# Nagar Nigam Gorakhpur v. Lal Bahadur Singh & Ors

- **Citation:** (2019) 3 ILRA 1457
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-29
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/nagar-nigam-gorakhpur-v-lal-bahadur-singh-ors-44775
- **Pages:** 15

## Headnote

A. Civil Law-Payment of Gratuity Act,
1972 - UP Municipal Corporation Act,
1959 - Section 458 (1)(f) - Issue as to
whether in matter of payment of gratuity
to
employees
of
Nagar
Mahapalika,
provision of Regulation, 1990 framed
under Act, 1959 prevail over Act, 1972.

Held: - Payment of Gratuity Act, 1972 works
to exclude the Regulations in the matter of
payment of gratuity to the employee - In
absence of notification of State Government
issued u/s 5(1) of the Act, employer cannot
claim exemption from regime of the Act, 1972.
(Para 2, 14 & 15)

Petition of employer dismissed (E-1)

Case law relied: -

## Text

_Characters 0–39,781 of 44,753. This is a partial read: ask again with offset=39781 for what follows._

3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1457
same there was no error in the order
passed by the licensing authority nor any
material facts were brought up in the
appeal so as to indicate that the charges
against the petitioner were not proved and
considering
the
entirety
of
the
circumstances the appeal was dismissed.

32. For the foregoing reasons the orders
passed by the licensing authority as also the
appellate authority cannot be faulted with.

33. The writ petition thus fails and is
accordingly dismissed.
----------

(2019)11ILR A1457

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.08.2019

BEFORE
THE HON'BLE J.J. MUNIR, J.

Writ C No. 64093 of 2010 connected with
other cases

Nagar Nigam Gorakhpur ...Petitioner
Versus
Lal Bahadur Singh & Ors. ...Respondents

Counsel for the Petitioner:
Sri Sanjay Kumar Tripathi

Counsel for the Respondents:
C.S.C., Sri Gopal Narain, Sri Shyam
Narain, Sri Sudhanshu Narain

A. Civil Law-Payment of Gratuity Act,
1972 - UP Municipal Corporation Act,
1959 - Section 458 (1)(f) - Issue as to
whether in matter of payment of gratuity
to
employees
of
Nagar
Mahapalika,
provision of Regulation, 1990 framed
under Act, 1959 prevail over Act, 1972.

Held: - Payment of Gratuity Act, 1972 works
to exclude the Regulations in the matter of
payment of gratuity to the employee - In
absence of notification of State Government
issued u/s 5(1) of the Act, employer cannot
claim exemption from regime of the Act, 1972.
(Para 2, 14 & 15)

Petition of employer dismissed (E-1)

Case law relied: -

1. Nagar Ayukt Nagar Nigam Vs Meraj Ahmad
& anr. 2019 (162) FLR 278.
2. Nagar Ayukt Nagar Nigam, Kanpur Vs Mujib
Ullah Khan & anr. (2019) 6 SCC 103.

(Delivered by Hon'ble J.J. Munir, J.)

1. Heard Sri Sanjay Kumar Tripathi,
learned counsel for the petitioner in the
present writ petition and in connected
matters and Sri Sudhanshu Narain,
learned counsel appearing on behalf of
respondent-employee No. 1 here, and on
behalf of each of the respondentemployees in connected matters. Learned
Standing Counsel has been heard on
behalf of respondent Nos. 2 and 3 here
and, likewise, on behalf of the Staterespondents
in
the
connected
writ
petitions.

2. The question involved in the present
writ petition as well as all other connected
matters is whether the Nagar Mahapalika
Gorakhpur "Akendriyat - Sevanivratti Labh
Viniyam, 1990" framed under Section 458
(1)(f) of the U.P. Municipal Corporations Act,
1959 would prevail in the matter of payment
of gratuity to employees of the Nagar
Mahapalika, Gorakhpur over the provisions of
the Payment of Gratuity Act, 1972?

3. Respondent No. 1, Lal Bahadur
Singh was appointed with the Nagar
Nigam Gorakhpur on 27.03.1973, as a
Safai Supervisor. He retired from the said
1458 INDIAN LAW REPORTS ALLAHABAD SERIES
post
upon
attaining
the
age
of
superannuation
on
31.03.2006,
completing 33 years of service. He retired
from the post of a Safai Supervisor. The
respondent was paid gratuity in the sum
of Rs. 66,175/-, in accordance with the
provisions
of
Nagar
Mahapalika,
Gorakhpur
"Akendriyat
Seva
Labh
Viniyam
1990"
(for
short,
the
'Regulations'). Respondent no. 1 (for short
the 'Employee') claimed that he was
entitled to payment of gratuity under the
Act that would reckon to a figure of Rs.
1,31,974/-; instead, he had been paid
gratuity under the Regulations, in the sum
of Rs. 65,175/-. He, therefore, claimed the
difference between his entitlement under
the Act and the sum paid to him by the
petitioner, Nagar Nigam Gorakhpur (for
short, the 'Employer') on that count under
the Regulations, together with interest @
12% per annum. The claim of the
petitioner to gratuity aforesaid was
registered on the file of the Controlling
Authority, Payment of Gratuity Act as PG
Case No. 56 of 2006. The aforesaid claim
was made through an application dated
31.07.2006.

4. The Employers filed written
statement, dated 31.03.2007 before the
Controlling Authority, taking a case that
the Employee had been paid his gratuity
in accordance with his entitlement, of
course, under the Regulations. It was
further urged that the said payment of
gratuity falls within the definition of a
final settlement, and, as such, no claim for
payment of gratuity before the Authority
under the Act, is maintainable. It was
specifically repudiated by the Employers
that gratuity can be claimed by the
Employee, in the sum of Rs. 1,31,974/-
calculated in terms of the Act. They said
that
the
Employee's
entitlement
to
gratuity is governed by the Regulation,
and not the Act.

