Case Note & Summary
The Petitioner, Maharashtra State Co-Operative Adivashi Vikas Mahamandal Maryadit, challenged the judgment and order dated 25/11/2019 passed by the Controlling Authority under the Payment of Gratuity Act, 1972, directing payment of additional gratuity of Rs. 1,01,948/- with 10% interest, and the Appellate Authority's order modifying interest to 8% p.a. The Respondent, Shivaji Rambhau Vanjari, was employed as Manager with the Petitioner from 01/10/1978. In 2004, he was transferred to Shabari Adivasi Vitta Va Vikas Mahamandal (Shabari Corporation) with his lien maintained with the Petitioner. The 6th Pay Commission recommendations were implemented for the Petitioner but not for Shabari Corporation. The Respondent retired on 31/07/2012. The Petitioner paid gratuity of Rs. 6,10,342/- based on the salary drawn at Shabari Corporation. The Respondent claimed additional gratuity based on the salary he would have drawn had he remained with the Petitioner. The Controlling Authority allowed the claim, computing gratuity on a last drawn salary of Rs. 30,000/- per month, resulting in total gratuity of Rs. 7,30,940/-. The Appellate Authority upheld the computation but reduced interest to 8% p.a. The High Court held that since the Respondent's lien was maintained with the Petitioner, the Petitioner remained the 'employer' under Section 2(f) of the Act and was liable to pay gratuity for the entire service. The Court found no perversity in the authorities' findings and dismissed the petition, upholding the orders.
Headnote
A) Gratuity - Employer Liability - Transfer with Lien - Section 2(f), 4, 7 Payment of Gratuity Act, 1972 - The Respondent was transferred from Petitioner to Shabari Corporation with lien maintained with Petitioner. The Court held that the Petitioner remained the 'employer' under Section 2(f) and was liable to pay gratuity for the entire service period, including the transfer period. The Controlling Authority's computation of gratuity based on last drawn salary was upheld. (Paras 1-8) B) Gratuity - Interest - Delay in Payment - Section 7 Payment of Gratuity Act, 1972 - The Appellate Authority reduced interest from 10% to 8% p.a. The Court found no perversity in the order and declined to interfere, noting that the gratuity amount was not paid within the prescribed time. (Paras 2, 8) C) Gratuity - Computation - Last Drawn Salary - Section 4 Payment of Gratuity Act, 1972 - The gratuity was computed based on the Respondent's last drawn salary of Rs. 30,000/- per month. The Court upheld the computation as per the formula under Section 4. (Paras 2, 8)
Issue of Consideration
Whether the Petitioner-Corporation is liable to pay gratuity to the Respondent for the entire period of service including the period when he was transferred to another corporation, and whether the Controlling and Appellate Authorities correctly computed the gratuity amount and interest.
Final Decision
The High Court dismissed the Writ Petition, upholding the orders of the Controlling Authority and Appellate Authority. The Petitioner was directed to pay the additional gratuity amount of Rs. 1,01,948/- with interest at 8% p.a. as per the Appellate Authority's order.
Law Points
- Gratuity entitlement
- transfer of employment
- lien
- employer liability
- Payment of Gratuity Act
- 1972
- Section 2(f)
- Section 4
- Section 7
- interest on delayed payment
