# Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr v. Chief Labour Commissioner & Ors

- **Citation:** (2021) 3 ILRA 609
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-03-10
- **Case number:** Writ-C No. 2340 of 2021
- **Bench:** Vivek Kumar Birla
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/baroda-up-bank-erstwhile-purvanchal-bank-gorakhpur-anr-v-chief-labour-46933
- **Pages:** 17

## Headnote

A. Civil Law - Service - Maintainability of
writ petition - Payment of Gratuity Act,
1972 - Section 7(4), 7(7), Rule 10(i);
Purvanchal
Gramin
Bank
(Officers
&
Employees) Service Regulations, 2010:
Regulation 72; Regional Rural Banks Act,
1976: Section 30 - The fact remains that
jurisdiction of the Controlling Authority
has not yet been settled and divergent
views of various High Courts are available
on the issue in hand. (Para 17)

While the powers the High Court may exercise
under its writ jurisdiction are not subject to
strict legal principles, two clear principles
emerge with respect to when a High Court's writ
jurisdiction may be engaged. First, the decision
of the High Court to entertain or not entertain a
particular action under its writ jurisdiction is
fundamentally
discretionary.
Secondly,
limitations placed on the court's decision to
exercise or refuse to exercise its writ jurisdiction
are
self-imposed.
It
is
a
well-settled
principle that the writ jurisdiction of a
High Court cannot be completely excluded
by statute. (Para 21)

Entertaining writ petition - Art. 226 is a
rule
of
discretion
and
not
one
of
compulsion and the Court may consider the
pros and cons of, the case and then may
interfere if it comes to the conclusion that where
the petitioner seeks enforcement of any of the
fundamental rights or where there is failure of
principles of natural justice or where the orders
or proceedings are wholly without jurisdiction or
the vires of an Act is challenged. Thus, law at
610 INDIAN LAW REPORTS ALLAHABAD SERIES
this stage is settled that the Courts in
extraordinary circumstances may come to the
conclusion where the Authority has assumed
powers which they do not possess or where
there is principle of natural justice or the
proceedings themselves are of abuse of process
of law. (Para 19, 22)

In the present bunch of petitions, the order of
the Controlling Authority is being assailed purely
on legal ground, particularly asserting that the
Controlling Authority under the Act had no
jurisdiction to interpret the Service Regulations
and to pick up the best out of the two schemes
to extend the benefit to an officer although such
officer is governed by one scheme only. I find
that
even
the
provisions
of
Regulations
regarding payment of gratuity are also in favour
of the contesting respondents to the extent that
the amount is to be calculated in two modes,
one, as per the provisions of Payment of
Gratuity Act and second, as per provisions of
Service Regulations and shall be entitled to
gratuity amount, whichever is higher. Thus,
assuming the jurisdiction above Rs.10,00,000/-
by the Controlling Authority goes to the root of
the case and the issue of jurisdictional error is
clearly involved in the present bunch of
petitions. That apart, question whether dearness
allowance can be included in term 'pay' or 'last
drawn pay' is also purely legal in nature, where
no finding of fact is required, power whereof,
normally, is available or should be with the
Appellate Authority. (Para 23)

When it is a question of interpretation of powers
or jurisdiction of the Controlling Authority, the
department Appellate Authority/the statutory
Appellate Authority under the same Act, most
likely, would not be inclined to interpret the
powers
or
jurisdiction
of
the
Controlling
Authority in a manner so as to curtail or limit
the same. (Para 24)

Present petitions were held to be maintainable
and impugned order dated 31.1.2020 and Form
(R) notice for payment of gratuity dated
5.2.2020 passed by the Assistant Labour
Commissioner
(Central)/Controlling
Authority
was stayed.(E-3)

Precedent followed:

## Text

_Characters 0–39,656 of 59,369. This is a partial read: ask again with offset=39656 for what follows._

3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
609

16. Apparently the issue was not
whether the State in exercise of its
powers under section 15(1) of 1957 Act
can amend the rules relating to minor
mineral to regulate the mining lease and
other mineral concession. Therefore the
petitioner is not benefited from the
decision in State of Kerala and others
Vs. Kerala Rare Earth And Minerals
Limited And Others (supra)

17. Even the decision in Shiv
Charan vs. Union of India 1981 Alld.
LJ 641 wherein it is held that the
mining lease can be granted only in
accordance
with
the
procedure
in
Chapter II or IV and not in any way by
relaxing terms and condition under
section 68 of U.P. Minor Minerals
(Concession) Rules 1963 is of no
assistance.

18. Having this considered since
we do not perceive any merit in the
challenge
to
the
50th
amendment
whereby impugned Rule 23(2)(a) is
substituted in the Rules of 1963, the
indulgence is declined.

19. Petition fails and is dismissed.

20. No costs.
----------
(2021)03ILR A609
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.03.2021

BEFORE

THE HON'BLE VIVEK KUMAR BIRLA, J.

