# Awadesh Kumar Rai & Anr v. Registrar, U.P. Co-Operative Societies & Ors

- **Citation:** (2016) 4 ILRA 1112
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-03-28
- **Bench:** Tarun Agarwala, Mukhtar Ahmad
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/awadesh-kumar-rai-anr-v-registrar-u-p-co-operative-societies-ors-43553
- **Pages:** 8

## Headnote

Service Law - Gratuity - Payment of Gratuity Act, 1972 - U.P. Co-operative Societies Act, 1965 -
Co-operative Banks Centralised Service Rules, 1976 - Rule 67 - Co-operative Banks Centralised
4 All. Awadesh Kumar Rai & Anr. Vs Registrar, U.P. Co-Operative Societies & Ors.

1113
Service Group Gratuity-Cum-Life Assurance Scheme - Section 4(2), 4-A and 7(3-A) of the
Payment of Gratuity Act - Method of calculation - Interest on delayed payment - Prevalence of
statutory provisions.

Gratuity - Petitioners, retired Deputy General Managers of District Co-operative Banks, challenged the
calculation of gratuity and non-payment of interest. Respondents calculated gratuity under the Centralised
Service Rules, 1976 and the Gratuity-Cum-Life Assurance Scheme, without applying the formula prescribed
under the Payment of Gratuity Act, 1972.

Payment of Gratuity Act, 1972 - Held that although gratuity is payable under Rule 67 of the 1976 Rules
and Clause 8 of the Assurance Scheme, the method for calculating "15 days' salary" is not provided therein. In
view of Clause 17 of the Assurance Scheme and Section 4-A of the Payment of Gratuity Act, where there is no
inconsistency, the Explanation to Section 4(2) of the Payment of Gratuity Act shall apply. Gratuity must
therefore be calculated by dividing the last drawn monthly wages by 26 and multiplying the quotient by 15.

4-A and 7(3-A) of the Payment of Gratuity Act - Further held that delay in payment of gratuity attracts
mandatory interest under Section 7(3-A) of the Payment of Gratuity Act, in absence of any fault attributable to
the employee.

Writ petition allowed. Respondents directed to re-calculate gratuity in accordance with the
Explanation to Section 4(2) of the Payment of Gratuity Act, 1972 and to pay interest under
Section 7(3-A) within six weeks.

Case listed
Awadesh Kumar Rai & Anr. v. Registrar, U.P. Co-Operative Societies & Ors.,

## Text

1112 INDIAN LAW REPORTS ALLAHABAD SERIES
between father and son has been recognized throughout ages in all times, in all races and in all parts
of the world without exception. When the debased proclivities of an outlaw violates such pious
relationship, the social ramifications which follow are outrageous. The act in which the applicant
has indulged himself is a heinous offence and also speaks about the cruelty displayed by him.
Further submission is that for a delinquent of such nature who had no qualms or hesitation in
burning his own father by acid, the period of detention cannot be said to be a soul criteria to release
him on bail.

6. Looking to the nature of offence, its gravity and the evidence in support of it and the
overall circumstances of this case, this Court is of the view that the applicant has not made out a
case for bail.

7. Therefore, the prayer for bail of the applicant is rejected.

8. It is clarified that the observations, if any, made in this order are strictly confined to the
disposal of the bail application and must not be construed to have any reflection on the ultimate
merits of the case.

9. However, it may be observed that if the trial of the case has already started, the trial
court shall make every sincere endeavor to expedite the proceedings of the trial and conclude the
same at the earliest in accordance with law.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.03.2016

BEFORE

THE HON'BLE TARUN AGARWALA, J.
THE HON'BLE MUKHTAR AHMAD, J.

