# U.P. Power Transmission Corporation Ltd v. Jagdish Narain Rawat and Ors

- **Citation:** (2013) 2 ILRA 706
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2013-05-30
- **Bench:** Tarun Agarwala
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/u-p-power-transmission-corporation-ltd-v-jagdish-narain-rawat-and-ors-42564
- **Pages:** 5

## Headnote

U.P. Retirement Benifits Rules 1961
readwith
New
Family
Pension
Scheme1965- whether the employees of
U.P.E.B. who opted pension Rule 1961
can be debarred from benefit of gratuity
Act?-held-'No'

Held: Para-14 and 15
14.In the light of the aforesaid, the
option exercised by the workers was an
exercise in futility and it did not bind
them for not receiving better benefits
payable under the Act.

15.Nothing stopped the workman from
receiving
the
benefits
under
the
Payment of Gratuity Act, 1972 in view of
sub-clause (5) of Section 4 of the Act,
which clearly indicates that the right of
the employee to receive better terms of
gratuity under any award or agreement
would not be affected by Section 4 of the
Act to receive payment under the said
Act.

Case Law discussed:
1999 (81) FLR 867; 2010 (124) FLR 192; 2001
(90) FLR 770

## Text

706 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
inquiry an outer limit of two weeks have been
provided for. The object of the said rule is that
normally suspension of kerosene oil licensee
should be ordered after giving due opportunity
and in case it is made suspension pending
inquiry it has outer limit of two weeks. A
perusal of the suspension order dated
30/4/2013, clearly indicates that suspension
order was pending inquiry, hence the said
suspension shall come to an end after expiry
of two weeks. However, the mere fact that
suspension order which was passed pending
inquiry has come to an end after two weeks
does not preclude the authorities from passing
a final order under the 1st proviso of Rule 11
of the Order, 1962.

12. In view of the facts of the
present case, no useful purpose will be
served in keeping the writ petition
pending and calling for a counter
affidavit. We are of the view that the
suspension order dated 30/4/2013, which
was pending inquiry shall cease to operate
after two weeks. However, it shall be
open for the authorities to pass a final
order under the first proviso of Rule 11 of
the Order, 1962 in accordance with law.

13. With the aforesaid observation,
writ petition is disposed of.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.05.2013

BEFORE
THE HON'BLE TARUN AGARWALA, J.

Civil Misc. Writ Petition No.26118 Of 2011
along with
 No. 18968 / 2010
with
No. 19004 / 2010
with
 No.19007 / 2010
with
 No. 19009 / 2010
with
 No. 19011 / 2010
with
 No. 19013 / 2010
with
 No. 19015 / 2010

U.P. Power Transmission Corporation
Ltd.
 ...Petitioner
Versus
Jagdish Narain Rawat and Ors Respondents

Counsel for the Petitioner:
Sri Arvind Kumar

Counsel for the Respondents:
Ms. Bushra Maryam

U.P. Retirement Benifits Rules 1961
readwith
New
Family
Pension
Scheme1965- whether the employees of
U.P.E.B. who opted pension Rule 1961
can be debarred from benefit of gratuity
Act?-held-'No'

Held: Para-14 and 15
14.In the light of the aforesaid, the
option exercised by the workers was an
exercise in futility and it did not bind
them for not receiving better benefits
payable under the Act.

15.Nothing stopped the workman from
receiving
the
benefits
under
the
Payment of Gratuity Act, 1972 in view of
sub-clause (5) of Section 4 of the Act,
which clearly indicates that the right of
the employee to receive better terms of
gratuity under any award or agreement
would not be affected by Section 4 of the
Act to receive payment under the said
Act.

Case Law discussed:
1999 (81) FLR 867; 2010 (124) FLR 192; 2001
(90) FLR 770

(Delivered by Hon'ble Tarun Agarwala,J.)
2 All] U.P. Power Transmission Corporation Ltd. Vs. Jagdish Narain Rawat and Ors.
707

1.

