Allowed

P. Rama Rao v. The State of Andhra Pradesh

Andhra Pradesh HC19 Jul 2022WP/30389/2015

Case brief

AI extract

What is this about?

In this writ petition, the Court held that a retired employee is entitled to gratuity and leave encashment despite the employer's claim that his post lacked government sanction. The Court emphasized that statutory liability to pay gratuity arises from the rendering of five years of continuous service and cannot be denied based on administrative inaction regarding post regularization after nearly t

What did the court decide?

Respondents directed to pay gratuity with 12% p.a. interest and encashment of earn leave for 285 days within eight weeks.

P. Rama Rao Vs The State of Andhra… — Pension and Retirement Benefits | Andhra Pradesh HC (2022)

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HON’BLE DR. JUSTICE K. MANMADHA RAO

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WRIT PETITION No.30389 of 2015

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ORDER :

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The writ petition is filed under Article 226 of Constitution of India seeking to declare the action of respondents in not paying the Gratuity to the petitioner as per the Payment of Gratuity Act and also not paying him the encashment of Earned Leave for 285 days consequent on his retirement as Technical Work Inspector/Assistant Engineer I/c. on 30.04.2015 as per the Rules application, as illegal and arbitrary.

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The brief facts of the case are that the petitioner was appointed as Technical Work Inspector (TWI) by the Executive Engineer, East Godavari Schedule Caste Service Cooperative Society Limited, Kakinada, East Godavari, on 04.04.1986 on daily wages and thereafter he was given regular scale of pat attached to the post of TWI i.e., pay scale of Rs.910-30-124035-1625 vide proceedings Ref.No.SAS2/11/88-1, dated 31.10.1988. Thereafter, he was posted as in Charge Draughtsman vide progs.No.SA2/1/93-1, dated 03.12.1998 and thereafter he was put incharge of the post of Assistant Engineer by Progs.No.SA2/Estt/P.R.Rao/02, dated 18.06.2002 and thereafter he was deputed to the District Water Management Agency, Kakinada by proceedings dated 02.082002 wherein he worked there till 02.07.2008. He was again posted back on 03.07.2008 of the VC & Managing Director, A.P.Scheduled Caste Coop. Finance Corporation

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Limited, Hyderabad. Thereafter, he was retired from service on attaining the age of superannuation on 30.04.2015.

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It is stated that the petitioner was worked for 29 years. He is a regular employee of the Corporation having been appointed after regular selection and he has also been sanctioned regular periodical increments. In fact the A.P. Scheduled Castes Coop. Finance Corporation Limited was merged with A.P. Education and Welfare Infrastructure Development Corporation (APEWIDC), whereupon the petitioner became the employee of the said Corporation. He is the senior most Technical Work Inspector. Earlier there were no Service Rules governing the staff and the Service Rules have been formulated in the year 2013. The petitioner was retired from service on 30.04.2015 and after his retirement he requested the respondents to pay his Gratuity and Encashment of Earned Lave as he retired from service after rendering 29 years of service. However, unfortunately, he is not being sanctioned these retiral benefits on the ground that the post has not been sanctioned by the Government and that the proposals are still pending with the Government. Hence, he filed the present writ petition.

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The respondents have filed counter affidavit denying all the averments made in the petition and contended that after formation as new Corporation with effect from 16.10.2008, it has been felt necessary to have new staffing pattern and new service rules to the employees of APEWIDC, based on the proposal sent by the APEWIDC, vide G.O.Ms.No.36, Finance

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(SMPC) Department, dated 23.03.2011. The post of Technical Work Inspector has not been included in the staffing pattern of erstwhile APSCCFC or APEWIDC. However, they are being continued in the Organization under work charged establishment without any sanctioned posts.

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It is stated that according to the State and Subordinate Service Rules, 1996 , “ a person is said to be appointed to a service “when, in accordance with these rules, except under rule 10 and in accordance with the Special Rules or adhoc rules applicable to such services he discharges for the first time, the duties of the post borne on the cadre of such service or commences the probation, instruction or training prescribed for members thereof .”

