Mamata Singha Roy vs State Of Tripura And Ors

Heard learned counsel for the parties for final disposal of the petition.

Petitioner has prayed for a direction to the respondents to release the gratuity by applying the revised limit of Rs.10,00,000 (rupees ten lakhs) instead of Rs.4,00,000 (rupees four lakhs) as has been applied by the employer.

Brief facts are as under:

Petitioner is an ex-employee of the Fish Farmer's Development Agency, a State Government constituted and controlled body (hereinafter to be referred to as the said agency). Petitioner retired on superannuation w.e.f. 31.01.2017 from Group-C post after putting in 35 years of service. At the time of her retirement, she was paid gratuity of a sum of Rs.4,00,000 (rupees four lakhs). The employer, however, sought recovery from such sum under a letter dated 07.04.2017. The petitioner thereupon filed WP(C) No.603 of 2017 and in addition to opposing the recovery also contended that the gratuity ought to have been paid to her by applying revised ceiling limit of Rs.10,00,000 (rupees ten lakhs). The learned Single Judge disposed of the petition by judgment dated 15.06.2018 in which following observations were made:

"11. It is also not a case of the respondents that at the time of retirement of the petitioner from service in January, 2017 the amount of gratuity payable was not Rs.4,00,000/- which in fact was paid to her on retirement towards gratuity vide order dt. 21st February, 2017. This court make it further clear that four lakhs has been revised by the Govt. of Tripura under Tripura State Civil Services (Revised Pension) Rules, 2017 which become applicable from 1st April, 2017. As the petitioner was retired on January, 2017 the amount towards gratuity payable to employee was four lakhs and not ten lakhs at the given point of time.

Counsel for the petitioner submits that his entitlement for gratuity is of Rs.10,00,000/- and places reliance on the decision of the Division Bench of this court in W.P(C) No.578/2015 (Sri Dipak Debnath Vrs. The State of Tripura & Others.), since the parties have not addressed on this issue, I leave it open as to whether the entitlement of the petitioner towards gratuity amount is four lakhs or ten lakhs to be examined in the independent proceedings.

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Consequently, the writ petition is allowed. The impugned order dt.7th April, 2017 calling upon the petitioner to refund the gratuity amount of Rs.4,00,000/- is quashed and set aside. As regard the question raised by the petitioner for entitlement of Rs.10,00,00/- instead of Rs.4,00,000/- towards gratuity, this court leave it open for the petitioner to examine in an independent proceeding if initiated at behest of the petitioner. No costs."

The short question that falls for consideration is whether the payment of gratuity of the petitioner could be frozen at the ceiling of `4,00,000 (rupees four lakhs) or should the employer have paid the entire amount of Rs.6,35,754 (rupees six lakhs thirty five thousand seven hundred and fifty four) which was computed on the basis of her length of service and last drawn wages but restricted to Rs.4,00,000 (rupees four lakhs).

Section 4 of the Payment of Gratuity Act, 1972 (the Act, for short) pertains to payment of gratuity. Sub-section (3) of Section 4 lays down the ceiling of the gratuity that may be paid to an employee and in the present form reads as under:

"(3) The amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government from time to time."

The group of words "such amount as may be notified by the Central Government from time to time" are in substitution of the group of words "ten lakh rupees" by Act 12 of 2018 w.e.f. 29.03.2018. Earlier these words "ten lakh rupees" were in substitution of words "three lakhs and fifty thousand rupees" by Act 15 of 2010 w.e.f. 24.05.2010. The petitioner is not a Government servant but an employee of respondent No.2. The petitioner is thus not covered by the Pension Rules of the State Government. The petitioner's entitlement of the gratuity, therefore, would be governed by the said Act. The ceiling for payment of gratuity would be as prescribed in sub-section (3) of Section 4 of the said Act which, as noted earlier, provided a limit of `3,50,000 (rupees three lakhs fifty thousand) which was substituted by Rs.10,00,000 (rupees ten lakhs) w.e.f. 24.05.2010. At the time of her retirement this revised limit of Rs.10,00,000 (rupees ten lakhs) was thus applicable. Even the Government of Tripura had understood the correct position in this respect and issued a memorandum dated 15.09.2016 providing that by virtue of Payment of Gratuity (Amendment) Act, 2010 (Act No.15 of 2010) w.e.f. 18.05.2010 enhanced rate of ceiling of gratuity would be applicable and, therefore, the PSUs / Autonomous Bodies/ Societies/ Boards / Corporations under different departments of the State Government shall take necessary arrangement to pay the amount of gratuity to the eligible employees as per the provisions of the said Amendment Act. While doing so, however, in the said office memorandum it was provided that the Payment of Gratuity Act, 1972 should not be extended without prior concurrence of Finance under any circumstances.

It appears that under a mistaken belief that the petitioner's gratuity ceiling would be governed by the prescription contained in the Pension Rules meant for the State Government, at the time of her retirement a sum of Rs.4,00,000 (rupees four lakhs) was released. It also appears that on the premise that the Finance Department had not given the concurrence for increasing the gratuity limit to Rs.10,00,000 (rupees ten lakhs), the recovery of the gratuity already paid was sought to be made. In my opinion, these actions are based on complete misconception of correct legal position. The petitioner was governed by the provisions of the said Act. Her entitlement of gratuity including the ceiling thereof would have to be on the basis of provisions made in Section 4 and other provisions of the said Act.

Under the office memorandum dated 15.09.2016 the Government correctly clarified this position and required all PSUs/ Autonomous Bodies/Societies/Boards/Corporations under different departments to make arrangements to pay the amount of gratuity as per the said revised limit. In the last paragraph, however, it has been stated as under:

"The payment of Gratuity Act 1972 should not be extended without prior concurrence of the Finance under any circumstances. This direction has been given by the Finance Department, Government of Tripura vide No.-F.29(9)-Fin(G)/2004 dated 16th August 2011."

This portion cannot nullify the earlier clarification of all PSUs/Autonomous Bodies/Societies etc. under the department of the State Government to pay gratuity as per the revised limit under the Payment of Gratuity (Amendment) Act, 2010 (Act No.15 of 2010). Firstly, no directive not to pay gratuity as per the statutory provision, can be made by executive instructions. Secondly, one possible meaning of this clarification is that when an organisation is extending the benefit of Payment of Gratuity Act, concurrence of the Finance Department will be needed. In either case, this last paragraph of the said office memorandum cannot govern the present case as per the correct legal position emerging from this statute.

Thus, when the legislature amended the said Act by Payment of Gratuity (Amendment) Act, 2010 (Act No.15 of 2010) and revised the ceiling of gratuity from `3,50,000 (three lakhs fifty thousand) to Rs.10,00,000 (rupees ten lakhs), the petitioner was governed by such provision. The ceiling of gratuity payable was thus raised to Rs.10,00,000 (rupees ten lakhs). On the date of retirement this provision was applicable. The act of the respondent No.2 to restrict her gratuity to Rs.4,00,000 (rupees four lakhs) against the computed gratuity of `6,35,754 was incorrect.

In the result, the petition is allowed. The respondents are directed to release the remaining amount of gratuity of Rs.2,35,754 by applying the revised limit. This payment shall be made along with simple interest @ 7.5% per annum from one month after the date of retirement till actual payments. Directions to be carried out within 4(four) months from today.

Petition is disposed of accordingly.

Pending application(s), if any, also stands disposed of.