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The Duration Of An Employee’s Service And Not Their Retirement Age Determines Their Entitlement To Gratuity: Supreme Court

Ifrah Murtaza ,
  15 May 2024       Share Bookmark

Court :
Hon’ble High Court of Allahabad
Brief :

Citation :
WP 6402 2024

Case title:

Sehrun Nisha v. State of UP & Ors

Date of Order:

07.05.2024

Bench:

  • Hon’ble Mr. Justice JJ Munir

Parties:

Petitioner: Sehrun Nisha

Respondent: State of UP & Ors 

SUBJECT:

The Hon’ble Supreme Court of India (hereinafter referred to as ‘the Supreme Court’ or ‘the Court’) heard a petition filed by an individual seeking gratuity after she opted for an early retirement at the age of 57 but was denied gratuity as the authorities stated that employees who retire at the age of 60 are eligible for the same. The Supreme Court held the authorities’ reasoning for denial to be completely flawed as employee’s years of service should be the basis of entitlement to gratuity and not the age. The Court ruled in favour of the petitioner and directed that the petitioner be paid her gratuity within 15 days of the judgment. 

IMPORTANT PROVISIONS:

The Constitution of India, 1950:

  • Article 32

The Civil Service Regulations:

  • Article 474

OVERVIEW:

  • The petitioner is a teacher in an aided intermediate institution who opted for voluntary retirement at the age of 57. 
  • As per the Government order dated 14th December 2011, teachers who failed to complete 10 years of qualifying service would be eligible for pension unless they opted for retirement at the age of 60, entitling them to gratuity.
  • Petitioner was denied gratuity by the District Minority Welfare Officer (DMWO), Prayagraj, who stated that she needed to complete the age of 60 of claim gratuity. 
  • The Supreme Court on 26.04.2024 provided the DMWO with the opportunity to reconsider the matter, but they did not change their decision.
  • Aggrieved by the rejection of her claim of gratuity, the petitioner has approached this Court. 

ISSUES RAISED:

  • Whether the petitioner is entitled to gratuity?

ARGUMENTS ADVANCED BY THE PETITIONER:

  • Denying the petitioner gratuity was unjust as the authorities were unfairly misinterpreting the government orders.
  • The authorities had failed to recognize that the government orders focused on the years of service rather than the age of retirement. 
  • The DMO’s rejection lacked proper application of mind and understanding of the governing principles. 

ARGUMENTS ADVANCED BY THE RESPONDENT(S):

  • Article 474 of CSR clearly states that the eligibility criteria for claiming gratuity is meeting the age requirements at retirement, i.e., individuals retiring at 60 are entitled to gratuity. The petitioner failed to meet this requirement as she voluntarily retired before turning 60.
  • The authorities have discretionary powers to interpret the rules and apply them in individual cases. 

JUDGEMENT ANALYSIS:

  • The Supreme Court opined that merely reaching the age of 60 does not automatically guarantee the right to receive gratuity. 
  • It clarified that gratuity entitlement is determined based on the number of years of employment rather than the age at which they retire. 
  • It held that the reason for rejecting the petitioner gratuity was flawed and criticized the authorities for failing to apply proper thought or understanding of the underlying principles of the government order. 
  • The Court cautioned the DMWO and the Joint Director (Pension), Prayagraj Division, from repeating similar misinterpretations in the future. 
  • A writ of Mandamus was issued by the Court which laid directives for the authorities to calculate, sanction, and disburse the gratuity to the petitioner in the next 15 days. 
  • The petition was subsequently allowed. 

CONCLUSION

The Supreme Court quashed the earlier order denying the petitioner gratuity and allowed the petition. The Court criticized the flawed reasoning of the authorities to deny petitioner gratuity and reiterated that the gratuity entitlement is contingent upon the employee’s years of service and not the age of retirement. The Court further instructed that a copy of the order be sent to the certain officials within 48 hours of the pronouncement of the judgment, with no order as to costs.   

 
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