RaviChand vs Punjab State Clvil Supplies ...

on 1 May, 2019
Punjab-Haryana High Court
RaviChand vs Punjab State Civil Supplies ... on 1 May, 2019
CWP No.6799 of 2017

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

CWP No,6799 of 2017

DATE OF DECISION:01.05.2019

Ravi Chand

Petitioner

Versus

The Punjab State Civil Supplies Corporation Limited and another

Respondents

CWP No.6832 of 2017

Bhupinder Singh

Petitioner

Versus

The Punj ab State Civil Supplies Corporation Limited and another

Respondents

CWP No. 6817 of 2017

Roshan Lal Khanduja

Petitioner

Versus

The Punjab State Civil Supplies Corporation Limited and another

Respondents

CWP No.6814 of 2017

Teja Singh and others

Petitioners

VersuS

The Punjab State Civil Supplies Corporation Limited and another

Respondents

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CWP No.6833 of 2017

Hardev Singh

Petitioner

Versus
The Punjab State Civil Supplies Corporation Limited and
another
Respondents
CWP No.6848 of 2017
Darshan Singh

Petitioner
Versus

The Punjab State Civil Supplies Corporation Limited and another

Respondents
CWP No.6915 of 2017
Samarjit Kaur

Petitioner

Versus

The Punjab State Civil Supplies Corporation Limited and another

Respondents
CORAM: HON'BLE MR. JUSTICE HARSIMRAN SINGH SETHI

Present: Mr. Vivek Sharma, Advocate for the

petitioner.
Ms Suman Devi Sexena, Advocate for
Ms. Deepali Puri, Advocate
for respondent-PUNSUP (CWP-6848-2617) .
Mr. Mehardeep Singh, Advocate
for respondent- PUNSUP (CWP-6817-2017).
Ms. Manpreet Kaur, Advocate for
Mr. A.D.S. Jattana, Advocate
for respondent-PUNSUP (CWP No.6832 of 2017).

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CWP No.6799 of 2017

HARSIMRAN SINGH SETHI, J. (ORAL)

By this common order, bunch of writ petitions, details of which have been given in the heading, are
being decided as all the writ petitions involve the same question of law and similar facts. For the
purpose of this order, the facts are being taken from CWP No.6799 of 2017.

The claim of the petitioner in the present writ petition is that he is entitled for the grant of the
gratuity upto the sealing of '1o lacs keeping in view the amendment which has been carried out in
the Payment of Gratuity Act, 1972 by the Government of India on 24.05.2010. The said prayer of the
petitioner has been declined by the respondent-Corporation on the ground that the petitioner had
already retired from service prior to the datewhen the amendment was done to the Payment of
Gratuity Act, 1972 on 24.05.2010 whereby maximum limit was enhanced to `10 lacs and, therefore,
as the amendment is prospective, the petitioner is not entitled for the grant of the said benefit as he
was not in service on the said date.

The facts as stated in the writ petition are as under: The petitioner was appointed as Daftri with the
respondents-department on 27.01.1976 and he retired on 31.08.2009 and he was paid the retiral
benefits including the graiuity amounting to '3.34,403/- and the claim of the petitioner for the
grant of retira! benefits stood decided.

The prayer of the petitioner is that as the State of Punjab has extended the benefit of enhanced
gratuity of `10 lakhs to its employees w.e.f. o1.01.2006 and the same benefit has also been 3 of 16
extended by the another institution, namely, MARKFED to its employees, the same benefit needs to
be extended to the petitioner as well, who is the employee of PUNSUP.

