Madras High Court

The Management vs The Assistant Commissioner Of on 27 September, 2012

Author:
S.Manikumar

Bench:
S.Manikumar

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 27/09/2012

CORAM
THE HONOURABLE MR.JUSTICE S.MANIKUMAR

W.P(MD)No.9327 of 2009
and
M.P.(MD)Nos.1 of 2009 & 1 of 2010

The Management, Virudhunagar
District Central Co-operative
Bank Ltd., rep. by its Special
Officer, Virudhunagar.

Vs.

1.The Assistant Commissioner of
Labour, Sundaram Theatre Road,
K.K.Nagar, Madurai-20.

2.A.S.Sangaiah
3.A.M.Subramaniam
4.L.Mahalingam
5.M.V.Ramaiah
6.A.Balasubramaniam
7.N.Rajendran
8.K.R.Guruvappan
9.M.Narayanan
10.U.Kulandaivelu
11.G.Rajagopal
12.G.Mariappan
13.R.Alagumuthu
14.C.Muthanandam
15.R.Latchumanan
16.A.Pitchaimohaideen
17.M.Narayanan
18.T.Velayutham
19.N.Karuppaiah
20.P.Kandasamy
21.A.Gurusamy
22.G.Ramachandran
23.P.Ramasamy
24.P.Rackamuthu
25.A.Mariappan
26.G.Sundaramahalingam
27.R.Ayyappan
28.P.Alagarsamy
29.P.R.Srinivasan
30.M.Pandian
31.G.Ramasamy
32.K.Rengasamy
33.P.Pappureddy
34.L.Perumalsamy
35.M.Ramakrishnan
36.V.Ramakrishnan
37.O.Singappan
38.M.Ramasamy
39.K.Balasubramanian
40.N.Alagarsamy
41.M.Kalappan
42.R.Sundararajan
43.K.Jeyaraman
44.M.Jeyaraj
45.T.Chandrasekar
46.S.Seetharaman
47.M.Mayandi
48.M.Kajamaideen
49.S.Marichamy
50.T.Jeyaraman
51.A.Sarangapani
52.A.Ramachandran
53.R.Krishnasamy .. Respondents

All are represented by Mr.Velu,
General Secretary, Tamil Nadu
Co-operative Retired Employees
Federation, 149, Pandian Street,
Alwar Thirunagar, Chennai-87.

PRAYER

Writ Petition filed under
Article 226
of the Constitution of India,
praying to issue a Writ of Certiorari, calling for the records relating to the
common order passed by the first respondent in P.G.Nos.177/2002 to 228/2002,
dated 22.04.2009, quash the same.

!For petitioner ... Mr.D.Shanmugaraja Sethupathi
^For 1st respondent ... Mr.S.Kumar,
Addl. Government Pleader
For respondents ... Mr.V.Illanchezian
2 to 53

:ORDER

Challenge in this writ petition is to a common order, dated 22.04.2009,
passed by the Appellate Authority under the
Payment of Gratuity Act
(The Joint
Commissioner of Labour), Madurai, directing the petitioner Bank to pay the
arrears of gratuity payable to the respondents 2 to 53.

2.The Special Officer/Joint Registrar of the Virudhunagar District Central
Co-operative Bank Ltd., Virudhungar, the petitioner herein has submitted that
Virudhunagar District Central Co-operative Bank is incorporated under the
Tamil
Nadu Co-operative Societies Act
and the Rules made thereunder, and that the Bank
is having registered by-laws and special by-laws, in respect of the service
conditions of the employees, in accordance with the provisions of the
Tamil Nadu
Co-operative Societies Act
.

3. According to the petitioner bank, respondents 2 to 53, who were the
employees of the petitioner Bank and retired from service, on attaining the age
of superannuation on various dates and they have received the entire gratuity,
due to them, as per the scheme viz., Group Gratuity (Cash Accumulation) Scheme,
which is linked with Life Insurance Corporation of India.

4. It is the case of the petitioner that the respondents 2 to 53 filed an
application before the Assistant Commissioner of Labour, Madurai, the first
respondent herein, claiming that they are entitled to receive further amount of
gratuity, notwithstanding the claim made already, as per the settlement, dated
05.03.1997, arrived at under
Section 12(3)
of the Industrial Disputes Act, which
according to them, provides for more benefit than the Act.

5. As per
Section 4(A)
of the Payment of Gratuity Act, the petitioner Bank
had framed a scheme viz., Group Gratuity Scheme linked with Life Insurance
Corporation of India. It is submitted that as per the said scheme, an employee
is entitled to get 15 days wages for every completed year of service, as
gratuity, subject to a maximum of the amount, equaling to 20 months salary. The
abovesaid term emanated from the scheme in respect of payment of gratuity has
been included in the settlement, dated 05.03.1997, arrived at, between the Bank
and various Employees Unions, in accordance with
Section 12(3)
of the Industrial
Disputes Act. Further the above term of the settlement also says that for the
purpose of calculation of Gratuity, 26 days would be reckoned, as a month, not
only for arriving at the pay, but also for calculation for the length of
service.

6. It is the further case of the petitioner Bank that the respondents 2 to
53 have filed applications before the Controlling Authority, viz., the first
respondent herein, claiming difference of gratuity, relying on the above terms
stated in the settlement. According to the petitioner Bank, the respondents 2
to 53 were misconstrued the term of the settlement, as if every 26 days would
form a month and as such, the calculation of length of service would be long
year than the actual working years and that if such method is adopted, then a
year with 365 days would have 14 months and the same would lead to absurdity.

7. The petitioner Bank has further stated that the Supreme Court in
Digvijai Woolen Mills Case reported in 1980(4) SCC 106 has held that in any
factory, an employee never works for all the 30 days in a month, and he gets 4
Sundays in a month and that though a month is understood to mean 30 days, but
the manner of calculating gratuity under the Act to the employee who works for
26 days, should be on the basis for what he gets for 26 working days.
Reiterating the same view, the Hon'ble Apex Court in Jeewanlal Ltd. case
reported in 1984 (4) SCC 356 has held that the "rate of fifteen days wages' of
an employee mentioned in
Section 4(2)
has to be calculated by ascertaining his
daily wages by dividing the monthly wages by 26 and multiplying it by 15.

