Tripura High Court: Amended Gratuity Limits Applicable Irrespective of Changes in Internal Regulations

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On 5th August 2020, the Hon’ble Chief Justice of Tripura High Court Mr. Akhil Kureshi dealt with the case of Smt Dalia Chakraborty & Anr vs. The State of Tripura & Ors. He assessed the applicability of the Payment of Gratuity (Amendment) Act 2010.

Facts of the Case

Petitioners are legal heirs (widow and son) of Mr. Soumendra Chakraborty, a deceased employee of The Tripura Co-operative Agriculture and Rural Development Bank Limited who retired on 31.05.2010. The gratuity was calculated to Rs.6,23,310/-, but only Rs.3,50,00/- was paid on the premise that that was the maximum gratuity payable under the Act.

Mr. Soumendra expired on 9.12.2014 leaving behind his wife and son as legal heirs. The Petitioners pointed out that notice was sent to the bank for themselves and several other retired employees for payment of the remaining amount as per revised limits. Despite repeated notices, the bank failed to pay the accurate amount of gratuity. The present petition has been filed to receive full gratuity on the ground that the Payment of Gratuity (Amendment) Act 2010, enhanced the limit to 10,00,000.

Arguments Advanced

Petitioners argued that the amendment to the Act was made before the retirement and hence the enhanced ceiling limit would be applicable.

Respondent argued that as on the date of retirement the maximum gratuity payable under the bank resolution was Rs.3,50,000 and the same was paid to Mr. Soumendra immediately on retirement. A subsequent rise in the limit according to the amendment was made by the bank management in a meeting and resolved only on 30.11.2015.

Court’s Observation and Decision

The court observed that there is no ambiguity regarding the fact that the amendment came before the retirement of the deceased employee and therefore this entitles the employee to the higher ceiling. This position was clarified in earlier cases of Hari Bhusan Sutradhar & Anr vs. Tripura Cooperative Agriculture & Rural Development Bank Ltd & Ors. And Smt. Minati Deb (Das) vs. the State of Tripura & Ors. with identical issues wherein the Court held in the case of the same bank that the revised limit would apply to the employees retired after the amendment in the law.

The issues at hand are squarely covered by the above-mentioned judgments and is a position well settled in law through precedents and therefore it is difficult to understand why the bank has not released the unpaid gratuity in favor of the Petitioners. Though the bank resolution has raised the limit and made it a part of internal regulation, the same was not applied for immediate recourse to the Petitioners and compelled them to move a writ petition. While the bank retained the money which belonged to the Petitioners and has caused an unreasonable delay in rational dealing of the matter.

Though the Petitioner has also shown some delay in approaching the court, the court observed that the Respondents are liable to pay reasonable interest for the period of delay. The court in pursuance to the observation made ordered that the remaining amount or unpaid gratuity be released to the Petitioners. Also, the Respondents shall also pay a simple interest of 7.5% per annum from the expiry of one month after the date of retirement will actual payment.


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