2019 LLR 300

SHORT NOTE CODE 17

DELHI HIGH COURT

Hon’ble Ms. Rekha Palli, J.

W.P.(C) No. 3385/2018; 3485/2008; 3498/2018;

3508/2018, Dt/–6-2-2018

 

M/s. BQH Electric Limited

vs.

Pradeep Mehra

 

PAYMENT OF GRATUITY ACT, 1972 – Section 4(3) and 4(5) – When an employee is entitled to gratuity more than the prescribed limit – Employee was Chief Executive Officer – He resigned after 12 years complete continuous service – He was paid gratuity as per. Section 4(3) of the Act which prescribes maximum limit not exceeding ten lakhs rupees – Employee claimed gratuity in terms of Section 4(5) of the Act read with terms and conditions of his contract/understanding with the employer – Employees’ demand was denied by the petitioner – Employee filed his claim before the Controlling Authority – Claim was allowed by calculating the gratuity as per terms of employment and in view of Section 4(5) of the Act, making the employee entitled to Rs. 1,73,75,000 after adjusting the amount of Rs. 10.00 lac already paid – Appeal filed against the award of the Controlling Authority failed – Petitioner challenged the order of the Appellate Authority and award passed by the Controlling Authority in writ petition – Held, Section 4(3) of the Act states that gratuity shall not exceed ten lakh rupees – Section 4(5) of the Act states that nothing shall affect the right of an employee to better terms of gratuity under any award or agreement or contract with the employer – Rule 6(b) states that gratuity shall be calculated in accordance with the provisions of that Act – Clause 11 of employee’s terms of employment states ‘entitled to gratuity on your becoming eligible as per laws’ – Executive Emolument Sheet (EES) issued periodically shows gratuity to be computed @ 4.81% of the annual basic salary – Section 4(5) of the Act begins with ‘a non-obstane clause’ having overriding effect over the remaining provisions of Section 4 of the Act – Technical pleas to deprive an employee of gratuity, which is not bounty, can’t be allowed – Amount payable to employees is already lying deposited – Amount alongwith accrued interest be released to each of the employees – Writ petitions are dismissed.

 

PAYMENT OF GRATUITY ACT, 1972 – Section 7(4)(a) and 7(4)(b) – Does the Controlling Authority under the Act have jurisdiction to decide claims of excess amount i.e., amount more than the prescribed limit under Section 4(3) of the Act ? Yes – Held, Act is a complete Code – Controlling Authority statutorily enjoins power under Section 7(4) (b) of the Act to adjudicate any dispute relating to payable gratuity or admissibility of any claim of gratuity – Act protects the right of employee to get higher gratuity vis-à-vis prescribed limit.

 

For Petitioners: Mr. Sandeep Sethi, Sr. Advocate and Mr. Gulshan Chawla, Advocate.

 

For Respondent: Mr. J.P. Cama. Sr. Advocate with Mr. Kunal Gosain and Mr. Utsav Jain, Advocates.

IMPORTANT POINTS

• An employee is entitled to gratuity more than the prescribed limit as per Section 4(3) of the Payment of Gratuity Act if the claim of the employee is under any award or agreement or contract with the employer, having better terms than under the Act, as provided under Section 4(5) of the Act.

 

• The Controlling Authority under the Payment of Gratuity Act, 1972 have jurisdiction to decide claims of excess amount i.e., amount more than that of the prescribed limit under Section 4(3) of the Act in view of its power under Section 7(4)(b) of the Act to adjudicate any dispute relating to payable gratuity or admissibility of any claim of gratuity since the Act is a complete Code.