8. According to the petitioner Bank, subsequent to the above judgments of
the Hon'ble Apex Court, an amendment was brought about in
Section 4
of the
Payment of Gratuity Act, inserting an explanation that "in the case of a monthly
rated employee, the 15 days wages shall be calculated by dividing the monthly
rate of wages last drawn by him by dividing 26 and multiplying the quotient by
15, and therefore, the above term of settlement dated 05.03.1997 has been
incorporated in conformity with the explanation inserted in
Section 4
of the
Payment of Gratuity Act.

9. According to the petitioner Bank, vide Letter No.8571/CC1/98-10, dated
20.11.2001, the Government have issued an amendment deleting the entire term of
the particular settlement and consequently, after issuing notice under
Section
9(A)
of the Industrial Disputes Act, the Special Officer of the petitioner Bank
has passed an order vide R.C.No.1386/200-2001/E.1, dated 18.09.2002, confirming
to the change made in the settlement. When the above order of the Special
Officer was challenged by the Employees Union before this Court in W.P.No.40604
of 2002, this Court, vide order dated 25.07.2008, dismissed the same holding
that the above Government Letter and consequential order of the Special Officer
is in conformity with law. Hence, as on date, the excess amount claimed by the
employee, relying on the relevant term of the settlement, cannot be granted.

10. It is further stated by the petitioner Bank that as regards the
dispute between the petitioner Bank and the respondents 2 to 53 is pertaining
to the gratuity payable under the group gratuity scheme linked with Life
Insurance Corporation of India, as mentioned in the settlement under
Section
12(3)
of the Industrial Disputes Act, the first respondent has no jurisdiction
to entertain the dispute under
Section 7(4)
of the Payment of Gratuity Act.
According to the petitioner Bank, the principle applied by the Hon'ble Apex
Court in
State of Punjab Vs. Labour
Court, Jullunder, reported in 1980(1) SCC 4
that any claim under the Act only could be made before the Authority prescribed
by the Act and
the said decision
is equally applicable to the facts of this
case, as in this case also, the claim under the settlement, which did not come
under the purview of the Act, has been claimed before the Authority under the
Act.

11. According to the petitioner Bank, the first respondent, authority
under the
Payment of Gratuity Act
, has no jurisdiction to decide the disputes,
on the interpretation of 12(3) settlement, in view of
Section 36(A)
of the
Industrial Disputes Act, which contemplates that if any difficulty or doubt
arises as to interpretation any provision or any award or settlement, the
appropriate Government shall refer the question to such Labour Court, Tribunal
or National Industrial Tribunal, as it may think fit. For the aforesaid
reasons, the petitioner bank has sought for quashment of the common order, dated
22.04.2009.

12. Denying all the contentions raised in the affidavit filed in support
of the writ petition and praying to vacate the interim stay granted by this
Court on 16.06.2009, the General Secretary of the Tamil Nadu Co-operative Bank's
Retired Employees Federation, Chennai, representing the respondents 2 to 53, in
the counter affidavit filed in support of the vacate stay petition has stated
that this writ petition is not maintainable, either in law or on facts, as there
is an alternative remedy under
Section 7(7)
of the Payment of Gratuity Act and
that the petitioner Bank, with the intention to evade the deposit of the amount
ordered by the controlling authority, has approached this Court with the writ
petition.

13. It is further stated that as per Clause 17 of the Settlement under

Section 12(3)
of the Industrial Disputes Act, dated 05.03.1997, all the
respondents 2 to 53 have filed separate petitions for payment of gratuity,
before the controlling authority with a delay and that the same was allowed. He
has further submitted that though the petitioner Bank has challenged the said
order before the appellate authority, the same was confirmed and subsequently
this Court, in W.P.No.1712 of 2004, has also confirmed the said order.
Thereafter, the petitioner bank has filed W.A.No.457 of 2008 and vide order
dated 22.09.2008, the appeal was disposed of by the Division Bench of this
Court. According to the respondents 2 to 53, the term Gratuity has been
mentioned as a separate clause, in the settlement dated 05.03.1997 under
Section
12(3)
of the Industrial Disputes Act, for arriving payment of gratuity, which is
applicable to the respondents 2 to 53. It is further submitted that the
calculation of one day salary, has to be taken from the last pay drawn divided
by 26.

14. According to the respondents 2 to 53, as per the judgment of the Apex
Court, a settlement arrived between the parties under
Section 12(3)
of the
Industrial Dispute Acts, has to be replaced only by way of another settlement
and not by a letter from the Government. It is further stated by the
respondents 2 to 53 that though the writ petition filed by the respondents 2 to
53, challenging the order of cancellation of term of settlement, has been
disposed by the Principal Bench of this Court, vide order dated 25.07.2008, the
appeal filed against that order in W.A.No.1686 of 2009 is still pending.
According to the respondents 2 to 53, the controlling authority had not at all
made any interpretation of the term "settlement" under
Section 12(3)
of the
Industrial Disputes Act and that therefore, the Government or the Registrar of
Co-operative Societies or the Management have no authority to cancel or modify
or alter the 12(3) Settlement, unilaterally, and any alteration or modification
or cancellation must be done only by a subsequent 12(3) Settlement. For the
abovesaid reasons, the respondents 2 to 53, prayed to vacate the stay granted in
M.P.(MD).No.1 of 2009 in W.P.(MD).No.9327 of 2009, dated 16.09.2009 and
consequently, dismiss the writ petition.

15. Heard the learned counsel for the parties and perused the materials
available on record.

16. Though several contentions have been raised on merits, for and against
the impugned order, this Court deems it fit to address the preliminary issue,
raised in this writ petition, as to whether the Assistant Commissioner of
Labour, Madurai, has jurisdiction to entertain the dispute, under the Payment of
Gratuity Act The factual dispute as could be deduced from the pleadings is
whether the computation of the period for calculating gratuity should be on the
basis of wages for 26 days in a month, though the number of days in a month is

30. Whether such dispute attracts the provision under
Section 7 (4)
of the
Payment of Gratuity Act, empowering the controlling authority to adjudicate the
dispute, and whether the terms of the settlement under
Section 12(3)
of the
Industrial Disputes Act, can be subject matter of a dispute, falling under

Section 7(4)
of the Payment of Gratuity Act.

