The Punjab State Cooperative Supply And Marketing Federation Ltd v. Sham Lal And ORS
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By this common judgment, the aforementioned Letters Patent Appeal(s) are being decided as common questions of law and facts are involved. For the sake of convenience, the facts have been taken from LPA1089-2025. 2.
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CHAPTER III SERVICE QUALIFYING FOR PENSION "3.17A. (1) Subject to the provisions of rule 4.23 and other rules and except in the cases mentioned below, all service rendered on establishment, interrupted or continuous, shall count as qualifying service:- (i) to (viii) xxxxxx (ix) Removal from public service for misconduct, insolvency, inefficiency not due to age, or failure to pass an examination will entail forfeiture of the past service.
(x) Service rendered beyond the date of retirement on superannuation in terms of rule 3.26 of Punjab Civil Services Rules, Volume I, Part I."
(emphasis supplied)
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"% $ ;- Section 4. Payment of gratuity.
(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation. For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piecerated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the
year], the employer shall pay the gratuity at the rate of seven days' wages for each season.
Explanation. In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twentysix and multiplying the quotient by fifteen.
(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
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee receive better terms of gratuity under any award or agreement or contract with the employer.
(6) Notwithstanding anything contained in subsection (1), (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused; (b) the gratuity payable to an employee may be wholly or partially forfeited (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment." &3
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"Having heard learned counsel for the petitioner and having perused the material placed on record, we are at one with the view taken by the High Court that mere exercise of option by an employee, to avail the benefit of extension of age of retirement to 60 years, could not have operated against his entitlement to gratuity; and exercising of such an option will not deprive the private respondents to gratuity unless and until the establishment i.e., the petitionerUniversity, was exempted in strict compliance of Section 5 of the Payment of Gratuity Act, 1972, after prior approval of the State Government. There being no such exemption availed by the petitionerUniversity, the High Court has rightly not interfered with the principal part of the orders passed by the Controlling Authority and the Appellate Authority.
On the other hand, the High Court has been rather considerate to the petitioner in reducing the rate of interest awarded to the private respondents from 10% to 6% p.a. In view of the above, no case for interference is made out. Hence, these special leave petitions stand dismissed. All the pending applications stand disposed of."
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"25. Further another limb of the argument of learned counsel for the petitioner is that once the employee has opted to continue up to 60 years by invoking the benefit of the Government Order dated 19.12.1984 his action would be barred by the principle of submission and acquiescence, because once he has availed the benefit of extension of service then he is simultaneously be bound by the conditions of the benefit likely to be extended in pursuance to the option exercised by him. Although, the issue has been dealt to the said effect in the earlier paragraphs of the judgment, but still it is repeated that since in pursuance to the exercise of benefit of extension of 60 years of age of retirement, the Payment of Gratuity under the Act of 1972, was not intended to deprive gratuity to optees. Hence, exercising of an option will not deprive the private respondent of gratuity until and unless it has been made exempted after a prior approval of the State Government. In that view of the matter, I do not find any error committed by both the Courts below." 13.
We, therefore, have no hesitation to hold that the private respondents would be entitled to gratuity for the entire length of service rendered upto the age of 60 years for computation of gratuity. The judgment of the Single Bench is in consonance with law.
14.
Consequently, all the above-mentioned Letters Patent Appeals being devoid of merit stand dismissed.
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