Writ A No.- 14161 Of 2012

Awadesh Kumar Rai & Anr. ...Petitioners
Versus
Registrar, U.P. Co-Operative Societies & Ors. ...Respondents

Counsel for the Petitioners:
P.K. Dubey, Dharam Pal Singh, Hari Bans Singh, S. Niranjan, Sharfuddin Ahmad, Yadevendra Dwivedi

Counsel for the Respondents:
S.M. Haider Zaidi

Service Law - Gratuity - Payment of Gratuity Act, 1972 - U.P. Co-operative Societies Act, 1965 -
Co-operative Banks Centralised Service Rules, 1976 - Rule 67 - Co-operative Banks Centralised
4 All. Awadesh Kumar Rai & Anr. Vs Registrar, U.P. Co-Operative Societies & Ors.

1113
Service Group Gratuity-Cum-Life Assurance Scheme - Section 4(2), 4-A and 7(3-A) of the
Payment of Gratuity Act - Method of calculation - Interest on delayed payment - Prevalence of
statutory provisions.

Gratuity - Petitioners, retired Deputy General Managers of District Co-operative Banks, challenged the
calculation of gratuity and non-payment of interest. Respondents calculated gratuity under the Centralised
Service Rules, 1976 and the Gratuity-Cum-Life Assurance Scheme, without applying the formula prescribed
under the Payment of Gratuity Act, 1972.

Payment of Gratuity Act, 1972 - Held that although gratuity is payable under Rule 67 of the 1976 Rules
and Clause 8 of the Assurance Scheme, the method for calculating "15 days' salary" is not provided therein. In
view of Clause 17 of the Assurance Scheme and Section 4-A of the Payment of Gratuity Act, where there is no
inconsistency, the Explanation to Section 4(2) of the Payment of Gratuity Act shall apply. Gratuity must
therefore be calculated by dividing the last drawn monthly wages by 26 and multiplying the quotient by 15.

4-A and 7(3-A) of the Payment of Gratuity Act - Further held that delay in payment of gratuity attracts
mandatory interest under Section 7(3-A) of the Payment of Gratuity Act, in absence of any fault attributable to
the employee.

Writ petition allowed. Respondents directed to re-calculate gratuity in accordance with the
Explanation to Section 4(2) of the Payment of Gratuity Act, 1972 and to pay interest under
Section 7(3-A) within six weeks.

Case listed
Awadesh Kumar Rai & Anr. v. Registrar, U.P. Co-Operative Societies & Ors.,

(Delivered by Hon'ble Tarun Agarwala, J.
&
Hon'ble Mukhtar Ahmad, J.)

1. We have heard Sri Devendra Pratap Singh, the learned counsel for the petitioners and Sri
Satyam Singh, the holding brief of Sri Shiv Nath Singh, the learned counsel for the respondents no.
2 and 3.

2. The petitioner no. 1 retired on 30.06.2008 upon reaching the age of superannuation as
Deputy General Manager in District Cooperative Bank Ltd., Ghazipur. The petitioner no. 2 retired
on 31st January, 2009 upon reaching the age of superannuation as Deputy General Manager from
District Co-operative Bank Ltd. Pilibhit. The petitioner no. 1 received an amount of Rs.4,48,239/-
towards gratuity on 15th September, 2009. The petitioner no. 2 received a sum of Rs.4,98,986/-
towards gratuity on 29th July, 2009. Both the petitioners filed separate representations with regard
to the calculation of gratuity, which was considered and the difference of amount was paid to
petitioner no. 1 vide cheque dated 18.05.2010 and the petitioner no. 2 was paid vide cheque dated
5th May, 2010.
1114 INDIAN LAW REPORTS ALLAHABAD SERIES

3. The petitioners contend that the calculation of gratuity by the respondents was wrongly
calculated, which was not in accordance with the procedure prescribed under the Payment of
Gratuity Act, 1972 (hereinafter referred to as the Act) and further interest, as provided under
Section 7 (3-A) of the Gratuity Act, has also not been paid on the initial amount or on the revised
amount and therefore, a writ of mandamus should be issued directing the respondents to pay the
difference of gratuity amount as per calculation provided under Section 4 (2) of the Payment of
Gratuity Act as well as interest as per Section 7 (3)-A of the said Act.