The said request of the petitioner was rejected by the respondents vide letter dated 10.10.2016 on
the ground that the employees of the respondent-PUNSUP are governed by the provisons of
Payment of Gratuity Act, 1972 and not the Punjab Civil Services Rules and as the amendment to the
1972 Act has been carried out by the Government of India on 24.05.2o10 and is prospective, the
employees retired before the said date are not entitled for the same. The said order of rejection of
the claim for the grant of gratuity on a higher sealing of '10 lakhs has been impugned by the
petitioner in the present writ petition.
Upon notice of motion, reply has been filed by the respondent-Punjab State Civil Supplies
Corporation Limited (PUNSUP). In the reply also, the respondents have stated that the employees
of the Board, Corporation PUNSUP are governed by the Payment of Gratuity Act, 1972 and as the
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amendment to the Gratuity Act has been implemented from 24.05.2010, the employees who retired
prior to the said date are not entitled for the benefit of the said amendment. Further, the
respondents have mentioned that the Board of Directors of the PUNSUP in their 187th meeting held
that the recommendation of the sth Pay Commission in respect of gratuity and ex-gratia to be got
approved at the level of the Chairman of the PUNSUP and after the approval of the Chairman, the
payment of gratuity of enhanced rate was only implemented from the date of 4of 16 amendment of
Payment of Gratuity Act, 1972 i.e. 24.05.2010. The relevant reply in this regard is as under:
"It is submitted that to implement the recommendations of 5th pay commission,
meeting of PUNSUP Board of Directors was held on 26.11.20og and an agenda item
No.189.4 was placed before the Board in which at point 6 (Annexure R

4), it was mentioned that, "In the PUNSUP Service By-laws 1978 Payment of
Gratuity,rules have been framed as payment of Gratuity will be regulated by
provision contained in the Payment of Gratuity Act 1972. Gratuity to the employees
who are not covered by the above said Act shall be paid in accordance with the rules
prevailing in the Punjab Government. In PUNSUP revised Service By- laws, 1985, it
was made clear that payment of gratuity will be regulated by decision taken by Board
from time to time. In accordance with above decisions payment of gratuity to the
retiring employees as well as legal heirs of the deceased officials is made under the
provisions of Payment of Gratuity Act, 1972 for which maximum limit is Rs.3.50
lakhs. So far as payment of ex-gratia in case of deceased is concerned it is also being
paid in accordance with State Government instructions being issued from time to
time. Now the Government of Punjab Department of Finance (Finance Pension
Policy &Coordination Branch) vide letter No.3/23/o9/3 FPPc/879 dated 7.8.2009
has issued instructions with regard to implementation of recommendations of _th
Punjab Pay Commission regarding Pension &other retirement benefits. Since no
pension scheme is inoperative in PUNSUP as it is covered under the Employees
provident funds and Miscellaneous provisions Act 1952, for which 12% matching
shares with the deductions made from the salary of employees is contributed with
Regional Provident Fund Commissioner Chandigarh (Government of India) on
month to month5 of 16 basis, hence the matter related only to Rates of
Retirement-cum-death Gratuity &Ex-gratia payment. The PUNSUP Board of
Directors approved in principle to accept the recommendations of 5th pay
commission, stating that "As regards gratuity and ex-gratia, the Board decided that
before implementing the recommendation of 5th Pay Commission instructions of
Department of Public enterprises be checked in this regard and be got approved at
the level of chairman of PUNSUP." Acopy of the order passed in this regard is
appended herein as Annexure R-5.

It is further submitted that as per decision of the Board of Directors in the meeting
held on 26.11.2009, the matter was referred to BPE, Department of Finance, Punjab
for seeking clarification with regard to date of payment of gratuity enhanced from
Rs.3.5 lakhs to Rs.10 lakhs under the provisions of Payment of Gratuity Act

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(Amendment Act), 2010. The Joint Director (Finance &Account), Directorate of

