Punjab Agro Industries Corporation Limited and Another Vs Harbhajan Dass Bhatia and Others

The present writ petition under Articles 226/227 of the Constitution of India has been filed seeking issuance of a writ of certiorari for quashing/modifying the order dated 04.10.2017 passed by the Controlling Authority under the Payment of Gratuity Act, 1972 and the order dated 29.01.2018 passed by the Appellate Authority, whereby respondent No.1 was held entitled to payment of gratuity amounting to Rs 5,66,717 along with consequential benefits.

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At the very outset, learned counsel appearing for the petitioners fairly submits that he confines the challenge in the present writ petition only to the quantum of gratuity awarded to respondent No.1 in view of the subsequent declaration of law by this Court. It is submitted that respondent No.1 admittedly retired from service on 31.12.2009, i.e. prior to the coming into force of the Payment of Gratuity (Amendment) Act, 2010 with effect from 24.05.2010, whereby the maximum ceiling of gratuity stood enhanced from Rs 3.50 lakh to Rs 10 lakh. According to learned counsel, the authorities below

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awarded gratuity in excess of the statutory ceiling applicable on the date of retirement. It is further submitted that though the petitioners had deposited the amount awarded by the Controlling Authority while preferring the statutory appeal, the legal position regarding the applicable ceiling of gratuity came to be authoritatively settled during the pendency of the present writ petition by this Court in Kuldeep Singh v. State of Punjab and anothe r, CWP No.5393 of 2018, decided on 16.11.2019 (Annexure P-4), and thereafter reiterated in Ram Kishan Arya and others v. Punjab Agro Industries Corporation Limited and others, CWP No.19640 of 2018 and connected matters, decided on 12.02.2020 (Annexure P-5). Learned counsel submits that in view of the aforesaid binding precedents, employees of the petitioner Corporation who retired prior to 24.05.2010 are not entitled to gratuity beyond the statutory ceiling of Rs 3.50 lakh. He accordingly submits that the petitioners do not press the remaining grounds urged in the writ petition and confine the challenge exclusively to the aforesaid limited issue.

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Per contra, learned counsel appearing for respondent No.1 supports the impugned orders and submits that no interference is warranted. According to him, the authorities below rightly computed the gratuity payable to respondent No.1 and the writ petition deserves dismissal.

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I have heard learned counsel for the parties at length and have thoughtfully considered their respective submissions.

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In view of the statement made by learned counsel for the petitioners, the controversy involved in the present writ petition stands considerably narrowed. The only question which survives for consideration is whether respondent No.1, having admittedly retired from service on 31.12.2009, was entitled to gratuity beyond the statutory ceiling applicable

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prior to the coming into force of the Payment of Gratuity (Amendment) Act, 2010 with effect from 24.05.2010.

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It is not in dispute that respondent No.1 retired from the services of the petitioner-Corporation on 31.12.2009. It is equally undisputed that the Payment of Gratuity (Amendment) Act, 2010, whereby the maximum ceiling of gratuity was enhanced from Rs 3.50 lakh to Rs 10 lakh, came into force only with effect from 24.05.2010.

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Subsequent to the passing of the impugned orders, the precise question as to whether employees of the petitioner Corporation, who had retired prior to 24.05.2010, were entitled to the benefit of the enhanced ceiling of gratuity came up for consideration before this Court in Kuldeep Singh v. State of Punjab and another (supra). After examining the statutory provisions as well as the effect of the amendment, this Court held that the enhancement introduced by the Amendment Act of 2010 operates prospectively and cannot be extended to employees who had retired prior to 24.05.2010. It was further held that the enhanced ceiling was not available merely on the basis of the Punjab Government notification unless the same had been validly adopted by the Corporation.

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The aforesaid principle was subsequently reiterated by this Court in Ram Kishan Arya and others v. Punjab Agro Industries Corporation Limited and others (supra), wherein identical claims raised by employees of the petitioner Corporation were rejected by observing that the controversy stood squarely covered by the earlier judgment rendered in Kuldeep Singh and no distinguishing feature existed so as to warrant a different view.

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Though the judgments in Kuldeep Singh and Ram Kishan Arya were rendered subsequent to the orders passed by the Controlling Authority

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and the Appellate Authority, the declaration of law contained therein governs all pending proceedings. Respondent No.1 having admittedly retired on 31.12.2009, his entitlement to gratuity has necessarily to be determined in accordance with the legal position settled by the aforesaid judgments. Consequently, the impugned orders, insofar as they award gratuity beyond the statutory ceiling applicable to employees retiring prior to 24.05.2010, cannot be sustained.

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Since the petitioners have expressly confined their challenge to the aforesaid limited issue and have chosen not to press the remaining grounds urged in the writ petition, this Court refrains from examining the same. The present writ petition is, accordingly, being decided solely on the question of the applicable ceiling of gratuity in the light of the law declared by this Court in Kuldeep Singh(supra) and followed in Ram Kishan Arya (supra) . No opinion is expressed on any other issue arising out of the impugned orders.

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Consequently, the present writ petition is partly allowed. The order dated 04.10.2017 passed by the Controlling Authority and the order dated 29.01.2018 passed by the Appellate Authority are modified only to the extent of the quantum of gratuity awarded therein. Respondent No.1 shall be entitled to gratuity only to the extent legally admissible to an employee of the petitioner-Corporation who retired on 31.12.2009, in terms of the law declared by this Court in Kuldeep Singh (supra) and followed in Ram Kishan Arya(supra). The petitioners shall re-work the gratuity payable to respondent No.1 in accordance with the aforesaid declaration of law. It is, however, clarified that if, upon such re working, any question regarding recovery of the excess amount already paid arises, the same shall be considered strictly in accordance with law, keeping in view that the excess payment, if any, was not

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occasioned by any misrepresentation, fraud or fault attributable to respondent No.1.

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Civil miscellaneous application(s) pending, if any, are also

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disposed of.

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(KIRTI SINGH) JUDGE July 23, 2026 Ritika Whether speaking/reasoned : Yes/No Whether reportable : Yes/No

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Punjab Agro Industries Corporation Limited and Another v. Harbhajan Dass Bhatia and Others

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Punjab Agro Industries Corporation Limited and Another v. Harbhajan Dass Bhatia and Others

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