5. The Controlling Authority by an
order, dated 06.02.2008 allowed PG Case
No. 56 brought by the employee, and
ordered the arrears of gratuity, being a
sum of Rs. 66,799.00 with effect from
01.03.2006, to be paid to the employee,
alongwith simple interest @ 8% per
annum. A sum of Rs. 200/- was awarded
in costs. The Employers aggrieved by the
order of the Controlling Authority, dated
06.02.2008,
filed
Civil
Misc.
Writ
Petition No. 23800 before this Court. The
aforesaid writ petition was summarily
dismissed on 17.03.2009, on ground of
there
being
an
equally
efficacious
alternative remedy available by way of an
appeal under the Act, to the Appellate
Authority. The Employers, therefore, filed
an appeal from the order of the
Controlling Authority, dated 06.02.2008,
on 19.05.2009, under Section 7(7) of the
Act. The aforesaid appeal was registered
on the file of the Appellate Authority
under the Act, as Appeal No. 1 of 2010.
The Employer filed an objection/reply on
22.03.2010, in the appeal last mentioned,
carried to the Appellate Authority by the
Employee. The Appellate Authority, vide
an order dated 24.07.2010, proceeded to
dismiss
the
Employers
appeal
and
affirmed the order of the Controlling
Authority, dated 06.02.2008.

6. Aggrieved by the order dated
24.07.2010 passed by the Appellate
Authority under the Act and the order
dated
06.02.2008
passed
by
the
Controlling Authority, the present writ
petition has been filed by the Employers.

7. Here, it would be apposite to
detail that all the connected matters have
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1459
been filed on identical facts by the
Employers against their retired employees
who have claimed gratuity under the Act,
in preference to what they have been paid
under the Regulations. Claims of each
such employee to a higher sum of
gratuity, calculated in accordance with the
provisions of the Act, over and above that
paid under the Regulations by the
Employers, have been allowed together
with interest on the arrears of outstanding
due on account of the difference.
Likewise, in all connected writ petitions,
the
Employers
appeal
against
the
respective determinations made by the
Controlling Authority under the Act have
been
dismissed
by
the
Appellate
Authority. This Court may record here
that this petition was admitted to hearing
on
27.07.2011
and
parties
have
exchanged
affidavits.
Most
of
the
connected
matters
too,
have
been
admitted to hearing by orders of various
dates. However, fourteen of these writ
petitions have not been formally admitted.
Nevertheless, identical questions of fact
being involved, these petitions too have
been heard by consent of learned counsel
appearing for the parties. Since all matters
connected to this petition,
whether
admitted or not, are founded on identical
questions of facts and law, no pleadings
have been exchanged in the connected
matters. Those matters, therefore, are
being heard and determined on the
pleadings here.

8. It would be an exercise in futility
to detail facts of each case that would be
no more than a repetition, except the
essential
particulars.
The
essential
particulars relating to the connected
matters are depicted in tabular form,
hereinunder:-
Sl
Wri
N
D
G
Gra
G
D
D
D
D
D
.
N
o.
t
Peti
tion
No.

a
m
e
of
E
m
pl
oy
ee
es
ig
na
ti
on

ra
tu
it
y
pa
id
by
E
m
pl
oy
er
s
u
n
de
r
th
e
R
eg
ul
at
io
ns
tuit
y
dete
rmi
ned
and
held
pay
able
und
er
the
Act
by
the
Aut
hori
ties
ra
tu
it
y
he
ld
by
th
e
A
ut
ho
rit
ie
s
pa
ya
bl
e
u
n
de
r
th
e
A
ct
(s
u
bs
ta
nt
iv
e
su
m
of
di
ff
er
en
ce
de
te
r
m
in
ed
wi
th
ou
t
ac
cr
eti
on
on
ac
co
u
nt
at
e
of
i
m
p
ug
ne
d
or
de
r
pa
ss
ed
by
th
e
C
on
tr
oll
in
g
A
ut
ho
rit
y
u
n
de
r
th
e
A
ct
at
e
of
i
m
p
ug
ne
d
or
de
r
pa
ss
ed
by
th
e
A
p
pe
lla
te
A
ut
ho
rit
y
u
n
de
r
th
e
A
ct
at
e
of
fil
in
g
th
e
W
rit
Pe
tit
io
n
be
fo
re
th
is
C
ou
rt
at
e
of
th
e
or
de
r
of
in
te
ri
m
st
ay
an
d
co
n
ne
cti
on
to
th
e
le
ad
in
g
pe
tit
io
n
at
e
of
a
d
m
is
si
o
n
to
he
ar
in
g
1460 INDIAN LAW REPORTS ALLAHABAD SERIES
of
in
te
re
st
a
w
ar
de
d)
1
642
66
of
201
0
H
an
u
m
an
M
is
hr
a
Cl
er
k
89
,1
00
/-
2,47
,159
/-
1,
58
,0
59
/-

18
.0
2.
20
08
24
.0
7.
20
10

25
.1
0.
20
10

27
.1
0.
20
10
27
.0
7.
20
11
2
642
67
of
201
0
B
ud
hu
C
ho
w
ki
da
r

60
,2
25
/-

1,27
,778
/-
67
,5
53
/-
06
/0
2/
08
24
.0
7.
20
10

25
.1
0.
20
10
27
.1
0.
20
10

27
.0
7.
20
11
3
642
68
of
201
0
Sh
au
ka
t
Sa
fai
W
or
ke
r
51
,0
00
/-
97,5
91/-
46
,5
91
/-
06
/0
2/
08
24
.0
7.
20
10
25
.1
0.
20
10

