Thursday, 9 June 2016

Supreme Court's judgment dated 12.02.2008- Fixation of cut-off date is ultra vires!


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.

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