JUDGMENT : N. Nagaresh, J. Petitioners are retired non-managerial employees of Malabar Cements Limited, Palakkad. The petitioners seek to direct the respondents to allow revised Gratuity to them. 2. The petitioners state that though the Malabar Cements Limited, Palakkad is in the A Grade category among the Public Sector Undertakings, the wages paid to the non-managerial employees in the Company are only half of the salaries drawn by the non-managerial employees in other A Grade Public Sector Undertakings. The wage structure in the Malabar Cements Limited is governed by the Central Board Settlements reached at National level between Cement Manufacturers Associations and National Trade Unions. 3. The salary structure under Cement Wage Board Award comprises various components, such as Basic pay, Variable Dearness Allowance ((VDA), Fixed Dearness Allowance (FDA) and a group of other allowances, which constitutes 35% of the total pay. These allowances will be excluded while determining the Gratuity amount. Therefore, the non-managerial employees of the Company get a very low amount of Gratuity compared to employees of other Public Sector Undertakings, where the salary elements to be excluded for computing gratuity would be less than 5%. 4. The petitioners state that the non-managerial employees, who have rendered service around more than 30–35 years in Malabar Cements Limited, are getting an average amount of Rs.4 lakhs as Gratuity, as against Rs.10 lakhs received by the non-managerial employees who have rendered service of about 20–25 years in other Public Sector Undertakings. Taking into consideration the aforementioned facts, the Malabar Cements Limited passed Ext.P1 resolution deciding to include various allowances comprising more than 35% of the wage part, for determining Gratuity. 5. Ext.P1 proposal with the recommendations of the Company was forwarded to the Government of Kerala for approval, as per Ext.P2 communication dated 06.10.2017. The Government of Kerala, by Ext.P3 letter dated 17.3.2019 (in W.P.(C) No.18792/2022), approved the proposal and informed the Company that the Government has no objection to frame a scheme/agreement to provide higher Gratuity amount, to those category of employees, by including all allowances, for determining the Gratuity amount. 6. In spite of Ext.P3, the Company took no steps to implement Ext.P1 decision. A representation was therefore submitted to the Minister for Industries as per Ext.P4 (in W.P.(C) No.18792/2022). The said representation was forwarded to the Managing Director of the Malabar Cements Limited as per Ext.P5 (in W.P.(C) No.18792/2022) directing to forward a report. 6. In spite of Ext.P3, the Company took no steps to implement Ext.P1 decision. A representation was therefore submitted to the Minister for Industries as per Ext.P4 (in W.P.(C) No.18792/2022). The said representation was forwarded to the Managing Director of the Malabar Cements Limited as per Ext.P5 (in W.P.(C) No.18792/2022) directing to forward a report. The Government, however, without waiting for a report, took Ext.P6 decision (in W.P.(C) No.18792/2022) rejecting the request to provide Gratuity amount in terms of Ext.P1 decision stating that the financial position of the Company is not conducive to bear the additional expenses. 7. The petitioners state that Ext.P6 decision is not sustainable in law or on facts. The balance sheets of the Company unmistakably reveal profits made by the Company. Every year the Company is paying dividend to the Government of Kerala on the basis of profits made. The petitioners therefore seek to quash Ext.P6 order of the 1st respondent and to allow revised Gratuity to the petitioners. 8. The respondent-Managing Director of Malabar Cements Limited filed counter affidavit in both the writ petitions. The respondent stated that as per the Payment of Gratuity Act, 1972, the definition of ‘wages’ does not include any Bonus, Commission, HRA, Overtime Wages or any other allowances. The Hon’ble Apex Court has clarified the meaning of the expression 'wages' under Section 2(s) of the Payment of Gratuity Act, 1972 and has held that wages will mean and include Basic Wages and Dearness Allowance and nothing else. 9. The respondent further stated that as the Company was running in profit continuously till the financial year 2016-2017, the Management took a lenient view and made a proposal to include other allowances also for calculating gratuity. The Board of the Company sought Government approval to the proposal. The Resolution passed by the Company specified that this method of calculation shall be applicable only up to the implementation of new wage structure to the non-managerial employees of the Company. 10. Though the Company forwarded the proposal to the 1st respondent-State of Kerala, the 1st respondent did not approve the same. In the meanwhile, the Company incurred losses. As per the Government Order, the Management is at liberty to make enhancement of Gratuity only if there exists legally binding agreement/scheme. No such agreement or scheme does exist now. The writ repetition is therefore, without any merit, it was urged by the respondent-Managing Director. 