17. Admittedly, the dispute between the Management of Virudhunagar
District Central Bank Limited and its employees, pertains to entitlement and
computation of gratuity, payable under the Group Gratuity linked with the Life
Insurance Corporation of India, as per the Settlement under
Section 12(3)
of the
Industrial Disputes Act. In order to address the issue of jurisdiction, let me
consider the decisions relied on by the learned counsel appearing for both
sides, which are as follows:

(
a) Gujarat State Export Corporation Ltd., Vs. Madhusudan L.Khandwala
,
reported in 2004(II) LLJ 389;

(
b) Gujarat State Road Transport Corporation Vs. Chandrakant Tapubhai
Vyas
, reported in 2004(III) LLJ 86;

(
c) Ayyappan Vs. Joint Labour Commissioner
, reported in 1999 (II) LLJ
1351;

(
d) Eastern Coal Fields Ltd. Vs. Regional Labour Commissioner (Central)
and others
, reported in 1982(II) LLJ 324;

(
e) Sivaraman Nair Vs. The Plantation Corporation of Kerala Ltd.
, reported
in 2005(1) KLT page 1;

(
f) Thomas Kurian Vs. Idukki District Co-operative Bank
, reported in
(2003 (99) FLR 154);

(
g) Allahabad Bank and others Vs. All India Allahabad Bank Retired
Employees Association
, reported in (2010 (2) SCC 44);

(
h) Shri Digvijay Woollen Mills Ltd., Vs. Shri Mahendra Prataprai Buch
,
reported in [(1980) 4 SCC 106];

(
i)Jeewanlal Limited and others Vs. Appellate Authority
under the
Payment
of Gratuity Act
and others, reported in [(1984) 4 SCC 356];

(j) Beed District Central Cooperation Bank Limited Vs. State of
Maharashtra and others, reported in [(2006) 8 SCC 514];

(k) Executive Engineer and another Vs. M/s.Sri Seetaram Rice Mill,
reported in [2011 (12) SCALE 243].

18.
In
Gujarat State Export Corporation Limited Vs. Madhusudan
L.Khandwala and another
, reported in 2004 (II) LLJ 389, the High Court of
Gujarat has considered a case where a Company Secretary and Senior Manager, who
had put in 28 years of service, sought for enforcement of a private scheme of
gratuity and for a direction, for payment of the differential amount, contending
inter alia that, in the private scheme, he was entitled to higher gratuity
amount. The controlling authority has accepted the contention. The corporation
filed an appeal, which has been dismissed. The decision has been challenged in
the High Court, wherein the learned counsel for the Corporation has mainly
contended that the controlling authority has no jurisdiction to adjudicate the
claim of the respondent, as the same was not flowing from the provisions of the
Act. On merits, it was contended that an employee cannot insist for payment of
gratuity under the private scheme, wherein the maximum limit was only 20 months.
On the aspect of jurisdiction, it has been contended that the controlling
authority under the
Payment of Gratuity Act
has no jurisdiction.

Reliance has
also been placed on the decision of the Kerala High Court in the matter of

Ayyappan Vs. Joint Labour Commissioner
, reported in 1999 (II) LLJ 1351 (Ker).
Per contra, the learned counsel for the Company Secretary and Manager has
contended that the controlling authority has the jurisdiction and made
submissions on merits. After considering the rival submissions, with reference
to the provisions Clauses (a) & (b) of the Sub
Section 4
of
Section 7
of the
Payment of Gratuity Act, which states that (a) if there is any dispute as
to the amount of gratuity payable to an employee under this Act or as to the
admissibility of any claim of or in relation to an employee for payment of
gratuity, or as to the person entitled to receive the gratuity, the employer
shall deposit with the controlling authority such amount, as he admits to be
payable by him as gratuity and (b) Where there is a dispute with regard to any
matter or matters specified in clause (a) the employer or employee or any other
person raising dispute may make an application to the controlling authority for
deciding the dispute, at paragraph No.12, the Gujarat High Court has held as
follows;

"12. Mr.Master, the learned advocate placed reliance on the following
decisions to contend that the Controlling Authority can entertain a claim on the
basis of settlements.

(i) Ramjilal Chimanlal Sharma Vs. M/s Elphinstone Spinning and Weaving Mill Co.
Ltd. and another, reported in 1984 LAB IC 1703 (Bombay High Court);

(
ii) Dholpur Kraya Vikraya Sahkari Samiti Ltd. Vs. Controller
under
Payment of
Gratuity Act
, Bharatpur and others, reported in 2000 (I) LLJ 663 (Rajasthan High
Court);

(
iii) Eastern Coal Fields Ltd. Vs. Regional Labour Commissioner (Central) and
others
, reported in 1982 (44) FLR 365 (Calcutta High Court);

(iv) Decision of the Honourable the Apex Court in the matter between
State
Government Pensioners' Association and others Vs. State of Andhra Pradesh
,
reported in (1986) 3 SCC 501;

These decisions have no application to the facts of the present case,
hence the same are not discussed in detail. As against that the decision in case
of
Ayyappan
(supra) of Kerala High Court is referred and relied upon by Mr.Patel
wherein it is held that the Controlling Authority can order payment of gratuity
only in terms of the Act. No decision of the Honourable the Apex Court on the
point is cited. In considered opinion of this Court, the benefits, to the extent
the same are flowing from the provisions of the
Gratuity Act
, the Authority
under the Act has power to adjudicate for the same. But if benefits sought for
are arising from a settlement or private scheme, the same cannot be agitated
before the Authority under the Act."

19.
In
Gujarat State Road Transport Corporation Vs. Chandrakant Tabubhai
Vyas
, reported in 2004 (III), LLJ 86, the question for consideration, was as to
whether any statutory liability was attracted for payment of gratuity, as per

Section 4(2)
of the Payment of Gratuity Act, 1972 and on account of subsequent
revision of pay scale, after the date of retirement amount or not. The second
question, which incidentally arose for consideration of the Gujarat High Court,
was what shall be the consequential order, in view of the subsequent change in
circumstances, from the date of filing of the application before the controlling
authority under the Act, till the pendency of the petition, more particularly,
when the same related to retiral benefits of the employees. After considering
the scope and ambit of
Section 4(2)
of the Payment of Gratuity Act, which reads
that for every completed year of service or part thereof in excess of six
months, the employer shall pay gratuity to an employee at the rate of 15 days'
wages, based on the rate of wages last drawn by the employee concerned and sub