The
erstwhile
U.P.
State
Electricity Board vide its boards meeting
dated 26th December, 1963 passed a
resolution
for
adopting
the
U.P.
Government
Rules
and
Regulation
regarding
Classification
and
Control
Rules, Government Servant Conduct
Rules, T.A. Rules, Medical Attendance
Rules and Pensionary Rules as amended
from time to time. Pursuant to the said
resolution, the U.P. State Electricity Board
adopted the U.P. Retirement Benefits
Rules, 1961 read with U.P. New Family
Pension Scheme, 1965. Under the Pension
Rules, a composite scheme was provided
for payment of GPF, gratuity and pension,
which according to the petitioner gave
better benefits than the Central Provident
Fund Scheme and gratuity payable under
different gratuity schemes. In 1972, the
Payment of Gratuity Act came into
existence, and under the said Act, it
became obligatory on the employers to pay
gratuity.
Accordingly,
an
office
memorandum dated 3rd April, 1976 and
5th May, 1976 was issued directing its
employees to either opt for the pension
Rules under the U.P. Retirement Benefit
Rules, 1961 or for payment of gratuity
under the Act of 1972. It was clarified that
if the employee opts for the benefit under
the Payment of Gratuity Act, 1972, he
would not be entitled to pensionary
benefits as provided under the U.P.
Retirement Benefit Rules, 1961. Based on
the aforesaid office memorandum, a
further office memorandum was issued on
17th February, 1982 and 21st June, 1983
directing the employees to give the option
either to opt for the U.P. Retirement
Benefits Rules, 1961 read with U.P. New
Family Pension Scheme, 1965 or opt for
the benefits of gratuity payable under the
Payment of Gratuity Act. Subsequently, an
office memorandum dated 19th September,
1984 was issued clarifying its earlier office
memorandums indicating therein that
employees of the U.P. State Electricity
Board, were no longer required to submit
their option for being allowed benefits
admissible under the U.P. Retirement
Benefit Rules, 1961 and the New Family
Pension Scheme, 1965.

2. It transpires that pursuant to the
office memorandum dated 17th February,
1982, the workman in question, gave an
option to take the benefits under the U.P.
Retirement Benefit Rules, 1961. The
workman retired on 30th September, 1994
and received GPF and gratuity amounting
to Rs.5,91,121/-, which he received
without any protest and also started
receiving pension under the said Rules.

3. After 9 long years, the workman
filed an application under the Payment of
Gratuity Act before the Controlling
Authority praying that he is entitled for
gratuity
under
the
said
Act.
The
petitioner's objected saying that since a
composite scheme had been framed by the
Government of Uttar Pradesh, which had
been adopted by the U.P. State Electricity
Board, which the workmen had opted, it
was no longer permissible for the
workmen to claim gratuity under the Act.
The
Controlling
Authority,
after
considering the matter, passed an order
dated 7th August, 2010 directing the
petitioner to pay the difference of the
gratuity amount along with interest at the
rate of 6% per annum. The petitioner,
being aggrieved, filed an appeal, which
also met the same fate. The petitioner has
now filed the present writ petition.

4. Heard Sri Arvind Kumar, the
learned counsel for the petitioner and Ms.
Bushra Maryam, the learned counsel for
the respondent.
708 INDIAN LAW REPORTS ALLAHABAD SERIES [2013

5. The admitted facts which emerges
is, that a composite scheme has been
given under the U.P. Retirement Benefit
Rules, 1961 and New Family Pension
Scheme, 1965, which has been adopted by
the U.P. State Electricity Board. It is
alleged that this composite scheme
provides for payment of gratuity, GPF
and pension, which is more beneficial to
the workers than other schemes. The
workman has also opted to receive the
benefits under the Rules of 1961 and the
Family Pension Scheme of 1965.

6. The question which is required to
be answered is, whether the option given
by the workman is binding on him and
whether he is entitled to claim the balance
gratuity amount under the Payment of
Gratuity Act.

7. In order to appreciate the
submissions of the learned counsel for the
parties, it would be appropriate to refer to
a few provisions of the Act. Section 4 of
the Payment of Gratuity Act, 1972
provides that gratuity would be payable to
an employee on termination of his
employment
after
he
has
rendered
continuous service for not less than 5
years on his superannuation or on his
retirement or resignation or on his death
or disablement due to accident or disease.
Sub-clause (5) of Section 4 provides as
under:-

4(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 of the employer.

8. A perusal of the aforesaid
indicates that nothing would affect a right
of the employee to receive better terms of
gratuity from the employer.

9. Section 5 provides power to
exempt the provisions of the Act by the
appropriate Government, if in the opinion
of the appropriate government, it is found
that the employees are in receipt of
gratuity or pensionary benefits, which are
more
favourable
than
the
benefits
conferred under the Act. Section 5 is
extracted hereunder:-

"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, if,
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
2 All] U.P. Power Transmission Corporation Ltd. Vs. Jagdish Narain Rawat and Ors.
709
than the date of commencement of this
Act, but no such notification shall be
issued so as to prejudicially affect the
interests of any person.]"

Section 14 of the Act 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."

10. A perusal of the aforesaid indicates
that the provisions of Payment of Gratuity
Act will have effect notwithstanding
anything inconsistent therewith contained
in any other enactment.

