( 1 ) M. THIMMAPPA Rai-the petitioner was an Asst Registrar of Co-operative societies. On 14-5-1964, he retired from Govt service at the age of 55. On 3-8-1s64, he was appointed by the S. Kanara Central Co-operative Wholesale Stories Ltd, Mangalore. His services were continued from time to time till he reached 60, and also thereafter till 30-6-71 on which date he was relieved from service. He had thus continuous service of nearly seven years from 3-8-1964 to 30-6-1971. ( 2 ) THE petitioner claimed terminal benefits like retrenchment compensation, gratuity, leave salary etc. The Management refused to grant the same. He, thereupon, approached the Labour Court under S. 33c (2) of the Industrial Disputes Act. The Labour Court rejected all his claims except the leave salary for 39 days though he had to his credit 80 days. The Labour Court observed that the petitioner's continuation in service beyond the age of 60 years was contrary to Rule 18 (2) of the Karnataka Co-operative Societies Rules, 1960 (shortly called 'the Rules'), and the said service being illegal, cannot be counted for determining the gratuity. Challenging the view taken by the Labour Court, the petitioner has approached this Court under Art. 227 of the Constitution. ( 3 ) I will first consider the validity of the claim for gratuity. The age of Superannuation of an employee of any Co-operative Society is 58 as provided under Rule 18 (2) of the Rules. Discretion, however, has been given to the Management to extend the services upto 60 years with the approval of the Registrar. Rule 18 (4) provides for the payment of gratuity. It reads:"gratuity.- (i) The Committee of a Co-operative Society shall grant gratuities on retirement to the employees cf the Co-operative Society or on his death to his nominees or legal heirs or representatives subject to the following conditions : (a) when an employee leaves the service within five years from the date of his permanent appointment, he shall have no claim to his benefit. (b) when an employee who has put in five to ten years service, retires from service or if he dies while in service, gratuity not exceeding half a month's pay for every year of service which he was drawing on the date of retirement or death as the case may be; (c) when an employee who has put in more than ten years service retires from servce or if he dies while in service, gratuity not exceeding a month's pay for every year of service, which he was drawing on the date of retirement, or death, as the case may be. (ii) The maximum amount payable to any employee shall not exceed fifteen months' pay under any circumstances. "the above rule incorporates a complete scheme for payment of gratuity on retirement or death of the employees of the Co-operative Society. It is like this: The employees who leave the service within five years from the date of their permanent appointment, are not entitled to gratuity. Others who have put in five to ten years service are entitled to not exceeding half a month's pay for every year of service. Those who have put in more than ten years service are entitled to gratuity not exceeding a month's pay for every year of service. The maximum amount of gratuity payable to the employees is however restricted to fifteen months pay. ( 4 ) IT is true that Rule 18 (4) confers a right on the employees to claim gratuity on retirement, but the word 'retirement' in the context, cannot be restricted to only compulsory retirement on attaining the age of superannuation. If it is so restricted, the persons who voluntarily retire before reaching the age of superannuation cannot claim gratuity even if they have put in more than five years service. That is not the purposse of the Rule. Rule 18 (4) is intended to confer some specific or substantial or advantages to the employees who retire from service, and therefore it is not proper to construe the word 'retirement' in a technical or restricted sense. It should be liberally construed' so that the relief contemplated by the Rule is not denied to the persons. If so construed, the word 'retirement' in the context must mean "going out of "service" and not necessarily on attaining the age of superannuation. It should be liberally construed' so that the relief contemplated by the Rule is not denied to the persons. If so construed, the word 'retirement' in the context must mean "going out of "service" and not necessarily on attaining the age of superannuation. In my view, the Labour Court was not right in holding that the service put in by the petitioner after the age of superannuation was illegal. The provisions relating to compulsory retirement do not come in the way of the Society to take anybody's service who has crossed the age of 58 or 60 years with the approval, if necessary, from the Registrar. The age of compulsory retirement extinguishes only the right of an employee to continue in service, but, it does not prohibit the parties to enter into a fresh contract of employment. Therefore, the service rendered by the petitioner beyond the age ot 60 years cannot be said to be illegal. ( 5 ) THE petitioner had continuous service from 3-8-1964 to 30-6-1971. In the above view, his case falls under Rule 18 (4) (b) and the gratuity to be determined accordingly. ( 6 ) THIS takes me to the next question relating to the right of the petitioner to receive leave salary. The Labour Court has given him the benefit of leave salary for 39 days out of the accumulated leave of 80 days. In support of that relief, the Labour Court has relied upon S. 15 of the Karnataka Shops and Commercial Establishments Act, 1961. Under S. 15 (4), the petitioner is entitled to one day's leave for every 20 days of work. S. 15 (7) of the said Act provides that the total number of days of leave that could be carried forward to the succeeding year shall not exceed 30 days. By these provisions, the petitioner could have accumulated altogether 39 days. That, however, is not the end of the matter. The petitioner is entitled to the benefit of S. 35 of the Karnataka, Shops and Commercial establishments Act, 1961, and the provisions relating to leave under Rule 18 (3) of the Rules. By these provisions, the petitioner could have accumulated altogether 39 days. That, however, is not the end of the matter. The petitioner is entitled to the benefit of S. 35 of the Karnataka, Shops and Commercial establishments Act, 1961, and the provisions relating to leave under Rule 18 (3) of the Rules. Section 35 provides :"saving of certain rights and privileges.-Nothing in this Act shall affect any rights or privileges which an employee in any establishment is entitled to under any other law, contract, custom or usage, applicable to such establishment, or any award, settlement, or any award, settlement or agreement binding, on the employer and the employee in such establishment if such rights or privileges are more favourable to him than thosse to which he would be entitled under this Act. "sec. 35 provides that the provisions of Shops and Commercial Establishments act, shall not affect the rights or privileges which an employee in any establishment is entitled to under any other law, contract, custom or usage if such rights or privileges are more favourable to him than those to which he would be entitled to under the said Act. If we turn to the Rules, it is seen that by Rule 18 (3) (iii), the petitioner is entitled to liberal conditions of service regarding leave. He could accumulate earned leave upto four months, and that right is specifically saved to him under S. 35 of the Shops and Commercial Establishments Act. The Labour Court was therefore in error in not giving the petitioner the leave salary for the entire accumulated leave of 80 days. ( 7 ) IN the result, rule is made absolute. A direction shall issue to. Respondent 2 to work out the benefit of gratuity and leave salary payable to the petitioner in the light of the observations made in this order. ( 8 ) IN the circumstances, there will be no order as to costs. --- *** --- .