Writ-C No. 2340 of 2021
Connected with
Writ C Nos. 3032 of 2021, 2727 of 2021, 2862
of 2021, 5508 of 2021, 5419 of 2021, 5352 of
2021, 5392 of 2021, 5170 of 2021, 5159 of
2021, 5079 of 2021,5478 of 2021 & 5080 of
2021

Baroda UP Bank Erstwhile Purvanchal
Bank, Gorakhpur & Anr. ...Petitioners
Versus
Chief Labour Commissioner & Ors.
 ...Respondents

Counsel for the Petitioners:
Sri Gyan Prakash Shrivastava, Sri Ashok Khare

Counsel for the Respondents:
A.S.G.I., Sri Amrendra Pratap Singh, Sri Rajesh
Tripathi

A. Civil Law - Service - Maintainability of
writ petition - Payment of Gratuity Act,
1972 - Section 7(4), 7(7), Rule 10(i);
Purvanchal
Gramin
Bank
(Officers
&
Employees) Service Regulations, 2010:
Regulation 72; Regional Rural Banks Act,
1976: Section 30 - The fact remains that
jurisdiction of the Controlling Authority
has not yet been settled and divergent
views of various High Courts are available
on the issue in hand. (Para 17)

While the powers the High Court may exercise
under its writ jurisdiction are not subject to
strict legal principles, two clear principles
emerge with respect to when a High Court's writ
jurisdiction may be engaged. First, the decision
of the High Court to entertain or not entertain a
particular action under its writ jurisdiction is
fundamentally
discretionary.
Secondly,
limitations placed on the court's decision to
exercise or refuse to exercise its writ jurisdiction
are
self-imposed.
It
is
a
well-settled
principle that the writ jurisdiction of a
High Court cannot be completely excluded
by statute. (Para 21)

Entertaining writ petition - Art. 226 is a
rule
of
discretion
and
not
one
of
compulsion and the Court may consider the
pros and cons of, the case and then may
interfere if it comes to the conclusion that where
the petitioner seeks enforcement of any of the
fundamental rights or where there is failure of
principles of natural justice or where the orders
or proceedings are wholly without jurisdiction or
the vires of an Act is challenged. Thus, law at
610 INDIAN LAW REPORTS ALLAHABAD SERIES
this stage is settled that the Courts in
extraordinary circumstances may come to the
conclusion where the Authority has assumed
powers which they do not possess or where
there is principle of natural justice or the
proceedings themselves are of abuse of process
of law. (Para 19, 22)

In the present bunch of petitions, the order of
the Controlling Authority is being assailed purely
on legal ground, particularly asserting that the
Controlling Authority under the Act had no
jurisdiction to interpret the Service Regulations
and to pick up the best out of the two schemes
to extend the benefit to an officer although such
officer is governed by one scheme only. I find
that
even
the
provisions
of
Regulations
regarding payment of gratuity are also in favour
of the contesting respondents to the extent that
the amount is to be calculated in two modes,
one, as per the provisions of Payment of
Gratuity Act and second, as per provisions of
Service Regulations and shall be entitled to
gratuity amount, whichever is higher. Thus,
assuming the jurisdiction above Rs.10,00,000/-
by the Controlling Authority goes to the root of
the case and the issue of jurisdictional error is
clearly involved in the present bunch of
petitions. That apart, question whether dearness
allowance can be included in term 'pay' or 'last
drawn pay' is also purely legal in nature, where
no finding of fact is required, power whereof,
normally, is available or should be with the
Appellate Authority. (Para 23)

When it is a question of interpretation of powers
or jurisdiction of the Controlling Authority, the
department Appellate Authority/the statutory
Appellate Authority under the same Act, most
likely, would not be inclined to interpret the
powers
or
jurisdiction
of
the
Controlling
Authority in a manner so as to curtail or limit
the same. (Para 24)

Present petitions were held to be maintainable
and impugned order dated 31.1.2020 and Form
(R) notice for payment of gratuity dated
5.2.2020 passed by the Assistant Labour
Commissioner
(Central)/Controlling
Authority
was stayed.(E-3)

Precedent followed:

1. Beed District Central Coop, Bank Ltd. Vs St.
of Mah. & ors., (2006) 8 SCC 514 (Para 18)

2. U.P. State Spinning Co. Ltd. Vs R.S. Pandey &
anr., (2005) 8 SCC 264 (Para 19)

3. Maharashtra Chess Association Vs U.O.I. &
ors., (2020) 13 SCC 285 (Para 21)

4. Khoday Distilleries Ltd. (Now known as
Khoday
India
Limited)
&
ors.
Vs
Sri
Mahadeshwara Sahakara Sakkare Karkhane
Ltd., Kollegal (Under liquidation), (2019) 4 SCC
376 (Para 16)

Precedent cited:

1. Purvanchal Bank, Head office Mohiddipur &
anr. Vs Chief Labour Commissioner & 2 ors.,
Writ-C No. 20437 OF 2018, Judgment dated
04.07.2018 (Para 8)

2. Chhatisgarh Rajya Gramin Bank Through the
Chairman, Mahadevghat Road, Sunder Nagar,
Raipur Chhatisgarh Vs Arun Phansalkar, Writ
Appeals being WA No. 436 of 2020, Chhatisgarh
High Court Judgment dated 28.01.2021 (Para 8)