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In so far as the applicability of Death cum Retirement

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Gratuity to State Government Employees , Rule 46 off the Revised Pension Rules, 1980, reads as under:

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Rule-46 : “A Government Servant, who has completed five years qualifying service and has become eligible for service gratuity or pension under rule 45, shall on his retirement be granted retirement gratuity.”

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It is stated that, in the instant case, the petitioner is neither a Government Servant, as defined by the State & Subordinate Service Rules, 1996 nor was appointed to a service that was borne on the cadre of neither the erstwhile APSCFC nor the present APEWIDC. He was never placed on probation in the post he worked and his services were never regularized, either by APSCFC or APEWIDC in the said cadre. Evidently his services were engaged by the erstwhile S.W. Engineering Wing to work as Work Inspector is not included

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either in the Staffing Pattern of SW Engineering Wing or as well as in the Staffing pattern of AOEWIDC in terms of G.O.Ms.No.36 Finance (SMPC.I) Department, dated 23.03.2011. The petitioner’s appointment is not supported by any Government Order, therefore, he is not eligible for payment of Death Cum Retirement Gratuity under Rule 46 of APRP Rules 1980. As per A.P. Leave Rules, 1933 regular leaves such as Earned leaves or Half Pay Leaves are permissible only to temporary/ permanent Government servants. The Technical Work Inspector under work charged establishment, to which, the petitioner belongs to, are not eligible for Earned Leaves or Half Pay leaves. The service benefits such as promotion, encashment of earned leave, LTC, Medical Reimbursement, gratuity etc. are applicable only to the persons appointed against a post that was sanctioned by the Government, by following due procedure and whose services have been regularized in the said post. As such the petitioner cannot be treated on par with other regular employees of the Corporation. Hence, prayed to dismiss the writ petition.

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Reply affidavit has been filed by the petitioner while reiterating the averments made in the petition and denying the averments made in the counter affidavit, contended that as stated by the respondents, he is not a Government Servant and not governed by A.P. State and Subordinate Service Rules, nor was he appointed to a Service that as born on cadre and therefore he is not entitled to Gratuity under the A.P. Revised Pension Rules. He submitted that, as per the Payment of

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Gratuity Act, Gratuity has to be compulsorily payable as all the Establishments have been covered under the said Act. In fact the liability is statutory and the respondents cannot escape from the liability on the ground that the post is not a sanctioned post after extracting work for nearly 30 years from the petitioner. Admittedly the petitioner rendered nearly 30 years of service and is entitled to 15 months salary as Gratuity. Hence, the petitioner claimed the relief as stated above.

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During pendency of the petition, vide order dated 22.09.2015, this Court, while admitting the Writ Petition, granted interim direction as under:

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“ WPMP No.39294 of 2015

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There shall be interim direction to the respondents to release gratuity amount to the petitioner as per the provisions of Payment of Gratuity Act and pass appropriate orders within a period of eight weeks from the date of receipt of a copy of this order.

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Post after eight weeks.”

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Since the respondents have not complied with the above order, the petitioner has filed the Contempt Case No.3298 of 2018 against the 3^rd respondent in W.P.No.30389 of 2015.

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Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondents.

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On hearing, learned counsel for the petitioner has relied upon catena of decisions of Hon’ble Supreme Court

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reported in (i) Ahmedabad Pvt Primary Teachers’

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Association versus Administrative Officer and others¹ , wherein it was held that Labour Law- Payment of Gratuity act, 1972-nature and object of – Held, it is a piece of welfare legislation and its provisions are in the nature of social-security measures like employment insurance, provident fund and pension – Statute Law- Welfare legislation. ”

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(ii) In case of Janardan Sharma versus GNCT of Delhi

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through : its Chief Secretary & ors² , wherein it was held that, “ it is clear that the Act does not draw a distinction between a fulltime employee/ a part time employee/ adhoc employee etc. In other words, as stated by the Court, the Section does not speak of any specific categories of the employees for its applicability i.e., regular, ad-hoc, part time, casual etc. the petitioner being an employee, though according to the respondents Part Time, he is still entitled to gratuity .”

