[Payment Of Gratuity Act] State Employee Can't Be Denied Increased Gratuity Based On Central Govt's Enhanced Ceiling Limit: Tripura HC

The Tripura High Court has held that a claim for enhanced gratuity by an employee of a State "establishment" cannot be denied by the State government on the ground that the revised ceiling limit on the payment of gratuity as adopted by the Centre was not adopted by the State due to separate rules which were framed by the State governing the gratuity of employees employed in 'state establishments'.

The court held that the employee would be entitled to receive gratuity based on the enhanced ceiling limit decided under the Payment of Gratuity Act, 1972.

Providing relief to the petitioner-employee who was employed as a steno-typist in the District Rural Development Agency (DRDA), the Bench comprising Justice S. Datta Purkayastha held that since the petitioner was employed in the 'state establishment', therefore the provisions of the Payment of Gratuity Act, 1972 would be applicable while making a payment of gratuity based on the enhanced ceiling limit.

In the present case, the petitioner (who retired from the service on 31.12.2019) was denied payment of gratuity based on an enhanced ceiling limit of Rs. 20,00,000/- revised by the Government of India under the Central Civil Services (Pension) Rules, 1972 (1972 Rules).

The said Rules of 1972 as adopted in the State of Tripura, earlier provides the upper ceiling limit of Gratuity to the extent of Rs.10,00,000/-, however by notification dated 29.03.2018, the Government of India has made the revised ceiling limit of gratuity Rs.20,00,000/.

The petitioner demanded Rs.13,69,665/- towards payment of gratuity but was only paid Rs. 10,00,000/-. Feeling aggrieved, the petitioner preferred a writ petition before the High Court seeking a direction to the State Government to sanction gratuity as per the revised ceiling limit on the payment of gratuity.

It was argued by the Respondent-State that since the State Government has a separate rule for (District Rural Development Agency Employees Death cum Retirement Gratuity and Leave Encashment Regulations of Tripura, 2014) deciding the payment of gratuity to the employee, therefore, the provisions of 1972 Rules would not be applicable, hence the petitioner was not entitled to receive payment of gratuity based on an enhanced ceiling limit.

High Court's Observation

Rejecting the State's Contention, the Court held that where the petitioner was entitled to receive the payment of gratuity based on an enhanced ceiling limit fixed by the Government of India as per 1972 Rules, the State Government could not have denied the payment of gratuity as per the revised ceiling limit under 1972 Rules. The Court said that since the 1972 Rules were adopted by the State of Tripura while deciding its own ceiling limit of Rs. 10 Lakhs, therefore, any change in the ceiling limit would need to be followed by the State as the less favorable amount of gratuity cannot be paid to an employee where the provision of Act of 1972 is applicable.

“The said rules prescribes that Death-cum-Retirement Gratuity would be paid to the employees of DRDA in accordance with the relevant provisions of Central Civil Services (Pension) Rules, 1972 as adopted in the State subject to availability of fund under direction and administration of DRDA on 90:10 sharing pattern between the Government of India and the State Government. The said Rules of 1972 as adopted in the State of Tripura provides the upper ceiling limit of Gratuity to the extent of Rs.10,00,000/- whereas already vide notification bearing No. S.O 1420(E) dated 29.03.2018, the Government of India has made the revised ceiling limit of gratuity to the extent of Rs.20,00,000/-. Therefore, in view of provisions of Section 5 of the said Act of 1972 as indicated above less favourable amount of gratuity cannot be paid to an employee where the provision of Act of 1972 is applicable.”, the court observed.

“In view of the above, it is held that the petitioner is entitled to get the amount of gratuity taking into consideration the revised ceiling limit of Rs.20,00,000/- as was notified by the Government of India as indicated above.”, the court added.

Case Title: Sri Ratan Kumar Das Versus State of Tripura & Ors., W.P.(C) No.745 of 2023

Citation: 2024 LiveLaw (Trip) 8

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