3. Vidarbha Konkan Gramin Bank Vs The
Appellate Authority & anr., 2020 SCC Online
Bom. 17 (Para 8)

4. Rajasthan Marudhara Gramin Bank, Jodhpur
through its Chairman, Head Office Tulsi Tower,
9th B Road, Sardarpura, Jodhpur Vs The
Appellate Authority, Under Payment of Gratuity
Act, 1972 and the Deputy Chief Labour
Commissioner (Central), Ajmer, S.B. Civil Writ
Petition No. 7359 OF 2019 (Para 9)

5. Chhatisgarh Rajya Gramin Bank through The
Chairman, Mahadev Ghat Road, Sunder Nagar,
Raipur Vs Meghraj Pathak & ors., Writ Petition
(L) No. 55 of 2020, dated 31.08.2020 (Para 9)

6. Chinmoy Majumder & ors. Vs Paschmim
Banga Gramin Bank & ors., W.P. No. 19538 (W)
of 2018, Calcutta High Court, Judgment dated
05.07.2019 (Para 9)

7. Muralee Mohanan KT & ors. Vs Corporation
Bank & ors., WP (C) No. 32386 of 2015 (W),
3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
611
Kerala
High
Court,
Judgment
of
dated
15.10.2019 (Para 9)

Precedent distinguished:

1.
All
India
Garamin
Bank
Pensioners
Organization Unit Rewa Vs Madhyanchal Gramin
Bank & anr., WP No. 9182 of 2017, Madhya
Pradesh
High
Court,
Judgment
dated
06.09.2018 (Para 9)

2. Madhyanchal Gramin Bank & anr. Vs All India
Garamin Bank Pensioners Organization Unit,
Rewa etc., WA No. 1318 of 2018, Madhya
Pradesh High Court (Para 9)

3. Madhyanchal Gramin Bank & anr. Vs All India
Garamin Bank Pensioners Organization Unit,
Rewa etc., Special Leave to Appeal (C) No.
11113 -11115 of 2019, dimissed vide order
dated 07.05.2019 (Para 9)

Present petition challenges order dated
31.01.2020 and form (R) notice for
payment of gratuity dated 05.02.2020,
passed by Assistant Labour Commissioner
(Central)/Controlling Authority.

(Delivered by Hon'ble Vivek Kumar Birla, J.)

1. Heard Sri Ashok Khare, learned
Senior Counsel assisted by Sri Gyan
Prakash,
learned
counsel
for
the
petitioners-Bank and Sri Amrendra Pratap
Singh, learned counsel for the respondent
no. 3 and perused the record. Learned
ASGI has accepted notice on behalf of
respondents no. 1 and 2.

2. This bunch of petitions involves
identical controversy and therefore, with
consent of learned counsel for the parties,
the petition being Writ-C No. 2340 of 2021
is being taken up as the leading case.

3. The petition has been filed
challenging the impugned order dated
31.1.2020 and form (R) notice for payment
of gratuity dated 5.2.2020 passed by the
Assistant
Labour
Commissioner
(Central)/Controlling Authority under the
Payment of Gratuity Act, 1972 in Case No.
A-48 (38) of 2018 (Shri Dilip Kumar
Shukla vs. The Chairman, Purvanchal Bank
and Another).

4. By the impugned order, the
Controlling Authority (respondent no. 2
herein) under the Payment of Gratuity Act,
1972 (hereinafter referred to as the 'Act')
allowed the claim/application filed by the
contesting respondent no. 3 under Rule 10
(i) of the Act read with Section 7(4) of the
Act after condoning the delay in filing the
said application.

5. A preliminary objection was raised
by Sri Amrendra Pratap Singh, learned
counsel for the respondent no. 3 on the
ground
that
the
petitioner-Bank
has
efficacious alternative statutory remedy
under Section 7 (7) of the Act before the
appellate authority. Therefore, present
petition is not maintainable. He submits
that once the statutory alternative remedy is
available under the aforesaid provisions,
there is no occasion to entertain present
petition under the Article 226 of the
Constitution of India and the same is liable
to be dismissed on the ground of
availability of statutory alternative remedy
itself.