Disinvestment vide letter/circular dated 24.5.2010 addressed to all MDs of Public
Sector Undertakings/Corporative Societies made it clear that Parliament has
amended the Payment of Gratuity Act, 1972 w.e.f. 24.5.2010 (in Section 4) in which
maximum limit of gratuity Rs.3.5 lakhs has been extended up to Rs.10 lakhs vide the
abovementioned letter/circular. The Directorate of Disinvestment further directed
the Managing Directors that if their employees are being paid as per the Payment of
Gratuity Act, 1972, then the Payment of Gratuity Act, 201o, as implemented by
Central Government will be implemented w.e.f. 24.5.2010.
In view of said circular letter issued by Department of Finance, the case was
forwarded to Hon'ble Chairment,PUNSUP for seeking approval in accordance with
the decision of Board of Directors and subsequent clarification from Department of
Disinvestment, Department of 6 of 16 Finance, Punjab. After the approval of worthy
Chairman, the amended Payment of Gratuity Act, 2010 was implemented w.e.f.
24.5.2010. Payment of gratuity with the maximum limit of Rs.10 lakhs is made to
those retiring employees who retired after 23.5.2010. Therefore, it is most humbly
and respectfully submitted that the averment made by the petitioner in the prayer
clause of the present writ petition is misconceived, wrongly interpreted and hence
denied. It has been made clear by above made submissions that the petitioner is not
entitled to enhanced gratuity."

Ibaveheard the counsel for the parties and have gone through the record of the case with their able
assistance.

It is a matter of fact that the petitioner in the present writ petiton and petitioners in the other
connected cases have retired prior to the amendnment which was carried out by the Government of
India to the Payment of Gratuity Act on 24.05.2010. Prior to the amendment to the Payment of
Gratuity Act, 1972 done on 24.05.2010, the maximum limit was '3.5 lacs. AIl the petitioners have
already been paid the gratuity on the basis of the said limit. Claim of the petitioner now is that the
said amendment which has been carried out by the Government of India on 24.05.2010 should be
implemented w.e.f. o1.01.2006. Once the amendment has been done by the Government of India
and as per the bye-laws of the PUNSUP, the employees are governed by the provisions of Payment
of Gratuity Act, 1972, the employees willonly be entitled for the gratuity on enhanced sealing after
the amendment only. The amendment made by the government of India on 24.05.2010 is not
retrospective. Once the same is not retrospective, the petitioner cannot claim the said 7 of 16 benefit
with retrospective effect.

As far as the argument of the counsel for the petitioner that the employees of the State of Punjab
have been given the benefit of enhanced gratuity of '10 lacs from o1.01.2006, the same will not
confer any right upon the petitioner to claim the same benefit. The employees of the Government of
Punjab are not covered under the payment of Gratuity Act, 1972 but they are covered under the
Punjab Civil Services Rules for the payment of gratuity.Various departments of Government of
Punjab are exempted from the applicability of the Payment of Gratuity Act, 1972. State of Punjab
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while revising the pay of itsemployee also enhanced the gratuity to `10 lacs w.e.f. o1.01.2006. The
said enhancement of gratuity by Government of Punjab to its employees is not applicable upon the
PUNSUP automatically tillthe same is adopted. In the present case, the Board of Directors have
adopted the amendment of the payment of gratuity at enhanced rate to its employees only from the
date of amendment which has been carried out by the Government of India to the Payment of
Gratuity Act on 24.05.2010. Therefore, the petitioners cannot equate themselves with the employees
of the government of Punjab, who are not similarly situated as the petitioner. Petitioners will be
governed by the decision of the competent authority of the PUNSUP and according to the said
decision, gratuity at the higher limit will be granted from the date of amendement which action is
not in challenge.

Further argument raised by the counsel for the petitioner is that an independent institution such as
MARKFED has also allowed &of 16 the benefits to its employees by giving them the gratuity at the
enhanced rate w.e.f. o1.01.20o6and the said case has been allowed by this Court while deciding
CWP No.15363 of 2011 decided on 31.1o.2014 and, therefore, on the same analogy, the petitioner
and the similarly situated employees of the PUNSUP are also entitled for the same relief. Abare
perusal of the order passed by this Court in CWP No.15363 of 2011 (Annexure P-6) decided on
31.10.2014 titled as Nathu Ram and others Vs. State of Punjab and others, would show that a
categoric finding has been recorded by the Court that MARKFED has passed a resolution allowing
its employees the same benefit as being extended to the Government of Punjab of granting gratuity
at the higher limit w.e.f. o1.01.2006 and by interpreting the said resolution of the MARKFED, this
Court has held that once the MARKFED has treated its employees on the same footing for the grant
of benefit as being given to the Punjab Government employees, the employees of the MARKFED will
be entitled for the gratuity at the higher rate w.e.f. o1.01.2016. The relevant para of the order passed
by the coordinate Bench in Nathu Ram's case (supra) is as under:

