SUPREME COURT OF INDIA

Before:- S. Saghir Ahmad and G.B. Pattanaik, JJ.

Civil Appeal No. 14162 of 1996. D/d. 29.7.1998

Municipal Corporation of Delhi - Appellant

Versus

Dharam Prakash Sharma - Respondents

Payment of Gratuity Act, 1972 Section 14 - Central Civil Services (Pension) Rules (1972), R. 1 - Gratuity - 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 - Held that employees of Municipal Corporation are entitled to payment of gratuity - Fact that provisions of Pension Rules which provide for gratuity are made applicable to them, notwithstanding.

[Para 2]

JUDGMENT

S. Saghir Ahmad, J. - This appeal is directed against the Division Bench judgment of the Delhi High Court dismissing the appellant's writ petition challenging the legality of the order of the authority under the Payment of Gratuity Act, 1972 granting extra amount of gratuity to the respondent who is admittedly an employee of the Municipal Corporation of Delhi (MCD).

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 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 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 employee 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 Pension Rules.

3. In the aforesaid premises, we do not find any merit in this appeal which is accordingly dismissed, but, in the circumstances, no order as to costs.

Appeal dismissed.