An Employee Gets His Right To Gratuity According To The Number Of Years He Serves; Not Retirement Age: Allahabad HC

The Allahabad High Court has clarified that gratuity entitlement is contingent upon years of service rendered rather than the age at which an employee opts for retirement.

The Single-Judge Bench of Justice J.J. Munir emphasized that retirement at the age of sixty years does not inherently confer the right to receive gratuity, instead, an employee's entitlement to gratuity is determined by the duration of their service.

"Retirement at sixty years is not an entitling fact, which leads the employee to acquire a right to receive gratuity, which he otherwise does not have. An employee gets his right to gratuity according to the number of the years that he serves," the Court said. 

The Bench also said that if an employee chooses to serve beyond the conventional age of sixty years, he is divested of that right for the extra remuneration of two years in regular service that he receives.

The case before the Court pertained to a Petitioner who served as a teacher in an aided intermediate institution and opted for voluntary retirement at the age of 57. Under a Government Order dated December 14, 2011, which outlined rules for teachers in aided intermediate colleges, those failing to complete ten years of qualifying service were ineligible for pension unless they chose to retire at sixty years, entitling them to gratuity. However, the Petitioner teacher, falling outside the purview of this government order, was initially denied gratuity and subsequently he filed a Writ Petition seeking redressal.

Upon review, the Court found the reasoning behind the rejection of the Petitioner's plea flawed. "The interpretation, based on the relevant Government Orders by the Joint Director (Pension), Prayagraj Division, Prayagraj, and the District Minority Welfare Officer, Prayagraj, is the product of what is conventionally called 'treading the beaten path', which shows utter lack of application of mind and non-understanding of principle," the Court said. 

The Bench said, "Here is a case, where the petitioner has chosen to retire at the age of fifty-seven years, prematurely. The option to retire at the age of sixty years is to be understood in contra-distinction to the option to retire at the unconventional and the higher age of sixty-two; it is not to be understood as an option vesting a teacher with a right to receive gratuity only if he elects to retire at sixty."

It granted the District Minority Welfare Officer, Prayagraj, an opportunity to reconsider the matter. "The Joint Director (Pension), Prayagraj Division, Prayagraj and the District Minority Welfare Officer, Prayagraj, shall also take note of this order and will not repeat this kind of interpretation in future, if a similar set of rights were to arise for consideration," the Court warned. 

The Court issued a writ of mandamus directing the sanctioning, calculation, and disbursement of the gratuity owed to the petitioner. Additionally, it directed the concerned authorities to refrain from repeating such misinterpretations in the future, emphasizing adherence to the principles elucidated in the judgment.

Accordingly, the Court ordered, "This petition succeeds and is allowed. The impugned order dated 02.12.2023, passed by the District Minority Welfare Officer, Prayagraj, is hereby quashed. A mandamus is issued to the respondents to sanction and calculate gratuity to the petitioner, of course, taking into account the total number of completed years of service rendered by him before prematurely retiring. The reckoning of the petitioner's entitlement to gratuity shall be done within a period of fifteen days hence and gratuity determined shall be paid to the petitioner within next fifteen days thereafter."

"Let this order be communicated to the Additional Chief Secretary (Secondary Education), U.P., Lucknow through the Civil Judge (Senior Division), Lucknow, the Joint Director (Pension), Prayagraj Division, Prayagraj and the District Minority Welfare Officer, Prayagraj through the Civil Judge (Senior Division), Allahabad by the Registrar (Compliance) within 48 hours," the Court further directed. 

Cause Title: Sehrun Nisha v. State Of Up And 3 Others

Appearance:-

Petitioner: Advocate R.B Singh 

Click here to read/download the Order