27
.1
0.
20
10
27
.0
7.
20
11
4
642
69
of
201
0
S
mt
.
M
en
iy
a
Sa
fai
W
or
ke
r
16
,2
19
/-
34,5
28/-
18
,3
09
/-

06
/0
2/
08
24
.0
7.
20
10
25
.1
0.
20
10
27
.1
0.
20
10
27
.0
7.
20
11
5
642
70
of
201
0
Sa
dd
ar
Pr
as
ad

K
ha
la
si
55
,1
93
/-
1,12
,915
/-

57
,7
22
/-
06
/0
2/
08

24
.0
7.
20
10
25
.1
0.
20
10
27
.1
0.
20
10
27
.0
7.
20
11
6
642
71
of
201
0
S
mt
.
Su
mi
tra
D
ev
i
C
ha
pr
as
i
55
,1
92
/-
1,00
,638
/-
45
,4
46
/-
06
/0
2/
08

24
.0
7.
20
10
25
.1
0.
20
10
27
.1
0.
20
10
27
.0
7.
20
11
7
642
72
Sh
an
Va
xi
63
,9
1,28
,205
64
,2
24
.0
24
.0
25
.1
27
.1
27
.0
of
201
0
ka
r
La
l

na
to
r
37
/-
/-
68
/-
3.
20
08
7.
20
10
0.
20
10
0.
20
10
7.
20
11
8
642
73
of
201
0

R
a
m
K
e
w
al
Ya
da
v

C
ha
w
ki
da
r

61
,3
80
/-
1,56
,163
/-
94
,7
83
/-

25
.0
2.
20
08

24
.0
7.
20
10
25
.1
0.
20
10
27
.1
0.
20
10
27
.0
7.
20
11
9
148
66
of
2011
R
a
m
D
ul
ar
e
H
ea
d
Cl
er
k

52
,1
61
/-
1,45
,130
/-
92
,9
69
/-
29
.0
3.
20
08
04
/1
1/
10
09
/0
3/
11
11
/0
3/
11
27
.0
7.
20
11
10 148
67
of
2011

R
a
m
A
dh
ar

B
el
da
r
NI
L
91,4
40/-
91
,4
40
/-
06
/0
2/
08
04
/1
1/
10
09
/0
3/
11
11
/0
3/
11
27
.0
7.
20
11
11 148
69
of
2011
B
ha
g
w
a
N
D
as

C
ha
pr
as
i
55
,1
93
/-
92,5
06/-
37
,3
13
/-

31
.0
5.
20
08
04
/1
1/
10
09
/0
3/
11
11
/0
3/
11
27
.0
7.
20
11
12 148
71
of
2011
S
mt
.
M
en
iy
a

Sa
fai
W
or
ke
r
46
,9
09
/-
66,0
44/-
19
,1
35
/-
06
/0
2/
08

04
/1
1/
10
09
/0
3/
11
11
/0
3/
11
27
.0
7.
20
11

13 148
72
of
2011

S
mt
.
A
sh
ar
fi
D
ev
i

B
el
da
r
Ni
l
1,10
,770
/-
1,
10
,7
70
/-

27
.0
2.
20
08
04
/1
1/
10
09
/0
3/
11

11
/0
3/
11

27
.0
7.
20
11
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1461
14 163
18
of
2011
R
a
m
A
dh
ar
C
ha
uk
id
ar
58
,4
10
/-
1,25
,707
/-
67
,2
97
/-
06
/0
2/
08
04
/1
1/
10

15
.0
3.
20
11
17
.0
3.
20
11

27
.0
7.
20
11

15 163
21
of
2011

B
an
sh
i
Pi
pe
Li
ne
K
ha
la
sh
i
55
,1
92
/-
1,01
,196
/-
46
,0
04
/-
06
/0
2/
08
04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11
27
.0
7.
20
11
16 163
24
of
2011
S
mt
.
Sh
ah
id
du
n
Ni
sh
a
Sa
fai
W
or
ke
r

49
,6
12
/-

99,1
52/
49
,5
40
/-
29
.0
3.
20
08

04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11
27
.0
7.
20
11
17 163
25
of
2011

S
mt
.
Sa
nt
R
aji
D
ev
i
B
el
da
r
Ni
l
1,02
,461
/-

1,
02
,4
61
/-
27
.0
2.
20
08

04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11

27
.0
7.
20
11
18 163
28
of
2011

S
mt
.
Z
ub
ai
da

Sa
fai
W
or
ke
r
51
,0
11
/-
937
69/-
42
,7
58
/-
29
.0
3.
20
08
04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11

27
.0
7.
20
11
19 163
30
of
2011
Sa
nt
Pr
as
ad
C
ha
ur
as
iy
a

Pu
m
p
Dr
iv
er
59
,0
70
/-
88,6
78/-
29
,6
08
/-
06
/0
2/
08
04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11
27
.0
7.
20
11
20 163
31
M
ol
B
el
60
,2
1,26
,346
66
,1
06
/0
04
/1
15
.0
17
.0
27
.0
of
2011
hu da
r

25
/-
/-
21
/-

2/
08
1/
10
3.
20
11
3.
20
11
7.
20
11
21 163
33
of
2011
Di
ne
sh
K
u
m
ar
D
ha
r
D
ub
ey
H
ea
d
Cl
er
k

80
,8
50
/-

2,23
,370
/-

1,
42
,5
20
/-
26
.0
2.
20
08
04
/1
1/
10
15
.0
3.
20
11

17
.0
3.
20
11
27
.0
7.
20
11

22 163
34
of
2011
S
mt
.
Vi
jai
K
u
m
ari

Sa
fai
W
or
ke
r
57
,3
37
/-
1,22
,098
/-

64
,7
61
/-

27
.0
2.
20
08
04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11
27
.0
7.
20
11
23 163
37
of
2011
Ja
gd
is
h
G
up
ta
C
ha
pr
as
i
36
,8
00
/-
63,2
67/-
26
,4
67
/-
28
.0
5.
20
08
04
/1
1/
10
15
.0
3.
20
11

