Case: INDIAN OVERSEAS BANK Vs. THE REGIONAL LABOUR COMMISSIONER (C) AND APPELLATE AUTHORITY AND ORS

the judgment of this Court in the case of Central Bank (supra) has clearly upheld fixation of cut-off date for different purposes, which is clear from paragraph 8 of the judgment. Paragraph Nos. 5 and 8 of the judgment in Central Bank of India (supra) are as follows:-"5. We find that during the pendency of the matters before this Court, a Full Bench of the High Court of Kerala, having regard to the divergent views taken by Division Benches of the said Court, has considered this issue, leading to the judgment dated 3-3-2016 in R. Parasurama Iyer v. State Bank of Travancore, (2016) 2 KLJ 105 and it has been held that fixation of cut-off date for extending the benefit of gratuity from a different date as compared to revision of payscale can neither be said to be arbitrary, discriminatory or violative of Articles 14 and 16 of the Constitution of India. The Full Bench has also placed reliance on the decisions of this Court in State Govt. Pensioners Assn. v. State of A.P., (1986) 3 SCC 501 , State of A.P. v. A.P. Pensioners Assn., (2005) 13 SCC 161 and State of Bihar v. Bihar Pensioners Samaj, (2006) 5 SCC 65. 8. Fixing of the cut-off date has been a wellaccepted principle and we do not find that the same needs to be supported by any judgment since it has been the consistent view taken by this Court. In State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754 , which was subsequently followed in State of A.P. v. N. Subbarayudu, (2008) 14 SCC 702 , this Court has referred to all the judgments in that regard. In the peculiar facts of this case, having regard to the background of the regularisation making process, we are of the view that the cut-off date fixed by the appellants in the regularisation was not arbitrary, unjust or unfair." 10. One more judgment of this court, which is relevant for the issue, which has arisen in the present appeal is judgment of this Court in State of Bihar and Others v. Bihar Pensioners Samaj, (2006) 5 SCC 65. The State of Bihar has taken a Resolution on 19.04.1990 for revising certain benefits of its employees, including the revision regulating family pension, death-cum-retirement gratuity. Paragraph No.2 of the judgment refers to the Resolution of the Government, which is to the following effect:-"2. A notification, Resolution No. PCI-Id/S7- 1853-F dated 19-4-1990, was issued by the State Government relating to the provisions regulating pension and death-cum-retirement gratuity pursuant to the recommendations of a special committee known as "Fitment-cum-Pay Revision Committee". The notification declared that after considering the recommendations of the aforesaid Committee the State Government, after due deliberations, had decided to revise the provisions regulating pension, family pension and death-cum-retirement gratuity of the State Government employees "to the effect and extent indicated in the subsequent paragraphs". That certain benefits were made available under the said notification is common ground. However, the effective date of the notification was fixed as 1-11986, although the notification declared that, the financial benefits of revision of pension would be admissible only with effect from 1-3-1989 and no arrears would be paid for the period 1-1-1986 to 28-2-1989. Para 1 of the said notification is relevant and reads as under:"1. (i) Date of effect.-The revised provisions as per these orders shall apply to government servants, who retire/die in harness on or after 1-1-1986. The revision of pension with effect from 1-1-1986 shall be merely notional as the financial benefit of revision of pension will be admissible only with effect from 1-3-1989, to it, no arrears accruing from revision of pension during the period from 1-1-1986 to 28-2-1989 shall be paid to the pensioners.(ii) Where pension has been provisionally sanctioned in cases occurring on or after 1-1-1986, the same shall be revised in terms of these orders. In cases where pension has been finally sanctioned under the pre-revised orders, the same shall be revised in terms of these orders, provided such revision is to the advantage of the pensioner (sic)." 11. The Association of Employees filed a Writ Petition in the Patna High Court, which writ petition was allowed on 21.08.1996. Notifications in questions were quashed and Government was directed to reconsider the matter in accordance with law. The judgment was although challenged in this Court but the special leave petition was summarily dismissed by this Court on 20.01.1997. The Governor of Bihar issued an Ordinance namely "the Bihar State Government Employees Revision of Pension, Family Pension and Death-cum-Retirement Gratuity (Validation and Enforcement) Ordinance, 2000", which was subsequently replaced by the Bihar Act 3 of 2001. The Act validated the revision of pension and gratuity in accordance with earlier two resolutions dated 19.04.1990. A writ petition was filed in the High Court challenging the Ordinance, which was struck down by the High Court. The challenge to the Ordinance and the Act on the ground of violation of Article 14, i.e. cut-off date for payment of the pensionary benefits w.e.f. 01.03.1989 was repelled by this Court. In Paragraph No. 17, this Court held:-"17................The only ground on which Article 14 has been put forward by the learned counsel for the respondent is that the fixation of the cut-off date for payment of the revised benefits under the two notifications concerned was arbitrary and it resulted in denying arrears of payments to certain sections of the employees. This argument is no longer res integra. It has been held in a catena of judgments that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration." 12. Thus, this Court held that the fixation of date for payment of financial benefits, w.e.f. 01.03.1989, does not suffer from any infirmity, even though the effective date of the notification was fixed as 01.01.1986. The above ratio fully supports the view, which we have taken above.

