D.S. Kumar and Others vs The Managing Director, Tamilnadu Civil Supplies Corporation Limited

K. Chandru, J.—The Petitioners are employees of the Respondent Tamil Nadu Civil Supplies Corporation. In this Writ Petition, they have come forward to challenge the circular issued by the Respondent dated 26.8.10, wherein and by which the Respondent Civil Supplies Corporation informed all their subordinates about the fact that the Payment of Gratuity Act, 1972 was amended by Central Act 15 of 2010 with effect from 17.5.2010. The ceiling of gratuity fixed u/s 4(3) was enhanced to Rupees Ten Lakhs with effect from 24.5.2010. Therefore, the Respondent Board also resolved to give effect to the said amendment. The Petitioners have all admittedly retired from service before April 2010. In this Writ Petition by seeking to challenge the circular, they want the benefit of the amendment being given effect to by considering their cases also. Such a Writ Petition can never be maintainable.

It is no doubt true that the Payment of Gratuity Act has been amended by Central Act 15 of 2010. In the Amendment Act itself, Section 1(2) gave power to the delegate, i.e., the Government of India to notify the date on which the Central Government consider it desirable to bring the Section into force. It is pursuant to such delegation of power, the Central Government issued a Notification by a Statutory Order S.O. No. 1217(E), Ministry of Labour and Employment, dated 24.5.2010 fixing the date of coming into operation of the amendment i.e. 24.5.2010. The said statutory notification has been published in the Gazette of India Extraordinary dated 24.5.2010. Therefore, when a notification brings into an amendment which prescribes the date "24.5.2010" and when the Respondent by a Circular notified the change in legal position, by merely challenging the said circular, the Petitioner cannot get any relief. Even though the amendment can have retroactive effect, i.e., that it applies to persons, who retires on or after 24.5.2010, the said Circular cannot have any retrospective effect.

The contingencies on which the gratuity have to be paid is set out u/s 4 of the Payment of Gratuity Act. It is only when such contingency takes place, the gratuity has to be calculated on the basis of last drawn wages earned by an employee. Therefore, the date on which the employee retires, dies or resign is the date by which the rate of gratuity has to be calculated.

While considering the "appointed day" by which the liability to pay gratuity will be passed on to a ''transferee'' employee came to be considered by the Supreme Court in Central Coalfields Ltd. Vs. Union of India (UOI) and Others, . In para 4 of the judgment, it was observed as follows:

The question of payment of gratuity, etc., which becomes due only at the end of the service, in respect of workmen who were continuing in service even after the appointed day, arose subsequent to the appointed day and is, therefore, not a prior liability for which the Central Government or the Government company would not be liable because of Section 9 of the Act.

Therefore, the challenge made to the impugned circular is misconceived. Accordingly the writ petition stands dismissed. No costs. The connected Miscellaneous Petition is closed.