Section 4
of
Section 7
of the Act which reads that if there is any dispute as to
the amount of gratuity payable to an employee under this Act or as to
admissibility of any claim under the Act, the employer shall deposit with the
controlling authority such amount, as he admits to be payable by him as gratuity
and also, after considering clause (c) of sub
Section 4
of
Section 7
of the Act
which states that the controlling authority, shall after due enquiry and after
giving the parties to the dispute a reasonable opportunity of being heard,
determined the matter or matters in dispute, at paragraph No.6 the Gujarat High
Court observed that ;

"6.The employees concerned in the present case asserted their right for
admissibility of the payment of gratuity is upon revision of pay-scale whereas
the employer-petitioner has denied the liability on the question of not
providing by way of settlement expressly for payment of gratuity. As such, on
a conjoint reading of
Sections 4
and
it appears that the jurisdiction of the
controlling authority would be attracted only if there is statutory liability to
pay the amount of gratuity, and there is non-payment by the employer concerned.
Further, even if the power under
Section 7
are construed for entertaining the
claim of gratuity in purported exercise of the right to receive gratuity, then
also the controlling authority, while exercising the admissibility of the claim
will have to decide as to whether such claim is legally admissible or not. At
the time when such aspect is to be considered, the authority shall be guided by
the provision of the Act for accrual of liability to pay the gratuity and for
accrual of the right to receive the amount of gratuity."

20.
In
Ayyappan Vs. Joint Labour Commissioner
, reported in 1999 (II) LLJ
1351 (Kerala), considered in
Gujarat State Export Corporation Limited
Case [2004
(2) LLJ 389], the dispute was whether the controlling authority was right in
ordering gratuity payable to the applicant therein, who retired from service and
the question that came up for consideration was, whether there could be a
classification between those who retired from service or resigned from service.
After considering the rival submissions, the Kerala High Court in paragraph
Nos.3 & 4 held as follows;

"3. A reading of the entire provisions of
Section 4
makes it clear that
gratuity payable under the Act is limited to 15 days wages for every completed
year and an employee can claim gratuity from the employer if he is entitled for
better terms in accordance with any other better provisions of conditions of
service. Therefore, the gratuity in terms of Clause 9 of Ext. Government order
providing for one month's wages for every completed year is not the gratuity
payable under the Act.

4.
Section 7
of the Act enables an employee to approach the controlling
authority for determination of the amount towards gratuity.
Section 7
can be
invoked only by "a person who is eligible for payment of gratuity under this
Act." The gratuity claimed by the petitioner is not under this Act but under
Ext. P2.
Under the Act
the petitioner is entitled only to the rate as mentioned
in Sub-
section 2
of
Section 4
The amount granted in Ext. P4 is equal to that
rate. Therefore, limiting of the gratuity payable to the petitioner under the
Act to 15 days' wages for every completed year as contained in Ext. P4 is
justified though on a different ground. On that basis, the petitioner cannot
challenge the quantum of gratuity directed to be paid in Ext. P4. Therefore, Ext
P4 to that extent alone is upheld. But the finding that Ext. P2 is not
applicable to the petitioner is set aside and left open."

21.
In
Sivaraman Nair Vs. The Plantation Corporation of Kerala Ltd.
,
reported in 2005(1) KLT page 1, the employees of the Plantation Corporation of
Kerala Limited, a Government of Kerala undertaking, on their retirement were
paid gratuity by the employer. Believing that they were entitled to a better
deal, the employees approached the controlling authority under the
Payment of
Gratuity Act
. According to them, full and eligible gratuity payable to them was
held back and that therefore, they sought for a direction. They also claimed
that the rate should be maintained, as one month wages for every completed years
of service, on the ceiling, as prescribed under the Act.
Under the Payment of
Gratuity Act
, the rate is 15 days wages per year of service, with a maximum
limit of Rs.3.5 lakhs. In the said case, the Government have issued orders, as
early as in 1989 to the effect that the employees were entitled to get gratuity,
for every completed years of service and at that time, an upper limit of
Rs.50,000/- had been fixed, as the maximum gratuity payable, by the Government
Order. It was latter revised by the Government in G.O.Ms.No.50/96/AD, dated
03.02.1996, whereby, the maximum limit was increased to Rs.1 lakh and after this
revision, there was no subsequent Government Order, enhancing the upper limit.

22.The employer
in
the above case
paid the maximum limit, as per the
Government Order and on this aspect, the employees had approached the
Controlling Authority, with a claim that full entitlement has not been extended
to them. Their claim that one month's salary for every completed year of
service and the upper limit of Rs.3.5 lakhs was not accepted by the Controlling
Authority. But the authority directed that the petitioners would be entitled to
gratuity payable under the
Payment of Gratuity Act
, i.e., at the rate of 15 days
salary per year for every completed year of service as it would have been more
advantageous. The Controlling Authority rejected the contention of the
petitioner that the rate has to be maintained, at one month salary, for every
completed years of service. Though the authority had gone into the merits of
the claim, the said authority also held that, it has no jurisdiction to
pronounce upon a claim, as to whether it falls within and not, in accordance
with the parameters, prescribed under the Act. The Controlling Authority also
maintained that he had no jurisdiction to travel beyond the statute and limits,
nor was enjoying powers of original jurisdiction. The appellate authority also
confirmed the orders, which resulted in the challenge before the High Court.

After considering the decisions made in Ramilal C.Sharma Vs. Elphinstone
Spinning and Weaving Mill Co. Ltd., reported in 1984 Lab.I.C. 1703 and State of
Punjab Vs. Labour Court, Jullunder reported in 1981 (I) LLJ 354;
Eastern Coal
Fields Ltd., Vs. Regional Labour Commissioner (Central), Calcutta and others

reported in 1982 (II) LLJ 324; and
Ayyappan Vs. Joint Labour Commissioner
(1298
(2) KLT 399), the Kerala High Court at paragraph Nos.10, 11, 13 & 14 held as
follows;

"10.
The Gratuity Act
prescribes that the payment is. of general
application. It may be permissible for the parties, namely, the employees and
employers to agree upon any terms of payment of gratuity, different from the one
prescribed under the Act. Only restriction is that such agreement should not
result in a payment of gratuity which is lesser than what is provided by the
Act. There is nothing in the Act or
Section 4
to indicate that in respect of
calculation, the rates prescribed by the Government orders could be taken notice
of, and for the purpose of ceiling limit, the prescription under the
Payment of
Gratuity Act
is adoptable. Option is for the workmen to claim benefits as per
the condition of service or in the alternate, request for applying the statutory
terms. The legal position as above has been correctly understood by the
Authorities when they had examined the claims presented by the workmen.

