Uttarakhand High Court

Babu Ram Kashyap vs Canara Bank (Erstwhile Syndicate Bank) on 29 April, 2024

IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
MS. JUSTICE RITU BAHRI, C.J.
AND
MR. JUSTICE RAKESH THAPLIYAL, J.
Reserved On : 10.04.2024
Delivered on: 29.04.2024
WRIT PETITION (M/B) NO. 75 OF 2023 (1)
Babu Ram Kashyap ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate Bank) ...Respondent

WRIT PETITION (M/S) NO. 396 OF 2022 (2)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Laxmi Kant Sharma ...Respondent

WRIT PETITION (M/S) NO. 401 OF 2022 (3)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Sheo Shanker Pandey ...Respondent
WRIT PETITION (M/S) NO. 406 OF 2022 (4)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Ravindra Kumar Chauhan ...Respondent
WRIT PETITION (M/S) NO. 413 OF 2022 (5)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Chandra Prakash Bisht ...Respondent
WRIT PETITION (M/S) NO. 415 OF 2022 (6)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.
Versus

Rakesh Kumar Bhatnagar ...Respondent
WRIT PETITION (M/S) NO. 418 OF 2022 (7)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Ghanshyam Singh Dhami ...Respondent
WRIT PETITION (M/S) NO. 419 OF 2022 (8)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Rajendra Singh Rawat ...Respondent
WRIT PETITION (M/S) NO. 420 OF 2022 (9)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Om Pal Singh ...Respondent
WRIT PETITION (M/S) NO. 423 OF 2022 (10)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Babu Ram Kashyap ...Respondent
WRIT PETITION (M/S) NO. 424 OF 2022 (11)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Sushil Kumar Grover ...Respondent
WRIT PETITION (M/S) NO. 429 OF 2022 (12)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Rajeshwar Sharma ...Respondent
WRIT PETITION (M/S) NO. 430 OF 2022 (13)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Jagat Ram ...Respondent
WRIT PETITION (M/S) NO. 432 OF 2022 (14)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Krishna Kant Rastogi ...Respondent
WRIT PETITION (M/S) NO. 437 OF 2022 (15)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Rakesh Kumar Agarwal ...Respondent
WRIT PETITION (M/S) NO. 858 OF 2022 (16)
Canara Bank Erstwhile Syndicate Bank Regional Office
..................Petitioner.

Versus

Raj Kumar Bhasin ...Respondent
WRIT PETITION (M/B) NO. 97 OF 2023 (17)
Sheo Shanker Pandey ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 98 OF 2023 (18)
Laxmi Kant Sharma ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 99 OF 2023 (19)
Rajeshwar Sharma ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 100 OF 2023 (20)
Rakesh Kumar Agarwal ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 101 OF 2023 (21)
Krishna Kant Rastogi ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 102 OF 2023 (22)
Ghanshyam Singh Dhami ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 103 OF 2023 (23)
Chander Prakash Bist ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 104 OF 2023 (24)
Ravindra Kumar Chauhan ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 105 OF 2023 (25)
Sushil Kumar Grover ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
WRIT PETITION (M/B) NO. 107 OF 2023 (26)
Raj Kumar Bhasin ..................Petitioner.

Versus
Canara Bank (Erstwhile Syndicate bank).
...Respondent
&
WRIT PETITION (M/B) NO. 108 OF 2023 (27)
Om Pal Singh ..................Petitioner.

Versus

Canara Bank (Erstwhile Syndicate bank).
...Respondent
Counsel for the petitioners : Mr. Vipul Gupta, learned Senior
Counsel assisted by Mr. A.M. Saklani,
learned counsel for the petitioner in
WPMB No. 75 of 2023.
Mr. Siddharth Sah, learned counsel
for the petitioner in WPMS Nos. 396,
401, 406, 413, 415, 418, 419, 420,
423, 424, 429, 430, 432, 437, 858 of
2022 and WPMB Nos. 97, 98, 99, 100,
101, 102, 103, 104, 105, 107, 108 of
2023.
Counsel for the respondents : Mr. Ashish Joshi, learned counsel for
the respondent in WPMB No. 75, 97,
98, 99, 100, 101, 102, 103, 104, 105,
107, 108 of 2023.
Mr. Shashank Upadhyay, learned
counsel for the respondents in WPMS
Nos. 396, 401, 406, 413, 415, 418,
420, 423, 424, 429, 430, 432, 437,
and 858 of 2022.

Upon hearing the learned Counsel, the Court
made the following

JUDGMENT :
(per Ms. Ritu Bahri, C.J.)

