Historic Order On Gratuity (This order yet to be verified)

Government Of India Reqistered A/D
Ministry Of Labour& •Employment
Office Of the Regional Labour Commissioner (Central).


FORM 'R'
[See Rule 17)
Notice for Payment of Gratuity No. 36(31
To, Dated. the June 15 2018

The Chairman,
Jharkhand Gramin Bank
Head Office . Rajendra Place, 5, Main Road,
Ranchi-834001


Whereas Sri Ashok Kumar Praéad, Slo Sri Lochan Prasad Sahu. "Sauräbh Kunj"
Birsa Vihar. Punchsheel Nagar, Road No.2, Pandra, P.O.-Hehal, District-Ranchi-834005 (Jharkhand) an employee under you, filed an application under Section 7 of the Payment of Gratuity Act, 1972;

And, Whereas the application was heard in your presence on 08_05.2018 and after the hearing I have come to the finding that the said Sri Ashok Kumar Prasad is entitled to a payment of Rs. Rs.24 93,285.00/- (Rupees twenty four thousand ninety three thousand two hundred eighty five only) as total amount of gratuity alongwith interest for delayed period under the Payment of Gratuity Act, 1972,

And. Whereas you have paid a sum of  (Rupees ten lakh thirty five thousand nine hundred only) to the said Sri Ashok Kumar Prasad on 02.09 2016.

Now, therefore, I hereby direct you to pay the balance amount of gratuity amounting to Rs_   (Rupees seventeen lakh twelve thousand four hundred twenty seven only) (which is calculated @ 10% per,annual from the date it became payable i.e. w e f 01 09.2016 till 31.05.2018) to Sri Ashok Kumar Prasad within thirty days from the date of receipt Of this notice under intimation to the Controlling Authority.

seal. this 15th day Of June, 2018.
( G.S. Doraiburu )
Controlling Authority under Payment 01 Gratuity Act, 1972
Regional Labour Commissioner (Central'
Ranchi.
' copy of finding to Sri Ashok Kumar Prasad.
Slo S' urabtlkunjv,
birsa Vlhar; Punchsheel Nagar, Road No.2, Pandra, P.O
Hehal, District-Ranchi-834005 (Jharkhand).•
He is advised to collect the payment from th employer.

BEFORE THE CONTROLLING AUTHORITY UNDER PAYMENT OF GRATUITY ACT. 1972
AND
REGIONAL LABOUR COMMISSIONER (CENTRAL). RANCHL

Dated this 15th day of June, 2018
Present: Sri G.S. Doraiburu. Regional Labour Commissioner (Central)
E-191 ,Sect0r-ll. HEC Colony, Dhruwa. Ranchi, Jharkhand
. APPLICATION
Be NO 361311/2016-RLC(R)
Slo Sri Lochan Prasad Sahu, Applicant "Saurabh Kunj", Birsa \Tlhar, Punchsheel Road No.2. Pandra, P.O.-Hehal. Ostrict-Ranchi-834005 (Jharkhand)
and
The Chairman. Jharkhand Gramin Bank,
Head Office. Rajendra Place, 5, Main Road Opponent
Ranchi-834001

APPEARANCE :
1 . On behalf of the Applicant           Sri Ashok Kumar Prasa$ Ex-Senior Man'ager, (Applicant)
2 On behalf of the Opposite party Sri Nithish Kumar, Manager (Legal), Jharkhand Gramin Bank, Ranchi.

Sri Ashok Kumar Prasad. SIO Sri Löchan Prasad Sahu. "Saurabh Kunj". Birsa Vihar.
Punchsheel Nagar. Road No.2, Pandra. P O.-Hehal. District-Ranchi-834005 (Jharkhand)
(hereinafter called as Applicant) filed application dated 18.11.2016 in Form •N' under Rule
10(1) of Payment of Gratuity (Central) Rules, 1972 for determination and direc)on to the The
Chairman. Jharkhand Gramin Bank, Head Office Rajendra Place, 5, Main Road. Ranchi•83400t (hereinafter called as Opponent) for payment of gratuity alongwith interest to him

2 Notices were issued to the parties thrOugh registered post directing them to attend
hearing The matter was heard on different dates and finally concluded on 08 05.2016 when both the parties were present.

