Thursday, 19 June 2014

Gratuity Case decided by the Supreme Court- Class I Officers Vs LIC of India


The Judgement of Supreme Court on Gratuity upheld the judgement of Kerala High Court covering Class I Officers of LIC who retired between 1.4.1993 to 31.7.1994. Those who retired between 1.8.1992 and 31.03.1993 were not covered and thus they were deprived of the difference in gratuity based on revised scales . Shri M L Gandhi, along with other four officers had also filed a similar case in Jan.1997 the judgement for which was pronounced on 04.07.2007 (CWP NO. 1128 of 1997) by the Hon'ble High Court of Punjab & Haryana At Chandigarh which provided relief to all Retired Officers irrespective of date of retirement. The text of the Judgement given below for the information of all.
CWP No.1128 of 1997
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Date of Decision: 4.7.2008
Madan Lal Gandhi and others ......Petitioners
Versus
Union of India and others .....Respondents.
Coram:
Present:
HON'BLE MR. JUSTICE HEMANT GUPTA
Shri K.K.Gupta, Advocate, for the petitioners.
Shri Rajiv Sharma, Advocate, for respondent No.1.
Shri B.R. Mahajan, Advocate, for the respondent Nos. 2 to 4.
1. Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
HEMANT GUPTA, J.
The challenge in the present writ petition is to Rule 9 of the Life Insurance Corporation of India Class I (Revision of Terms and Conditions of Service) (Amendment) Rules, 1996, to the extent of enforcement of the amendment from 1.6.1994. In other words, the challenge is to the cut off date of 1.8.1994 and claim is for payment of gratuity irrespective of the date of retirement.
Learned counsel for the petitioners relies upon an order passed by the Hon'ble Supreme Court in Civil Appeal No. 1289 of 2007 - Life Insurance Corporation of India and others v. Retirement L.I.C. Officers Association and others, decided on 12.2.2008, wherein the appeal filed by the Life Insurance Corporation of India against the judgment of the Kerala High Court was dismissed.
In the aforesaid case, the Hon'ble Supreme Court has held to the following effect:-
“25. Revision of scales of pay as also other allowances is technical in nature. When a benefit is extended to a group of employees the effect of such benefit, if otherwise comes within the purview thereof must be held to be applicable to other groups of employees also. An employee is entitled to gratuity. It is not a bounty. It is payable on successful tenure of service. Regulation 77 provides as to how the amount of gratuity is to be calculated. Regulation 51 provides for a rule of measurement. Only because it employed the word “permanent basic pay”, the same will not itself lead to the conclusion that once an employee has retired, he would not be entitled to any revision of the amount of gratuity.
26. The Chairman of the Corporation has himself given a retrospective effect to revision in scales of pay. Such a retrospective effect has also been given so as to benefit a class of employees. The employees, irrespective of the fact whether they had superannuated or not, were given the benefit of arrears of pay from Ist August, 1993. By reason of grant of such benefit both to serving employees as also the superannuated employees, both the class of employees became entitled thereto as of right. If by reason thereof, even a retired employee, as on the date of retirement, became entitled to the benefit of the revised scale of pay, the same for all intent and purpose must be taken to be the permanent basic pay, apart from other allowances, if any, which are required to be taken into consideration for the purpose of computation of the amount of gratuity.”
Later, the Hon'ble Supreme Court found that fixation of cut off date by the Chairman of the Corporation is beyond the powers conferred upon him by the Statute.
In view of the aforesaid judgment, the present writ petition is allowed in the same terms as ordered by the Hon'ble Supreme Court, with directions to the respondents to grant the consequential benefits to the petitioners within a period of three months.
04-07-2008
ds
(HEMANT GUPTA)
JUDGE
The case was decided in favor of payment of Gratuity at revised rates to the Class I Officers.
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Source: High Court and Supreme Court judgments relating to insurance. (Internet)

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