Since a common issue is involved in this

bunch of writ petitions, it is being disposed of by a

common judgment.

2. For the sake of brevity, the facts of
WPMB

No. 75 of 2023 Babu Ram Kashyap Vs. Canara Bank

(Erstwhile Syndicate Bank
) are being taken-up for

consideration.
3. The petitioner has challenged the order dated

29.11.2021 passed by the Appellate Authority / Deputy

Chief Labour Commissioner (Central), Dehradun under

Payment of Gratuity Act, 1972
(hereinafter referred to

as the PG Act).

4. The petitioner preferred a claim for grant of

Service Gratuity after seeking VRS on 10.11.2014 in

terms of the Bank after completing active service of 36

years 3 months and 12 days, but his claim for gratuity

was not decided and he approached the Controlling

Authority for issuing appropriate direction to the Bank

for deciding the claim. The Bank decided the claim vide

order dated 06.05.2019 (Annexure PA-1) and an

amount of Rs. 11,87,100.00 (Rs. Eleven Lacs Eighty

Seven Thousand One Hundred Only) was granted as

the Service Gratuity. It was stated that it has been

calculated as per Syndicate Bank Officers Service

Regulations, 1979 (for short "SBOSR"). The calculation

of the gratuity has been done by observing in the order

dated 06.05.2019 as under:-

"For purpose of calculating Gratuity as per
Syndicate Bank Officers Service Regulation, the
eligible component of pay are: Basic Pay +
Stagnation Pay + Basic components of EPP + PQP
+ other allowances (ranking for PF only) shall be
considered.
Further we wish to inform you that "The
Regulation 46(2) of Syndicate Bank (Officers)
Service Regulation, 1979, read as the amount of
gratuity payable to Officer shall be one month
"pay" for every completed year of service subject
to maximum of 15 months of pay. Provided that
where an officer has completed more than 30
years of service, he shall be eligible by way of
gratuity for additional amount @ on half of months
pay for each completed year of service beyond 30
years. Therefore, it is relevant to peruse the
definition of "Pay" and "salary" which defines
"Pay" as basic pay including stagnation increment
and "Salary" means the aggregate of the pay and
DA."

5. The Bank has, vide impugned order dated

06.05.2019, declined the claim of 45 days additional

amount of pension for each completed year of service

after completion of 30 years' service and has allowed

only 15 days additional amount for each completed

year of service after completion of 30 years' service by

the officer. Against the impugned order dated

06.05.2019 (Annexure P-1), the petitioner approached

the Controlling Authority after registration. The

registered case number is Case No. D-36(32)/2019-

ALC.

6. As per the order, the gratuity was awarded to

the tune of Rs. 15,22,042/-. The claim of the petitioner

for additional sum of 45 days for each completed year

after completion of service of 30 years was not allowed
and a final order was passed by the Controlling

Authority, which is as under:-

"Final Order"

In view of the above mentioned legal points,
I am of considered opinion that the appellant Sh.
Babu Ram Kashyap is entitled to receive total
gratuity of 15,22,042/- (Rupees Fifteen Lakh
Twenty Two Thousand & Forty Two Only) as the
higher amount of gratuity as per the service
Regulations of the bank. As the applicant has
already received Rs. 11,87,100/-, he need to be
paid further amount of gratuity equivalent to Rs.
3,34,942/- (Rupees Three Lakh Thirty Four
Thousand Thirty & Nine Hundred & Forty Two
Only), by the Respondent (The General Manager,
Syndicate Bank, Head Office, Manipal) within 30
days from receipt of this order along with simple
interest @ 7% p.a. from 12.10.2014."

7. With respect to length of service, the gratuity

was calculated for a period of three years beyond 30

years i.e. till 33 years. The petitioner, in the present

case, has put in service of 36 years, three months and

twelve days. The petitioner is also aggrieved that the

benefit of six of years of service beyond thirty years

has been wrongly denied.

8. The petitioner was communicated the claim

order vide order dated 28th February, 2020 (Annexure

PA-2). Against the order dated 28.02.2020, the

petitioner filed an Appeal under Section 7(7) of PG Act

(Annexure P-3). The Bank also filed an Appeal against

the order dated 28.02.2020 passed by the Controlling
Authority. Both the Appeals were decided by the

Appellate Authority by a common order dated

29.11.2021 (Annexure P-4).

9. In the impugned order, while interpreting

Clause-46 of SBOSR, the Appellate Authority held as

under:-

"Now after noting the above findings, I conclude
that the respondent is entitled to be paid
additional amount of gratuity over and above what
has already been paid to him but not as per
calculation arrived at by the CA. The CA should
include the component of DA only with Basic Pay
and calculate the amount of payable gratuity
accordingly. The CA should further calculate
interest @ 5% only upon the difference of amount
of gratuity paid and payable."