6. Replying the preliminary objection,
Sri Khare, learned Senior Counsel submits
that the order passed by the Controlling
Authority is wholly without jurisdiction
and therefore, availability of statutory
remedy would not be a bar in the present
case. He submits that sending the matter
from one authority, who has committed
jurisdictional error, to another authority
under the same Act would not, in any case,
be efficacious alternative remedy and
612 INDIAN LAW REPORTS ALLAHABAD SERIES
therefore, present petition is maintainable.
He submits that the preliminary objection
that the order passed by the Controlling
Authority is appealable under the Act, was
raised in Writ-C No. 20437 of 2018
(Purvanchal
Bank,
Head
Office
Mohiddidpur and another vs. Chief Labour
Commissioner and 2 others) and was
rejected by Hon'ble Single Judge of this
Court on the ground that any order, which
is bereft of reasons or findings on the facts
and circumstances brought before the
statutory authority, cannot withstand the
test or scrutiny and cannot be allowed to
survive merely on the ground that the said
order is appealable before a higher
authority. He further submits that the
services of the respondent no. 3 are
governed by Service Regulations, namely,
Purvanchal Gramin Bank (Officers &
Employees) Service Regulations, 2010
(hereinafter referred to as the 'Regulations')
framed under Section 30 of the Regional
Rural Banks Act, 1976 (hereinafter referred
to as the RRB Act). He submits that
Regulation 72 of the Regulations governs
the gratuity payable to an officer or an
employee. Drawing attention to various
provisions of the Act as well as of the
Regulations, he submits that in the
Regulations, a distinction has been drawn
in case of an 'officer' and that of an
'employee', therefore, in the present case,
the gratuity is to be calculated as per the
Regulations as applicable to an officer. He
pointed out that in the present litigation, all
are officers of the bank. He submits that
second proviso to Clause 3 of Regulation
72 of the Regulations uses the expression
"last pay drawn" applicable to the 'officer'
and therefore, the said provision covers the
same. He submits that the third proviso as
applicable to an 'employee' includes the
basic pay, dearness allowance and special
allowance etc., therefore, there being a
clear distinction between the two and thus,
interpretation of term "pay" as applicable in
case of an 'employee' cannot be made
applicable to an 'officer'. He further pointed
out that the controlling authority has
authority only to interpret the provisions of
the Act and has no authority to interpret the
provisions of Regulations as applicable on
the bank employee. He further submits that
even otherwise the maximum limit upto
which gratuity can be awarded under the
Act is only Rs. 10,00,000/-, therefore, the
controlling authority has no jurisdiction to
decide the dispute above that limitation and
under no circumstances, he can direct
payment of gratuity over and above Rs.
10,00,000/-. He pointed out that as per
Regulation 72 of the Regulations, the
amount of gratuity is to be calculated in
two modes; one, in accordance with the
provisions of Service Regulations and
second, in accordance with the provisions
of Payment of Gratuity Act and as per subregulation 2 of Regulation 72 of the
Regulation, the amount whichever is
higher. He submits that in case the amount
calculated as per Regulation is less and the
amount as per the Act is higher, the officers
shall be entitled for the higher amount,
however, with a ceiling of Rs. 10,00,000/-.
He further pointed out that admittedly, the
amount calculated as per the Regulation
was
less
than
Rs.
10,00,000/-
and
calculation of the amount as per the Act
was higher, therefore, as per the ceiling, a
sum of Rs. 10,00,000/- as provided under
the Act had already been paid to the
contesting
officers,
which
had
been
accepted by them without protest.

7. Crux of the argument of Sri Khare,
learned Senior Counsel is that: dearness
allowance is not included in last drawn pay
as per Regulation 72 of the Regulations; the
controlling authority under the Act has no
3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
613
jurisdiction to grant gratuity above Rs.
10,00,000/- and therefore, direction to pay
amount above Rs. 10,00,000/- is without
jurisdiction; 'Officer' and 'Employee' are
two different categories as per Service
Regulations and calculation of gratuity is
governed by second and third proviso of
the Regulation 72 of the Regulations;
clearly the controlling authority lacks
pecuniary jurisdiction; and once the amount
of gratuity has been accepted as calculated
under the Service Regulation without
protest, if any claim is filed or dispute is
raised before the controlling authority, he
had no jurisdiction to condone the delay;
the controlling authority had no jurisdiction
to interpret the provisions of Service
Regulations as he is an authority only under
the Payment of Gratuity Act and therefore,
the interpretation given by the controlling
authority that in the term 'pay' as given in
the Service Regulations, which governs the
category of officers, dearness allowance is
also included in the basic-pay by necessary
implications, is wholly without jurisdiction;
and once it is accepted that service
conditions are to be governed by the
Service Regulations, the officer cannot
insist upon having the best out of the two
schemes as scheme has to be accepted or
rejected in toto. Submission, therefore, is
that the order of the controlling authority is
without jurisdiction and the issue involved
in the present bunch of petitions goes to the
root of the matter wherein interpretation of
any fact or factual dispute is not required
and purely jurisdictional issue is to be
decided, therefore, the statutory alternative
remedy is no bar and writ petition is
maintainable.

8. In support of his argument to the
merit of the case to contend that the order
of the controlling authority is without
jurisdiction
and
that
the
preliminary
objection regarding availability of statutory
remedy by way of appeal under the
provisions of the Act has already been
rejected, learned counsel for the petitioners
has placed reliance on a judgement dated
4.7.2018 passed by Hon'ble Single Judge of
this Court in Writ-C No. 20437 of 2018
(Purvanchal
Bank,
Head
Office
Mohiddidpur and another vs. Chief Labour
Commissioner and 2 others). He has also
referred to the interim orders passed by this
Court in Writ-C No. 22082 of 2019, Writ-C
No. 24879 of 2020, Writ-C No. 14568 of
2019 and to a recent judgement of Hon'ble
Division Bench of Chhattisgarh High Court
dated 28.1.2021 passed in bunch of writ
appeals being WA No. 436 of 2020
(Chhattisgarh Rajya Gramin Bank Through
the Chairman, Mahadevghat Road, Sunder
Nagar, Raipur Chhattisgarh vs. Arun
Phansalkar) and other connected writ
appeals and in Vidarbha Konkan Gramin
Bank vs. The Appellate Authority &
another, 2020 SCC Online Bom 17,
touching upon the jurisdictional error
committed by the controlling authority.

