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2025 DIGILAW 2427 (KER)

Usha J, W/o. D Sudheeraj v. Government Of Kerala

2025-09-11

T.R.RAVI

body2025
JUDGMENT : T.R.RAVI, J. The writ petition has been filed praying for a direction to the respondents to release the arrears of Pay and Leave Surrender salary due to the petitioners as per the 7 th Central Pay Revision Scales for the period from 01.01.2016, and to quash Exts.P9 and Ext.P10 to the extent they deny the right of the petitioners for retirement gratuity under the Payment of Gratuity Act, 1972 (hereinafter referred to as 'the 1972 Act'), and to disburse the amounts with interest and costs. 2. The petitioners retired on superannuation from the service of the 2 nd respondent (hereinafter referred to as RCC) after 01.01.2016, and between 2018 and 2020. Petitioners have the qualifying service required for full pension. Exts.P4 to P8 give the service details of the petitioners, including their entry into service and length of service. Ext.P12 Government Order dated 6.2.1987 relates to the bifurcation of the staff and segregation of funds of the 2 nd respondent. It says that terminal benefits applicable to the State Government employees who retire from service on superannuation, will be given to the employees of the Medical Education Department working in the RCC who opt for absorption, that conditional option will be treated as not opting for absorption in RCC and that on becoming regular employees of the RCC, they will be governed by the service rules of the RCC. By Ext.P1 Government Order dated 26.2.2021, revision of pay as per the 7 th Central Pay Revision was sanctioned to the employees of RCC. Petitioners fall within the Non- Academic staff category and come under Sl.Nos.14,15, and 39 in Ext.P1. Paragraph II (b) of Ext.P1 says that the multiplication factor applicable on the existing basic pay (pay in the band + GP) as on 31.12.2015, is 2.57. Paragraph 5 of Ext.P1 shows that the date of effect of pay revision will be 1.1.2016, and allowances shall be prospective from 1.1.2021, and that arrears will be settled later. 3. Ext.P3 is the order issued on a request made by the 3 rd petitioner, pursuant to directions issued by this Court. It is stated therein that the request for benefits of the 7 th pay revision will be considered along with the case of all employees who retired from 1.1.2016 to 31.5.2021 on receiving clarification from the Government. 3. Ext.P3 is the order issued on a request made by the 3 rd petitioner, pursuant to directions issued by this Court. It is stated therein that the request for benefits of the 7 th pay revision will be considered along with the case of all employees who retired from 1.1.2016 to 31.5.2021 on receiving clarification from the Government. Regarding gratuity, it is stated that the employees of RCC are governed by Rule 44(a) of the RCC Service Rules, and not by the Payment of Gratuity Act, 1972 . It is stated that RCC has been exempted from the provisions of the 1972 Act as per a statutory notification issued by the Government of Kerala. The petitioners submit that the Government has neither issued any clarification nor any statutory notification, exempting the RCC from the provisions of the 1972 Act. Regarding the pension, it is stated in Ext.P3 that it will be paid as 40% of Basic Pay + DA till modified orders are issued by the Government. By Ext.P9 order, the 1 st respondent granted sanction for payment of an enhanced rate of DCRG of ?17,00,000/- to the employees of the 2 nd respondent. The amount payable under the 1972 Act was ?20,00,000/-. However, the same was restricted to ?17,00,000/- and that too on a prospective basis, subject to the condition that the additional financial commitment will be met from the own funds of the 2 nd respondent. Ext.P9 is dated 21.11.2022. It can be seen from Ext.P10 order relating to the 3 rd petitioner that the amount of gratuity was restricted to ?10,00,000, even though the admissible retirement gratuity was ?11,12,426/-. 4. Heard Sri S. Abdul Razzak, learned counsel for the petitioner, Sri P.M.Sameer, Government Pleader, for the 1 st respondent, and Sri Athul Shaji, for the 2 nd respondent. 