17
.0
3.
20
11
27
.0
7.
20
11
24 163
42
of
2011
H
ar
en
dr
a
K
u
m
ar
Pu
m
p
Dr
iv
er
66
,4
12
/-
/-
1,40
,905
/-
74
,9
93
/-

06
/0
2/
08
04
/1
1/
10
15
.0
3.
20
11
17
.0
3.
20
11
17
.0
3.
20
11
25 165
28
of
2011

Sa
ty
a
N
ar
ay
an
Ya
da
v

Pu
m
p
O
pe
rat
or
61
,3
60
/-
1,31
,113
/-
69
,7
33
/-
29
.0
3.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
26 165
31
of
2011

G
ay
a
Pr
as
C
ha
uk
id
ar
Ni
l
95,5
35/-
95
,5
35
/-
23
.1
0.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
1462 INDIAN LAW REPORTS ALLAHABAD SERIES
ad
27 165
33
of
2011
S
mt
.
Sa
mj
ira
D
ev
i
B
el
da
r
Ni
l
1,05
,230
/
1,
05
,2
30
/-
27
.0
2.
20
08
04
/1
1/
10
16
.0
3.
20
11

18
.0
3.
20
11
27
.0
7.
20
11
28 165
36
of
2011

R
as
oo
l
Sa
fai
W
or
ke
r
54
,3
74
/-
1,40
,732
/-
86
,3
58
/-
25
.0
2.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
29 165
38
of
2011
Sh
ah
M
oh
a
m
m
ad
S
w
ee
pe
r
60
,2
25
/-
1,20
,871
/-

60
,6
46
/-
06
/0
2/
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
30 165
39
of
2011
R
as
ul
an
ali
as
R
as
uli
ya

Sa
fai
W
or
ke
r
55
,4
88
/-
1,12
,652
/-
57
,1
64
/-
25
.0
2.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11

31 640
95
of
201
0
Sr
ip
at
La
l
Sa
fai
Su
pe
rv
is
or
66
,4
12
/-
1,44
,692
/-
78
28
0/
-
06
.
02
.2
00
8
24
.0
7.
20
10
23
.1
0.
20
10
26
.1
0.
20
10
27
.0
7.
20
11
32 165
39
of
2011
R
as
ul
an
@
R
as
uli
ya
Sa
fai
r
W
or
ke
r
55
,4
88
/-
1,12
,,65
2/-
57
,1
64
/-
26
.0
2.
20
08
04
/1
1/
10

16
.0
3.
20
11

18
.0
3.
20
11
27
.0
7.
20
11
33 165
41
of
2011
H
au
sh
la
Pr
as
Pu
m
p
O
pe
rat
53
,7
93
/-
1,04
,062
/-

50
,2
69
/-
06
/0
2/
08
04
/1
1/
10

16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
ad
Sh
uk
la
or

34 165
42
of
2011
Tr
ib
u
w
an
La
l
Sr
iv
as
ta
va
Le
kh
a
Li
pi
k

75
,9
00
/-
1,16
,723
/-
40
,8
23
,
29
.0
3.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
35 165
45
of
2011
N
az
zi

Sa
fai
W
or
ke
r
Ni
l
1,08
,571
/-
1,
08
,5
71
/-
31
.0
5.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
36 165
46
Of
2011
S
mt
.
Sa
vit
ri
D
ev
i
C
ha
uk
id
ar
Ni
l

1,56
,780
/-
1,
56
,7
80
/-
23
.1
0.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
37 165
49
of
2011
Kr
an
ti
Ji
w
an
Pu
m
p
Dr
iv
er

66
,4
12
/-
1,68
,600
/-
1,
02
,1
88
/-
19
.0
2.
20
08
04
/1
1/
10

16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
38 165
50
of
2011
S
mt
.
A
bi
da
K
ha
to
on

C
ha
pr
as
i
48
,2
00
/-
79,2
30/-
38
,4
30
/-
27
.0
2.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11

39 165
51
of
2011
R
a
m
Br
ik
sh
C
ha
pr
as
i
59
,2
54
/-
1,37
,160
/-
77
,9
06
/-

26
.0
2.
20
08
04
/1
1/
10
16
/0
3/
11
18
.0
3.
20
11
27
.0
7.
20
11
40 165
53
S
mt
B
el
Ni
l
1,05
,230
1,
05
27
.0
04
/1
16
.0
18
.0
27
.0
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1463
of
2011
.
K
ali
nd
ar
D
ev
i
da
r
/-
,2
30
/-
2.
20
08
1/
10
3.
20
11
3.
20
11
7.
20
11
41 165
54
of
2011

K
ha
di
m
H
us
ai
n
Pu
m
p
O
pe
rat
or
65
,1
75
/-
1,47
,971
/-

82
,7
96
/-
29
.0
3.
20
08
04
/1
1/
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
42 166
77
of
2011

M
un
na
Sa
fai
W
or
ke
r
58
,4
10
/-
1,26
,652
/-
68
,2
42
/-
18
.0
2.
20
09
22
.1
1.
20
10
16
.0
3.
20
11
18
.0
3.
20
11
27
.0
7.
20
11
43 172
63
of
2011
Sh
ya
m
B
ah
ad
ur

H
ea
d
R
ok
ari
ya
72
,5
00
/-
97,0
38/-
24
,5
38
/-
29
.0
3.
20
08
04
/1
1/
10
23
.0
3.
20
11
25
.0
3.
20
11
27
.0
7.
20
11