11. In the meanwhile, the Company incurred losses. As per the Government Order, the Management is at liberty to make enhancement of Gratuity only if there exists legally binding agreement/scheme. No such agreement or scheme does exist now. The writ repetition is therefore, without any merit, it was urged by the respondent-Managing Director. 11. I have heard the learned counsel for the petitioners, the learned Standing Counsel appearing for the Company and the learned Government Pleader appearing for the State of Kerala. 12. The petitioners seek to direct the respondents to allow revised Gratuity as requested for and approved by the Malabar Cements Limited. It is not in dispute that the non-managerial employees of the Company receive much lesser amount of Gratuity when compared to other Public Sector Undertakings in the State. In fact, the Board of Malabar Cements Limited has admitted in its resolution dated 31.08.2017 (Ext.P1 in W.P.(C) No.18792 of 2022) that the non-managerial employees are paid ‘‘meager amount of gratuity’’. 13. The Board of the Malabar Cements Limited therefore resolved and approved to include the various allowances which comprise more than 30% of the wage part of non-managerial employees for calculation of Gratuity retrospectively with effect from 01.04.2017. The Company resolved that this method of calculation shall be applicable only up to the implementation of new wages structure to the non-managerial employees of the Company, subject to Government approval. 14. The reason advanced by the Company for not giving revised Gratuity to the petitioners is that the Government has not approved the revision. The said reason is unsustainable. The Principal Secretary to the Industries Department has issued Ext.P3 communication (in W.P.(C) No.18792/2022) to the Managing Director of Malabar Cements Limited, stating that there is no bar in providing higher amount of Gratuity than the statutory gratuity, if there is any agreement or scheme. It is evident from Ext.P3 that the Government has given its approval to provide revised Gratuity to the employees of the Malabar Cements Limited. 15. The Malabar Cements Limited would now contend that there is no agreement or Scheme for revision of gratuity. It is to be noted that in view of Section 5 of the Payment of Gratuity Act, an employer is at liberty to give higher Gratuity amount to his employees, not less favourable than the benefits conferred under the Payment of Gratuity Act, 1972 subject to obtaining exemption from appropriate Government. It is to be noted that in view of Section 5 of the Payment of Gratuity Act, an employer is at liberty to give higher Gratuity amount to his employees, not less favourable than the benefits conferred under the Payment of Gratuity Act, 1972 subject to obtaining exemption from appropriate Government. The Principal Secretary to Industries Department in his communication dated 17.03.2019 (Ext.P3 in W.P.(C) No.18792 of 2022) has categorically stated that the Government has no objection in providing higher amount, if there is an agreement or Scheme. 16. The Management of the Company would contend that there is no agreement or Scheme to give a higher amount of Gratuity. Ext.P1 cannot be treated as one satisfying Section 7 of the Contract Act. It cannot be treated as final acceptance of the demand made by the employees, since Ext.P1 is conditional and is subject to Government approval. 17. Ext.P1 Resolution of the Board of Directors of the Company acquires importance in this regard. The Resolution reads as follows : AGENDA ITEM NO.214-16: PAYMENT OF GRATUITY-EXEMPTION OF ALLOWANCES-REG. The Board noted that in view of the meager amount of Gratuity paid to Non-Managerial employees of the Company when compared to other leading to Public Sector Undertakings in the State, recognized Trade Unions of the Company were requesting for a higher amount of Gratuity. Determination of Gratuity amount is calculated based on last drawn wage of a particular employee which comprises of Basic + Dearness Allowance (DA) excluding all allowances, as the wage structure of the Non-Managerial employees are covered under the Cement Wage Board Award, which includes various allowances, which amounts to more than 30% of the total emoluments. In case of other PSU's the allowances part contains only less than 5% of the total emoluments. The Payment of Gratuity Act does not prevent employer in paying better benefits to the employees. After discussions, the following Resolution was passed: RESOLUTION NO.2994 RESOLVED THAT the Board be and hereby approved to include the various allowances which comprise more than 30% of the wage part of Non-Managerial employees for calculation of Gratuity retrospectively w.e.f. 01.04.2017. This method of calculation shall be applicable only upto the implementation of new wage structure to the non-managerial employees of the Company, subject to Government approval. Though Ext.P1 resolution is not an agreement between employer and employees, it is a complete Scheme by itself. 18. This method of calculation shall be applicable only upto the implementation of new wage structure to the non-managerial employees of the Company, subject to Government approval. Though Ext.P1 resolution is not an agreement between employer and employees, it is a complete Scheme by itself. 