11. Reliance had been placed by the petitioners on a decision of the
Bombay High Court, Ramilal C. Sharma v. Elphinstone Spinning and Weaving Mill
Co. Ltd. (1984 Lab.I.C. 1703). The Court had observed that claim for granting
gratuity on the basis of a settlement also could be entertained under the Act.
The objection as above had been overruled by the Court, holding that being a
beneficial piece of legislation, it should be construed in a manner which would
advance the cause of justice.
The Court, of course, noticed that a claim for
gratuity under the Act was to be exclusively tried by the Controlling Authority
under the Act, as laid down by the Supreme Court in
State of Punjab v. Labour

Court, Jullunder (1981 (I) LLJ 354). In the case before it, gratuity was being
claimed on the basis of a settlement, and the Controlling Authority had
jurisdiction to take cognisance of the claim, as it pertained to gratuity, as
what was brought about by the settlement was only to vary the rate of amount.

The Court had also adverted to a judgment of Calcutta High Court in
Eastern Coal
Fields Ltd. v. Regional Labour Commissioner (Central), Calcutta and Ors.
(1982
(II) LLJ 324). Copy of two judgments have been produced as Exts.P3 and P4
respectively.

13. Therefore, the Controlling Authority could have determined a claim as
exclusively coming under the Act alone. Of course, a claim for gratuity other
than that coming within the purview of the Act could have been adjudicated under

Section 33-C(2)
of the Industrial Disputes Act, by a Labour Court. In such a
case also, possibly the adjudication could have been only as prescribed by the
settlement, and simultaneously taking notice of the ceiling as it always was to
operate as a package deal. In short, the petitioners had to face restrictions at
one point or another, viz., at the rate prescribed by the Government Orders, and
with a ceiling prescribed by the order, or purely under the Act. The claims as
presented therefore were ambitious, but without legal backing.

14. I do not think that the Controlling Authority or Appellate Authority
had committed any error in comprehending the issue. The Original Petitions are
dismissed."

23.
In
Thomas Kurian Vs. Idukki District Co-operative Bank Limited
,
reported in 2003 (199) FLR 154, the petitioner therein, a retired General
Manager of Idukki District Co-operative Bank Limited, has filed an original
petition for quashing Ex.P8, arbitration proceedings, before the arbitrator and
also prayed for a declaration to declare, that the question regarding the
gratuity has to be decided by the fifth respondent therein, the controlling
authority constituted under the
Payment of Gratuity Act, 1972
. The petitioner
therein has contended that he was eligible for an amount of Rs.4,92,692/-,
whereas, the Bank issued a notice to him, that an excess amount of Rs.77,000/-
has been disbursed to the petitioner towards gratuity and that the said amount
was liable to be returned, with interest of 18%. The Bank also filed Ex.P8,
arbitration case before the arbitrator for recovery of the alleged excess
amount. The petitioner has filed Ex.P12, an application before the Controlling
Authority, claiming the balance amount, due towards gratuity. He has also filed
an original petition for quashing Ex.P8, proceedings pending before the
arbitrator and for a declaration that the controlling authority constituted
under the
Gratuity Act
alone is competent to decide the dispute regarding the
quantum of gratuity and not the Arbitrator. After considering the rival
submissions, at para 6 of the judgment, the Kerala High Court held that the
Controlling Authority has no jurisdiction.

"6. Learned counsel for the petitioner submitted that in view of the
provision in Clause 21(A) "For this purpose the
Payment of Gratuity Act (Central
Act
) or this provision, whichever is beneficial will be applicable", the
petitioner would be entitled to the amount of gratuity calculated in accordance
with the above provision in the service regulation. But by exhibit P-1 circular
issued by the Registrar of Co-operative Societies the gratuity had been limited
to the amount payable in accordance with the provisions of the
Gratuity Act
. In
view of exhibit P-1 Circular No. 25/99, dated June 22, 1999, an employee would
be entitled to claim gratuity payable only in accordance with the provisions of
the
Gratuity Act
and he was not entitled to any amount in excess of the same. As
the amount paid to the petitioner towards gratuity was in excess of the amount
fixed under Sub-section (3) of
Section 4
of the Act, the audit department
objected to the excess payment and in pursuance of the same, exhibit P-4 notice
was issued to the petitioner for refund of the excess amount. The petitioner
filed objections contending that he was entitled to furthermore amount in view
of the provisions in the revised service regulations. As the petitioner was not
ready to repay the excess amount collected by him, the bank filed arbitration
proceedings before the arbitrator and thereafter the petitioner filed exhibit P-

12 application before the Controlling Authority constituted under
Section 3
of
the Gratuity Act claiming further amount. Learned counsel for the first
respondent submitted that the maximum amount payable under Sub-section (3) of

Section 4
of the Gratuity Act is Rs. 3.5 lakhs and the bank is not disputing the
petitioner's claim for Rs. 3.5 lakhs. The Controlling Authority constituted
under the
Gratuity Act
can consider the claim of an employee in accordance with
the provisions of the
Gratuity Act
and can sanction me maximum amount or Rs. 3.5
lakhs prescribed under Sub-section (3). In view of
Section 5
of the Act, the
Controlling Authority can allow in excess of the maximum prescribed under Sub-
section (3), if there, was any provision in the bye-law or any agreement with
the employer entitling for higher amount. But in the present case, by exhibit P-
1 circular, the gratuity payable to an employee was limited to the amount
payable under the
Gratuity Act
. The Controlling Authority constituted under the

Gratuity Act
is incompetent to consider the legality or propriety of exhibit P-1
circular as he does not have any authority or jurisdiction to consider the same.
When the right to get the maximum amount of gratuity under the
Gratuity Act
is
not disputed by the bank, the Controlling Authority has no jurisdiction in
adjudicating the dispute regarding the excess amount paid to the employee. As
the dispute is relating to the payment of an amount in excess of the amount
prescribed under Sub-section (3) of
Section 4
of the Gratuity Act and that being
a dispute between the employer and employee, it has to be adjudicated by the
arbitrator under
Section 69
of the Co-operative Societies Act.
The Co-operative
Societies Act
envisages a dispute between the employer and the former employee
also to be decided by arbitration. Hence, exhibit P-8 proceedings initiated by
the bank before the arbitrator is in accordance with law and has to be proceeded
with. In the present case, the Controlling Authority cannot have any
jurisdiction in the matter, as the dispute relates to the claim regarding the
excess amount paid which is beyond the purview of the
Gratuity Act
. Hence, the
reliefs prayed for in this original petition cannot be allowed."