9. In reply to the arguments raised by
Sri Ashok Khare, learned Senior Counsel,
Sri
Amrendra
Pratap
Singh,
learned
counsel for the respondent no. 3, placing
reliance on a judgement dated 16.10.2020
of learned Single Judge in a bunch of
petitions being S.B. Civil Writ Petition No.
7359 of 2019 (Rajasthan Marudhara
Gramin
Bank,
Jodhpur
through
its
Chairman, Head Office Tulsi Tower, 9th B
Road,
Sardarpura,
Jodhpur
vs.
The
Appellate Authority, Under Payment of
Grautity Act 1972 and The Deputy Chief
Labor Commissioner (Central), Ajmer)
along with connected matters passed by
Rajasthan High Court at Jodhpur, submits
that issue has been settled by the Rajasthan
High Court on merits and therefore, no
614 INDIAN LAW REPORTS ALLAHABAD SERIES
such jurisdictional issue or any other issue
as has been raised by Sri Khare, learned
Senior Counsel is involved in the present
case. He has also placed reliance on a
judgement of Chhattisgarh High Court
passed in Writ Petition (L) No. 55 of 2020
(Chhattisgarh Rajya Gramin Bank through
The Chairman, Mahadev Ghat Road,
Sunder Nagar, Raipur vs. Meghraj Pathak
and others) dated 31.8.2020 and in a
judgement of Calcutta High Court passed
in W.P. No. 19538 (W) of 2018 (Chinmoy
Majumder and others vs. Paschim Banga
Gramin Bank and others) dated 5.7.2019;
the judgement of Kerala High Court in WP
(C) No. 32386 of 2015 (W) (Muralee
Mohanan KT and others vs. Corporation
Bank and others) dated 15.10.2019; and the
judgement of Madhya Pradesh High Court
in WP No. 9182 of 2017 (All India Gramin
Bank Pensioners Organization Unit Rewa
vs.
Madhyanchal
Gramin
Bank
and
another) dated 6.9.2018 along with other
connected petitions, which was affirmed by
the Division Bench of Madhya Pradesh
High Court passed in WA No. 1318 of
2018 (Madhyanchal Gramin Bank and
another vs. All India Gramin Bank
Pensioners Organization Unit) dated along
with connected matters wherein special
appeals filed were dismissed. It was
pointed out that the aforesaid judgement of
Hon'ble
Division
Bench
of
Madhya
Pradesh High Court was taken up to
Hon'ble Supreme Court by the Bank by
filing Special Leave to Appeal (C) No.
11113-11115
of
2019
(Madhyanchal
Gramin Bank and another vs. All India
Gramin Bank Pensioners Organisation
Unit, Rewa etc), which was dismissed vide
order
dated
7.5.2019.
Submission,
therefore, is that alleged jurisdictional issue
involved in the present case is now, in fact,
no longer available to him and the present
petition is liable to be dismissed on the
ground of alternative statutory remedy, in
case the petitioners-bank wishes to further
challenge the order of the controlling
authority.

10. At this stage, learned Senior
Counsel submits that the judgment of
learned Single Judge of Rajasthan High
Court in Rajasthan Marudhara Gramin
Bank (supra) was stayed by the Division
Bench in D.B. Spl. Appl. Writ No. 503 of
2020 in its order dated 15.12.2020 and
therefore, the said order is of no avail to the
respondents. He further pointed out that in
a recent judgement of Hon'ble Division
Bench of Chhattisgarh High Court dated
28.1.2021 passed in Chhattisgarh Rajya
Gramin Bank (supra), all such judgements
including the dismissal of the special
appeal
by
Hon'ble
Apex
Court
in
Madhyanchal Gramin Bank (supra) has
been considered and the special appeals
were decided in favour of the bank.
Submission, therefore, is that jurisdictional
issue is involved in the present case, which
is still open. He further submits that it is
settled law that mere dismissal of special
leave petitions does not settle the law as
there is no merger.

11. I have considered the rival
submissions on the issue of preliminary
objection involved in the present batch of
petitions.

12. Before proceeding further, it
would be appropriate to take note of
provisions of the Payment of Gratuity Act
and of the Service Regulations as well as of
the merits of the case only to the extent to
satisfy that if any exceptional circumstance
are present in this bunch of petitions so that
it may be decided whether alternative
statutory remedy is a bar in the present
bunch of petitions and the petitions are
3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
615
liable to be dismissed on the ground of
statutory alternative remedy.

13. For ready reference, relevant
Regulations of Purvanchal Gramin Bank
(Officers
and
Employees)
Service
Regulations 2010 are quoted as under:

"2. Definitions-

(1) .....

(a) "Act" means the Regional Rural
Banks Act, 1976 (21 of 1976);

(i) "Emoluments" means the aggregate
of salary and allowances, if any;

(j) "Employee" means an employee of
the Bank as classified under clause (b) and
(c) of sub-regulation (1) of regulation 3,
and includes such employee whose services
are lent to other organizations under
regulation 75;

(l) "Officer" means an officer of the
Bank as classified under Clause (a) of subregulation (1) of regulation 3;

(m) "Pay" means basic pay drawn per
month by the officer or employee in a payscale including stagnation increments an
any part of the emoluments which may
specifically be classified as pay under these
regulations.