4. Para-13 of the counter affidavit reveals that the petitioners were to be paid gratuity as per
Rule 67 of the Co-operative Banks Centralised Service Rules, 1976 (hereinafter referred to as the
Rules of 1976). In para-9 of the counter affidavit, the respondents contend that the gratuity amount
is required to be disbursed as per the provisions of Co-Operative Banks Centralized Service Group
Gratuity-Cum-Life Assurance Scheme (hereinafter referred to as the Assurance Scheme). In Para20 of the counter affidavit, the respondents contend that calculation of the salary can not be worked
out on 26 working days, since no such rules are provided.

5. In the light of the aforesaid, we have heard the learned counsel for the parties and we find
that the services of the petitioners are governed by the CoOperative Bank Centralised Service
Rules, 1976, which have been framed in exercise of power conferred by Section 122 of the U.P.
Co-Operative Societies Act, 1965. Rule 67 provides for payment of gratuity. For facility, the said
provisions is extracted here-under:-

"Gratuity:

67. A member of the service shall be granted gratuity equivalent to 15 Days salary for
every completed year of service subject to a maximum of 20 months salary (part of year if less
than six months, to be ignored), if he has attained the age of retirement or has resigned or
been declared invalid for service by Chief Medical Officer or has been retrenched or dies
while he is in service.

Provided that a member shall be illegible for gratuity only if he has put in atleast 5 years
of continuous service immediately preceding resignation, retrenchment, invalidation or death.
In case of death, gratuity shall be payable to the nominee of the member and in the absence of
nomination to his legal heir:

Provided further that-

(a) the gratuity of a member whose services have been terminated for any act of
wilful omission or negligence causing any damage or loss to, or destruction of,
property belonging to the bank in which he is working or may have worked, shall
be forfeited to the extent of the damage or loss so caused;

(b) the gratuity payable to a member shall be wholly forfeited-
4 All. Awadesh Kumar Rai & Anr. Vs Registrar, U.P. Co-Operative Societies & Ors.

1115
(i) If the services of such member have been terminated for his riotous or
disorderly conduct or any other act of violence on his part, or

(ii) If the services of such member have been terminated for any act which
constitutes an offence involving moral turpitude, provided that such
offence is committed by him in the course of his employment."

6. A perusal of Rule 67 indicates that a member of the service shall be granted gratuity
equivalent to 15 days salary for every completed year of service subject to a maximum of 20
months salary, if he has attained the age of retirement.

7. Section 4 of the Payment of Gratuity Act 1972 provides that the gratuity would be payable
to an employee on the termination of his employment after he has rendered continuous service for
not less than five years on his superannuation. Explanation to Section 4(2) provides that in the case
of monthly rated employee, fifteen days' wages for every year of service would be calculated by
dividing the monthly rate of wages, last drawn by him by twenty-six and multiplying the quotient
by fifteen. For facility, the Section 4 (2) of the Payment of Gratuity Act, 1972 and the explanation
is extracted here-under:-

 "4. Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination
of his employment after he has rendered continuous service for not less than five years,--
 (a) on his superannuation, or
 (b) on his retirement or resignation, or
 (c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be
necessary where the termination of the 5 employment of any employee is due to death or
disablement:

[Provided further that in the case of death of the employee, gratuity payable to him
shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any
such nominees or heirs is a minor, the share of such minor, shall be deposited with the
controlling authority who shall invest the same for the benefit of such minor in such bank or
other financial institution, as may be prescribed, until such minor attains majority.]

Explanation.--For the purposes of this section, disablement means such disablement
as incapacitates an employee for the work which he was capable of performing before the
accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the
employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate
of wages last drawn by the employee concerned:

 Provided that in the case of a piece-rated employee, daily wages shall be computed
on the average of the total wages received by him for a period of three months immediately
preceding the termination of his employment, and, for this purpose, the wages paid for any
overtime work shall not be taken into account:
1116 INDIAN LAW REPORTS ALLAHABAD SERIES

Provided further that in the case of [an employee who is employed in a seasonal
establishment and who is not so employed throughout the year], the employer shall pay the
gratuity at the rate of seven days' wages for each season.