Ultimately, in the above reported case, the Kerala High Court held that
the arbitration pending before the Arbitrator shall be proceeded with, whereas,
the proceedings of the controller shall be dropped.

24.
In a recent decision of the Apex Court, in
Allahabad Bank and others
Vs. All India Allahabad Bank Retired Employees Association
(2010(2) SCC 44) =
(2010) 2 SCC 44, one of the issues considered by the Supreme Court was, whether
the controlling authority has jurisdiction under the Act to deal with any issue,
under Sub
Section 5
of
Section 4
and as to whether the terms of gratuity
payable under any award or agreement or contract was more beneficial to
employees then one provided for under payment of
Gratuity Act
.

After considering
the statutory provisions and the decisions of the Supreme Court in
Som Prakash
Rekhi Vs. Union of India
, reported in (1981) 1 SCC 449;
Sudhir Chandra Sarkar
Vs. TATA Iron and Steel Co. Ltd.
, reported in (1984) 3 SCC 369;
Union of India
Vs. All India Services Pensioners' Association and another
, reported in (1988) 2
SCC 580; DTC retired
Employees' Association & others Vs. Delhi Transport
Corporation and others
, reported in (2001)6 SCC 61; Beed District Central
Cooperative Bank Limited Vs. State of Maharashta and others, reported in (2006)
8 SCC 514;
Municipal Corporation Delhi, Vs. Dharam Prakash Sharma and others

reported in (1998) 7 SCC 221;
Workman of Metro Theatre, Bombay Vs. Metro Theatre
Limited, Bombay
, reported in (2003) 2 SCC 721;
Bank of India and others Vs. P.O.
Swarnakar and others
, reported in (2003) 2 SCC 721;
Hindustan Lever and another
Vs. State of Maharashtra and another
, reported in (2004) 9 SCC 43810 : (1996) 2
SCR 353, at paragraph Nos.41 to 46 the Hon'ble Supreme Court held as follows;

"41.
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.

42.
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.

43.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.

44.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 Court's 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.

45.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.

46. 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."

25.
In an unreported common order in W.P.(MD).Nos.11896 to 11898 of 2008,
dated 16.03.2012, (Venugopal and two others Vs. The Joint Commissioner of
Labour, Madurai and the Management of Thanjavur Sarvodaya Sangham, Thanjavur),
three writ petitions have been filed by three employees of the second respondent
Management therein, challenging the order passed by the Joint Commissioner of
Labour, the Appellate Authority under the
Payment of Gratuity Act
, made in
P.G.A.I.A.Nos.16 to 18 of 2006, by which the said authority allowed the appeals
filed by the second respondent management and set aside the orders passed by the
Controlling Authority viz., the Assistant Commissioner of Labour, in
P.G.
Case
Nos.18 to 20 of 2004. In the above cases, the Management was having its own
scheme for voluntary retirement and according to the scheme, those who retired
from service can avail the benefit of gratuity for 45 months of salary. The
scheme was modified on 01.05.2002 in its 92nd General Body Meeting held on
11.04.2002 and that the petitioners therein submitted their applications for
seeking voluntary retirement and that they were relieved from service on
30.04.2002. They contended that as per resolution No.3(2), they were entitled
to gratuity of 45 months of salary, along with other retirement benefits, but
paid only a limited extent. In sum and substance, the grievance of the
petitioners therein was that full gratuity agreed to, at the general body
meeting was not paid. Hence, applications have been made before the controlling
authority, under the
Payment of Gratuity Act
. The second respondent Management
inter alia has contended that the employees applied for voluntary retirement of
service from 17.04.2002, 25.04.2002 & 27.04.2002, respectively and that they
were paid part of the gratuity amount and due to paucity of funds, the entire
amount could not be paid and that the petitioners herein agreed to receive the
balance, as and when the financial position of the Sangam improved.

26.In
the above case
, the Controlling Authority by its order, dated
03.04.2006, allowed the applications, holding that the general body resolution
made in the 92nd meeting was fully applicable to the petitioners therein and
that therefore, they are entitled for 45 months salary, along with interest, as
gratuity. Being aggrieved by the same, the Management has filed an appeal before
the Joint Commissioner of Labour, the appellate authority under the
Payment of
Gratuity Act
. Inter alia it has been contended that the Controlling Authority
under the
Gratuity Act
has no jurisdiction to enforce a private scheme framed
for voluntary retirement. It has been further contended that, since the
petitioners therein were already paid gratuity, the question of payment of
interest, on the unpaid amount does not arise. The appellate authority held
that the Controlling Officer has no jurisdiction to enforce any private scheme
of gratuity and in that view of the matter, set aside the order passed by the
controlling authority.

When a challenge to the said order of the appellate
Authority under the payment of
Gratuity Act
was made, in W.P.(MD).Nos.11896 to
11898 of 2008, the Hon'ble Mr.Justice Chandru, after considering the
Gujarat
State Export Corporation Ltd., Vs. Madhusudan L.Khandwala
, reported in
2004(II) LLJ 389 ;
Ayyappan Vs. Joint Commissioner
, reported in (1999) II LLJ
1351;
Eastern Coal Fields Ltd., Vs. Regional Labour Commissioner
, reported in
1982 II LLJ 324;
Gujarat State Road Transport Corporation Vs. Chandrakant
Tapubhai Vyas
, reported in 2004 (III) LLJ 86;
Thomas Kurian Vs. Idukki
District Co-operative Bank Limited and others
, reported in 2003 (99) FLR 154;
and
Allahabad Bank and another Vs. All India Allahabad Bank Retired Employees
Association
, reported in 2010 (2) SCC 44, held that no interference called for
in the order passed by the appellate authority, wherein, the said authority has
held that the controlling authority under the
Payment of Gratuity Act
has no
jurisdiction to enforce a private scheme of gratuity.