5. The second respondent has filed a counter affidavit. Ext.R2(c) produced along with the counter affidavit is the copy of the RCC Employees Pension Rules. Clause 16 of Ext.R2(c) says that full pension shall be 50% of the last basic pay of the employee and that only those employees who have completed 30 years qualifying service on the date of retirement will be eligible for full pension. Clause 17 gives the proportional pension based on the length of qualifying service. Clause 16 of Ext.R2(c) says that full pension shall be 50% of the last basic pay of the employee and that only those employees who have completed 30 years qualifying service on the date of retirement will be eligible for full pension. Clause 17 gives the proportional pension based on the length of qualifying service. The counter affidavit says that, as far as the benefit of 7 th pay revision is concerned, the request of the petitioners can be considered only after receiving clarification from the Government. Regarding the enhanced gratuity, it is submitted that at the time of the retirement of the petitioners, the maximum eligible amount of gratuity was ?10,00,000/- and the same was sanctioned to the petitioners, and that Ext.P9 order by which ?17,00,000/- was sanctioned has only a prospective effect from 21.11.2022. It is stated that no service pension/statutory pension scheme is prevailing in the RCC and that the scheme under Ext.R2(c) is a contributory pension scheme. The 6 th petitioner was impleaded as a petitioner during the pendency of the writ petition. In the petition for impleading, the 6 th petitioner has produced Annexure A1, which is the judgment in WPC No.39902 of 2022, issued by a learned Single Judge of this Court, directing refund of the gratuity amount which had been recovered at 8% interest from the date on which it became due, since the recovery was against the judgment of the Hon'ble Supreme Court in State of Punjab v. Rafik Masih [ (2015) 4 SCC 334 ] . Pursuant to Annexure A1 judgment, Annexure A2 order had been issued on 30.08.2024 by the 2 nd respondent, restoring the benefits to the 6 th petitioner. 6. The petitioner has filed replies to the counter-affidavits filed by the 1 st and 2 nd respondents. Exts.P12 to P16 have been produced along with the reply affidavit. By Ext.P13 dated 17.06.2000, the first respondent sanctioned the implementation of the 6 th pay revision in the 2 nd respondent. The Government had ratified the order issued by the Director of RCC implementing the pay revision, with effect from 01.03.1997. Ext.P14 is the order by which the pay was fixed as per the 6 th pay revision to the 3 rd petitioner. The Government had ratified the order issued by the Director of RCC implementing the pay revision, with effect from 01.03.1997. Ext.P14 is the order by which the pay was fixed as per the 6 th pay revision to the 3 rd petitioner. Ext.P15 is again an order by which the Government had extended the 6 th Central pay revision to the academic and non- academic staff of the RCC, subject to certain conditions. Ext.P16 is an order issued by the Government, enhancing the retirement age of non-academic staff in the RCC to 60 years, at par with the Sree Chithira Thirunal Institute for Medical Sciences and Technology prospectively. 7. On the above facts, the questions that need to be decided are whether the petitioners are entitled to gratuity under the 1972 Act and whether the petitioners are entitled to receive the arrears of pay, leave surrender salary, and arrears of service pension, reckoning the implementation of 7 th Pay Revision from 01.01.2016. 8. On the issue regarding the applicability of the 1972 Act, Sri Athul Shaji, appearing for the 2 nd respondent, placed before the Court the notification dated 23.12.2021 issued by the Government whereby the Government of Kerala exempted RCC from the purview of the 1972 Act, in exercise of powers conferred under Section 5 of the 1972 Act. Section 5 of the 1972 Act reads thus. “ 5. Power to exempt: (1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. (2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. (3) A notification issued under sub-section (1) or sub- section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.” 9. It can be seen from Section 5 that an order granting an exemption cannot prejudicially affect the rights of the employee. Section 5 (3) specifically says that no notification can be issued retrospectively to the prejudice of the employees. The petitioners are admittedly persons who retired between 1.1.2016 and 30.11.2021. Hence, the notification dated 23.12.2021, which is relied upon by the respondents, and which is not retrospective in operation, cannot be applied in the case of the petitioners. As such, it has to be held that the petitioners are governed by the provisions contained in the 1972 Act. On a plain reading of the statutory provision, the order Ext.P10 whereby the amount of gratuity was restricted to ?17,00,000/- cannot hold good, in view of the fact that Ext.P9 read with the exemption notification can be implemented only with effect from 23.12.2021 and persons who retired before that date will have to be given the benefits available under the 1972 Act. 10. Counsel for the petitioners relied on the judgments of this Court in Regional Cancer Centre (RCC) and Ors. v. Ganga Devi C. & Ors. 10. Counsel for the petitioners relied on the judgments of this Court in Regional Cancer Centre (RCC) and Ors. v. Ganga Devi C. & Ors. [ 2022 (5) KHC 123 ] , Rajendra Prasad K. v. State of Kerala [ 2023 (4) KHC 136 (SB)] , Travancore Cochin Chemicals Ltd. v. Chandran V. [2024 KHC 7135] , Chandrasekharan Nair v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. [2017 (4) KLT 276 (FB)], Viswanathan A.B v. Fertilizers and Chemicals Travancore Ltd.