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

1. All India Allahabad Bank Retired Employees Association (for short `Association) filed a writ petition invoking the original jurisdiction of the Allahabad High Court under Article 226 of the Constitution of India with a prayer to issue a writ of mandamus directing the appellant bank herein to pay gratuity to the members of its Association under the Payment of Gratuity Act, 1972 ( for short `the said Act). The High Court on due consideration of the matter declared that the retired employees of the appellant bank were entitled to the benefit of gratuity under the said Act and accordingly directed the payment of gratuity within the time specified in the judgment. The said judgment of the Allahabad High Court is impugned in this appeal.2. A short question that arises for our consideration in this appeal is as to whether the retired employees of appellant bank are entitled to payment of gratuity under the provisions of the said Act?3. The retired employees of the appellant bank having formed an association which includes officers and subordinate staff sent a legal notice to the appellant bank on 27.11.1988 requiring it to release the amount of gratuity to its members in accordance with the provisions of the said Act. The case set up by the Association was that its members were being illegally deprived of their statutory right to receive gratuity under the provisions of the Act on the pretext that they had opted for pensionary benefits in lieu of gratuity.

Reasoning:
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