10. The Appellate Authority has not given the

benefit of calculation of gratuity beyond thirty years of

service i.e. 36 years three months and twelve days,

which was given by the Controlling Authority as per

Regulation 46 of Syndicate Bank (Officers') Service

Regulations, 1979. Hence, this writ petition has been

filed now. The challenge has been made on two

grounds:-

(I) The CA reduced the interest from 7% p.a. to

5% p.a. which is against the Circular of the

Reserve Bank of India dated 6th March, 2020

(Annexure No. 5 to the writ petition), which
prescribes payment of interest at the rate of 10%

till the date of making payment.

(II) Clause 46 of SBOSR has been misread and

misinterpreted by only including Dearness

Allowance as part of pay and not including

Emoluments as part of pay.

INTEREST:-

11. Counsel for the petitioner has referred to the

judgments of the Hon'ble Supreme Court in
Y.K.

Sigla vs. Punjab National Bank & Ors. (Civil

Appeal No.
9087 of 2012, decided on 14.12.2012)

and D.D. Tiwari vs. Uttar Haryana Bizli Vitran

Nigam Ltd. (Civil Appeal No. 7113 of 2014),

wherein the Hon'ble Supreme Court has held that

Controlling Authorities (CA) have no discretion to award

interest on delayed payment other than the rate of

interest as is provided under the statute in terms of

Sub Section (3A) of
Section 7
of Payment of Gratuity

Act, 1972.

12. In another judgment of the Hon'ble Supreme

Court in Assistant Commissioner, Commercial Tax

Department, Works Contract & Leasing, Kota vs.

Shukla & Brothers (2010) 4 SCC 785, it has been

held that the rate of interest cannot be reduced by the
Controlling Authority once it was granted as per the

prevalent rules of banking.

DEFINITION OF WORD 'PAY':-

13. The Hon'ble Supreme Court in the case of

The Regional Provident Fund Commissioner (II)

W.B. vs. Vivekanand Vidhya Mandir & Ors. (Civil

Appeal No. 6221 of 2011, decided on 28.02.2019)

held that the basic principle is where the wage is

universally, necessarily and ordinarily paid to all

employees across the board, such emoluments are

basic wages. It is not denied by the respondent-Bank

that Special Allowance is being paid to all the officers

working in the Bank at the rate based on their scale of

pay. Therefore, exclusion of Special Allowance from

the component of Basic Pay is not permissible for the

purpose of calculating gratuity. Therefore, the same

shall be taken as part of basic pay for calculating the

gratuity payable to the officers of the respondent-Bank

but no reason has been assigned by the learned AA

with regard to exclusion of Special Allowance. In the

said judgment with regard to addition of Dearness

Allowance, the Hon'ble Supreme Court has observed as

under:-
"9. Basic wage, under the Act, has been defined
as all emoluments paid in cash to an employee in
accordance with the terms of his contract of
employment. But it carves out certain exceptions
which would not fall within the definition of basic
wage and which includes dearness allowance apart
from other allowances mentioned therein. But this
exclusion of dearness allowance finds inclusion in

Section 6
. The test adopted to determine if any
payment was to be excluded from basic wage is
that the payment under the scheme must have a
direct access and linkage to the payment of such
special allowance as not being common to all. The
crucial test is one of universality. The employer,
under the Act, has a statutory obligation to deduct
the specified percentage of the contribution from
the employee's salary and make matching
contribution. The entire amount is then required to
be deposited in the fund within 15 days from the
date of such collection. The aforesaid provisions
fell for detailed consideration by this Court
in Bridge & Roof (supra) when it was observed as
follows:-

"7. The main question therefore that falls for
decision is as to which of these two rival
contentions is in consonance with
s. 2(b)
.
There is no doubt that "basic wages" as
defined therein means all emoluments which
are earned by an employee while on duty or
on leave with wages in accordance with the
terms of the contract of employment and
which are paid or payable in cash. If there
were no exceptions to this definition, there
would have been no difficulty in holding that
production bonus whatever be its nature
would be included within these terms. The
difficulty, however, arises because the
definition also provides that certain things
will not be included in the term "basic
wages", and these are contained in three
clauses. The first clause mentions the cash
value of any food concession while the third
clause mentions that presents made by the
employer. The fact that the exceptions
contain even presents made by the employer
shows that though the definition mentions all
emoluments which are earned in accordance
with the terms of the contract of
employment, care was taken to exclude
presents which would ordinarily not be
earned in accordance with the terms of the
contract of employment. Similarly, though
the definition includes "all emoluments"

which are paid or payable in cash, the
exception excludes the cash value of any
food concession, which in any case was not
payable in cash. The exceptions therefore do
not seem to follow any logical pattern which
would be in consonance with the main
definition.

