PATNA ELECTRICITY SUPPLY CO LTD Vs. PANCHKAURI RAM

JUDGEMENT

(1.) By this application under Articles 226 and 227 of the Constitution the Patna Electric Supply Company Ltd., has prayed for quashing of Annexure 2 by which the Controlling Authority under the Payment of Gratuity Act, 1972 (Act No. 39 of 1972) (hereinafter referred as 'the Act' directed the petitioner to pay sum of Rs. 1940 in full and final settlement of the claim to gratuity claimed by respondent No. 1.

(2.) The short point which falls for consideration in this application is whether gratuity due to a workman under a Wage Board Award made prior to the enactment of the Payment of Gratuity Act, 1972 is gratuity under the Act. The application arises in the circumstances hereinafter state 1,

(3.) Respondent no. 1 Panchkauri Ram retired from the service of the Company on 21.7.1973 after completing 44 years 5 months and 21 days. At the time of retirement he was earning Rs. 190 as basic wages besides dearness allowance and variable dearness allowance of Rs. 131, thus making up a total of Rs. 321. The Company and its workmen were at that me governed by a gratuity scheme. In terms of the Scheme an employee with more than 15 years continuous service was to receive gratuity at the rate of one month's basic wages for every completed year of qualifying service. There was no maximum limit of the amount which could be earned. Before the respondent superannuated, the Payment, of Gratuity Act (Act 39 of 1972) came into being. In terms of the Act an employee is entitled to payment of gratuity at the rate of 15 days wages for every completed year of service. Under the Act, however, wages was defined as all emoluments including dearness allowance and not only basic wages. The Act also laid down the maximum gratuity which could be earned. In terms of the Act gratuity payable to an employee cannot exceed twenty months basic wages. It is manifest that so far as the respondent no. 1 is concerned, the scheme for payment of gratuity prior to the enactment of the Act was more favourable to the respondent than that under the Act. On. the retirement of the contesting respondent, the petitioner Company offered to the respondent Rs. 6,420 as gratuity. This sum was paid in accordance with the provisions of the Payment of Gratuity Act and not in terms of the Scheme of the Company. Respondent no. 1 received the sum offered to him under protest contending that he was entitled to Rs. 8,550 in terms of the Company's scheme. He, therefore, filed an application under section 7 (4) (a) of the Act before the Controlling Authority, repondent No". 2, appointed under section 3 of the Act. The said Authority after hearing the parties passed an award for Rs. 1,940 besides the sum of Rs. 6,420 paid already to respondent No. 1. The petitioner being aggrieved by order of the Controlling Authority contained in Annexure 2 has moved this Court by the present application for quashing it.