The Supreme Court has ruled that pensioners cannot be denied the payment of gratuity under the Payment of Gratuity Act, 1972 unless and until the government has passed some specific orders as part of the government policy.

A bench comprising Justices B Sudershan Reddy and R M Lodha, while dismissing the appeals of the Allahabad Bank with a cost of Rs 25,000 ruled that only those employees who had retired from service between January 1, 1986 to October 31, 1992 will be entitled to the benefit of payment of gratuity under the judgement.

The apex court noted ‘ The Act nowhere confers any Jurisdiction upon the controlling authority to deal with any issue under Sub-section (5) of Section (4) as to whether the terms of gratuity payable under any award or agreement or contract is more beneficial to employees than the one provided for under the Act.

This court’s order could not have conferred any such jurisdiction upon the controlling authority to decide any matter under Sub-section (5) of Section (4), since Parliament in its wisdom had chosen to confer such jurisdiction only upon the appropriate government and that too for the purpose of considering to grant exemption from the operation of the provision of the Act’.

The apex court turned down the contention of the bank that since the employees have exercised their option in favor of pensionary benefits in lieu of gratuity, they are not entitled to gratuity.

Justice Reddy in his judgement also noted ‘There can be no comparisons between a pension scheme which does not provide for payment of any gratuity and right of an employee to receive payment of gratuity under of the provision of the Act.’

UNI