3. The case Of the applicant is that he was appointed on 05.01.1981 in Jharkhand Gramin Bank and superannuated on 31.082016 after rendering 35 years. 7 months and 27 days of continuous service and his last wage drawn was Rs.90,635.30/- (Basic
Allowance+DA on Special Allowance+CCA) per month and total amount of gratu'ty amounting to Rs.25,09 900.56 was payable to him as per Regulation of the Bank, But he was paid less amount Of gratuity on 02.09 2016 i.e. Rs.10,35t900!-.

Therefore. the applicant claimed differential amount of gratuity amounting to Rs. 14.74.000.56 alongwflh interest for delayed payment from 01.092016 till the date Of payment. The applicant further stated that as per Rule72(1) of Bank (Officer and Employees) Service Regulation 2010, an officer or employee shall be eligible for payment of gratuity either as per the provisions Of the Gratu& Act. 1972 (39 of 1972) or as per sub-regulations (2) whichever is higher.

As per Sub-Regulation 213), the amount of gratuity payable to an officer or employee shall be one month's pay for every completed year of service or part thereof in Gess of months subject to a mavmum of 15 n 's pay- provided that Where an Officer or employee has completed more than 30 0' service. he Shall be eligible byway of gratuity for an additional amount at the rate one hat' of a month's pay for each completed year of service beyond 30 years provided further that respect of an officer the gratuity is payable based on the last pay drawn

The applicant furnished the details of calculation of gratuity. Further, the applican•t relied upon the vanous in the similar nature Of case by the different Controlling Authorities under the P G Actand aso of Hon'ble Supreme court in Civil Appeal No 9087 of 2012 (arising out of SLP No 14570
2012) in the matter of Sri Y K Singla The applicant also relied upon the decision dated
13.12 2017 Of Appellate Authority under the Payment of Gratuity Act. 1972 and Dy Labour Commissioner(central). Hyderabad in case PGA-36/21 to 44/2017 between Spatagt'ih Gramin Bank Vs. Shri P. Venugopal Gupta ahd 23 Others

4. On the Other hand. the opponent submitted that as per Regulation NO 72(3). they have Considered 18 months' pay for arriving at the due amount for gratuity payable to the applicant As per claim Of the applicant for payment Of gratuity dated 29 08 2016. the bank made payment ot Rs 10.35.900/- to the applicant by crediting in the applicant's Saving Account Number for Rs.10.28.720f- after deduction Of income tax The bank further stated that as per Regulation No.2 1 (m) •pay" means basic pay drawn per month by the officer Or employee in a pay-scale including stagnation increments and any part of the emoluments which may specifically be classified as pay under these regulations." In the light of this provisions, the pay eligible tor gratuity calculation in respect Of the applicant Shri Ashok Kumar Prasad as on 31 08 2016 i e  the date Of retirement was taken as under:-
- Rs.55.870/person? ualification Pay . Rs. 1,680/-
Oue arriOyn gratuity (i.e. 18 month's pay.) -18 x Rs.57.550/-= Re
'Shus, thö total, gratuity payable to the applicant as per service regulations comes to RsAO.i5,900/,. on tbe total pay component Of Rs.57.5501-.

However. the maximum amount Copayabld pay nt of Gratuity Act. 1972 is Rs 10 00.000/- only But higher amount of vRs.1Q;ß900/e.ch en paid to the applicant as per Regulation 72(1),

The apponent relied updn .tfie•ordérs Appellate Authority under the Payment Of Gratuity Act. 1972 & Dy Chief Central). Bangalore in the case Of the Chairman, Pragati Krishna
Granieé0å8an*,: ellary vs. Sri B K. Sathyanarayanrao and Beed District Central Co-operative
Bank VB.>t• Of Maharashtra and others


5. Heard both the parties in the matter. On considering the contentions Of the applicant and opponent, the following issues are to be decided
i) Whether the Applicant is justified in claiming Basic Pay + DA + special Allowance DA on Special Allowance + POA for the purpose of calculating the gratuity?
ii) Whether the applicant is justified in claiming forgratuity atthe rate 0145 days even completed year Of service rendered beyond 30 years? iii) Total amount of gratuity payable to the applicant, iv) Whether the applicant is entitled for interest for the less payment'delayed payment c gratuity amount?