(o) "Salary" means aggregate of pay
and dearness allowances.

3. Classification of officers and
employees

(1) The officers and employees of the
Bank shall be classified as follows, namely-

Junior Management

(i) Scale I (Assistant Manager)

Middle Management

(ii) Scale II (Manager)

(iii) Scale III (Senior Manager)

Senior Management

(iv) Scale IV (Chief Manager)

(v)
Scale
V
(Assistant
General
Manager)

Explanation: For the purposes of
these regulations, the Chairman may
designate the officer, as Branch Manager,
Regional Manager or General Manager,
depending on the work of functions
assigned and the scale of the officer.

(b) Group 'B'- Office Assistants
(Multipurpose).

(c) Group 'C'- Office Attendants
(Multipurpose).

(2) Nothing in this regulation shall be
construed as requiring the Bank to have at
all times all the cadres or categories of the
officers or employees serving the Bank.

72. Gratuity-

(1) An officer or employee shall be
eligible for payment of gratuity either as
per the provisions of the Payment of
Gratuity Act, 1972 (39 of 1972) or as per
sub-regulation (2), whichever is higher.

(2) Every officer or employee shall be
eligible for gratuity on,-

(a) retirement

(b) death

(c) disablement rendering him unfit
for further service as certified by a medical
officer approved by the Bank, or

(d) resignation after completing 10
years of continuous service, or

(e) termination of service in any other
way except by way of punishment after
completion of 10 years of service

Provided that in respect of an
employee there shall be no forfeiture of
gratuity for dismissal on account of
misconduct except in cases where such
misconduct causes financial loss to the
bank and in that case to that extent only.

(3) The amount of gratuity payable to
an officer or employee shall be one months
pay for every completed year of service or
part thereof in excess of six months subject
to a maximum of 15 month's pay:

Provided that where an officer or
employee has completed more than 30
616 INDIAN LAW REPORTS ALLAHABAD SERIES
years of service, he shall be eligible by way
of gratuity for an additional amount at the
rate of one half of a month's pay for each
completed year of service beyond 30 years:

Provided further that in respect of an
officer the gratuity is payable based on the
last pay drawn:

Provided also that in respect of an
employee
pay
for
the
purposes
of
calculation of the gratuity shall be the
average of the basic pay (100%), dearness
allowance and special allowance and
officiating allowance payable during the 12
months
preceding
death,
disability,
retirement, resignation or termination of
service, as the case may be.

(emphasis supplied)

14. For ready reference, relevant
sections of The Payment of Gratuity Act,
1972 are quoted as under:

"2. Definition- In this act, unless.....

(d) "controlling authority" means an
authority appointed by the appropriate
Government under Section 3;

(e) "employee" means any person
(other than an apprentice) who is employed
for wages, whether the terms of such
employment are express or implied, in any
kind of work, manual or otherwise, in or in
connection with the work, of a factory,
mine, oilfield, plantation, port, railway,
company, shop or other establishment to
which this Act applies, but does not include
any such person who holds a post under the
Central Government or a State Government
and is governed by any other Act or by any
rules providing for payment of gratuity;

(s) "wages" means all emoluments
which are earned by an employee while on
duly or on leave in accordance with the
terms and conditions of his employment
and which are paid or are payable to him
in cash and includes dearness allowance
but
does
not
include
any
bonus,
commission,
house
rent
allowance,
overtime wages and any other allowance.

3.
Controlling
authority
-
The
appropriate
Government,
may,
by
notification, appoint, any officer to be a
controlling
authority,
who
shall
be
responsible for the administration of this
Act and different controlling authorities
may be appointed for different areas.

4. Payment of gratuity-

(3) The amount of gratuity payable to
an employee shall not exceed ten lakh
rupees.

(5) Nothing in this section shall affect
the right of an employee to receive better
terms of gratuity under any award or
agreement or contract with the employer.

7. Determination of the amount of
gratuity-

(4) (a)...

(b) Where there is a dispute with
regard to any matter or matters specified in
clause (a), the employer or employee or
any other person raising the dispute may
make an application to the controlling
authority for deciding the dispute.

(Emphasis supplied)

15. It is not in dispute that all the
contesting respondents were officers of the
Bank and are governed by the Service
Regulations. Definition clause definitely
discloses that officer and employee have
been defined differently. Regulation 3
provides for classification of officers and
employees. Perusal of other provisions
clearly indicates that the term 'officer' and
the term 'employee' have been differently
referred to in most of the provisions of the
Regulations. Even the Regulation 39,
which provides for penalties towards the
officers and employees differently by
providing different major and minor
penalties. More specifically Regulation 72,
3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
617
draws distinction in both the terms and
provides that different mode of calculation
is to be adopted in case of an 'officer' and in
case of an 'employee'. Reference may be
made to second proviso and third proviso to
the Regulation 72, which are categorical in
nature. Under the Payment of Gratuity Act,
a limit has been provided that amount of
gratuity payable to an employee shall not
exceed
Rs.
10,00,000
(unamended
provisions as applicable in the present
bunch of petitions). Under Section 3 of the
Act, the controlling authority who shall be
authority as notified by the appropriate
government to be controlling authority who
shall be responsible for the administration
of this Act and different controlling
authorities may be appointed for different
areas, meaning thereby, the controlling
authority would have jurisdiction for the
administration of this Act. As per Section 4
(3) of the Act, the amount of gratuity
payable to an employee shall not exceed
Rs. 10,00,000 as already noted. Therefore,
prima facie, the controlling authority would
not have jurisdiction over the matters above
Rs. 10,00,000/- or in other words, he
cannot at all direct payment over and above
Rs. 10,00,000/-. In this case, the controlling
authority
has
the
responsibility
of
administration of the Act, but it is to be
seen that to what extent it can interpret the
provisions of the Regulations, which are
entirely different in nature. Particularly
when the term 'Officer' is not included in
the Payment of Gratuity Act and even if for
the sake of argument can be deemed to
have been included in the term 'employee'
as defined in the Act, it is, of course, with
the rider as provided therein.