8. Then we come to clause (ii). It excludes
dearness allowance, house rent allowance,
overtime allowance, bonus, commission or
any other similar allowance payable to the
employee in respect of his employment or of
work done in such employment. This
exception suggests that even though the
main part of the definition includes all
emoluments which are earned in accordance
with the terms of the contract of
employment, certain payments which are in
fact the price of labour and earned in
accordance with the terms of the contract of
employment are excluded from the main part
of the definition of "basic wages". It is
undeniable that the exceptions contained in
clause (ii) refer to payments which are
earned by an employee in accordance with
the terms of his contract of employment. It
was admitted by counsel on both sides before
us that it was difficult to find any one basis
for the exceptions contained in the three
clauses. It is clear however from clause (ii)
that from the definition of the word "basic
wages" certain earnings were excluded,
though they must be earned by employees in
accordance with the terms of the contract of
employment. Having excluded "dearness
allowance" from the definition of "basic
wages", s. 6 then provides for inclusion of
dearness allowance for purposes of
contribution. But that is clearly the result of
the specific provision in
s. 6
which lays down
that contribution shall be 6-1/4 per centum
of the basic wages, dearness allowance and
retaining allowance (if any). We must
therefore try to discover some basis for the
exclusion in clause (ii) as also the inclusion of
dearness allowance and retaining allowance
(for any) in
s. 6
. It seems that the basis of
inclusion in
s. 6
and exclusion in clause (ii) is
that whatever is payable in all concerns and
is earned by all permanent employees is
included for the purpose, of contribution
under
s. 6
, but whatever is not payable by all
concerns or may not be earned by all
employees of a concern is excluded for the
purpose of contribution. Dearness allowance
(for examples is payable in all concerns
either as an addition to basic wages or as a
part of consolidated wages where a concern
does not have separate dearness allowance
and basic wages. Similarly, retaining
allowance is payable to all permanent
employees in all seasonal factories like sugar
factories and is therefore included in
s. 6
; but
house rent allowance is not paid in many
concerns and sometimes in the same concern
it is paid to some employees but not to
others, for the theory is that house rent is
included in the payment of basic wages plus
dearness allowance or consolidated wages.
Therefore, house rent allowance which may
not be payable to all employees of a concern
and which is certainly not paid by all concern
is taken out of the definition of "basic
wages", even though the basis of payment of
house rent allowance where it is paid is the
contract of employment. Similarly, overtime
allowance though it is generally in force in all
concerns is not earned by all employees of a
concern. It is also earned in accordance with
the terms of the contract of employment; but
because it may not be earned by all
employees of a concern it is excluded from
"basic wages". Similarly, commission or any
other similar allowance is excluded from the
definition of "basic wages" for commission
and other allowances are not necessarily to
be found in all concerns; nor are they
necessarily earned by all employees of the
same concern, though where they exist they
are earned in accordance with the terms of
the contract of employment. It seems
therefore that the basis for the exclusion in
clause (ii) of the exceptions in
s. 2(b)
is that
all that is not earned in all concerns or by all
employees of concern is excluded from basic
wages. To this the exclusion of dearness
allowance in clause (ii) is an exception. But
that exception has been corrected by
including dearness allowance in
s. 6
for the
purpose of contribution. Dearness allowance
which is an exception in the definition of
"basic wages", is included for the propose of
contribution by
s. 6
and the real exceptions
therefore in clause (ii) are the other
exceptions beside dearness allowance, which
has been included through
S. 6
."

14. Original Pension Regulation of 1995 is still in

force and no amendment has yet been made in such

Regulation regarding exclusion of Special Allowance.

The definition of 'Pay' as defined in Reg. 3(k) is

inclusive definition, which means that the basic pay not

only includes stagnation increment, but also other

component of basic pay as held by the Hon'ble Apex

Court in Vivekanand Vidyamandir case (supra) and

the Madhya Pradesh High Court in
Madhyanchal

Gramin Bank and others vs. All India Gramin Bank

Pensioners Organisation Unit (WA Nos
. 1318 of

2018, 1316 of 2018 & 1317 of 2018, decided on

26.02.2019).
15.
In a recent judgment rendered by the High

Court of Kerala at Ernakulam in
Muralee Mohanan

K.T. and others vs. Corporation Bank and others

(WP (C) No. 32386 of 2015 (W), decided on

15.10.2019), the Kerala High Court condemned the

exclusion of special allowance payable to bank

employees / officers. For ready reference, the relevant

Paragraphs 8 and 9 of
the said judgment
are

reproduced herein below:-

"8. However, in
Bank of Baroda v. G.Palani
and others
, the Apex Court drew a distinction
where the aggrieved employees are officers who
retired from the Bank in question. It was held that
the provisions of the
Industrial Disputes Act, 1947