27.In an unreported decision made in W.A.No.675 of 2007, dated 26.10.2010,
(
Management, Madurai District Central Co-operative Bank Limited, Madurai Vs.
the Joint Commissioner of Labour, Madurai
and 5 others), the respondents
therein, were the employees of the Bank and on attaining the age of
superannuation the respondents 3 to 6 therein received gratuity, according to
the Group Gratuity (Cash Accumulation) Scheme. Stating that they were to be
paid gratuity, as per the
Payment of Gratuity Act
, the respondents 3 to 6 filed
applications before the controlling authority, claiming that the further amount
of gratuity has to be calculated, by ignoring the maximum of 20 months salary,
prescribed in the Group Gratuity Scheme. By a common order, dated 04.03.2004,
the controlling authority allowed the claim of the respondents 3 to 6 and
ordered payment of gratuity, as per the Act. The appeals filed by the Bank
before the Joint Commissioner of Labour, Madurai, appellate authority, were also
dismissed. Being aggrieved by the same, the Bank has filed a W.P.(MD).No.874 of
2006. The writ Court, while considering the dispute, held that so long as the
terms of
Section 12(3)
of the settlement is in existence, it can override, only
the contract providing for lesser benefits, as per
Section 14
of the Payment of
Gratuity Act and further held that therefore, the Bank having signed the
agreement, cannot resile from the terms of the settlement, as it deals with the
very same subject matter viz., gratuity and accordingly, dismissed the writ
petitions.

28. The Bank pursued the matter by filing a Writ Appeal (MD).No.675 of
2007 and inter alia contended that under
Section 7(4)
of the Payment of Gratuity
Act, if there was any dispute, as to the amount of gratuity payable under the
Act, it can only be decided by the controlling authority, but, when the dispute
between the appellant bank and the respondent 3 to 6 pertain to gratuity
payment, under Group Gratuity Scheme linked with Life Insurance Corporation of
India, as mentioned in the settlement under
Section 12(3)
of the Industrial
Disputes Act, such a dispute would not come under the purview of
Section 7(4)
of
the Payment of Gratuity Act. It was therefore, contended by the bank, that both
the controlling and the appellate authorities, under the
Payment of Gratuity Act

have no jurisdiction, to entertain such a dispute. It was also contended that
the controlling and appellate authorities have no jurisdiction to entertain such
a dispute. The contentions of the Bank, incorporated at paragraph Nos. 9 to 10
of the Judgment of the Division Bench, are extracted hereunder:

"9.Under
Section 7(4)
of the Act, if there is any dispute as to the amount
of gratuity payable to the employee under the Act or as to the admissibility of
any claim or in relation to an employee for payment of gratuity, or as to the
person entitled to receive the gratuity, Respondents 1 and 2 who are the
competent authority under the Act shall have jurisdiction.
In
the above
decision
[(2004) II LLJ 389], gratuity was payable on the basis of private
scheme and the factual matrix of the said case is entirely different from the
case on hand. The dispute is not mere interpretation of any provision of
settlement, but to see whether the employees can claim gratuity under
Payment of
Gratuity Act
or as per settlement. Therefore, it cannot be contended that
Respondents 1 and 2 did not have competency to entertain the claim.

10.There is Group Gratuity (Cash Accumulation) Scheme linked with Life
Insurance Corporation of India in the Appellant Bank. As per the scheme, an
employee is entitled to get 15 days wages as gratuity for every year of service,
subject to a maximum of the amount equivalent to 20 months salary. According to
Appellant Bank, since the gratuity amount was more beneficial to the employees
than the Act, in the settlement dated 17.02.1997 under
Section 12(3)
of the
Industrial Disputes Act, it was agreed to continue the Group Gratuity Scheme, So
the existing practice of payment of gratuity under Group Gratuity Scheme has
been continued as per the Settlement. in the subsequent
Section 12(3)

settlement dated 05.12.2003 also it has been reiterated that the existing
benefit of payment of gratuity as per the Group Gratuity Scheme would continue."

29. Similar to the issue in the present case, as to how the salary has to
be computed for the purpose of arriving at the gratuity, in the unreported
judgment in Writ Appeal No.675 of 2007, dated 26.10.2010, the salary, defined in
Clause 1 (xiv) of the Group Gratuity (Cash Accumulation) Scheme has been
extracted as follows;

"Clause 1(xiv): "Salary" shall mean gross salary of the member inclusive
of dearness allowance shall not include the commission, house rent allowance,
bonus, overtime or any emoluments a variable or contingent nature. In the case
of monthly rated employees a day's is to be calculated as 1/26th of the monthly
salary and in case of daily rated employees salary will be calculated as 26
times the daily wages."

However, the Division Bench did not go into the aspect of jurisdiction,
but decided the issue on merits, in favour of the bank.

30.The decision in
Beed District Central Co-operative Bank Vs. State of
Maharashtra & others
, reported in 2006(8) SCC 514, does not pertain to
jurisdiction. The decision in Executive Engineer and another Vs. M/s.Sri
Seetaram Rice Mill, reported in 2011 (12) SCALE 243, relied on by the learned
counsel for the petitioner, may not in strict sense, applicable to the facts of
this case.

31. Let me now consider, the decisions relied on by the learned counsel
for the respondents which are (
a) State of Punjab Vs. Labour
Court, Jullundur
and others, reported in 1981 (1) LLJ 354; (
b) Steel Authority of India Vs.
Regional Labour Commissioner (Central) & others
, reported in 1995 (1) LLJ 1007;

32.
In
State of Punjab Vs. Labour
Court, Jullundur and others, reported in
1981(1) LLJ 354, the contention raised by the Government as to the jurisdiction
of the controlling, has been answered at paragraph Nos.6 & 7, which are as
follows;

"6.The third contention raised by the appellant is that the employee
respondents were not entitled to apply under
section 33-C(2)
of the Industrial
Disputes Act, 1947 for payment of the gratuity, and should have, if at all,
applied under the provisions of the
Payment of Gratuity Act
. It is urged that
the
Payment of Gratuity Act
is a self-contained code incorporating all the
essential provisions relating to payment of gratuity which can be claimed under
that Act, and its provisions impliedly exclude recourse to any other statute for
that purpose. The contention has force and must be accepted. A careful perusal
of the relevant provisions of the
Payment of Gratuity Act
shows that Parliament
has enacted a closely knit scheme providing for payment of gratuity. A
controlling authority is appointed by the appropriate Government under section