16. At this stage, I am not inclined to
deeply go into the merits of the case of the
petitioners or of the respondents on merits
as at present I am concerned with the
maintainability
of
present
petitions,
however,
broadly
speaking,
although
against the judgement of Madhya Pradesh
High Court in Madhyanchall Gramin Bank
(supra),
special
leave
petitions
were
dismissed by Hon'ble Apex Court but as the
law is settled that merely because special
appeals were dismissed as there is no
merger, the same cannot be treated as law
having been settled by Hon'ble Apex Court.
A reference may be made to a recent
judgement of the Hon'ble Supreme Court in
Khoday Distilleries Limted (Now known as
Khoday India Limited) and others vs. Sri
Mahadeshwara Sahakara Sakkare Karkhane
Limited,
Kollegal
(Under
liquidation)
Represented by the Liquidator, (2019) 4
SCC 376, paragraphs 26, 26.1 and 26.2
whereof are quoted as under:

"26. From a cumulative reading of the
various judgments, we sum up the legal
position as under:

26.1 The conclusions rendered by the
three-Judge Bench of this Court in
Kunhayammed and summed up in para 44
are affirmed and reiterated.

26.2 We reiterate the conclusions
relevant for theses cases as under:
(Kunhayammed vs. State of Kerala, (2002)
6 SCC 359, SCC p. 384)

"(iv) An order refusing special leave
to appeal may be a non-speaking order or
a speaking one. In either case it does not
attract the doctrine of merger. An order
refusing special leave to appeal does not
stand substituted in place of the order
under challenge. All that it means is that
the Court was not inclined to exercise its
discretion so as to allow the appeal being
filed.

(v) If the order refusing leave to
appeal is a speaking order i.e. gives
reasons for refusing the grant of leave, then
the order has two implications. Firstly, the
618 INDIAN LAW REPORTS ALLAHABAD SERIES
statement of law contained in the order is a
declaration of law by the Supreme Court
within the meaning of Article 141 of the
Constitution. Secondly, other than the
declaration of law, whatever is stated in the
order are the findings recorded by the
Supreme Court which would bind the
parties thereto and also the court, tribunal
or authority in any proceedings subsequent
thereto by way of judicial discipline, the
Supreme Court being the Apex Court of the
country. But, this does not amount to
saying that the order of the court, tribunal
or authority below has stood merged in the
order of the Supreme Court rejecting the
special leave petition or that the order of
the Supreme Court is the only order
binding as res judicata in subsequent
proceedings between the parties.

(vi) Once leave to appeal has been
granted and appellate jurisdiction of the
Supreme Court has been invoked the order
passed in appeal would attract the doctrine
of merger;the order may be of reversal,
modification or merely affirmation.

(viii) On an appeal having been
preferred or a petition seeking leave to
appeal having been converted into an
appeal
before
the
Supreme
Court
jurisdiction of the High Court to entertain a
review petition is lost thereafter as
provided by sub-rule (1) of Order 47 Rule 1
CPC." (Emphasis supplied)

17. The latest judgement on the
interpretation of the provisions as quoted
above is the judgement of Hon'ble
Chhattisgarh High Court in Chhattisgarh
Rajya Gramin Bank (supra), which is dated
28.1.2021. Therefore, without speaking
much on the merits of the case, the fact
remains that jurisdiction of the controlling
authority has not yet been settled and
divergent views of various High Courts are
available on the issue in hand.

18.

However,
on
merits
of
preliminary objection, at this stage for the
purpose of considering the exception to the
alternative remedy, it would be appropriate
to take note of the judgement of Hon'ble
Apex Court rendered in the case of Beed
District Central Coop. Bank Ltd. vs. State
of Maharashtra and others, (2006) 8 SCC
514, paragraphs 10, 11, 13, 14 and 16
whereof are quoted as under:

"10. The `doctrine of blue pencil' was
evolved by the English and American
Courts. In Halsbury's Laws of England (4th
Edn. Vol.9), p.297, para 430, it is stated:

"430. Severance of illegal and void
provisions - A contract will rarely be
totally illegal or void and certain parts of it
may be entirely lawful in themselves. The
question therefore arises whether the
illegal or void parts may be separated or
"severed'' from the contract and the rest of
the contract enforced without them. Nearly
all the cases arise in the context of restraint
of trade, but the following principles are
applicable to contracts in general"