Before discussing the aforesaid issue, it is pertinent to verify that whet<er the applicat has filed this application in Form •N' before this authority within the period of 90 days of h/ superannuation as prescribed under the payment of Gratuity Act, 1972 and Rules thereunder. In this connection. it is observed that the applicant was superannuated from service on 31 08.2016 and filed his applicati in before this Authority on 18 I l 201 Thus. the applicant filed his application in ated i.e. 90
superannuation.

3
6 With regard to the Issue No 50). I find that the Regulat,on the Opponent

"Pay" means basic pay drawn per month by the officer or employee in a
including stagnation increments and any pårt 0' the emoluments Which may specifically be

As per Clause 20) Of Regulations, "Emoluments" means the aggregate Of salary and allowances, if anyL and
As per clause 2(o) of Regulations, "Salary" means aggregate of Pay and dearness allowance
In the light of the above clauses, I fully agree with the contention Of the Applicant that the definition of Pay having already included word "Emoluments" and further includes *Salary and allowances". The allowances are not defined in the Regulations. The word "salary" is defined under the Regulations NO.2(o) and Salary means aggregate Of pay and dearness allowances, \
The definition Of Pay under Regulations cannot be said and believed that it would not include the emoluments and salary Hence, the definition of Pay read as whole means of Basic pay + Dearness Allowance + Allowance
The Swages" defines under section 2(S) of the P G. Act, 1972 as under.-

 :waqes" means all emoluments which are carried by an employee while on duty or on leave io accordance with terms and conditions Of his employment and which-are paid or are payable to cash and includes dearness allowance but does not include any bonus, commisston ho nt allowance, overtime wages and any other allowance."
this connection. the Hon'ble High Court of Madras in W.A. 1478 of 2006 in P. Selvaraj
VS. Managemeni of Shardlow India held that •the Gratuity Act is a beneficial prece Of and,/t 5hbu/d receive an interpretation consistent with the pnncples of equity and fair play.• Therefo/e, the/term •last drawn wage" found in Section 4(2) of the Gratuity Act should receive its full mea ng and it cannot gtve any fractured interpretation Further. the settlement provides to w t should be the wages that should be paid to a workman and that the Management cannot adopt an artificial interpretation with reference to the term •wages" It is in context: t,46 term •wages' which is defined under the Gratuity Act, must Include not only what
JD-hihfilso what IS payable to a workmån if there was a bonafide delay in the payment Of
Gratuity on account Of calculations to be inade by taking into account the variable Dearness Allowance. the best. the Management may not be accused Of any deliberated delay so as to be mulcted mth any Interest and on account Of the delayed payment.

Constder•ng the facts presented before me that the Respondent Sank is interpreting the word •pay' as salary. which includes Dearness Allowance and other components at the time of recovenng the salary from employees under Regulation 10(1). which states,
Termination Of Service b; Notice:•

(1 No officer or employee shall leave or discontinue his service in the Bank without first giving notice in writing to the Appointing Authority 0 s intention to leave or discontinue rus service or  The period notice required Shan be

Three months. in the case Of or Confirmed
 One month, in the case o' Officer ot employee Who ts on
In case of breach of clause (b) of sub-regulaton an shall be liable to pay to the Bank as compensation a sum equal to hrs

Further it was also observed that under Regulation Superannuation and Retirernent and under Regulation 66(2) Paternity Leave to Male Officer or Employee the opponent 'harkhand Gramin Bank is interpreting the word •Pay' as total salary whch Includes Dearness Allowance and Other components

On the other hand. the Opponent Jharkhand Gramin Bank has Interpreted the word •Pac undet Regulation 72(3) with reference to the work •Pay• under Regulation 2 ( l)tm) as only basic pay and increment ccrnponents for calculating the gratuty tn the instant case. Which is contradctory
Regulation 72(3) The amount of Gratuity payabk to an officer or employee shall be one month's pay for every completed year of servtce or part thereof tn excess of months subject to a maximum of 15 month's pay.
Provided that where an or employee has cornpleted more than 30 years of service shall be e? le byway of gratuity for an additiona' amount at the rate of one half of a month-s pay foreach ted year of service beyond 30 years provided r that in respect of an Offcet the gratuity is payable based on the last pay
Provideé at in respect of an employee pay for the purpose of calculation of gratuity Shall be Basic Pay?" dearness allowance and special allowance and officiating allowance payable duringÅhe months preceding death, disabi0ty retirement. resignation term.nat.cn of service. as e may be
above. it is observed that the work •pay' was used in case of both the officers But in case of officers. it was last drawn pay and for it was an average of last 12 months.