3. and Parliament has made him responsible for the administration of the entire
Act. In what event gratuity will become payable and how it will be quantified
are detailed in
section 4
.
Section 7(1)
entitled a person eligible for payment
of gratuity to apply in that behalf to the employer. Under
section 7(2)
, the
employer is obliged, as soon as gratuity becomes payable and whether an
application has or has not been made for payment of gratuity, to determine the
amount of gratuity and inform the person to whom the gratuity is payable
specifying the amount of gratuity so determined. He is obliged, by virtue of the
same provision, to inform the controlling authority also, thus ensuring that the
controlling authority is seized at all times of information in regard to
gratuity as it becomes payable. If a dispute is raised in regard to the amount
of gratuity payable or as to the admissibility of any claim to gratuity, or as
to the person entitled to receive the gratuity,
section 7(4) (a)
requires the
employer to deposit with the controlling authority such amount as he admits to
be payable by him as gratuity. The controlling authority is empowered. under

section 7(4)(b)
, to enter upon an adjudication of the dispute, and after due
inquiry, and after giving the parties to the dispute a reasonable opportunity of
being heard, he is required to determine the amount of gratuity payable. In this
regard, the controlling authority has all the powers as are vested in a court
while trying a suit under
the Code of Civil Procedure
, 1908 in respect of
obtaining evidentiary material and the recording of evidence. The amount
deposited by the employer with the controlling authority as the admitted amount
of gratuity will be paid over by the controlling authority to the employee or
his nominee or heir.
Section 7(7)
provides an appeal against the order of the
controlling authority under
section 7(4)
to the appropriate Government or such
other authority as may be specified by the appropriate Government in that
behalf. The appropriate Government or the appellate authority is empowered under

section 7(8)
, after giving the parties to the appeal a reasonable opportunity of
being heard, to confirm, modify or reverse the decision of the controlling
authority. Where the amount of gratuity payable is not paid by the employer with
in the prescribed time, the controlling authority is required by
section 8
, on
application made to it by the aggrieved person, to issue a certificate for that
amount to the Collector. The Collector, thereupon, is empowered to recover the
amount of gratuity, together with compound interest thereon at the rate of nine
per cent per annum from the date of expiry of the prescribed time, as arrears of
land revenue, and pay the same to the person entitled thereto.

7.It is apparent that the
Payment of Gratuity Act
enacts a complete code
containing detailed provisions covering all the essential features of a scheme
for payment of gratuity. It creates the right to payment of gratuity, indicates
when the right will accrue, and lays down the principles for quantification of
the gratuity. It provides further for recovery of the amount, and contains an
especial provision that compound interest at nine per cent per annum will be
payable on delayed payment. For the enforcement of its provisions, the Act
provides for the appointment of a controlling authority, who is entrusted with
the task of administering the Act. The fulfillment of the rights and obligations
of the parties are made his responsibility, and he has been invested with an
amplitude of power for the full discharge of that responsibility. Any error
committed by him can be corrected in appeal by the appropriate Government or an
appellate authority particularly constituted under the Act."

33.In
the said judgment
, the contention was as to whether an application
filed under
Section 33(c)(2)
of the Industrial Disputes Act would lie before the
Labour Court, when the amount under the
Payment of Gratuity Act
was not paid and
at paragraph Nos.8 & 9 the Apex Court has held as follows;

"8.Upon all these considerations, the conclusion is inescapable that
Parliament intended that proceedings for payment of gratuity due under the

Payment of Gratuity Act
must be taken under that Act and not under any other.
That being so, it must be held that the applications filed by the employee
respondents under
section 33-C(2)
of the Industrial Disputes Act did not lie,
and the Labour Court had no jurisdiction to entertain and dispose of them. On
that ground, this appeal must succeed.

9.In the circumstances, it is not necessary to notice the further
submission on behalf of the appellant that where a serious dispute exists in
regard to the basis of a claim for payment of gratuity, no proceedings will lie
under
Section 33C(2)
of the Industrial Disputes Act."

34.
In
Steel Authority of India Vs. Regional Labour Commissioner (Central)
& others
, reported in 1995 (1) LLJ 1007, one of the contentions raised by the
parties was, whether the controlling authority has jurisdiction to entertain a
dispute regarding the payment of gratuity, if there are better terms of gratuity
under any award or agreement or contract with the employer. Dealing with the
issue, at para No.9, the Division Bench of the Orissa High Court held as
follows;

"9. The aforesaid being the gamut of operation of
Payment of Gratuity Act

which is a beneficial legislation, we cannot deny the opp party No. 3 his right
to claim gratuity and get it adjudicated before the Controlling Authority for
the period during which his wages came to be enhanced beyond the ceiling. It
would be against the spirit of the Act to drive him to seek this remedy in some
other forum. Since the entitlement of the employee- opposite party to get the
gratuity is conceded and the only dispute by the employer being that for the
subsequent period, another forum should be approached, we are of the considered
opinion that the equitable jurisdiction of this Court should not be invoked
under
Article 226
of the Constitution. It is well settled that where an inferior
tribunal passes a just and correct order, the High Court may not interfere with
the same, even if the order may be without jurisdiction. In the facts and
circumstances of the present case, it would be wholly unjust and inequitable to
require the employee to approach another forum for part of the service period to
receive the gratuity."

35. In W.P.Nos.11896 to 11898 of 2008, dated 16.03.2012, after considering
various judgments, including the judgment of the Apex Court in Allahabad Bank's
case, cited supra, this Court has held that the authority under the
Gratuity
Act
, has no jurisdiction to enforce the private scheme of gratuity. When there
is a judgment of this Court, rendered on the basis of an Apex Court judgment, it
is binding on the co-equal Bench and has to be followed.

36. In the light of the above, the writ petition is allowed, holding that
the controlling authority under the
Payment of Gratuity Act
, has no jurisdiction
to decide the dispute and accordingly, the common order passed by the first
respondent, appellate authority are set aside. Consequently, connected
M.P.(MD).No.1 of 2009 is dismissed and M.P.(MD).No.1 of 2010 is closed. No
costs.

gcg

To

1.The Assistant Commissioner of
Labour, Sundaram Theatre Road,
K.K.Nagar, Madurai-20.