"13. Coming now to the second argument of learned counsel for

respondent-MARKFED, though, without doubt, MARKFED being an independent
entity, the instructions and policies of the Punjab Government can only be made
applicable to it upon adoption by MARKFED itself, however, the stand taken by the
respondents in their reply itself is contrary to theletter dated o9.10.2011, which has
been produced in Court and has not been denied by the respondents, even after the
matter was adjourned on 17.10.2014.

9 of 16 The letter reads as under:

"The Punjab State Cooperative Supply and Marketing Federation Limited Sector 35-B
Chandigarh (PERSONNEL DEPARTMENT) No.EST/EAG-6/11/4120 Dated
19/10/2011

1. Allthe Officers of Markfed at H.0. Chandigarh.

2. All the District Managers, Markfed in the Punjab State

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3. AllGeneral Managers/Managers, Markfed
Plants/Units in the State
4.0.S.D. (C), Markfed, Bathinda
5. Liaison Officer, Markfed, C-212, Defence Colony, New Delhi Sub:
Markfed Common Cadre Rules,Dear Sir(s), I amn directed toaddress youAmendement
in Rule 4.6 in
on the subject noted above
and to inform that as per decision taken by Board of Directors of Markfed vide
agenda item No.4 in
its meeting held on 17.2.2011 and as approved by Registrar Cooperative Societies Punjab Vide
memo
No.RSS/MANDI/MS-45-B/1g163 dated 13.09.2011 following amendement is being ín Rule 4.6 of
Markfed Common Cadre Rules 1990/-,

Existing Provision Amended Provision On one's retirement, under Rule On one's retirement, under
2.21 of these Rules or death an Rule 2.21 of these rules or employee shall be granted death an
employee shall be gratuity of an amount equal to one granted retirement-cum-death month's wages
for each gratuity as per completed year of service or part rules/instructions in force and thereof in
excess of six months amended from time to timé with the Markfed provided that applicable to
Punjab Govt. the total amount of gratuity shallemployees. not exceed 15 times the amount of wages
last drawn.

10 of 16 The above decision is applicable from the date of approval of Registrar, Cooperative
Societies Punjab i.e. w.e.f. 13.09.2011.However, the instructions issued by the State Govt. vide
No.3/33/o9/3FPPC/879 dated 17.08.2009 with regard to enhancement of maximum limit of
payment of gratuity from Rs.3-50 lacs to Rs.10.00 lacs will be applicable w.e.f. 1.1.2006.

Thanking you, Yours faithfuly, sd/

Establishment Officer (C), for Managing Director."

Thus, even though the decision was applicable w.e.f. 13.09.2o11, i.e. The amended provisions came
into effect from that date, upon approval by the Registrar, yet, by a conscious decision taken, the
enhancement in the amount of gratuity payable, upon the retirement of an employee, was made
applicable from o1.01.2006, for employees of MARKFED, to whom the Common Cadre Rules apply.
Hence, it is obvious that once the Common Cadre Rules have been held by this Court to be
applicable to the petitioners,the letters of the Punjab Government, Annexures P1 to P3 would also
apply to them, in terms of MARKFEDs' own letter dated 19.10.2011, issued by respondent No.2."