are not applicable to such officers. It was held that
the Pension Regulations framed under
Section 19

of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 are statutory
in character. In the circumstances, in view of the
definition of average emoluments at
Regulation
2(d)
, Pay at
Regulation 2(s)
and the provision for
calculating pension at Regulation 35, it was held
that employees are to be paid pension as provided
in the Regulations and no reduction from the same
is possible, relying on the provisions of a Joint
Note, which has no statutory force, unless the
Regulations are appropriately amended. It was
held in paragraph 28 of the judgment as follows:-

"28. Thus joint note/agreement could not
have been in derogation of the existing
statutory Regulations and regulation 2(s)(c)
could not have been given retrospective
effect. It is also apparent from the decisions
of this Court in P.Sadagopan vs.Food
Corporation of India [(1997) 4 SCC 301],
that executive instructions cannot be issued
in derogation of the statutory Regulations.
The settled position of law is that no
Government Order, Notification or Circular
can be a substitute of the statutory rules
framed with the authority of law.
In

Dr.Rajinder Singh v. State of Punjab & Ors

(2001) 5 SCC 482, this Court had reiterated
that the settled position of law is that no
government order, notification or circular can
be a substitute of the statutory rules framed
with the authority of law. In K.Kuppuswamy
& Anr.v. State of Tamil Nadu (1998) 8 SCC
469, this Court has observed that statutory
rules cannot be overriden by executive
orders or executive practice. Merely because
the Government had taken a decision to
amend the rules, does not mean that the rule
stood obliterated. Till the rule is amended,
the rule applies."

The amendment to
Regulation 2(s)
of the Pension
Regulations was struck down as arbitrary and
repugnant to
Regulation 2(d)
, 35 and 38(1) and
(2).

9. In the above view of the matter, I am of the
opinion that the prayers sought for in the writ
petition are liable to be allowed. The petitioners
are entitled to pension in terms of the Pension
Regulations especially
Regulation 2(d)
and 35
thereof. The respondents are directed to revise
the basic pension of the petitioners in accordance
with the provisions of the Corporation Bank
(Employees) Pension Regulation, 1995 by taking
into account the Special Allowances introduced in
Exhibit P6 as part of pay for the purpose of Basic
Pension. There will be a direction to the 2nd
respondent to recalculate the commutation
pension of the petitioners on the basis of the
revised basic pension by including the special
allowance introduced vide Exhibit P6 and to refund
the pension arrears recovered from the petitioners
as per Exhibits P5. P5(a),P5(b) and P5(c). The
necessary shall be done within a period of three
months from the date of receipt of a copy of this
judgment."

16. So far as inclusion of DA is concerned in the

definition of 'Pay', both the CA as well as AA
categorically held in view of binding precedents that DA

shall be part of basic pay. There appears no illegality

in such finding.

How the gratuity is to be calculated after serving

for a period beyond thirty years:-

17. Recently, the High Court of Rajasthan in

Rajasthan Marudhara Gramin Bank, Jodhpur vs.