But the Opponent Jharkhand Gramin Bank interpreted the word •pay• for effrcers differently which is against its own regulations
Hence, on the facts discussed above the regulations of the Opponent Jharkhand Gran"" Bank curtail the right Of an employee to get the entitled components of wages whych are earned by an employee as specified in section 2(s) Of the P G. Act by categorizing the into •Officer and Employee• The Opponent Bank allows paying only Pay but net Dearness Allowance for which the Appellant is eligible for
Under Section 14 of the Act. •the provisions of this Act. or may rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or Controct having effect by virtue Of any enactment other than this Act'
Therefre this tssue s answered affirmative that the a's. entitieo Dearness Allowances. PQA DA on PGA. speciat Allowanco and DA on Special Allowance the purpose calculations of Tne
Gramin sank cannot differentiate the term •pay• in the case cf Officer Employee for the purpose of cabculatons Of gratuity

  As regards Second issue it ts pertinent to discuss and examine the relevant provisions under the PG. Act. and then the Regulations:

Section Of the PG. Act. provides that —
'Nothing this section shad affect the of an employee receive terms uf gratuiry under any award agreement cr   the employer •
in the instant case. the Opponent Jharkhand Gramin Bank has framed Regulations 2010 with a view to grve better terms cf gratuity under Regulation 72(3) which read as under-


•The amount Of Gratuity   an officer or employee shall be One month's pay for even,' comp,'eted year cf service or part thereof excess of sn months su&Ject to a of  5 months pay:
Provided that '.v+ere an Off•cer or employee has completed more than 30 years of serv'tce. he be eLg;51e by way cf gratuity an amount at the rate cf half Of a  pay for each completed year of service beyond 3C years

that in respect •f an Officer, the gratuity is payable eased on the last pay
Ffcv•ded 'so at in respect of an employee pay for the purpose of calculation of gratuity Baste Fay dearness and special allowance and offic'aång eur:pg the preceding death. disability. retirement, resignation or termrnation

the case fray be
Here:in thk*R Illation. an amount equal to •Pay' of maximum Of 15 Months pay at the one y for every completed year Of service shall be payab'e upto 30 years of yservtce to say that the bank is paying 15 months pay upto 30 years. Irrespective of rs of semce complete within 30 years,
As regards calculation gratuity beyond 30 years of service as pet Regwation_ the Appellate Authority under the PG Act, 1972 and. Dy Chief Labour Commissioner Central). Hyderabad in the Case Nos. PGA-36J21 to 44/2017 between Sapatigri Gramin Bank Vs Shri P Venugopal Gupta and 23 others has clarified that as per the regulations 72(3). one halt o' the month's pay has to be paid as gratuity beyond 30 years of service, One half means. one and hatf of the month's pay i.e, 45 days and further ordered that the gratuity has to be calculated @ 45 days wages, for each year of service heyond 30 years of service. As per Act is 15 days wages per each year ef service Since it is a better scheme. the Bank has framed regulations to pay gratuity @ one month pay upto 30 years cf service (subiect to a maximum of 15 months pay) and % months pay tor each year of service beyond 30 years of service There is logic in paying one month pay upto 30 years, and IS days after 30 years of service There is extra incentive to retired emptoyees whe have completed more than 30 years met}onous setvce by way et months pay. fer each et year ot service was framed in the regulatos as a reward to empioyeeS who had rendered 'engest service in the Bank Even otherwise. •half means and •one half* means 1 If the intention ef the regulations is to give only 15 days pay then they would have menttoned •hatt- ef pay Since it was spec.tted

6
as "one half' of the month's it must be read as 1 % of the month's pay 'e 45 days pay for each year of service beyond 30 years of service Thus. the to recerve based on
Thus. it is clear that the calculation of the gratüity beyond 30 years Of service in respect the applicant Should be calculated @ 1 of the months pay i e.45 for each
In View Of the above, I determine the gratuity in respect of the ts as under-
 