The facts in the present case are different. There is no such resolution which has been passed by the
PUNSUP giving the benefit of enhanced gratuity to its employees from o1.01.2006. The stand of the
respondents is that a conscious possession has been taken by the respondent-Corporation to grant
the benefit of the amended provisions of the Payment of Gratuity Act, 1972 as amended on
24.05.2010 prospectively of the employees, who were in service on the said date. Therefore, the
judgment of this Court in Nathu Ram's 11 of 16 case (supra) is not applicable in the present case.

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Eurther, this Court had an occasion to decide the same question of law in respect of the employee of
the Milk Fedreation (for short as 'the MILKFED'), who had also approached this Court for the grant
of gratuity at higher rate w.e.f. o1.01.2006 as being paid to the employees of the MARKFED and the
employees of the government of Punjab.

While deciding CWP No.28539 of 2018, titled as Dhani Ram and others Vs. State of Punjab and
others decided on 24.01.2019, this Court held that as the employee of the MILKPED and the MILK
Unions are an independent body and are governed by the Payment of Gratuity Act, 1972, the
amendment in the Payment of Gratuity Act, 1972 by the Government of India on 24,05.2010, will
only be applicable prospectively and the employees, who retired prior to the said date, willnot be
entitled for the benefit of higher gratuity as granted by the said amendment. The order passed in
CWP No.28539 of 2018 is as under:

"In the present writ petition, the prayer which has been made by the petitioners is
that the petitioners, who retired prior to 24.05.2010, should also be given the benefit
of the amendment to the Payment of Gratuity Act, 1972 by which maximum ceiling of
the gratuity was enhanced from 3.5 lacs to 1o lacs.
The petitioners are the employees of the Milk Fed and Milk Unions. They have retired
from the service starting from the year 2007 onwards till 31.01.2010. The prayer
which has been made by the petitioners is that though they retired prior to the
amendment carried out by the Government of India vide Act No. 15 of 2010 on 12 of
16 17.05.2010 enhancing the maximum ceiling under the Payment of Gratuity Act,
1972 from 3.5 lacs to 10 lacs, the same should be implemented retrospectively w.e.f.
01.01.2006 and the petitioners should be granted the said benefit. In this regard, the
petitioners served a legal notice dated 20.11.2017 (Annexure P-1u) and the said legal
notice was decided by the respondents vide order dated 15.06.2018 (Annexure P-13)
declining the claim of the petitioners, which order has been impugned by the
petitioners in the present writ petition. Learned counsel for the petitioners states that
the petitioners are entitled for the grant of enhanced gratuity as per the Notification
dated 17.08.2009 (Annexure P-2). Learned counsel for the petitioners states that as
order dated 17.08.2009 (Annexure P-2) has been implemented w.e.f. o1.01.2006, the
petitioners are entitled for the gratuity at the enhanced rate w.e.f. o1.01.2006. The
arguments of learned counsel for the petitioners is fallacious. Annexure P-2 is the
Notification issued by the Government of Punjab by which the pay scales of the
government employees were revised in the year 2009 w.e.f. o1.01.2006. The said
Notification was issued in August, 2009 and does not talk of the grant of gratuity at a
higher rate. This is for the reason that the amendment to the Payment of Gratuity
Act, 1972 was done by the Government of India only on 17.05.2010, therefore,
question of granting benefit of the enhanced gratuity to the employees vide
Notification dated 17.08.2009 (Annexure P-2) is not at all possible.

Further, the petitioners are the employees of the Milk Fed and Milk Union, which are
totally independent autonomous bodies. They are governed by their own Rules called
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"The Cooperative Milk Producers Union Employees Service (Non-Common Cadre),
Rules 1996'. Under Rule 19 of the said Rules, an employee is only 13 of 16 entitled for
gratuity as per the provisions of Payment of Gratuity Act, 1972. Relevant Rule 19 of
the said Rules is as under :

"19 GRATUITY:Every employee of the Milk Union, irrespective of the post held and
salary drawn by him shall be entitled to the payment of gratuity as per the provisions
contained in the Payment of Gratuity Act, 1972 and the rules framed there under, as
may be in force from time to time. The calculations of gratuity shall be made on the
basis of wages last drawn by him."