11. In P. Ramanatha Aiyar's Advanced
Law Lexicon, 3rd Edn. 2005, Vol. l,p.553554, it is stated:

"Blue pencil doctrine (test). A judicial
standard for deciding whether to invalidate
the whole contract or only the offending
words. Under this standard, only the
offending words are invalidated if it would
be possible to delete them simply by
running a blue pencil through them, as
opposed
to
changing,
adding,
or
rearranging words. (Black, 7th Edn., 1999)
This doctrine holds that if Courts can
render
an
unreasonable
restraint
reasonable by scratching out the offensive
portions of the covenant, they should do so
and
then
enforce
the
remainder.
Traditionally, the doctrine is applicable
only if the covenant in question is
3 All. Baroda UP Bank Erstwhile Purvanchal Bank, Gorakhpur & Anr. Vs. Chief Labour Commissioner & Ors.
619
applicable, so that the unreasonable
portions may be separated. E.P.I, of
Cleveland, Inc. v. Basler, 12 Ohio App2d
16:230 NE2d 552, 556.

Blue pencil rule/test. - Legal theory
that permits a judge to limit unreasonable
aspects of a covenant not to compete.

Severance of contract. - "severance
can be effected when the part severed can
be removed by running a blue pencil
through it without affording the remaining
part. Attwood v. Lamont, (1920) 3 K 571
(Banking) A rule in contracts a Court may
strike parts of a covenant not to compete in
order to make the covenant reasonable.
(Merriam Webster) Phrase referring to
severance (q.v.) of contract. "Severance
can be effected when the part severed can
be removed by running a blue pencil
through it" without affording the remaining
part. Attwood v. Lamont, (1920) 3 KB 571.
(Banking)"

13. We, however, are of the opinion
that the said doctrine cannot be said to
have any application whatsoever in the
instant case. Undoubtedly, the Payment of
Gratuity Act is a beneficial statute. When
two views are possible, having regard to
the purpose, the Act seeks to achieve being
a social welfare legislation, it may be
construed in favour of the workman.
However, it is also trite that only because a
statute is beneficent in nature, the same
would not mean that it should be construed
in favour of the workmen only although
they are not entitled to benefits thereof.
(See Regional Director, ESI Corpn. v.
Ramanuja Match Industries, AIR (1985) SC
278).

14. Applying the `Golden Rule of
Interpretation of Statute', to us it appears
that the question should be considered from
the point of view of the nature of the
scheme as also the fact that the parties
agreed to the terms thereof. When better
terms are offered, a workman takes it as a
part of the package. He may volunteer
therefor, he may not. Sub-Section (5) of
Section 4 of the 1972 Act provides for a
right in favour of the workman. Such a
right may be exercised by the workman
concerned. He need not necessarily do it. It
is the right of individual workman and not
all the workmen. When the expression
"terms" has been used, ordinarily it must
mean "all the terms of the contract". While
interpreting even a beneficent statute, like,
Payment of Gratuity Act, we are of the
opinion that either contract has to be given
effect to or the statute. The provisions of
the Act envisage for one scheme. It could
not be segregated. Sub-Section (5) of
Section 4 of the 1972 Act does not
contemplate that the workman would be at
liberty to opt for better terms of the
contract, while keeping the option open in
respect of a part of the statute. Whilereserving his right to opt for the beneficent
provisions of the statute or the agreement,
he has to opt for either of them and not the
best of the terms of the statute as well as
those of the contract. He cannot have both.
If such an interpretation is given, the spirit
of the Act shall be lost. Even in Shin
Satellite (supra), this Court stated :

"The proper test for deciding validity
or otherwise of an agreement or order is
"substantial severability" and not "textual
divisibility". It is the duty of the court to
sever and separate trivial or technical parts
by retaining the main or substantial part
and by giving effect to the latter if it is
legal, lawful and otherwise enforceable. In
such cases, the court must consider the
question whether the parties could have
agreed on the valid terms of the agreement
had they known that the other terms were
invalid or unlawful. If the answer to the
said question is in the affirmative, the
doctrine of severability would apply and
620 INDIAN LAW REPORTS ALLAHABAD SERIES
the valid terms of the agreement could be
enforced, ignoring invalid terms. To hold
otherwise would be "to expose the
covenanter to the almost inevitable risk of
litigation which in nine cases out of ten he
is very ill-able to afford, should he venture
to act upon his own opinion as to how far
the restraint upon him would be held by the
court to be reasonable, while it may give
the
covenantee
the
full
benefit
of
unreasonable provisions if the covenanter is
unable to face litigation."

16. We are, therefore, of the opinion
that the workman cannot opt for both the
terms. Such a construction would defeat the
purpose for which Sub-Section (5) of
Section 4 has been enacted. For the
reasons aforementioned, the impugned
judgment cannot be sustained, which is set
aside accordingly. The appeal is allowed.
No costs.
 (Emphasis supplied)

19. Insofar as the maintainability of
present
petitions
on
the
ground
of
availability of alternative remedy, it would
be appropriate to take note of the
judgement of Hon'ble Apex Court rendered
in U.P. State Spinning Co. Ltd. vs.