JUDGMENT Honble Prakash Krishna, J.—Raising a somewhat interesting question the present writ petition has been filed. The question involved in the present petition is regarding the applicability of Payment of Gratuity Act, 1972 (hereinafter referred to as the Act) and the U.P. Nagar Mahapalika Non-Centralized Services Retirement Benefit Regulations, 1984 (hereinafter referred to as the Regulation) with respect to employees of Nagar Mahapalika Non Centralized Services. 2. The facts of the case are not much in dispute. Ram Saran Ruhela, the respondent No. 3, who was working with the petitioner was placed under suspension, charge-sheeted and his services were terminated vide order dated 8th of January, 1991. He was dismissed by the order dated 8th December, 1995. The said order was modified by the appellate authority and dismissal was substituted by an adverse entry and stoppage of two increments. The matter came up before this Court in two writ petitions being writ petition Nos. 1998 of 1996 and 7140 of 1996. Both the writ petitions were clubbed together and were decided by a common judgment dated 15th of October, 2003. It was held by this Court that the contesting respondent herein is entitled for subsistence allowance and in addition thereto 30 per cent of back wages from the date of suspension to the date of reinstatement. The amounts were directed to be paid within three months. The necessary payments were made to the respondent No. 3 which is evident from the receipt dated 27th February, 2004. In the meantime, the respondent retired and he filed an application before the Controlling Authority under the Payment of Gratuity Act, 1972 claiming gratuity for a total period of service i.e. 40 years three months and 11 days. The said proceeding was contested on the ground that the petitioner is not entitled for any gratuity as he was removed from the services by the order dated 18th February, 1995. It was further stated that in view of the Rule 10, the respondent No. 3 is not entitled either for gratuity or family pension. The Controlling Authority by the order dated 7th October, 2005 directed the petitioner to pay a sum of Rs. 61,347/- as gratuity with interest etc. as per the Gratuity Act. The said amount has also been paid. However, an appeal being appeal No. 138 of 2005 was filed before the appellate authority under the Act. 3. The Controlling Authority by the order dated 7th October, 2005 directed the petitioner to pay a sum of Rs. 61,347/- as gratuity with interest etc. as per the Gratuity Act. The said amount has also been paid. However, an appeal being appeal No. 138 of 2005 was filed before the appellate authority under the Act. 3. The Appellate Authority, U.P., under the Payment of Gratuity Act by the impugned order dated 3rd of May, 2006 has allowed the appeal and directed that the gratuity amount should be calculated as per the provisions of the Act instead of Regulation. Challenging the said order the present writ petition has been filed. 4. Shri R.K. Awasthi, the learned counsel for the petitioner submits that the provisions of the Act are not attracted. The Appellate Authority committed illegality in ordering the calculation of the gratuity amount as per the Regulation. He submits that the Regulations having been framed under the provisions of U.P. Municipalities Act will be applicable to the facts of the present case. Shri Vishnu Sahai, learned counsel for the respondent No. 3, on the other hand, submits that the provisions of the Act will be applicable and has placed reliance upon a judgment of the Apex Court in Municipal Corporation Delhi v. Dharam Prakash, AIR 1999 SC 293 . 5. A pristine question of law is involved as to whether the provisions of the Regulation will be attracted as submitted by the learned counsel for the petitioner or the gratuity shall be payable as per the provisions of the Gratuity Act. 6. Considered the respective submissions of learned counsel for the parties. 7. The Act applies to every factory, mines, oilfields, plantations, ports, railway, companies, shops or other establishments or classes of establishments in which ten or more persons are employed, or were employed, on any date of the preceding twelve months, as the Central Government may, by notification, specify in this behalf, as provided by Section 1 of the Act. The learned counsel for the respondents submits that the petitioner is an establishment and therefore, the provisions of the Act shall apply ipso facto. He submits that Section 14 of the Act provides that it will prevail over the other enactments notwithstanding anything in consistence therewith contained in any enactment other than the Act or in any instrument or contract. The learned counsel for the respondents submits that the petitioner is an establishment and therefore, the provisions of the Act shall apply ipso facto. He submits that Section 14 of the Act provides that it will prevail over the other enactments notwithstanding anything in consistence therewith contained in any enactment other than the Act or in any instrument or contract. Power to grant exemption by the appropriate government has been provided for by Section 5 of the Act. The crux of the argument is that there being no exemption notification by the State of U.P. in respect of non-centralized services of Nagar Mahapalika, the Regulations shall not be applicable. 