44 298
21
of
201
4

S
mt
.
R
a
m
R
ati
D
ev
i

O
pe
rat
or
59
,6
95
/-
1,17
,969
/-

58
,2
74
/-
25
.1
1.
20
10

25
.0
2.
20
14

24
.0
5.
20
14
27
.0
5.
20
14
N
ot
ad
m
itt
ed
45 298
24
of
201
4
S
mt
.
M
un
na
Sa
fai
K
ar
m
ch
ari
56
,2
65
/-
1,19
,838
/-
63
,5
76
/-
25
.1
1.
20
10
25
.0
2.
20
14

24
.0
5.
20
14
27
.0
5.
20
14
N
ot
ad
m
itt
ed
46 298
22
of
201
4
C
ha
nt
ha
Sa
fai
K
ar
m
ch
ari
56
,0
00
/-

1,00
,488
/-
44
,4
88
/-
25
.1
1.
20
10
25
.0
2.
20
14
24
.0
5.
20
14
27
.0
5.
20
14
N
ot
ad
m
itt
ed
47 298
S
B
42 1,26
84 25 25 24 27 N
25
of
201
4
mt
.
A
kh
tar
an
el
da
r

,0
00
/-
,046
/-

,0
46
/-
.1
1.
20
10
.0
2.
20
14
.0
5.
20
14
.0
5.
20
14
ot
ad
m
itt
ed
48 298
27
of
201
4
K
a
m
ar
Ja
ha
n
Fi
tte
r
65
,1
75
/-
1,30
,451
/-
65
,2
76
/-
25
.1
1.
20
10

25
.0
2.
20
14
24
.0
5.
20
14
27
.0
5.
20
14
N
ot
ad
m
itt
ed

49 298
28
of
201
4

Tu
lla
Sa
fai
K
ar
m
ch
ari
60
,2
25
/-
1,58
,261
/-
98
,0
36
/-
25
.1
1.
20
10
25
.0
2.
20
14
24
.0
5.
20
14

27
.0
5.
20
14
N
ot
ad
m
itt
ed
50 298
30
of
201
4
S
mt
.
R
os
ha
n
A
ar
a

Se
ni
or
Cl
er
k

62
,9
29
/-
1,49
,252
/-
86
,3
23
/-
25
.1
1.
20
10

25
.0
2.
20
14
24
.0
5.
20
14

27
.0
5.
20
14
N
ot
ad
m
itt
ed
51 298
33
of
201
4
M
ol
hu
La
bo
ur

53
,0
47
/-

1,10
,090
/-
57
,0
43
/-
25
.1
1.
20
10
25
.0
2.
20
14
24
.0
5.
20
14
27
.0
5.
20
14
N
ot
ad
m
itt
ed

9. The submission of the learned
counsel
for
the
petitioner
is
that
retirement
benefits
payable
to
the
Employee under the Regulations are more
to the Employee's advantage, when
compared with gratuity payable under the
Act. He submits, therefore, that the
Employee is not entitled to claim gratuity
calculated in accordance with the Act. It
is also urged by Sri Sanjay Kumar
Tripathi,
learned
Counsel
for
the
Employers that under the Regulations, the
employees are also entitled to pension, in
addition
to
gratuity. As
such,
the
Regulations
are
clearly
more
1464 INDIAN LAW REPORTS ALLAHABAD SERIES
advantageous to the Employee compared
to what his entitlement would be, under
the Act. It is argued that the Authorities
have not at all taken into account the fact
that under the Regulations, the employees
are entitled to gratuity and pensionery
benefits, not less favourable than benefits
obtaining under the Act.

10. It is also argued that the
provisions of the Act are not applicable to
the Employers as they are a state
establishment, incorporated under an Act
of the State legislature, that is to say, the
U.P. Municipal Corporations Act, 1959
(for short the, 'Act of 1959'). Regulations
framed by them in exercise of their
statutory powers under Section 548(1)(f),
together with the parent statute, have to
be regarded as a special law vis-a-vis the
Act, in the matter of payment of gratuity.
As such, the provisions of the Act would
stand excluded by the Regulations framed
under the Act of 1959. The two
Authorities below, in the submission of
Sri
Sanjay
Kumar
Tripathi,
have
manifestly erred in law, where they failed
to notice this exclusion of the Act, by a
special statute. It is on the fringes of these
thematic submissions that learned counsel
for the petitioner has urged that the
Appellate Authority has gone wrong in
his observation, where he says in the
order impugned passed by him that the
relevant regulations were not shown to
him. It is submitted that the Regulations
framed under the Act, relating to payment
of gratuity, pension and other benefits, all
framed under the Act of 1959, were
clearly brought to his notice.

11. There is one submission put
forward by Sri Sanjay Kumar Tripathi,
that is away from the rest hereinabove
recorded.
He
has
urged
that
the
Authorities
have
calculated
gratuity
payable to the employee under the Act, by
including in the last wages drawn, the
sum of money paid towards House Rent
Allowance
and
City
Compensatory
Allowance. It is his submission that the
said allowances could not be included,
while determining the last wages drawn
for the purpose of calculating gratuity
payable under the Act. Learned counsel
for the Employers points out that under
the Act, 'wages' are inclusive of all
emoluments,
including
Dearness
Allowance,
but
excludes
Bonus,
Commission, House Rent Allowance,
Over
Time
Wages
and
any
other
allowances. This, according to Sri Sanjay
Kumar Tripathi, is how wages have been
defined under Section 2(s) of the Act,
which have to serve as the basis while
calculating "15 days wages based on the
rate of wages last drawn by the
employee", to borrow the phraseology of
the statute, under Section 4(2) of the Act.
This submission of Sri Tripathi, shall be
dealt with, independent of the other
submissions in this judgment.

