LexALLAHABAD BANK & ANR. versus ALL INDIA ALLAHABAD BANK RETIRED EMPS. ASSN.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
B
[2010] 2 S.C.R. _162
ALLAHABAD BANK & ANR.
v.
ALL INDIA ALLAHABAD BANK RETIRED EMPS. ASSN.
(Civil Appeal No. 1478 of 2004 etc.)
DECEMBER 15, 2009 & JANUARY 29, 201 O*
[8. SUDERSHAN REDDY AND R.M. LODHA, JJ.]
Payment of Gratuity Act, 1972 - ss. 4, 4(5), 5 and 14 -
Denial of gratuity - To the employees opting for pension in
C lieu of gratuity - Employer-Bank placing reliance on Awards
and Bip.artite Settlements - Held: Gratuity being a statutory
right cannot be taken away except in accordance with
provisions of the Act - Pension and gratuity are separate
retiral benefits - Provisions of the Act prevail over other
D enactments, or instruments or contract so far as gratuity is
concerned - Notwithstanding the Awards and Settlements,
employees were entitled to gratuity - No exemption was
granted to the employer·Bank from operation of the
provisions of the Act - Waiver to the claim of gratuity on the
E part of employees also not established - The Controlling
Authority neither had jurisdiction to decide nor was correct in
deciding the que.stion as regards comparative beneft{s
between the pension scheme and the gratuity under the Act
- Jurisdiction to decide such question is conferred on
F appropriate Government - An employee.establishment
cannot decide this question for itself - For protection uls. 4(5),
the comparison is between gratuity under the Award/
Settlement/contract and the gratuity under the Act -
Comparison cannot be between the pension scheme and
G gratuity under the Act - Service Law - Pension and Gratuity
- Distinction between.
Interpretation of Statute - Remedial I welfare I labour
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*Ed: The Judgment dated 15.12.2009 is modified/clarified by order dated
29.1.2010.
H
162
ALLAHABAD BANK v. ALL INDIA ALLAHABAD BANK 163
RETIRED EMPS. ASSN.
statutes - Interpretation of - Held: Such statutes should
A
receive liberal construction having due regard to the directive
principles of the State Policy, so as to secure the relief
contemplated by the statute - Constitution of India, 1950 -
Directive Principles.
The questions for consideration before this court
were whether the retired employees of the appellant-
Bank were entitled to payment of gratuity under the
provisions of Payment of Gratuity Act, 1972, having opted
B
for pensionary benefits in lieu of gratuity; and whether C
the Controlling Authority had jurisdiction to decide or
rightly decided the question that the pension scheme
offered by the Bank was more beneficial than the benefit
of gratuity under Payment of Gratuity Act.
Dismissing the appeal preferred by the Bank and
D
allowing the Writ Petitions preferred by the employees'
Association, the Court
HELD: 1.1. Gratuity payable to an employee on the
termination of his employment after rendering continuous
E
service for not less than 5 years and on superannuation
or retirement or resignation etc. being a statutory right
cannot be taken away except in accordance with the
provisions of Payment of Gratuity Act, 1972, whereunder
an exemption from such payment may be granted only
F
by the appropriate Government under Section 5 of the Act
which itself is a conditional power. No exemption could
be granted by any Government unless it is established
that the employees are in receipt of gratuity or pension
benefits which are more favourable than the benefits
conferred under the Act. [Para 14] [174-G-H; 175-A-B]
1.2. Pensionary benefits or the retirement benefits as
G
the case may be whether governed by a Scheme or Rules
may be a package consisting of payment of pension as
well as gratuity. Pensionary benefits may include-
H
164
SUPREME COURT REPORTS
[2010] 2 S.C.R.
A payment of pension as well as gratuity. One does not
exclude the other. Only in cases where the gratuity
component in such pension schemes is in better terms·
in comparison to that of what an employee may get under
the Payment of Gratuity Act, the Government may grant
B · an exemption and relieve the employer from the statutory
obligation of payment of gratuity. Pension and gratuity
are separate retiral benefits and right to gratuity is a
statutory right. (Paras 16 and 17] (175-D-H]
C
1.3. It is not correct to say that under pension and/or
gratuity, in terms of Shastry/Desai Awards and/or
Bipartite Settlement on one hand and the gratuity payable
under the Act on the other, pensionary benefit was better
in terms and more favourable than the benefits conferred
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