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Revised Gratuity Ceiling Notified by Central Government Applicable To All Establishments Irrespective of Whether Controlled by the State or Centre: Tripura High Court

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In the case of Sri Tapas Guha vs Tripura Tea Development Corporation Ltd. and others, a single-judge bench comprising of Hon’ble Justice Akil Kureshi dealt with the issue of whether State-controlled establishments require additional approval from the State government to apply the Centre notified gratuity ceiling.

Facts of the Case

The petitioner, a former employee of Tripura Tea Development Corporation Ltd. claims the benefit of the revised ceiling for payment of gratuity. He retired after 33 years in service and the gratuity payable based on computation using basic pay is Rs 13,42,211/- while only Rs. 10,00,000/- was paid citing that the ceiling at the time such gratuity was payable. However, later the ceiling was revised to Rs. 20,00,000/- and the petitioner, therefore, claims the calculated amount.

Arguments Advanced

Petitioner argued that he retired post the issuance of notification by the government raising the gratuity ceiling and hence is entitled to higher gratuity payment. Respondent argued that the Corporation resolved to grant the higher amount, however, such decision required the sanction of the government which has not been granted.

Court’s Observation

The court observed that in the case of Sri Bhupati Debnath, W.P. (C) No.1054 of 2019, the court considered a similar issue and had held that the revised limit is applicable and also granted interest on the difference for the time lapsed. The case of Lal Zakim Rokhum vs. Tripura Road Transport Corporation and another also followed the principle. Considering the settled position of law, the Court stated that examining the Act and the division of power between the Centre and State within the legislation, it can be noticed that earlier the ceiling was mentioned in the Act, however, post the amendment in 2018, the power to fix the ceiling has been given to the Central Government.

Pursuant to such granted power, the Central government has issued the notification raising the ceiling limit which has to be applied to all establishments irrespective of whether it is controlled by the State or Central government. Therefore any additional adoption of the ceiling by the State government is not necessary.

Court’s Decision

In light of the abovementioned, the Court held that the revised ceiling is to be applied and therefore, the amount as per calculation is to be paid to the Petitioner. Further, an interest of 7.5% is to be given from the date of retirement till actual payment within 4 months. Thus, the petition was disposed of.

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