8. The Regulations have been framed in exercise of power under sub-section (2) of Section 297 of the Municipalities Act, 1916 by the Governor. Section 297 of the U.P. Municipalities Act empowers a Board to make Regulations consistent with the Municipalities Act in respect of matters enumerated therein including the conditions of service, including period of service of all servants of Board as also the conditions under which gratuities or compassionate allowances may be paid to the surviving relatives of any such servant whose death has been caused through the execution of his duty vide clause (K) of Section 297. Under sub-section (2) of Section 297, the State Government has been empowered to make Regulations consistent with the provisions of the Municipalities Act in respect of the matters specified in clauses (d, h to n) of Section 1. A conjoint reading of Section 1 and sub-section (2) of Section 297 amply makes it clear that the State Government has been empowered to provide Regulations consistent with the Municipalities Act with respect to the payment of gratuities. Thus, the power of the State Government to frame the Regulation for payment of gratuity cannot be doubted. The validity of the Regulation has not been questioned by the respondent in the present writ petition. 9. The only question which survives is whether the gratuity would be payable to non-centralized services of Nagar Mahapalika as per provision of the Gratuity Act or as per Regulations framed by the State Government. 10. A brief survey of the provisions of the Act would show that the Act is general enactment for the purposes of payment of gratuity and is applicable to all the factories, mine, oilfields, establishments as mentioned in Section 1 of the Act. 10. A brief survey of the provisions of the Act would show that the Act is general enactment for the purposes of payment of gratuity and is applicable to all the factories, mine, oilfields, establishments as mentioned in Section 1 of the Act. This enactment by Section 14 has been given overriding effect over the other Statutes. Section 5 of the Act empowers the State Government to exempt any employee or class of employee etc. by issuing a notification if in the opinion of the State Government such employee or class of employee is in receipt of gratuity or pensionary benefits not less favourable than the benefits under the Act. A close reading of Section 5 would show that if there is already in existence any scheme for payment of gratuity or pensionary benefits and if the appropriate government is of the opinion that the said scheme is more favourable than the benefits conferred under the Act, it by issuing a notification may exempt the operation of the Act. In other words, it talks about such schemes which were in existence and were more beneficial on the date of commencement of the Act. 11. A scheme which has been framed subsequent to the commencement of the Act by an appropriate government, does not come within the ambit of Section 5 of the Act. 12. The Regulation has come into force subsequent to the enactment of the Act, w.e.f. 1st October, 1984. The date on which the Regulations were framed, it is presumed that the State Government was aware about the existence of the Act on the Statute book. The argument that there being no exemption notification, therefore, the provisions of Regulation will not be attracted, is liable to be rejected for the reasons more than one. Firstly, Section 5 of the Act which talks about the power to exempt is not applicable to such enactments which have come into operation subsequent to the commencement of the Act. Secondly, the Regulations have been validly made by the appropriate government in exercise of power conferred on it by Section 297 (2) of the Municipalities Act. It cannot be presumed that the Act has denuded the power of the State Government which is otherwise possessed by it under Section 297 of the Municipalities Act. 13. There is another aspect of the case. It cannot be presumed that the Act has denuded the power of the State Government which is otherwise possessed by it under Section 297 of the Municipalities Act. 13. There is another aspect of the case. The Act is a general Act to deal with the subject of payment of gratuity in general to all the employees working in factories etc. The Regulation is a special Act and has its limited area of the operation. Under the said Regulation, the non-centralized employees of the U.P. Nagar Mahapalika are only covered. Even if it is taken that the Act and Regulations both are special Acts, it has been laid down by the Apex Court in no uncertain terms that in such an event it is a later Act which must prevail, as observed in Solidaire India Limited v. Fairgrowth Financial Services Limited and others, (2001) 3 SCC 71 . In this case the Supreme Court has referred, in this context the following cases : (1) Maharashtra Tubes Ltd. v. State Industrial & Investment Corpn. of Maharashtra Ltd., (1993) 2 SCC 144 ; (2) Sarwan Singh v. Kasturi Lal, (1977) 1 SCC 750 ; (3) Allahabad Bank v. Canara Bank, (2000) 4 SCC 406 and (4) Ram Narain v. Simla Banking & Industrial Co. Ltd., AIR 1956 SC 614 . 