12. Sri Sudhanshu Narain, learned
counsel for the Employers on the other
hand submits that the question whether
the Employee is entitled to gratuity under
the Regulations, framed by the Employer
in exercise of powers under Section
548(1)(f) of the Act of 1959 or under
Section 4(2) of the Act, is no longer res
integra in view of the decision of this
Court in Nagar Ayukt Nagar Nigam vs.
Meraj Ahmad and another1, where
precisely the same issue was the one that
was raised by the Nagar Nigam, Kanpur.
In the aforesaid decision, this Court,
while
dealing
with
an
identical
submission, that stemmed from a case
about an exemption for the Nagar Nigam
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1465
from the provisions of the Act in that
case, owning to more favourable terms
claimed to be offered by the Nagar Nigam
Kanpur, it was held by this Court:

10. Sri Y.S. Sachan, learned
Counsel for the petitioner submits that the
definition of an employee under the Act,
read with section 5 thereof, leads one to
the
inevitable
conclusion
that
an
employee of any establishment, like the
petitioner-Nigam who under its rules is
entitled to receive gratuity on terms not
less
favourable
than
the
benefits
conferred under the Act, would render
such an establishment being exempt from
the applicability of the Act. He urges that
the Retiral Dues and General Provident
Fund Regulation, 1962 framed by the
petitioner-Nigam are more favourable to
its
employees,
circumstanced
as
respondent No. 1, in the matter of
entitlement to gratuity than the provisions
of the Act, attracting the exemption clause
under section 5 of the Act. This Court is
afraid that the submission cannot be
accepted.

11. On a plain reading of
section 2(e) of the Act in applicability of
the Act is there only in relation to the
such
employees
of
the
Central
Government or the State Government,
who hold a post that is governed by any
Act or any Rules providing for payment
of gratuity. This Court has no doubt that
the question of inapplicability of the Act
is very different from exemption from its
operation. The Act on its own term is
alone inapplicable in case of such persons
who hold a post under the Central or a
State Government that is governed by an
Act or Rules providing for payment of
gratuity; no other class of employees has
been placed in a category to whom the
Act is inapplicable. There is no manner of
doubt that the petitioner-Nigam is neither
the Central Government or a State
Government.
It
is
a
Corporation
established under a State enactment.
Therefore,
an
employee
of
the
Corporation can never fall in the class to
whom the Act may be held inapplicable.

12. Exemption is quite another
matter that is dealt with under section 5 of
the Act. Section 5 of the Act, reads thus:

"5. Power to exempt--

[1] The appropriate Government
may, by notification, and subject to such
conditions as may be specified in the
notification, exempt any establishment,
factory, mine, oilfield, plantation, port,
railway company or shop to which this
Act applies from the operation of the
provisions of this Act if, in the opinion of
the
appropriate
Government,
the
employees in such establishment, factory,
mine, oilfield, plantation, port, railway
company or shop are in receipt of gratuity
or pensionary benefits not less favourable
than the benefits conferred under this Act.

[2] The appropriate Government
may, by notification and subject to such
conditions as may be specified in the
notification, exempt any employee or
class of employees employed in any
establishment, factory, mine, oilfield,
plantation, port, railway company or shop
to which this Act applies from the
operation of the provisions of this Act, in
the
opinion
of
the
appropriate
Government, such employee or class of
employees are in receipt of gratuity or
pensionary benefits not less favourable
than the benefits conferred under this Act.

[3] A notification issued under
sub-section (1) or sub-section (2) may be
issued retrospectively a date not earlier
than the date of commencement of this
Act, but no such notification shall be
1466 INDIAN LAW REPORTS ALLAHABAD SERIES
issued so as to prejudicially, affect the
interests of any person."

13. Exemption may be sought
by any establishment, factory, mine,
oilfield etc. and that exemption may be
granted by the appropriate Government as
defined
under
section
2(a)(ii). The
appropriate Government would mean the
State Government. Exemption under
section 5(1) of the Act may be granted by
the
appropriate
Government
by
notification,
and
subject
to
such
conditions as specified there. In case,
employees of such establishment, factory,
mine etc. are in receipt of gratuity or
pensionary benefits conferred under the
services Rules, in order to avail an
exemption from the provisions of the Act,
an establishment like the petitionerNigam have to establish that the State
Government
by
notification
have
exempted them from the operation of the
Act under section 5(1) or under section
5(2) of the Act, in case of a particular
employee, or a class of employees. There
is no such case much less pleading to
show that the petitioner-Nigam has been
granted an exemption by the State
Government, under section 5(1) of the
Act. In the absence of an exemption
granted by a notification duly made by
the State Government, the mere fact that
the terms of gratuity offered by the
petitioner-Nigam are more beneficial to
an employee like the first respondent
here, would not automatically entitle the
petitioner to an exemption from the
provisions of the Act, by pleading or
establishing before the Authority or the
Court, the better terms of gratuity
available under their service rules. The
exemption can come from a notification
under section 5 of the Act issued by the
appropriate Government alone, and in no
other way. That being the case, the
petitioner is not entitled to say that
exemption from operation of the Act is
there merely because they say or can
establish before the Authority or this
Court that under the Retiral Dues and
General Provident Fund Regulation, 1962
(as amended up to date) the terms of
gratuity offered to their employees, like
the first petitioner, are more beneficial
than those available under section 4(2) of
the Act.