18. Ext.P1 states that various allowances being paid to the non-managerial employees, which amounts to more than 30% of the total emoluments, should be taken into account for calculation of Gratuity. Ext.P1 states that such inclusion shall have retrospective effect from 01.04.2017. Ext.P1 further states that this method of calculation shall be applicable only upto the implementation of new wage structure to the non-managerial employees of the Company. When the Company has passed a resolution to give higher amount of Gratuity, giving all necessary parameters for calculation of Gratuity and the period during which the employees would be eligible for the revised Gratuity, the unanimous resolution passed by the Board of Directors itself should be treated as a complete Scheme in itself. The Management cannot be permitted to shirk from its obligation based on the resolution for the reason that a separate document is not drafted describing it as a Scheme. 19. By Ext.P6 communication dated 01.01.2022, the Government has subsequently taken a stand that since there is no Scheme for grant of higher Gratuity and since the Company cannot afford to pay higher Gratuity due to the present financial position, only the Gratuity prescribed under the Act, 1972 can be paid to the petitioners. The defence of the Government as regards absence of a Scheme to pay higher gratuity cannot be accepted as I have already held that Ext.P6 constitute a Scheme. Let us now consider the suitability of the defence based on financial position of the Company. 20. Ext.P7 decision to pay higher Gratuity was taken by the Company on 31.08.2017. Ext.P1 is an unconditional resolution to pay higher Gratuity, subject only to Government approval. The Government has given approval as per Ext.P3 communication dated 17.03.2019. Hence, it is to be assumed that there was no financial issues to pay higher Gratuity in the year 2017-2018. Ext.P8 information provided by the Public Information Officer under the Right to Information Act, 2005 would show that the Company made Rs.931.68 lakhs profit before tax, in the year 2020-2021. 21. Hence, it is to be assumed that there was no financial issues to pay higher Gratuity in the year 2017-2018. Ext.P8 information provided by the Public Information Officer under the Right to Information Act, 2005 would show that the Company made Rs.931.68 lakhs profit before tax, in the year 2020-2021. 21. Ext.P10 notice dated 03.09.2022 of the Managing Director of the Company would disclose that the Company had decided to pay Rs.36,500/-as ex-gratia payment to all serving employees. In October, 2022, the Company, as per Ext.P11, decided to pay pro-rata incentive to serving employees. 22. Ext.P9 minutes of the Company would show that Company had provided financial assistance in the form of Loan and Equity to the following state PSU's based on Government order and accounted for Accrued interest on the PSU loans based on GO from the date of loan given to the PSU's till 31.03.2017 as per detail given below : Sl. No. Name of PSU G.O Reference Loan Equity Accrued Interest Provided in books Rs. Lakhs Rs. Lakhs Rs Lakhs 1. Kerala Industries Small Dev Corp Ltd G.O(Ms) No.147/2010/ID dated 30.06.2010 400 400 183.65 2. United Electrical Ind. Ltd G.O (Rt) No.931/2010/ID dated 30.06.2010 250 250 9.59 Refunded 250 150 Balance 0.00 100.00 3. KSTC Ltd/ Trivandrum Spinning Mill G.O(Ms) No.939/2010/ID dated 01.07.2010 & 200 200 92.02 G.O(Rt) No.955/2016/ID dated 23.09.2016 4. Traco Cable Ltd G.O(Rt) No.930/2010/ID dated 30.06.2010 400 400 183.96 5. KELTRON G.O(Rt) No.146/2010/ID dated 30.06.2010 400 400 214.98 6. KSIE Ltd G.O(Ms) No.148/2010/ID dated 1.7.2010 250 250 98.97 Refunded 60 250 Balance 190 0.00 7. Kerala Ceramics G.O (Rt) No.462/2012/ID dated 17.3.2012 50 0 4.5 Refunded 50 0 Balance 0.00 0 8. Kerala Electrical & Allied Eng Co Ltd G.O (Rt) No.474/12/ID dated 20.03.2012 300 0 28.03 Refunded 300 0 Balance 0.00 0 9. Travancore Cements G.O(Rt) No.67/2018 dated 12.01.2018 & 200 0 G.OIND-H2/344/2017-IND dated 22.12.2017 Total 1790 1500 815.71 The total accrued interest on the outstanding of PSUs loan on 31.03.2017 is Rs.815.71 lakhs. 23. Taking note of aforementioned facts, it is evident that the Malabar Cements Limited was a profit making Company in the year 2017 when Ext.P1 decision was taken and had no serious financial problems in the ensuing years at least till the year 2021-2022. 23. Taking note of aforementioned facts, it is evident that the Malabar Cements Limited was a profit making Company in the year 2017 when Ext.P1 decision was taken and had no serious financial problems in the ensuing years at least till the year 2021-2022. If the Company has incurred losses in subsequent years, that cannot be a reason to deny the revised Gratuity benefit of Ext.P1 decision to the non-managerial employees who have rendered their valuable service and retired from the services of the Company. Those employees are entitled to get the benefit of Ext.P1 Resolution of the Company. Ext.P6 communication dated 01.01.2022 in W.P.(C) No.18792 of 2022 is therefore set aside. The writ petitions are disposed of directing the respondents to extend the benefits of Ext.P1 Resolution to the petitioners within a period of two months.