On the day when the petitioners retired, the maximum ceiling for the payment of
gratuity was 3.5 lacs, which has already been paid to the petitioners. The amendment
to the Act was prospective and on the day when the amendment was done to the
Payment of Gratuity Act, 1972 by the Government of India on 17.05.2010, the
petitioners were not in service and there is no retrospective operationof the said
amendment. It can be safely said that as per the amendment, only the employees,
who retired after the amendment, are entitled for the benefit of the enhanced gratuity
ceiling as amended by the Government of India vide Act No. 15 of 2010 on
17.05.2010. Further, it has been admitted by the counsel for the petitioners that the
said relief has not been extended to anyone, who retired prior to 17.05.2010 by the
respondent-Corporation. Therefore, once all the employees of the Milk Fed and Milk
Unions are being treated in the same manner and there is no discrimination in
respect of implementing the Notification issued by the Government of India
amending the Payment of Gratuity Act,1972 with prospective effect only, no
grievance can be made by the petitioners.

As the petitioners had already retired from the service much prior to the date of
amendment and no similarly situated person has been extended the said benefit, no
14 of 16 interference is called for by this Court in respect of the impugned order dated
15.06.2018 by which the claim of the petitioners is rejected.

At this juncture, learned counsel for the petitioners states that the Milk Federation
and Milk Union is the Government body for all intents and purposes as the same is
being managed by a Managing Director, who is an IAS Officer. Counsel says that
therefore, the Milk Federation should be treated as a Government Organization for
all intents and purposes.

In this writ petition, there is no pleading as to why and how the said Milk Federation
and Milk Union are to be treated as Government Organization. Merely an IAS Officer
has been appointed to oversee affairs of an Autonomous Body on deputation,the
same cannot be treated as a Government Organization for all intents and purposes.
No fact has been brought to the notice of this Court, according to which it can be said
that the Government has deep persuasive control on the Milk Fed and Milk Union as

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 RaviChand vs Punjab State Civil Supplies ...on 1 May, 2019
the case may be, so as to be treated as Government department and hence, in the
absence of said material, no finding can be recorded, either for or against the said
argument, which is primarily a factual assertion.
Learned counsel for the petitioners further states that the Markfed has granted the
benefit of enbanced gratuity to its employees w.e.f. o1.01.2006. Counsel states that
once Markfed has adopted the said amendment w.e.f. o1.01.2006, the sarne should
automatically become applicable upon the other autonomous body as well namely
Milk Fed and Milk Union.

Merely an autonomous body had passed a Resolution granting some benefits to its
employees, the other autonomous body does not become bound to adopt the same
irrespective of their functioning. Every autonomous 15 of 16 body has right to decide
its own pay structure and relief to its employees. If the Markfed has granted the said
benefit to its employee, it does not become a precedent for the other autonomous
body to follow the same. No benefit can be granted to the petitioners,who retired
from Milk Fed/Milk Unions on the basis of a benefit which has been exten ded by
Markfed to its employees.
for the
In view of the above, the present writ petition is dismissed with no order as to cost. " Counsel
petitioner is unable to distinguish the case of the petitioners in this bunch of writ petitions from the
Punjab
case of the petitioners in CWP No.28539 of 2018 titled as Dhani Ram and others Vs. State of
and others in any manner.

Under these circumstances, the claim of the petitioner for the grant of benefit of gratuity on higher
limit cf '10 lakhs w.e.f. 01.01.2006 as per the amendment dated 24.05.2010, is not at all
maintainable and cannot be accepted as no fault can be found in the impugned order by which the
said claim of the petitioner has been rejected by the respondent-Corporatio.
In view of the above, no interference is called for in the impugned order and the present writ
petitions stands dismissed with no order as to cost.

May 01, 2019

jt (HARSIMRAN SINGH SETHI)
JUDGE

Whether speaking/reasoned: Yes / No

Whether reportable : Yes / No

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