14. This view of the law accords
with the guidance of the Hon'ble Supreme
Court in Municipal Corporation of Delhi
v. Dharam Prakash Sharma, 1999 (81)
FLR 867 (SC), where it was held by their
Lordships thus:

"2. The short question that
arises for consideration is whether an
employee of the MCD would be entitled
to payment of gratuity under the Payment
of Gratuity Act when the MCD itself has
adopted the provisions of the CCS
(Pension)
Rules,
1972
(hereinafter
referred to as "the Pension Rules"),
whereunder there is a provision both for
payment of pension as well as of gratuity.
The contention of the learned Counsel
appearing for the appellant in this Court is
that the payment of pension and gratuity
under the Pension Rules is a package by
itself and once that package is made
applicable to the employees of the MCD,
the provisions of payment of gratuity
under the Payment of Gratuity Act cannot
be held applicable. We have examined
carefully the provisions of the Pension
Rules as well as the provisions of the
Payment of Gratuity Act. The Payment of
Gratuity Act being a special provision for
payment of gratuity, unless there is any
provision therein which excludes its
applicability to an employee who is
otherwise governed by the provisions of
the Pension Rules, it is not possible for us
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1467
to hold that the respondent is not entitled to
the gratuity under the Payment of Gratuity
Act. The only provision which was pointed
out is the definition of "employee" in section
2(e) which excludes the employees of the
Central Government and State Governments
receiving pension and gratuity under the
Pension Rules but not an employee of the
MCD. The MCD employee, therefore,
would be entitled to the payment of gratuity
under the Payment of Gratuity Act. The mere
fact that the gratuity is provided for under the
Pension Rules will not disentitle him to get
the payment of gratuity under the Payment
of Gratuity Act. In view of the overriding
provisions contained in section 14 of the
Payment of Gratuity Act, the provision for
gratuity under the Pension Rules will have
no effect. Possibly for this reason, section 5
of the Payment of Gratuity Act has conferred
authority on the appropriate Government to
exempt any establishment from the operation
of the provisions of the Act, if in its opinion
the employees of such establishment are in
receipt of gratuity or pensionary benefits not
less favourable than the benefits conferred
under this Act. Admittedly MCD has not
taken any steps to invoke the power of the
Central Government under section 5 of the
Payment of Gratuity Act. In the aforesaid
premises, we are of the considered opinion
that the employees of the MCD would be
entitled to the payment of gratuity under the
Payment of Gratuity Act notwithstanding the
fact that the provisions of the Pension Rules
have been made applicable to them for the
purpose
of
determining
the
pension.
Needless to mention that the employees
cannot claim gratuity available under the
Pension Rules."

13. It was, further held by this Court,
in relation to the issue of applicability of
the Act to the Nagar Nigam, Kanpur in
Nagar Ayukt Nagar Nigam vs. Meraj
Ahmad (Supra), particularly, taking note
of a decision of the Supreme Court in
Nagar Ayukt Nagar Nigam, Kanpur vs.
Mujib Ullah Khan and another2, thus:

24. The issue relating to the
applicability of the Act to the petitionerNagar Nigam has been very recently
examined by the Supreme Court in Nagar
Ayukt Nagar Nigam, Kanpur v. Mujib
Ullah
Khan
and
another,
MANU/SC/0457/2019 : 2019 (161) FLR
503 (SC) which incidentally is a decision
on an Appeal by Special Leave carried by
the petitioner-Nigam from the decision of
this Court in Nagar Ayukt, Nagar Nigam,
Kanpur v. Mujib Ullah Khan (supra)
referred to in the earlier part of this
judgment. Their Lordships have clearly
held
the
petitioner-Nigam
and
its
employees to be amenable to the Act by
virtue of a notification dated 8th January,
1982 issued by the Central Government in
exercise of powers under section 1(3)(c)
of the Act. The decision aforesaid of their
Lordships in Nagar Ayukt, Nagar Nigam,
Kanpur v. Mujib Ullah Khan and another
(supra) (the Hon'ble Supreme Court's
decision) lays down the law in this regard,
to which a wholesome and contextual
reference finds detail in paragraphs 6, 7,
8, 9, 10, 11 and 12 of the Report, where it
is held:

"6. The appellant relies upon
section 3 of the U.P. Dookan Aur Vanijya
Adhishthan Adhiniyam, 1962 (1962 Act)
which is to the effect that such Act will
have no application to the office of
Government or Local Bodies. Therefore,
on
the
strength
of
such
statutory
provision, it was argued that the Act
would not be applicable in respect of the
Municipalities. The appellant is not a
factory, mine, oilfield, plantation, port
and railway company and that there is no
1468 INDIAN LAW REPORTS ALLAHABAD SERIES
notification as stipulated under Clause (c)
of section 1(3) of the Act. Therefore, the
employees of the Municipalities are
entitled to the gratuity in terms of the
Regulations framed in exercise of powers
of section 548 of the 1959 Act and not
under the Act.

7. On the other hand, learned
Counsel for the respondent pointed out
that
the
Central
Government
has
published a notification in terms of
section 1(3)(c) of the Act on 8.1.1982 to
extend the applicability of the Act to the
Municipalities. Thus, the Act is applicable
to
the
Municipalities. The
relevant
provisions of the Act read as under:

"1.
Short
title,
extent,
application and commencement.--(1) This
Act may be called the Payment of
Gratuity Act, 1972.
(2) It extends to the whole of India:

Provided that in so far as it
relates to plantations or ports, it shall not
extend to the State of Jammu and
Kashmir.

(3) It shall apply to-

(a) every factory, mine, oilfield,
plantation, port and railway company;

(b) every shop or establishment
within the meaning of any law for the
time being in force in relation to shops
and establishments in a State, in which
ten or more persons are employed, or
were employed, on any day of the
preceding twelve months;

(c) such other establishments or
class of establishments, in which ten or
more employees are employed, or were
employed, on any day of the preceding
twelve
months,
as
the
Central
Government may, by notification, specify
in this behalf."

