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2008 DIGILAW 832 (DEL)

MUNICIPAL CORPORATION OF DELHI v. P. P. MALHOTRA

2008-08-29

S.MURALIDHAR

body2008
JUDGMENT Dr. S. Muralidhar, J.-These four writ petitions by the Municipal Corporation of Delhi (MCD) challenging orders passed by the Appellate Authority under the Payment of Gratuity Act, 1972 (Act) raise a common question of law as regards the applicability of the Act to the MCD. Accordingly, these four writ petitions are disposed of by this common judgment. 2. Learned Counsel for the MCD sought to urge at the outset that in certain other petitions raising these very questions, notice has been issued and those petitions are listed for hearing in November 2008. It was submitted that the present writ petitions should be heard along with those petitions. However, in view of the settled position of law as contained in the decision of the Supreme Court and this Court, which are discussed hereafter, this Court is proceeding to dispose of these writ petitions. 3. The respondent in each of these petitions is a retired employee of the MCD. Each of them received retiral benefits including the gratuity payable in terms of CCS (Pension) Rules, 1972 (Rules) which was adopted by the MCD. Each of them filed an application before the Controlling Authority under the Act claiming the additional amount of gratuity that was payable in terms of the Act. By separate orders, the Controlling Authority (CA) condoned the delay in the filing of the application under the Act. After computing the gratuity payable under the Act, the CA directed the MCD to pay each of the respondents the differential amount of gratuity together with simple interest @ 10% under Section 7(3A) of the Act for the period commencing with the date of retirement. Accordingly, Shri P.P. Malhotra, Respondent in WP(C) No. 6280 of 2008 was directed to be paid a sum of Rs. 1,00,091/- together with interest @ 10% from 31st May, 2000, Shri S.K. Sharma, Respondent in WP(C) No. 6282 of 2008 was directed to be paid a sum of Rs. 32,309/- together with interest from 31st December, 1997, Shri Ram Chander Yadav, Respondent in WP(C) No. 6284 of 2008 a sum of Rs. 33,220/ - together interest @ 10% from 31st May, 2000 and Shri Balraj Wadhwan, Respondent in WP(C) No. 6288 of 2008 together interest@ 10% from 31st May, 1996. 4. The appeals filed by the MCD before the Appellate Authority were dismissed by separate orders which have been challenged in these four writ petitions. 33,220/ - together interest @ 10% from 31st May, 2000 and Shri Balraj Wadhwan, Respondent in WP(C) No. 6288 of 2008 together interest@ 10% from 31st May, 1996. 4. The appeals filed by the MCD before the Appellate Authority were dismissed by separate orders which have been challenged in these four writ petitions. It may be mentioned that the order of the Appellate Order under challenge in WP(C) No. 6280 of 2008 is dated 31st July, 2006 and there is no satisfactory explanation for the delay of two years in filing the present petition. However, the orders of the Appellate Authority under challenge in the connected writ petitions are dated 31st January, 2008, 8th April, 2008 and 26th February, 2008. Those writ petitions cannot be said to be unduly delayed. Further, since the submissions of the learned Counsel for the MCD have been heard at length on merits, this Court is not inclined to reject the first petition only on the ground of laches. 5. It is pointed out by learned Counsel for the Petitioner that the Central Government had issued a notification exempting the MCD from applicability of the Act on 22nd July, 2005. It is contended that although the said notification is prospective, it should be held to apply as on date of the consideration of the applications filed by the respondents. In other words, since the notification was in force on the date that the CA considered the applications of the respondents, those applications should not have been entertained at all. Without prejudice to the above contention, it is submitted that in any event since the respondent had belatedly approached the CA for relief, the MCD cannot be asked to pay interest on the amount of gratuity payable under the Act. 6. This Court is unable to accept the submissions of the learned Counsel for the petitioner. It is clear that till 22nd July, 2005 the MCD was obliged to mandatory comply with the statutory obligation under the Act. In fact, this question has been answered against the MCD by the decision of the Supreme Court in Municipal Corporation of Delhi v. Dharam Prakash Sharma, VII (1998) SLT 118 = (1998) 7 SCC 221 . It is clear that till 22nd July, 2005 the MCD was obliged to mandatory comply with the statutory obligation under the Act. In fact, this question has been answered against the MCD