The Supreme Court has declared that the legal heirs of the deceased employee shall be entitled to receive gratuity in terms of the provisions of the Gratuity Act, 1972, along with the entitlement towards the leave encashment. While explaining the difference between resignation and retirement, the Court said that resignation by an employee forfeits his past service, which makes him ineligible to any pension, but not gratuity, which is a statutory right of an employee completing five years of service tenure.
The declaration came in the wake of the beneficial provision of Section 4 of the 1972 Act, which stipulates that an employee who had rendered not less than five years of service will be entitled to payment of gratuity, regardless of the fact that he had retired or resigned from service.
A Two-Judge Bench of Justice Rajesh Bindal and Justice Manmohan observed that, in terms of Section 5 of the 1972 Act, there is no notification issued by the appropriate government exempting the Delhi Transport Corporation (respondent) from the application of the 1972 Act. Once it could not be established by the respondent that the 1972 Act does not apply to the Corporation, the claim of the appellant for release of gratuity cannot be denied even if he had resigned from service.
The Bench considered the arguments of the appellant that the words used in his resignation letter, i.e., “notice for resignation,” should not be literally construed but should be taken as voluntary retirement so as not to deprive him of his pension, which was earned on account of more than 20 years of service rendered by him, however discarded the same by quoting Rule 26 of the Gratuity Rules, 1972, which declares that resignation from service entails forfeiture of the past service.
However, the Bench pointed out that there is a difference between resignation and retirement, and the benefits flowing therefrom. Reference was made to the decision in the case of Shashikala Devi vs. Central Bank of India [2014 INSC 1045]. Accordingly, the Bench held the appellant entitled to receive gratuity in terms of the provisions of the 1972 Act for the service rendered by him.
Briefly, the deceased appellant was selected and appointed as a conductor with the respondent/ Delhi Transport Corporation in the year 1985, after which a new pension scheme was introduced in the Corporation. After opting for the same, the deceased employee resigned from the job, citing family circumstances, and the said resignation was accepted by the competent authority. Later on, a request was made for withdrawal of the resignation, which was declined by the competent authority of the Corporation.
Later, the deceased employee requested the respondent for the release of his retirement benefits, namely, gratuity, provident fund, leave encashment and pension. Considering that the employee had resigned from service, the Corporation informed him that he was entitled to only the provident fund and no other benefit. The deceased employee also approached the High Court, but in vain.
Appearances:
AOR Narender Kumar Verma and Advocate Anil Mittal, for the Appellant
AOR Aviral Saxena, along with Advocates Abhinav Sharma and Paritosh Goyal, for the Respondent