(FACT) [2021 KHC 209] , and the judgments of the Hon'ble Supreme Court in Jyotirmay Ray v. Field General Manager, Punjab National Bank , [2023 KLT OnLine 1939 (SC)], State of Punjab & Ors. v. Jagjit Singh & Ors. [2017 (1) SCC 148] and State of Rajasthan & Ors. v. Mahendra Nath Sharma [2015 KHC 4442] in support of his contentions. 11. In Jagjit Singh (supra) , the Hon’ble Supreme Court, considering the application of the principle of “equal pay for equal work” in the context of temporary employees and regular employees, held that the principle will apply and that the temporary employees are entitled to draw wages at the minimum of the pay scale extended to regular employees holding the same post. The counsel for the petitioners points out that the petitioners were in service on the date of implementation of the 7 th pay revision in the RCC, and hence they cannot be denied the benefits which are available to others who were in service on the said date. In Mahendra Nath Sharma (supra) , the Hon’ble Supreme Court held that pension is not a bounty and the benefit of pension in the higher band after pay revision cannot be denied. The Court specifically held that the antiquated notion of pension being a bounty, a gratuitous payment depending upon the sweet will or grace of the employer, not claimable as a right and unenforceable through Court, has been swept under the carpet by the decision of the Constitution Bench of the Hon'ble Supreme Court in Deokinandan Prasad v. State of Bihar [ 1971 (2) SCC 330 ] , and that the payment no longer depends on the discretion of the Government. In Ganga Devi (supra), a Division Bench of this Court held that refixing the pay of an employee after retirement and ordering recovery of excess amount allegedly paid is arbitrary and unreasonable and in violation of the principles of natural justice. The Court held that the last drawn pay cannot be lowered after retirement. The said decision was rendered in the case of an employee of the RCC. In Rajendra Prasad (supra) , a learned Single Judge of this Court held that gratuity becomes payable on the date of retirement and not on the date on which sanction was accorded for payment, and when there is no exemption from the 1972 Act, the gratuity payable will be as per the 1972 Act. In Chandran (supra) , a learned Single Judge of this Court held that the provisions of a memorandum of settlement cannot override the provisions of the 1972 Act. In Chandrasekharan Nair (supra) , a Full Bench of this Court held that the employee will be entitled to a higher amount than the limit provided under the 1972 Act, if he has opted in terms of Section 4(5) of the Act to be governed by better terms under the Rules governing the payment of gratuity. In Viswanathan (supra), a Division Bench of this Court in which I was a member, held that the right to gratuity is a right to property which is a constitutional right under Article 300A of the Constitution of India. In Jyotirmay Ray (supra) , the Apex Court also held that the provisions of the 1972 Act will prevail over the Service Regulations of the Bank. 12. The principles laid down in the above judgment support my earlier conclusion that the petitioners will be governed by the 1972 Act, since the notification of exemption was after they retired from service, and the amount payable to them as gratuity cannot be curtailed on the strength of a notification issued after their date of retirement. 13. The petitioners are hence entitled to succeed. Exts.P9 and P10 to the extent they deny the right of the petitioners for retirement gratuity under the Payment of Gratuity Act, 1972 , are quashed. 13. The petitioners are hence entitled to succeed. Exts.P9 and P10 to the extent they deny the right of the petitioners for retirement gratuity under the Payment of Gratuity Act, 1972 , are quashed. The respondents are directed to release the arrears of gratuity payable under the Payment of Gratuity Act, 1972 , with statutory interest and the amounts due to the petitioners towards Leave Surrender Salary and arrears of pay based on the 7 th Central Pay Revision Scales in Ext.P1 for the period from 01.01.2016, within one month from the date of receipt of a copy of this judgment. The petitioners shall also be paid the arrears of service pension as per the Rules, reckoning the implementation of the 7 th Central Pay Revision Scales from 01.01.2016 within the one month stipulated above.