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Judgment
Ram Mohan Reddy, J.—Petitioner-Road Transport Corporation, aggrieved by the order dt. 22/2/2010-Annex. A. of the Controlling Authority, 2nd Respondent, unsuccessfully challenged the order in an appeal to the 1st Respondent, Appellate Authority, who by order dt. 28/12/2010-Annex. C, dismissed the appeal. Hence this writ petition.
The 3rd Respondent, an employee of the Petitioner-Corporation, retired on 31/5/2007, whence gratuity was paid by a calculation in terms of the Karnataka State Road Transport Corporation Servants Gratuity Regulations, for short ''Regulation''. 3rd Respondent, not being satisfied with the said calculation, filed an application under Rule 10 of the Payment of Gratuity (Central) Rules, 1972, along with an application to condone the delay up to 13/3/2008 for re-determination of difference in gratuity. That application was opposed by filing statement of objections of the Respondent, interalia contending that the period from 15/1/1971 to 18/11/1976, while the Petitioner was on badli rolls, was disentitled to be treated as active service for calculating gratuity. In addition, it was contended that Rs. 9,854/- was a statutory deduction by way of income tax on Rs. 3,61,463/ determined as Gratuity under the Regulations, which was remitted to the income tax authorities.
Parties entered trial, whence the Petitioner-Corporation produced documents before Court, more appropriately, a circular marked as Ex. R3 instructing officials preparing the service registers of employees to record in Part VI of the Register Ex. R4, particulars of the service rendered by the employee during the period when on badli rolls, provided he has completed 180/240 days of continuous service. The Controlling Authority, having regard to the material on record, held that in the absence of relevant material constituting substantial legal evidence of the fact that the 3rd Respondent had not discharged duties continuously during the period 15/1/1971 to 18/11/1976, though the Petitioner was the custodian of records, held that the said period ought to be reckoned as active service for determining gratuity. The Controlling Authority further declined to accept, the contention that there being no entries in Part-VI of the service register, Ex. R4, was not conclusive evidence of the fact that the 3rd Respondent did not discharge duties continuously during the period, when his name was found in the badli list. As regards the income tax deduction of Rs. 9,854/-, the same was disallowed and accordingly by the order dt. 22/2/2010-Annex. A, determined the difference of gratuity of Rs. 1,04,766/-, together with interest at 10% per annum from 1/7/2007 onwards, which was confirmed by the Appellate Authority. in its order dt. 28/1.2/2010, Annex. C.
Although Smt. H.R. Renuka; learned Counsel for the Petitioner, contends that the period from 15/1/1971 to 18/11/1976, while the 3rd Respondent''s name was found in the badli list, ought not to be reckoned as active service, 1 am afraid, is unacceptable. Petitioner, custodian of records relating to the employment particulars of the 3rd Respondent while on the badli rolls, ought to have produced that material, which, for reasons best known to the Petitioner, was not produced and therefore it is too farfetched to contend that it was for the 3rd Respondent to establish completion of 180/240 days of continuous service during the said period to reckon as active service for determining gratuity. So also, merely because no entries are forthcoming in Part-VI of the service register Ex. R4, by itself and nothing more, it cannot be assumed that the 3rd Respondent, while on the badli list, did not complete 180/240 days of continuous service. It is not disputed that in terms of the various settlements entered into between the Petitioner and the Trade union, employees borne on the badli list will have to be brought on time scale of pay, if completed 180 days of continuous service and on probation if completed 240 days of continuous service, provided there exists substantive vacancies in the posts. If the 3rd Respondent was brought on probation, and the service register Ex. R4, opened undoubtedly the service particulars of the 3rd Respondent for having completed 240 days of continuous service, during the badli period, ought to have been recorded in Part-VI.
Reckoning the last drawn wage of the 3rd Respondent as Rs. 12,832/- and the period of active service as 36 years and 4 months, the Controlling Authority, justifiably redetermined Rs. 4,66,229/- as gratuity and deducting Rs. 3,61,463/-, since made over to the 3rd Respondent, on retirement, the difference in gratuity is Rs. 1,04,766/-.
There is force in the submission of the learned Counsel for the Petitioner that gratuity amount, if exceeds Rs. 3,50,000/-, income tax thereon will have to be deducted and remitted to the department. In the instant case. Rs. 9,854/- was deducted towards income tax and remitted to the department. Sri. M.C. Basavaraju. learned Counsel, does not seriously dispute that position in law. In that view of the matter, the authorities under the Act, fell in error in declining the deduction of Rs. 9,854/- towards income tax.
The contention of the learned Counsel for the Petitioner that the direction to pay interest at 10% per annum with effect from 1/7/2007, was unjustified, is without merit. I say so because, retirement was on 31/5/2007 and the application for re-determination of difference in gratuity, when filed on 13/3/2008, is beyond 90 days, the period of limitation prescribed under the Payment of Gratuity act, 1972, and Rules thereunder, nevertheless, that delay was condoned by the authority and the order is final, since not questioned.
In the result, this petition is allowed in part. The orders of the authorities are modified, entitling the 3rd Respondent to Rs. 94,912/- instead of Rs. 1,04,766/- and in all other respects, remains unaltered.