The Appellate Authority (S.B. Civil Writ Petition

No. 7359 of 2019, decided on 16.10.2020) has

considered this aspect of the matter and in the light of

the facts narrated in Paragraph 4 has made its

observation in Paragraph 22. Relevant Paragraphs 4

and 22 read as under:-

"4. The brief facts of the case as noticed by this
Court are that all these writ petitions relate to the
dispute of computation of gratuity of the retired
Bank Officers. The petitioner bank is a Regional
Rural Bank which has been constituted by
amalgamation of Marudhara Gramin Bank and
Mewar Anchalik Gramin Bank on 01.04.2014. The
retired Bank Officers-private respondents filed
their respective applications before the Controlling
Authority under the
Payment of Gratuity Act,
claiming the differential amount of gratuity
with interest with effect from 01.12.2017 based
on the basic + dearness allowance + PQP + FPP
components of the last pay drawn for the
calculation of amount of gratuity payable to such
officers. The petitioner-Bank vehemently objected
their applications but the same were allowed and
the petitioner-Bank was directed to pay the
additional amount of gratuity along with simple
interest at the rate of 10% with effect from
01.12.2017 till the date of payment made by the
petitioner-Bank. The petitioner being aggrieved by
the order of the Controlling Authority filed appeals
under
Section 7
Sub-
Section 7
of the Payment of
Gratuity Act 1972, before the Appellate Authority
under the
Payment of Gratuity Act, 1972
and
Deputy Chief Labour Commissioner (Central),
Ajmer. The petitioner being under a legal
obligation deposited the difference of the amount
to the Government before filing the appeals. The
Appellate Authority partly allowed the appeals with
a direction to pay lesser amount along with
simple (31 of 83) [CW-7359/2019] interest at the
rate of 10% per month with effect from
01.12.2017 only on the ground of the ratio of the
monthly addition of gratuity after completion of 30
years while upholding the broader issue laid down
by the Controlling Authority. The bank officers
have also made cross-objections against the
Appellate Authority's order in certain writ petitions
whereby the calculations as per Clause 72(3) of
the regulation have been made and reduced by
the Appellate Authority and seeking of counting 30
days + 15 days i.e. one and a half months' salary
for the basic computation.

22. In view of the above, the writ petitions are
allowed. The impugned orders passed by the
Appellate Authority are quashed and set aside and
the orders passed by the Controlling Authority in
the case of the contesting respondents are
restored. Accordingly, the petitioner Bank is found
not liable to pay any further amount towards
gratuity to the contesting respondents as they
admittedly received the amount of Rs.10,00,000/-
from the petitioner Bank immediately upon their
superannuation." This Court is of the opinion that
the judgment in
Madhyanchal Gramin
Bank
(supra) rendered by the Hon'ble Madhya
Pradesh High Court and upheld by the Hon'ble
Apex Court is the correct view and also binding
upon this Court on count of the same having been
upheld by the Hon'ble Apex Court. Moreover, the
Regulations of 2010 clearly define in Clause
2(1)(i) that emoluments means aggregate of
salary and allowances and in Clause 2(1)(m) pay
means basic pay drawn per month by the officer
or employee in a pay scale including stagnation
increments and any part of the emoluments which
may specifically be classified as pay under these
Regulations. As per the Clause 72(1) of the
Regulations, for the purpose of gratuity, an officer
or employee shall be eligible either as per the
provision of
Payment of Gratuity Act, 1972
or as
per the Sub-Regulation (2), whichever is higher
and thus, for the beneficial legislation of a welfare
law, the benevolent connotation ought to have
been accepted by this Court. There is no reason
why this Court should take a different view than
the one taken by the Hon'ble Madhya Pradesh
High Court and affirmed by the Hon'ble Apex
Court. The cross-objections made by the Officers
do not warrant any interference by this Court
because on a bare reading (82 of 83) [CW-
7359/2019] of Clause 72(3) of the Regulations, it
is clear that the Statute required the petitioner to
pay half month's pay for each completed year of
service beyond 30 years. Clause 72(3) of the
Regulations reads as follows:-

"(3) The amount of gratuity payable to an
officer or employee shall be one months pay
for every completed year of service or part
thereof in excess of six months subject to a
maximum of 15 month's pay:

Provided that where an officer or
employee has completed more than 30 years
of service, he shall be eligible by way of
gratuity for an additional amount at the rate
of one half of a month's pay for each
completed year of service beyond 30 years:

Provided that in respect of an officer the
gratuity is payable based on the last pay
drawn:

Provided also that in respect of an
employee pay for the purposes of calculation
of the gratuity shall be the average of the
basic pay (100%), dearness allowance and
special allowance and officiating allowance
payable during the 12 months preceding
death, disability, retirement, resignation or
termination of service, as the case may be."
Regulation 72(3) has an optimum gratuity
prescribed upto maximum of 15 months' pay and
the concession given is only for the officers who
have completed more than 30 years of service by
making them entitled for an additional amount of
one half of month's pay for each completed year
of service beyond 30 years, which is an exception
to the maximum of 15 months' pay gratuity rule
and thus, the exception has to be read strictly. It
is thus clear that the Appellate Authority has
rightly arrived at a conclusion that the Officers
who have completed more than 30 years of
service shall be eligible by way of gratuity for
the (83 of 83) [CW-7359/2019] additional amount
at the rate of one half month's pay for each
completed service beyond 30 years. Thus, once
the statute is clear, there is no question of
expanding the meaning. It is one thing to choose
one of the beneficial conditions amongst two and
it is another thing to expand the ambit of benefits
which are strictly prescribed. Accordingly, the
cross objections are dismissed. In light of the
aforementioned observations, the legal issues,
facts and grounds raised by the petitioners do not
call for interference by this Court. Accordingly, all
these writ petitions are dismissed and the orders
of the Appellate Authority are upheld. The
consequential benefits shall be released to the
respondent officers within a period of three
months starting from 1st December, 2020. All
pending applications stand dismissed accordingly.
All the interim orders stand vacated."

