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Khairatabad, Hyderabad, Telangana, 500004
Khairatabad, Hyderabad, Telangana, 500004

Harshit Sharma | Amity Law School, Madhya Pradesh | 13th January 2020 

Sri Tapan Chandra V/s. Union of India W.P. No. 22312 (W) of 2018

FACTS OF THE CASE

  1. The present petitioner was the employee of sail and super annuated on 31.10.2016 after rendering the service of 36 years, 9 months and 22 days. Thereby he was entitled to the Payment of Gratuity Act 1972.
  2. The petitioner on 24th November, 2017, filed an application for direction of payment of Gratuity along with Form ‘N’ before the Controlling Authority under the Act, but the same was dismissed by an order dated 26th April, 2018. The order directed M/s SAIL to make payment of gratuity only after vacation of quarter allotted to the petitioner by the ASP.
  3. Thereafter, a proceeding was initiated by the ASP against the writ petitioner for unauthorized occupation of ASP Quarter. By an order dated 16th June, 2018 the Ld. Estate Officer, SAIL, Durgapur Steel Plant allowed the application and directed the petitioner to vacate the said quarter within 15 days from the days from the date of receipt of this order.
  4. The petitioner preferred an appeal before the Appellate Authority against the Controlling Authority’s order and the same was dismissed by an order dated 11th September, 2018 directing the Bar & Bench (www.barandb,ench.com) 4 petitioner to pay penal rent to ASP for non-vacation of quarter after his superannuation. This penal rent was to be recovered from his gratuity thus, making the payment of gratuity conditional upon vacation of quarter by the petitioner.
  5. Hence the present writ petition was preferred impugned the order of the appellant authority.

ISSUES RAISED

  1. Whether any company/organization is allowed to delay or withhold or make deductions from the gratuity amount payable to the ex-employee after superannuation in case of non-vacation of accommodation provided by the company / organization under the Payment of Gratuity Act, 1972?
  2. Whether the SAIL Gratuity Rules will have overriding effect on Payment of Gratuity Act, 1972?

RULING OF THE COURT/ THE COURT HELD THAT

While upholding in the favour of the petitioner, the petition was allowed and it was directed that the gratuity payment be released in the favour of the petitioner on the following findings and observed the following:

  1. In the light of the case of SAIL V. Taraknath Sengupta, the first issue was resolved stating “… under no circumstances can the employer make deductions or withhold the amount payable to the employee in terms of his gratuity amount apart from the three conditions mentioned in Section 4(6) of the said act. Moreover, in the present matter the petitioner has served the respondent company for more than 36 years and now upon his retirement he is entitled to get his Gratuity which is a statutory right backed by the provisions of the said Act. The only exception where the gratuity amount can be forfeited by the employer is only when any of the conditions mentioned under Section 4(6) of the said Act comes into play but in the present matter none of the conditions are attracted and thus in this case, under no circumstances, can the statutory right of the petitioner be curtailed. According to me the Appellate Authority had not looked into the case of the writ petitioner in a diligent manner and thus the order dated 11th September, 2018 is violating the rights of the petitioner.”
  2. “Accordingly, relying on the ratios carved out in Taraknath Sengupta & Ors. (supra) and Ram Ranjan Mukherjee and Others (supra), I am of the view that ASP cannot withhold the petitioner’s gratuity other than for any other conditions as has been laid down in the Section 4(6) of the Act.”
  3. “In Y.K. Singla v. Punjab National Bank and Ors., the Supreme Court has examined Section 14 of the said Act and held that the law is very clear with respect to its Bar & Bench (www.barandb,ench.com) 26 superiority and leaves no scope for any other instrument or contract to frustrate the intent of the legislature behind the said Act. The law relating to gratuity must be governed by the said Act and in the present case Rule 3.2.1(c) and Rule 3.2.1(d) of the Rules is clearly inconsistent with the said Act. Therefore, the defense taken by the respondent by relying on the SAIL Gratuity Rules cannot be considered as a valid one and I find that the Payment of Gratuity Act, 1972, will have an overriding effect over the SAIL Gratuity Rules.”

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