 [Explanation.--In the case of a monthly rated employee, the fifteen days' wages
shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and
multiplying the quotient by fifteen.]"

8. At this stage, Section 4-A of the Payment of Gratuity Act, 1972 provides compulsory
insurance to be provided by every employer towards his liability for payment towards gratuity
under this Act. Based on the provisions of Section 4-A of the Act, the Co-operative Banks
Centralised Service Group Gratuity-Cum-Life Assurance Scheme was framed which according to
the respondents is applicable upon the petitioners' services and the gratuity amount is required to be
disbursed under the scheme.

9. The respondents have relied upon the provision of clause 8 of the scheme. For facility, the
said provisions as well as appendix-1 is extracted here-under:-

"Section IV

Benefits of Survival to superannuation date:

Upon a Member's retirement at Superannuation Date there shall become payable to the
Trustees, for the benefit of the Member an amount equal to 15 days salary as on the Annual
Renewal Date last preceding the Superannuation Date multiplied by the total number of years of
s1-10ervice completed by the member, subject to a maximum of 20 months Salary.

The Trustees shall pay the benefits to the Member in accordance with the provisions of
Appendix (I).

Members who have not rendered 5 years service shall not be entitled to any benefits
hereunder. The Assurances effected in respect of such members would be surrendered by the
Trustees and the Surrender Value credited to Sur1-10plus Account.

APPENDIX(I)

 Contingency on the Happening
 of
 which Benefits become payable
 BENEFITS
(1) After the member has rendered service of
not less than 5 years upon his retirement on or
after Superannuation.
15 days' salary of the Member as on the date of
retirement for each year of service subject to a
maximum of 20 month's salary.
(2) Upon the member becoming disabled due to
accident
or
discease
whilest
in
service
(rendering
the
employee
incapable
of
15 days Salary of the member as on the date of
disablement for each year of service subject to a
maximum of 20 month's Salary
4 All. Awadesh Kumar Rai & Anr. Vs Registrar, U.P. Co-Operative Societies & Ors.

1117
performing work which he was capable of
performing before the accident or disease
resulting in such disablement)
(3) In the event of the death of the member
before Superannuation Date whilest in the
service of the Employer.
(a) In respect of a Member who is declared to be
insurable and for1-10 whom life cover has been
granted:

15 days' Salary of the member as on the Annual
Renewal Date last preceding the date of death
for each year of his anticipated service uptothe
Superannuation Date but for his earlier death
subject to a maximum of 20 month's Salary.

PROVIDED
THAT
the
benefits
payable
hereunder shall not be less than the benefits in
paragraph (c) below:

NOTE---" Anticipated Service" shall mean the
Service which the member would have
completed had the be member lived upon his
Superannuation Date.

(b) In respect of a member who is declared to be
insurable on the Entry Date and/or Annual
Renewal date but uninsurable on subsequent
Annual Renewal Dates.

(i) Sum for which the Member's life was assured
by the Corporation under Term Assurance on
the date death of the Member and (ii) The value
of Assurance under pure Indowment,

PROVIDED THAT the total benefits payable
vide (i) and (ii) above shall not be less than the
benefits in paragraph

(c) below; (c) In respect of a Member who is
declared to be uninsurable on the Entry Date
and Annnual Renewal Date.

15 day's salary of the Members on the date of
death for each year of service upto the date of
death subject to maximum of 20 month's salary.
1118 INDIAN LAW REPORTS ALLAHABAD SERIES
(4) After the member has rendered service for
not less than 5 years Upon his termination or
resignation from service of the employer prior
to Superannuation Date.
15 day's salary of the member as the date
leaving service for each year of Service subject
to a maximum of 20 month's salary."

