordingly set aside.28. However, the judgment of ours is applicable to only such of those employees/workmen who retired from the service between 1.1.1986 and 31.10.1992.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It appears that on behalf of the Association applications were sent to the competent authority in the prescribed proforma for payment of gratuity in response to which the appellant bank made its stand explicitly clear that it was not possible to make payment of gratuity in addition to pension. Since the whole cause of action is based on the response of the appellant bank dated 10.01.1989, it would be appropriate to notice the same in its entirety.In our considered opinion pensionary benefits or the retirement benefits as the case may be whether governed by a Scheme or Rules may be a package consisting of payment of pension and as well as gratuity. Pensionary benefits may include payment of pension as well as gratuity. One does not exclude the other. Only in cases where the gratuity component in such pension schemes is in better terms in comparison to that of what an employee may get under the Payment of Gratuity Act the government may grant an exemption and relieve the employer from the statutory obligation of payment of gratuity.17. In the result, we find merit in the submissions made by the learned senior counsel, Shri P.P. Rao appearing for the Association that pension and gratuity are separate retiral benefits and right to gratuity is a statutory right.23. There is no material placed before us that the employees while opting for the pension scheme at the time of their superannuation/retirement either expressly or impliedly waived their statutory right to claim payment of gratuity under the provisions of the Act. In the circumstances we find no merit in the submission made by the learned counsel for the appellant in this regard. For the aforesaid reasons we find no merit in the appeal.The Controlling Authority held that the amount received by the employees under the said Scheme is much more than what they could have received under the Act. The benefits according to the Controlling Authority available under the Scheme are more beneficial than the gratuity payable under the Act.26. Being aggrieved by the order of the Controlling Authority two writ petitions were filed, one by All India Allahabad Bank Retired Employees Association and the other by the Allahabad Bank Retirees Association challenging the validity of the order of the Controlling Authority datedcan be no comparison between a Pension Scheme which does not provide for payment of any gratuity and right of an employee to receive payment of gratuity under the provisions of the Act. Viewed from any angle the order of the Controlling Authority is unsustainable. The order is liable to be set aside and the same is accordingly set aside.28. However, the judgment of ours is applicable to only such of those employees/workmen who retired from the service between 1.1.1986 and