11. From the aforesaid, it is clear
that gratuity is payable to an employee
under Section 4, if the employee meets
the conditions mentioned therein. This
payment is mandatory. If a scheme is
floated by the employers, which is more
beneficial than the benefit granted under
the Payment of Gratuity Act then the
provisions of the Act can be exempted by
the appropriate government under Section
5 upon an application filed by the
employers in such purposes failing which,
the provision of Section 14 will override
any other enactment made, which is
inconsistent with the Payment of Gratuity
Act.

12. In the instant case, the
respondents are giving the benefits as per
the U.P. Retirement Rules, 1961 read with
New Family Pension Scheme, 1965. The
question is, whether the workman was
still liable to be paid the gratuity under the
Act of 1972. The learned counsel for the
petitioner
contended
that
once
the
workers gave their option and had
exercised their right to receive the benefit
under the Rules of 1961 read with the
New Family Pension Scheme, 1965, it
was no longer permissible for them to
receive gratuity under the Act of 1972.

13. The submission of the learned
counsel for the petitioner cannot be
accepted. The Court finds that the office
memorandum of 1982 was subsequently
clarified by another office memorandum
dated 19th September, 1984, in which it
was clarified that the employees were no
longer required to submit their option for
receiving the benefits under the U.P.
Retirement Benefit Rules, 1961 read with
New New Family Pension Scheme, 1965.

14. In the light of the aforesaid, the
option exercised by the workers was an
exercise in futility and it did not bind
them for not receiving better benefits
payable under the Act.

15. Nothing stopped the workman
from receiving the benefits under the
Payment of Gratuity Act, 1972 in view of
sub-clause (5) of Section 4 of the Act,
which clearly indicates that the right of
the employee to receive better terms of
gratuity under any award or agreement
would not be affected by Section 4 of the
Act to receive payment under the said
Act.

16. In Municipal Corporation of
Delhi Vs. Dharam Prakash Sharma of
Delhi, 1999 (81) FLR 867 the Supreme
Court held that since no steps were taken
by the employer to seek exemption under
Section 5 of the Payment of Gratuity Act
and in view of the overriding provision of
710 INDIAN LAW REPORTS ALLAHABAD SERIES [2013
Section 14 of the said Act, the provisions
of gratuity payable to the employees
under the pension Rules would have no
effect and that the employees would be
entitled to payment of gratuity under the
Payment of Gratuity Act. The said
decision is squarely applicable in the
instant case.

17. Similarly, in Allahabad Bank and
another Vs. All India Allahabad Bank
Retired Employees Association, 2010
(124) FLR 192, the Supreme Court held that
gratuity payable under the Payment of
Gratuity Act is a statutory right and the same
cannot be taken away except in accordance
with the provisions of the Act.

18. In the instant case, it was open to
the employers to seek exemption under
Section 5 of the Payment of Gratuity Act,
which has not been done and so long as
the exemption is not granted by the
appropriate government, the provisions of
the Gratuity Act will remain applicable
upon the petitioner.

19. The learned counsel for the
petitioner has relied upon the decision of
the Supreme Court in DTC Retired
Employees Association and others Vs.
Delhi Transport Corporation, 2001 (90)
FLR 770 wherein the Supreme Court held
that the appellants, who were the retired
employees and had opted for the pension
scheme, which was introduced by the
employer corporation through which they
were paid gratuity could not avail the
benefit of both the pension and gratuity
and that it was not open to the Court to
interfere with the pension scheme that
was implemented by the employers. The
said decision is squarely distinguishable
and is not applicable in the instant case,
inasmuch as the provision of Sections 5
and 14 of the Payment of Gratuity Act
was not considered nor noticed.

20. In the light of the aforesaid, the
Court is of the opinion that the order of
the Prescribed Authority directing the
petitioners' to pay the difference of the
gratuity was justified. However, the Court
finds that the order of payment of interest
was not justified. The workman did not
stir in the matter for 9 long years and,
thereafter, filed the claim application. The
Court is of the opinion that on account of
the fault of the workman, the payment of
the interest liability cannot be fastened
upon the employers.

21. In the light of the aforesaid, the
writ petition is partly allowed. The order
of the Controlling Authority is modified
to the extent that the employers, namely,
the petitioners are only liable to pay the
difference of the gratuity amount under
the Payment of Gratuity Act and that no
interest would be payable. Since the entire
amount
has
been
deposited,
the
Controlling Authority would disburse the
payment of the gratuity amount to the
workers and the interest component
would be refunded to the petitioners.
---------

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.05.2013

BEFORE
THE HON'BLE A.P. SAHI, J.

Civil Misc. Writ Petition No. 28553 of 2013

Girish Chandra

 ...Petitioner
Versus
State of U.P. and Ors. ...Respondents

Counsel for the Petitioner:
Sri Ashok Khare, Sri Siddharth Khare