by the decision of the Supreme Court in Municipal Corporation of Delhi v. Dharam Prakash Sharma, VII (1998) SLT 118 = (1998) 7 SCC 221 . The question that arose in the said case was whether an employee of the MCD would be entitled to payment of gratuity under the Act when the MCD itself has adopted the CCS (Pension) Rules, 1972 which contains provisions both for payment of pension as well as gratuity. It was sought to be contended in the said case, as it is now, that an employee of the MCD cannot seek a double benefit-one under the CCS (Pension) Rules, 1972 and the other under the Act. That contention was negatived by upholding that "the Act was a special provision for payment of gratuity" and "unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provisions of the Pension Rules, it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act." It was categorically held that "the MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act." It was noticed by the Supreme Court that at that stage that "the MCD has not taken any steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act, notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules." 7. Even prior to the decision of the Supreme Court, this Court had, in Municipal Corporation of Delhi v. Padma Devi, 1986 (52) FLR 372, held as under: "Even if Municipal Corporation of Delhi has certain scheme it is no bar to the applicability of the Act to the employees of the petitioner corporation. Even prior to the decision of the Supreme Court, this Court had, in Municipal Corporation of Delhi v. Padma Devi, 1986 (52) FLR 372, held as under: "Even if Municipal Corporation of Delhi has certain scheme it is no bar to the applicability of the Act to the employees of the petitioner corporation. It is only common which can be said that an employee cannot have benefit of the regulation/pension framed by the corporation but if he has availed of the benefit under the Payment of Gratuity Act, to that extent benefit will be denied to him under the regulations/pension scheme framed by the corporation. If scheme framed by the corporation gives higher benefit to the extent the employee obtains benefit under the Payment of Gratuity Act, to that event the those benefits will be adjusted while claiming benefits under the scheme of regulation/pension framed by the corporation. The employee cannot have complete benefit under the both the Payment of Gratuity Act as well as under the Scheme of regulations/ pensions. To the extent the benefit has been granted to him under the Payment of Gratuity Act, only to that extent the benefit will be adjusted while enforcing the scheme of regulations/pension framed by the corporation. Similarly, if under a scheme framed by the corporation the benefit is less than which is available in the Payment of Gratuity Act, the employee will be entitled to claim difference under the Payment of Gratuity Act." 8. In view of the above categorical pronouncement of the law by the Supreme Court and this Court, there can be no doubt that till 22nd July, 2005 the MCD employees who retired till that date then were entitled to be paid gratuity in terms of the Act. Since they could not derive a double benefit, they would be entitled only to the differential amount where the gratuity calculated under the Act was higher than the gratuity paid to them under the CCS (Pension) Rules. Also, after the law stood settled by the Supreme Court way back on 29th July, 1998, it was no longer open to the MCD to deprive any of its employees who retired till 22nd July, 2005 of the benefit of the payment of gratuity under the Act. It was not necessary for the employees to make an application for the purpose. The MCD was statutorily bound to do so on its own. It was not necessary for the employees to make an application for the purpose. The MCD was statutorily bound to do so on its own. This Court in Municipal Corporation of Delhi v. Nand Kishore, 2003 (102) DLT 518 held: "the denial of the payment of the gratuity under the Act is a continuing wrong and there is no question of any delay in approaching the Controlling Authority and the claim of gratuity cannot be resisted on the ground of delay." 9. In the circumstances no fault can be found with the order of the CA for condoning the delay in each of the respondents making the application. It was in fact the duty of the MCD to have itself made the payment of gratuity under the Act. Consequently, the direction to the MCD to pay interest @ 10% per annum from the date of the retirement of each of the employees till the date of the payment under the Act cannot be faulted. 10. Accordingly, this Court finds no merit in any of these writ petitions and they are dismissed as such. The pending applications also stand dismissed. Writ Petitions & Applications dismissed.