B YOGANANDAM Vs. DIVISIONAL CONTROLLER

JUDGEMENT

(1.) Petitioner has called in question the order of the Authority under the Payment of Gratuity Act 1972 dated 12.3.2009 produced at Annexure-A confirmed by the Appellate Authority dated 29.01.2011 produced at Annexure-B.

(2.) Brief facts leading to this case are: Petitioner retired as an Assistant Traffic Inspector on 30th September 2005. He had put in 37 years 3 months of service without any break. His basic salary was Rs.9,000/- and the Dearness Allowance was Rs.6,390/- and he was entitled for 10% of basic towards the price index. As such, the component for the purpose of determination of payment of gratuity was Rs.16,290/-. However, the Controlling Authority as well as the Appellate Authority erroneously only took the basic pay and number of years of service, accordingly, calculated the gratuity at Rs.3,31,500/-. Though the petitioner is entitled for additional gratuity of Rs.2,71,230/-, the Appellate Authority also concurred with the findings of the Gratuity Authority and committed an error in not noticing the settlement of 1981 and 1989.

(3.) Learned Counsel for the petitioner submitted that, under the settlement, the Corporation employee is entitled for calculation of the gratuity by taking into consideration one month's wages multiplied by number of years of service. The "wages" as defined under Section 2 clause (s) of the Payment of Gratuity Act is inclusive of the Dearness Allowance. The Apex Court in a judgment in the matter of Management of KSRTC Th. Chief Law Officer -vs- R.Krishna Reddy, 2007 1 LLJ 231 has held that, wages means inclusive of the Dearness Allowance and under the Corporation Scheme, 30 days' wages for each completed year of service has to be taken. Following the said judgment, this Court in W.P.Nos.828-849/2009 and connected matters dated 13th February 2009 has held that, addition of Dearness Allowance is different from merger of wages, merger means the inclusion of Dearness Allowance i.e., basic pay + Dearness Allowance for one month of every completed year of service for the purpose of calculating the gratuity. The said judgment was confirmed by the Division Bench in Writ Appeal No.1470/2009 and connected matter dated 9th March 2010 and submitted that, what is taken by the Controlling Authority as well as the Appellate Authority is only the basic pay and thereby has denied the legitimate difference of amount of gratuity by both the authority. He relied on the settlement dated 27th September 1981 clause (7) and also 1989 settlement and submitted that, in terms of the settlement by the Corporation, the gratuity has to be calculated.