10. A perusal of this provision indicates that upon a member's retirement, the gratuity shall
become payable which should be equal to 15 days salary as provided in Appendix-1. The method
of calculation of 15 days salary is, however, not given under clause-8 or in Appendix-1 to this
Assurance Scheme.

11. Clause 17 of this Assurance Scheme provides that if anything contained in the Rules is in
contravention of the provisions of Payment of Gratuity Act 1972 or the Rules framed thereunder,
the provisions of the said Act and Rules would prevail, meaning thereby, if there is conflict
between the Assurance Scheme framed under Section 4-A of the Payment of Gratuity Act, in which
case the provisions of Payment of Gratuity Act 1972 or the Rules framed thereunder would prevail
over the Assurance Scheme.

12. There is no method of calculation provided under Rule 67 of the 1976 Rules or under the
Assurance Scheme which have been framed under Section 4-A of the Payment of Gratuity Act. The
method of calculation of 15 days salary has been provided in the Explanation to Section 4 (2) of the
Payment of Gratuity Act.

13. In our opinion, this provision will prevail and the calculation has to be made by the
respondents as per the Explanation to Section 4 (2) of the Payment of Gratuity Act which provides
that wages for every year of service would be calculated by dividing the monthly rate of wages last
drawn by him by twenty-six and multiplying the quotient by fifteen.

14. The contention that there is no rule which provides calculation of salary of 26 working
days is misconceived inasmuch as the authority respondents have not considered the Explanation to
Section 4(2) of the Payment of Gratuity Act 1972 which is applicable to the petitioners' case.

15. In the light of the aforesaid, we are of the opinion that the calculation of the gratuity is
required to be done by the respondents considering Rule 67 of the 1976 Rules and Clause-8 of the
Assurance Scheme read with Clause-17 and Section 4 (2) to the Explanation of the Payment of
Gratuity Act.

16. We also find that the petitioners retired on 30.06.2008 and 31st January, 2009, respectively
whereas the gratuity was paid to the petitioner no. 1 on 15th September, 2009 and to the petitioner
no. 2 on 29th July, 2009, respectively. The difference was subsequently paid to the petitioner no. 1
on 18.05.2010 and to the petitioner no. 2 on 05.05.2010.

17. Admittedly, no interest was paid. Interest is required to be paid under Section 7(3-A) of
the Payment of Gratuity Act 1972. For facility, the said provisions is extracted hereunder:-
4 All. Rajiv Agrawal Vs Presiding Officer Labour Court U.P.& Anr.

1119
 "7(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the
employer within the period specified in sub-section (3), the employer shall pay, from the
date on which the gratuity becomes payable to the date on which it is paid, simple interest
at such rate, not exceeding the rate notified by the Central Government from time to time
for repayment of long-term deposits, as that government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the
fault of the employee and the employer has obtained permission in writing from the controlling
authority for the delayed payment on this ground."

18. Accordingly, we are of the opinion that the interest is required to be paid to the petitioners
by the respondents.

19. In the light of the aforesaid, the writ petition is allowed. A writ of mandamus is issued
directing the respondents to re-calculate the gratuity as per the Explanation to Section 4 (2) of the
Payment of Gratuity Act and also pay the interest as per Section 7 (3-A) of the said Act. The said
exercise shall be carried out within six weeks from the date of presentation of a certified copy of
this order.

20. No order as to costs.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.04.2015

BEFORE

THE HON'BLE SURYA PRAKASH KESARWANI, J.

Writ C No.- 21277 Of 2015

Rajiv Agrawal ...Petitioner
Versus
Presiding Officer Labour Court U.P.& Anr. ...Respondents

Counsel for the Petitioner:
Ram Krishna,Rakesh Kumar Pandey,Vijay Kumar Mishra

Counsel for the Respondents:
C.S.C.

Industrial Dispute - Territorial Jurisdiction - Appropriate Government - Reference under
Section 4-K of the U.P. Industrial Disputes Act, 1947 - Determination of nexus between dispute
and territory - Control and supervision from Head Office outside State - Mere receipt of