18. The judgment of the Rajasthan High Court

has been upheld by the Hon'ble Supreme Court.

19. In the facts of the present case, as per

proviso to Regulation 46(2) of the SBOSR, the

calculation of the gratuity is done. Regulation 46(2) of

the SBOSR reads as under:-
"Gratuity:

46.(2) The amount of gratuity payable to an
officer shall be one month's pay for every
completed year of service, subject to a
maximum of 15 months' pay.

Provided that where an officer has completed
more than 30 years of service, he shall be
eligible by way of gratuity for an additional
amount at the rate of one half of a month's
pay for each completed year of service
beyond 30 years.

Provided further that pay for the purpose of
Gratuity for an officer who ceased to be in
service during the period 1-7-1993 to 31-10-
1994 shall be with regard to scale of pay as
specified in sub-regulation (1) of regulation 4.

Provided also that pay for the purpose of
Gratuity of an Officer who ceased to be in
service during the period 1-4-1998 to 31-10-
1999 shall be with regard to scale of pay as
specified in sub-regulation (2) of Regulation

4.

Note:

If the fraction of service beyond completed
years of service is 6 months or more, gratuity
will be paid pro-rata for the period."

21. The judgment of Rajasthan High Court is

applicable to the facts of the present case, which made

it clear that for the purpose of calculation of gratuity

beyond thirty years, which is an exception, the

additional amount at the rate of one half month's pay

for each completed year of service beyond 30 years has

to be calculated. The Rajasthan High Court has held

that the officers, who have completed more than thirty
years of service, shall be eligible by way of gratuity for

the additional amount @ one half month's pay for each

completed service beyond thirty years. Thus, once the

statute is very clear, there is no question of expanding

the meaning.

22. In the present case as well, as per the

proviso to Regulation 46(2) of the SBOSR, if an officer

has completed more than thirty years he is eligible by

way of gratuity for an additional amount at the rate of

one half month's salary for each completed year of

service beyond thirty years. Hence, for the purpose of

calculation of gratuity, the salary of 45 days has to be

taken into account for each completed year beyond

thirty years.

23.
In the writ petitions filed by the Canara Bank,

counsel for the Bank has referred to the judgment of

the Hon'ble Supreme Court in the case of
Beed

District Central Cooperative Bank Ltd. vs. State of

Maharashtra and others
(2006) 8 SCC 514 has

been referred to on the preposition that when an

Scheme of employer has been offered, the workman

can opt for the best terms of Statute, and the nature of

gratuity scheme and agreement of the parties cannot
be changed subsequently to take better benefits under

the
Payment of Gratuity Act, 1972
.

24. He has further referred to another judgment

of the Calcutta High Court in
Paschim Banga Gramin

Bank and others vs. Chinmay Majumdar & others

(F.M.A. 657 of 2020, decided on 04.02.2021),

wherein the Calcutta High Court has held that once the

employee has accepted the terms and conditions of the

Regulations for the purpose of definition of the word

'pay' and calculation of gratuity, then they are

restrained from seeking modification of definition of the

word 'pay' and mode of calculation of gratuity.

25. He further states that in this judgment, the

respondents were claiming the benefit of Dearness Pay

to be treated as part of pay. However, the High Court

allowed the appeal filed by the Bank and restricted the

meaning of the words as per the Regulations of the

Bank. The Regulation made a clear distinction between

an officer and an employee and in the matter of

calculation of gratuity. Regarding the employees, the

'basic pay' included only allowances and not 'dearness

allowance' and the appeal of the Bank was allowed.
26. In the present case, as per the impugned

order dated 17th December, 2021 (Annexure-4), the

Appellate Authority had partly allowed the Appeal of

Shri Babu Ram Kashyap by including Basic Pay and

DA for the purpose of calculation of gratuity and

awarded 5% interest.

27. In the judgment of the Hon'ble Supreme

Court in the Regional Provident Fund

Commissioner (II) W.B. (supra), while dealing with

the employees of the Bank, it has been held that the

definition of 'pay' was an inclusive definition, which

means that the Basic Pay not only includes stagnation

increment but also other component of the Basic Pay,

i.e. the Special Allowance.
Similarly, the Madhya

Pradesh High Court in
Madhyanchal Gramin Bank

and others
(supra) and the Kerala High Court in

Muralee Mohanan K.T. and others
(supra) have held

that exclusion of Special Allowances payable to the

bank employees / officers for calculating gratuity was

not correct, and the petitioners were held entitled to

pension in terms of the Pension Regulations by taking

into account the Special Allowances.
28. In the present case, as per the Regulations of

the Bank, the definition of 'emoluments' is in

Regulation 3(e)
, which reads as under:-

"e) "Emoluments" means the aggregate of salary
and allowances if any."