Date Of A Ointment
Date of Retirement
Length of completed year of service for which
 
Last wages drawn PCP + Special
Allowance on S ecial Allowance)
Amount of ratui a able
a) For first 30 years 90.035 30 30 26

b) For beyond 30 years of service i.e. 5 ars. 7 months & 27 da s
Total amount of ratuit   a able a+b rounde#ff Rs 24,93.285.00
A Ount Of gratuity already paid to thea
Balance ount of gratuity to be paid licant Rs.10,35.900 00
Rs.14,S7 ,385/- (Rupees fourteen lakh fifty seven thousand three hundred eighty five onl


Thus, the applicant is entitled differential/balance amount of gratuity amounting to Rs_
14 57,085/- (R pee's fourteen lakh fifty seven thousand three hundred eighty five only).
;9'.- • Sofa' sue No.5(iv) regarding interest on delayed payment of graffity is concerned.
itt may menti6q•t t as per Section 4 of the Payment of Gratuity Act. 1972. gratuity shall be loyee on the termination of his employment after he has rendered continuous erviCe4pr;ti less than five years(a) on his superannuation. or (b) on his cetirement Or

(c) on his death of disablement due to accident or disease. It is obligatory on the ttof;thé employer as per Section 7(2) of the Act that as soon as gratuity becomes payable. the employer shall, whether an application referred to in sub-section (1) has been made or not. determine the amount Of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of the gratuity so determined

As per Section 7(3), the employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. Further. as per sub-section 4(a) of Section 7, if there is aoy dispute as to the amount of gratuity payable to an  employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity. or as to the person entitled to receive the gratuity. the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity I find that the opposite party Jharkhand Gramin Bank not deposited the gratuity amount With this authority, thereby the opposite party failed to comply the above provisions of Act, Further. as per provisions contained in Section 7(3A) Of the Payment Of Gratuity Act. 1972, If the amount Of gratuity is not paid by the employer within the period specified in sub-section 3. he shall pey from the date on which the gratuity becomes payable to the date on vvhtch it is paid, simp:e interest at such rate not exceeding the rate notified by the Central Government from time to trine for repayment of long term deposits , provided that no such interest shall be payable if the delay in payment is due to the fault or the employee and the employer has obtained pem'iss?on writing from the controlling authority for the dela d'payment that ground
In similar situation in the case of H Gangahanume and corporation Ltd the Hon'ble Supreme court held that payment of gratuity as the case may be does not lie in the domain of
In this case. the opposite party responsible for delay in payment of gratuity to applicant/employee eligible amount of to the employee The  entitled to Interest on delayed payment of balance amount Of gratuity
As per existing rates of interest notified by the Central Government Vide Notification No
S 0 874(E) dated 01 10 1987, the rate of interest is 10% per annum As such. the Opponent Jharkhand Gramin Bank is liable to pay interest @ 10% per annum for the penod of de'as,• rn payment of differential amount of gratuity, i e from 01 09 2016 to the date on which the gratuty IS actually paid

Thus, the total interest on differential amount of gratuity payable for delayed penod 0' 01 year and nine months (i e from 01.09 2016 to 31 05 2018) is calculated as under -

14.57.335 00 x 10 x 21 mqnths = Rs.2.55_042 00 100 x 12
Thus, the total amount of gratuity (differentiat amount of gratuity) together wtth interest payable •s Rs 17.12 427/- (Rupees seventeen lakh twelve thousand four hundred twenty seven only) to the applicant by the opposite party

10, The applicatton is allowed In the circumstances mentioned above I hereby direct the opposite party to pay the balance amount of gratuity together with interest amount•ng t' Rs 7,12 427/- (Rupees Seventeen lakh twelve thousand four hundred twenty Seven only) to the applicant. Sri Ashok Kumar Prasad, Ex-Sentor Manager within thirty days Of receipt Of this O'der under intimation to this Authority. This disposes of the applicant's application dated IS 20tö and thus, I ordered accordingly.
Given under my hand and seal, this 15tn day Of June, 2018
Controlling Authority under Payment of Gtatulty Act
Regional Labour Commissioner