RAJENDRA DEVA Vs. ADDL LABOUR COMMISSIONER

JUDGEMENT

(1.) The petitioner, Rajendra Deva was employer as a Chemist in M/s Hari fertilizers which was an a unit of M/s Orissa Cement Limited, Sahupuri, Varanasi, U.P. The service of the petitioner came to be terminated w.e.f. 16.5.1989 on account of closure of the said unit. The gratuity payable to the petitioner was not paid by the employer and therefore he stated his claim for gratuity under Section 7 of the payment of gratuity Act, 1972 (hereinafter referred to as the act). In his application the petitioner submitted that he had completed more than 20 years of service on 16.5.1989 and his last pay was Rs.1440/- per month. The amount of gratuity claimed by the petitioner was Rs.16,615.38 paise with interest. The application was contested inter alia on the ground that the last wages drawn by the petitioner was Rs.1400/- only beside Rs.38/- per month as H.R.A which was not to be included in the wages for the purpose of calculating the amount of gratuity. The petitioner thereafter filed replication stating therein that according to the pay structure prevalent I the establishment he had earned an increment @Rs.40/- per month w.e.f.. 1.4.1989 and therefore, his wages as on 16.5.1989 would be Rs.1440/-. The controlling Authority on consideration of the fact and circumstances of the case allowed the petitioner's application and held that he was entitled to payment of Rs.16,615.38 paise as gratuity and interest @ 10% under Section 7(3-A) of the Act. Aggrieved against the said order the respondent employer filed an appeal which was initially dismissed for want of prosecution vide order dated 22.12.1993 but the matter came to be remitted by this court to the appellate authority for decision on merit. The appellate authority thereafter allowed the appeal in apart and held that calculation of the amount of gratuity on the basis of imaginary increment of Rs.40/- in the monthly salary of Rs.1400/- was unjustified and the order passed by the controlling authority was modified accordingly. The instant petition has been filed praying for issuance of writ order or direction for the payment of modified gratuity amount with interest and compensation of Rs. 40,000/- for necessary delay and harassment in payment of gratuity.

(2.) I have heard the petitioner who appeared in person and Sri Piyush Bhargav, learned counsel appearing for the respondent no.2. Although the prayer clause of the writ petition is not happily worded but the petitioner in the course of his submission urged that the appellate authority was not justified in modifying the order passed by the Controlling authority inasmuch as the increment earned by the petitioner was rightly added in the monthly salary last drawn by him. Wages according to Section 2(s) of the act of 1972 means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are "payable " to him in cash and includes dearness allowance but does not include any bonus commission, house rent allowance overtime wages and any other allowance. The Controlling Authority in its order dated 10.12.1993 has clearly held that accordance to the pay scale prevalent in the establishment the petitioner had earned the increment of Rs.40/- as on 1.4.1989 and for the purpose of calculating the gratuity the increment so earned was to added in the salary actually paid to the petitioner inasmuch as was no order withholding payment of increment was brought on record. In the absence of any order withholding the annual increment, the Controlling Authority was, in my opinion justified calculating the amount of gratuity on Rs.1440/- as the wages last drawn by the petitioner, even the appellate in its order dated 30.12.1995 has held that the increment ought to have been given to the petitioner but since it was in fact not given and therefore, the appellate authority held that the Controlling Authority was not justified in calculating the amount of gratuity after adding the imaginary of Rs.40/- in the monthly salary. In my opinion the order passed by the appellate authority is unsustainable.

(3.) It was also submitted by the petitioner that the failure of the employer to discharge the obligation cast upon it by sub Section (2) rendered itself liable to pay interest on the amount of gratuity till the date on which the amount of gratuity was actually paid Sri Piyush Bhargava submitted that a sum of Rs.16,615/- was deposited by the petitioner with the appellate authority on 17.3.1993 and , therefore the employer was not liable to pay interest after 17.3.1993. The Submission made by the learned counsel cannot be countenanced. Sub Section (2) of section 7 of the act of 1972 provides that as soon as gratuity becomes payable the employer shall, whether an application referred to in sub-section (1) has been made or not