14. Facts in brief from the case of Solidaire India Ltd. (supra) relevant for the present purposes may be noticed. The appellant therein had taken a loan from the respondent therein and the agreement was to repay the loan within the specified time together with interest at 15% per annum. The respondent was notified under Section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 and proceedings were initiated by the custodian for recovery of the said amount before the Special Court. During the pendency of the appeal before the Apex Court, the appellant has become sick and proceedings were initiated under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1982. It was contended that in view of special provisions contained in the Sick Industrial Companies (Special Provisions) Act, 1955 no proceedings should have been initiated or continued under the Special Court Act, 1992. It was contended that in view of special provisions contained in the Sick Industrial Companies (Special Provisions) Act, 1955 no proceedings should have been initiated or continued under the Special Court Act, 1992. In this factual background Apex Court took the view that the Legislature being aware of the provisions of Section 22 under the Sick Industrial Companies (Special Provisions) Act, 1985 still empowered only the Special Court under the 1992 Act to give directions to recover and to distribute the assets of the notified persons in the manner set down under Section 11 (2) of the 1992 Act. It was held that this only means that the Legislature wanted the provisions of Section 11 (2) of the 1992 Act to prevail over the provisions of any other law including those of the Sick Industrial Companies (Special Provisions) Act, 1985. Thus, it is clear that in the instant case, there was no intention of the legislature to permit the 1985 Act to apply, notwithstanding the fact that proceedings in respect of a company may be going on before the BIFR. The 1992 Act is to have an overriding effect notwithstanding any provision to the contrary in another Act. 15. The learned counsel for the petitioner could not place any exemption notification issued by the State of U.P. under Section 4 of the Act but in my view that is of little consequence. The Regulation may be treated as a combined notification both the exemption notification under Section 5 of the Act as also the intention of the State Government to make a special provision through the Regulation for its non centralized services of U.P. Nagar Mahapalika so far as payment of gratuity is concerned. Somewhat a similar situation came for consideration before the Apex Court in a slightly different context in a sales tax matter in Commissioner of Sales Tax U.P. v. Agra Belting Work, 1987 UPTC 850. In this case the commodity in question was exempt from payment of sales tax under Section 4 of the U.P. Sales Tax Act. Subsequently a notification was issued under Section 3-A of the Act levying the tax. In this case the commodity in question was exempt from payment of sales tax under Section 4 of the U.P. Sales Tax Act. Subsequently a notification was issued under Section 3-A of the Act levying the tax. Repelling the argument of the dealer that unless a notification withdrawing the exemption under Section 4 is issued, the notification levying tax under Section 3-A of the Act would not be operative, it was held that, in fact, the notification under Section 3 A can easily be treated as a combined notification both for withdrawal of exemption as also for providing higher tax. The relevant portion is reproduced below : “In fact, the second notification can easily be treated as a combined notification both for withdrawal of exemption and also for providing higher tax. When power for both the operations vests in the State and the intention to levy the tax is clear we see no justification for not giving effect to the 2nd notification. We would like to point out that the exemption was in regard to a class of goods and while the exemption continues, a specific item has now been notified under Section 3-A of the Act.” 16. Municipal Corporation of Delhi v. Dharam Prakash Sharma and another, AIR 1999 SC 293 was heavily relied upon by the learned counsel for the respondents. From the report it appears that the Pension Rules were already in existence at the time of commencement of the Act. The Apex Court was of the view that unless an exemption notification under Section 5 of the Act is issued, the provisions of the Act will be applicable. In the case on hand, the Regulation has come into force subsequent to the commencement of the Act, thus the ratio as laid down in the above case by the Apex Court is distinguishable. 17. Apart from the above, the Apex Court proceeded to decide a controversy on the footing that the Payment of Gratuity Act being a special provision for payment of gratuity unless there is any provision which excludes its applicability to an employee who is otherwise governed by the provisions of Pension Rules, it is not possible to hold that an employee of Municipal Corporation of Delhi is not entitled to the gratuity under the Act. In the present case, position is different inasmuch as the Regulations for payment of gratuity have been enacted by the State Legislature for a class of its employees. In this view of the matter also, on facts the ruling given in the case of Municipal Corporation of Delhi (supra) is distinguishable. 18. Viewed as above, I find sufficient force in the argument of the learned counsel for the petitioner and it is held that the contesting respondent is entitled to get the gratuity as per the Regulations framed by the State Government in this regard and not under the Payment of Gratuity Act. The writ petition succeeds and is allowed and the impugned order is quashed. 19. But no order as to costs. ————