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(iii) In a case of Union Public Service Commission versus Dr. Jamuna Kurup and others³ , wherein, the Hon’ble Apex Court held that , the words “permanent” or “regular” were not used either with reference to “employees of the government” or “employees of MCD ”.

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(iv) In a case of State of Jharkhand and others Versus Jitendra Kumar Srinvastava and another⁴ , wherein the Hon’ble Apex Court held that, Service Law- Pension – withdrawal or withholding of pension – withholding of, in

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1 (2004) 1 Supreme Court Cases 755

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2 WP(C ) 11154 of 2019 dated 03.08.2021

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3 (2008) 11 Supreme Court Cases 10

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4 (2013) 12 Supreme Court Cases 210

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absence of specific rules therefor – Impermissibility of – Bihar Pension Rules, 1950 R.43(b) (as made applicable to State of Jharkhand) ; and

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(v) In a case of Nihal Singh and others Versus State of Punjab and others⁵ , wherein the Hon’ble Apex Court held that mere payment of wages-relevance-on facts held, since the appointments of appellant Special Police Officers were made by the State, and the disciplinary control vested with the State, relationship of master and servant existed between the State and Appellants- mere fact that wages of appellants were paid by banks at whose disposals their services were made available, did not render the appellants employees of the banks .

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On the other hand, learned counsel for the respondents has also placed reliance on the decision of Hon’ble Supreme Court reported in (i) Secretary, State of Karnataka and others Versus Umadevi (3) and others⁶ , wherein it was held that “when a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognized by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the

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5 (2013) 14 Supreme Court Cases 65

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6 (2006) 4 Supreme Court Cases 1

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Public Service Commission. Therefore the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees .”

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But the facts of the above cases are not applicable to the present set of facts in the present writ petition.

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It is pertinent to mention here that, in such cases where recruitment is by regular process of selection, after long years of service, regularization cannot be denied solely on the ground that the posts were not sanctioned after extracting service all through. The State as a Model Employer ought not resort to such practice and cannot take such a stand which is arbitrary and denies the benefit of long years of service especially when their appointment is made by following the due process of law. In so far as payment of Gratuity is concerned, it is a statutory provision and has to be compulsorily paid together with interest. So also the petitioner should be paid encashment of Earned Leave for 285 days which is at his credit and he had worked 29 years uninterruptedly as all the rules applicable to Government service are also made applicable to this Corporation. Non sanctioning of post would not have any effect as he worked for 29 years. Even otherwise sanctioning of a post is an administrative exercise and it is not in the control of the petitioner. The petitioner having rendered continuous service as defined under the payment of Gratuity Act for more than five years, is entitled for gratuity and any pase on the part of the Government in not sanctioning a post or non-inclusion in the staffing pattern is untenable.

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This Court further observed that, the respondents are liable to pay gratuity as they have extracted work from the petitioner and the payment is a statutory one. Further, the Gratuity Act itself does not distinguish between any service rendered in a sanctioned post or otherwise but makes it clear that gratuity is payable when once a person renders a minimum period of five years of continuous service. In this case, the petitioner has rendered nearly 30 years of service and at this stage, after nearly 30 years of service, it does not lie in the mouth of the respondents to state that the petitioner has not been appointed in a sanctioned post. Further, the petitioner is entitled to leave encashment of his earned leave as per A.P. Leave Rules 1993 which has been made applicable to Corporation.

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Having regard to the facts and circumstances of the case, in view of the submissions made by both the learned counsels and in view of the catena of decision of Hon’ble Supreme Court cited above, this Court is of the considered view that, in the interest of justice, directing the respondents to pay gratuity to the petitioner together with interest @ 12% p.a. from the date of his superannuation i.e., 30.04.2015 as per the Payment of Gratuity Act. Further, directing the respondents to pay the encashment of Earned Leave for 285 days consequent on his retirement as Technical Work Inspector/ Assistant Engineer I/c. on 30.04.2015, as he has rendered 29 years of regular service, in accordance with the Rules applicable to him,

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within a period of eight (08) weeks from the date of receipt of a copy of this order.

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