8. A perusal of the above
provisions would show that the Act is
applicable to : (1) every factory, mine,
oilfield, plantation, port and railway
company;
and
(2)
every
shop
or
establishment within the meaning of any
law for the time being in force in relation
to shops and establishments in a State, in
which ten or more persons are employed,
the said provision has two conditions, viz.
(i) a shop or establishments within the
meaning of a State law and (ii) in which
ten or more persons are employed; and
(3) the establishments or class of
establishments
which
Central
Government may notify.

9. The appellant is not covered
by clauses (a) and (b) of section 1(3) of
the Act. Clause (a) is not applicable on
the face of the provisions, but even clause
(b) is not applicable in view of section
3(c) of the 1962 Act as such Act is not
applicable
to
the
offices
of
the
Government or local authorities. The
Local Authorities means a municipal
committee, district board etc or entrusted
with the control or management of a
municipal or local fund in terms of
section 3(31) of the General Clauses Act,
1897.

10. In terms of the above said
section 1(3)(c) of the Act, the Central
Government has published a notification
on 8.1.1982 and specified Local Bodies in
which ten or more persons are employed,
or were employed, on any day of the
preceding twelve months as a class of
establishment to which this Act shall
apply.
The
said
notification
dated
08.01.1982 reads as under:--

"New
Delhi,
the
8th
January, 1982

NOTIFICATION

S.O. No. 239....-In exercise of
the powers conferred by clause (c) of subsection (3) of section 1 of the Payment of
Gratuity Act, 1972 (39 of 1972), the
Central Government hereby specified
3 All. Nagar Nigam Gorakhpur Vs. Lal Bahadur Singh Ors.
1469
"local bodies' in which ten or more
persons are employed, or were employed,
on any day preceding twelve months, as a
class of establishments to which the said
Act shall apply with effect from the date
of publication of this notification in the
Official Gazette.

 Sd/.

(R.K.A. Subrahmanya)

Additional Secretary

 (F.
No. S-70020/16/77-FPG)"

11. We find that the notification
dated 8.1.1982 was not referred to before
the High Court. Such notification makes
it abundantly clear that the Act is
applicable to the local bodies i.e., the
Municipalities. Section 14 of the Act has
given an overriding effect over any other
inconsistent provision in any other
enactment. The said provision reads as
under:

"14. Act to override other
enactments, etc.--The provisions of this
Act or any rule made thereunder shall
have effect notwithstanding anything
inconsistent therewith contained in any
enactment other than this Act or in any
instrument or contract having effect by
virtue of any enactment other than this
Act."

12. In view of section 14 of the
Act, the provision in the State Act
contemplating payment of Gratuity will
be
inapplicable
in
respect
of
the
employees of the local bodies."

14. It is the Employer's case that
they are a Nigam which clearly falls
within the definition of "local bodies",
envisaged under the Notification, dated
8th January, 1982, issued by the Central
Government in exercise of their powers
under Clause (c) of sub Section (3) of
Section 1 of the Act, referred to in the
decision of their Lordships in Nagar
Ayukt Nagar Nigam, Kanpur vs. Mujib
Ullah Khan and another (Supra). It is
not the case of the Employer, pleaded
anywhere, that they employ less than ten
persons. Since the Employers have not
taken that case of employing less than ten
persons
anywhere,
it
is
reasonably
inferable that they employ more than ten
hands; their establishment is a Nagar
Nigam, where judicial notice may be
taken of the fact that an establishment of a
local body, like a Nagar Nigam, has a
workforce, far stronger in numbers than
the figure of ten. Clearly, going by the
principle laid down by their Lordships in
Nagar Ayukt Nagar Nigam, Kanpur vs.
Mujib Ullah Khan and another (Supra),
the Employers are an establishment, to
whom the provisions of the Act shall
apply by virtue of the Notification of 8th
January, 1982, issued by the Central
Government, under Section 1(3)(c) of the
Act.
Once
the
Employers
are
an
establishment, to whom the Act applies,
the overriding effect of Section 14,
thereafter, would exclude the provisions
of the Regulations framed by the
Employers, by virtue of their powers
under Section 548(1)(f) of the Act of
1959. The inapplicability of the Act of
1959, and a fortiorari, any regulation
framed under it, in the matter of payment
of gratuity to an employee of the
establishment to which the Act is
applicable, has been laid down to be the
law in Nagar Ayukt Nagar Nigam,
Kanpur vs. Mujib Ullah Khan and
another (Supra) by the Supreme Court.
Incidentally, the said decision relates to
para materia Service Regulations of the
Kanpur Nagar Nigam, framed by the said
1470 INDIAN LAW REPORTS ALLAHABAD SERIES
Nigam in exercise of powers under
Section 548(1)(f) of the Act of 1959,
which is the source of power exercised by
the
Employers,
while
framing
the
Regulations, relating to gratuity here.
Thus, there can be no doubt that so far as
the applicability of the Act and its
overriding effect vis-a-vis the Regulations
is concerned, the Act works to exclude the
Regulations, in the matter of payment of
gratuity to the Employee.

15. The Employer has not come up
with a case that any kind of exemption
has been granted to them by the
appropriate Government, which under the
Act would mean the State Government,
acting under Section 5(1). There is no
such case pleaded by the Employers,
either before the Authorities below or
before this Court. In the absence of a
notification by the State Government,
issued under Section 5(1) of the Act, the
Employer cannot claim exemption from
the regime of the Act, in so far as
entitlement to gratuity of their employees
is concerned, including its calculation and
determination. In this view of the matter,
it must be held that the provisions of the
Act are applicable in the matter of
calculation and determination of gratuity
payable
to
the
Employee
by
the
Employer, to the exclusion of the
Regulations framed under the Act of
1959. Thus, it must be held that the two
Authorities below have rightly applied the
Act and calculated gratuity payable to the
Employee,
in
accordance
with
the
provisions of the Act.

16.