29. The definitions of words 'pay' and 'salary' are

given in
Regulation 3(k)
and
Regulation 3(l)
of the

Regulations of the Bank respectively, which read as

under:-

"k) "Pay' means basic pay including stagnation
increment.

l) "Salary" means the aggregate of the pay and
dearness allowance."

30. Applying the ratio of the above said

judgments, the definition of 'pay' is inclusive of special

allowances, emoluments, dearness allowance and

stagnation increments. Hence, the petitioners

(employees) are entitled to include the Special

Allowances as part of Pay for the purpose of calculation

of gratuity by including Dearness Allowance as well.

31. The second ground taken by the writ

petitioner is that the payment of interest could not be

reduced from 10% to 5%. Even on this aspect, the
Hon'ble Supreme Court in
Y.K. Sigla vs. Punjab

National Bank & Ors. (Civil Appeal No.
9087 of

2012, decided on 14.12.2012) and D.D. Tiwari vs.

Uttar Haryana Bizli Vitran Nigam Ltd. (Civil

Appeal No. 7113 of 2014) and Assistant

Commissioner, Commercial Tax Department,

Works Contract & Leasing, Kota vs. Shukla &

Brothers (2010) 4 SCC 785, has consistently held

that the rate of interest cannot be reduced once it was

granted by the prevalent rules of banking. Hence, in

the present case, the petitioners (employees) are

entitled for interest at the rate of 7%.

32. The judgment, referred to by the counsel for

the Canara Bank, which is
Beed District Central

Cooperative Bank Ltd. vs. State of Maharashtra

and others
(2006) 8 SCC 514, will not be applicable

to the facts of the present case as
in that case
the

Supreme Court was not examining the definitions of

special allowances, emoluments, pay and salary of the

Bank employees. It was examining the option exercised

by an employee of the Bank. The Hon'ble Supreme

Court was examining the provisions of the Banking

Regulations, which had been opted by the employee at
the time of joining the Cooperative Bank. It was held

therein that the employees, thereafter, could not claim

the benefit of calculation of gratuity under the
Payment

of Gratuity Act, 1972
.

33. The Canara Bank, in the present case, is

bound by their Regulations for the purpose of

calculation of gratuity and that is not being disputed by

the Bank employees.

34. The judgment of the Calcutta High Court in

Paschim Banga Gramin Bank and others vs.

Chinmay Majumdar & others
(F.M.A. 657 of 2020,

decided on 04.02.2021) cannot be made applicable in

the facts of the present case as the Calcutta High Court

in that case
was dealing with the definition of 'pay' as

per the Regulations with respect to officers and

employees in the matter of calculation of gratuity and it

was held that once the employee had accepted the

entitlement under the Regulations
,
in that case
, they

could not claim the benefit of definition of 'pay' which

was applicable to officers.

Even this judgment is not

applicable as in this judgment, the Calcutta High Court

was not examining the definition of 'pay' for the

purpose of calculation of gratuity and this aspect has
been considered in detail in the judgment of the

Hon'ble Supreme Court in The Regional Provident

Fund Commissioner (II) W.B. vs. Vivekanand

Vidhya Mandir & Ors. (Civil Appeal No. 6221 of

2011, decided on 28.02.2019), in the judgment of the

Madhya Pradesh High Court in
Madhyanchal Gramin

Bank and others vs. All India Gramin Bank

Pensioners Organisation Unit (WA Nos
.

1318 of

2018, 1316 of 2018 & 1317 of 2018, decided on

26.02.2019), the SLP against which was dismissed by

the Supreme Court, and in the judgment of the Kerala

High Court in
Muralee Mohanan K.T. and others vs.

Corporation Bank and others
(WP (C) No. 32386

of 2015 (W), decided on 15.10.2019).

35. All the writ petitions, filed by the employees,

are being allowed, and a direction is given to the Bank

to recalculate their gratuity after calculating the pay,

including Dearness Allowance and emoluments, along

with 7% interest. All the writ petitions filed by the

Canara Bank are dismissed.

______________
RITU BAHRI, C.J.

__________________
RAKESH THAPLIYAL, J.

Dt: 29th April, 2024
Rathour