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

Explanation:
1[ds]We are sure that the third respondent must have received the different in the amount of gratuity, which was already allowed to him7. The High Court in the impugned judgment has taken the view that in the settlement entered into in respect of revision of salary a subsequent cut-off date was 1st November, 1994 for the purpose of gratuity, which is unsustainable8. The Division Bench has taken the view that fixation of cut-off date for payment of gratuity is unsustainable. In the present case the cut-off date was 1st November, 1994 which was the date fixed for computation of payment of gratuity in the revised pay scale on the basis of settlement relied upon by the respondents as well as the bank9. The cut-off date for revision of the wages is a different concept than payment of gratuity on a particular date. As per the provisions of the Payment of Gratuity Act, 1972 which were existing on the date of retirement of the third respondent, the maximum gratuity payment was Rs. 1,00,000/- (Rupees one lac). The Full Bench of the Kerala High Court had considered all aspects of the matter including the divergent views taken by different High Courts and has upheld the cut-off date. The judgment of this court in the case of Central Bank (supra) has also referred to the judgment of the Kerala High Court with approval in paragraph 5 of the judgment. Although learned counsel for the appellant is correct in his submission that no further consideration has been made in the said judgment, the judgment of this Court in the case of Central Bank (supra) has clearly upheld fixation of cut-off date for different purposes, which is clear from paragraph 8 of the judgment11. The Association of Employees filed a Writ Petition in the Patna High Court, which writ petition was allowed on 21.08.1996. Notifications in questions were quashed and Government was directed to reconsider the matter in accordance with law. The judgment was although challenged in this Court but the special leave petition was summarily dismissed by this Court on 20.01.1997. The Governor of Bihar issued an Ordinance namely "the Bihar State Government Employees Revision of Pension, Family Pension and Death-cum-Retirement Gratuity (Validation and Enforcement) Ordinance, 2000", which was subsequently replaced by the Bihar Act 3 of 2001. The Act validated the revision of pension and gratuity in accordance with earlier two resolutions dated 19.04.1990. A writ petition was filed in the High Court challenging the Ordinance, which was struck down by the High Court. The challenge to the Ordinance and the Act on the ground of violation of Article 14, i.e. cut-off date for payment of the pensionary benefits w.e.f. 01.03.1989 was repelled by this Court. In Paragraph No. 17, this Court held:-"17................The only ground on which Article 14 has been put forward by the learned counsel for the respondent is that the fixation of the cut-off date for payment of the revised benefits under the two notifications concerned was arbitrary and it resulted in denying arrears of payments to certain sections of the employees. This argument is no longer res integra. It has been held in a catena of judgments that fixing of a cut-off date for granting of benefits is well within the powers of the Government as long as the reasons therefor are not arbitrary and are based on some rational consideration."12. Thus, this Court held that the fixation of date for payment of financial benefits, w.e.f. 01.03.1989, does not suffer from any infirmity, even though the effective date of the notification was fixed as 01.01.1986. The above ratio fully supports the view, which we have taken above.