Summary
The son of a teacher in a Government-aided school in Maharashtra who died in service claimed gratuity under the Payment of Gratuity Act, 1972. The Court held that while teachers are entitled to gratuity, aided school teachers whose pay and service conditions are regulated by the State are governed by the Maharashtra Civil Services (Pension) Rules, 1982, whose scheme of death-cum-retirement gratuity and pension is, taken as a whole, more beneficial than the Act; the petitioner was directed to be paid DCRG under the Rules with 7% interest, without insisting on a legal heirship certificate.
Issues
- Whether the legal heirs of a deceased teacher of a Government-aided school are entitled to gratuity under the Payment of Gratuity Act, 1972 or to death-cum-retirement gratuity under the Maharashtra Civil Services (Pension) Rules, 1982.
- Whether an aided school teacher holds a post under the State Government so as to fall outside the definition of 'employee' under the Act of 1972.
- Whether the petitioner could be required to produce a legal heirship certificate when the deceased's husband is alive and the petitioner was nominee for provident fund dues.
Provisions considered
- Section 2(e) (definition of employee), Payment of Gratuity Act, 1972The definition excludes persons holding a post under the Central or State Government. Although a teacher in an aided school may not strictly hold a post under the State Government, such a post is akin to one, since posts are sanctioned or approved by the Government, pay and allowances are paid by the Government, and retiral benefits follow the Rules framed under Article 309. (¶¶ 4, 6, 7)
- Section 4(2) and 4(5), Payment of Gratuity Act, 1972Section 4(2) provides gratuity at 15 days' wages for every completed year of service, and sub-section (5) makes Section 4 inapplicable where the employee has a right to better terms of gratuity under any award, agreement or contract. The comparison must consider the whole scheme, not an individual employee's figure in isolation; the Rules of 1982 provide higher death gratuity where death occurs before five years' service and also pension. (¶¶ 8, 9)
- Rule 2(a); death-cum-retirement gratuity, Maharashtra Civil Services (Pension) Rules, 1982Rule 2(a) extends the Rules to any person for whose appointment and conditions of employment special provision is made by or under any law; aided school teachers whose pay, allowances and service conditions are regulated by the Government are therefore covered, and DCRG under the Rules is payable without any minimum five-year service requirement. (¶¶ 8, 10)
- Article 309, Constitution of IndiaThe Rules of 1982 are framed under Article 309 and govern the pension, provident fund and gratuity of aided school teachers whose service conditions are set by the State. (¶¶ 3, 7)
Held
- The entitlement of teachers to gratuity is settled by Birla Institute of Technology v. State of Jharkhand; the real question is whether the heirs of a deceased aided school teacher take gratuity under the Act of 1972 or under the Rules of 1982. (¶ 6)
- A post of teacher in an aided school, for all practical purposes, is akin to a post under the State Government, at least for pay and allowances in service and for pension and other retiral benefits, since the posts are sanctioned or approved by the Government, which also pays the salary and extends service conditions under the Rules framed under Article 309. (¶ 7)
- In deciding which scheme is more beneficial for the purpose of Section 4(5) of the Act of 1972, the scheme must be considered in its entirety and not by comparing the amount an individual employee would receive. The Rules of 1982 pay DCRG without the five-year minimum service, provide more on death within the first years of service, and also confer pension; Government teachers get gratuity under the Rules and aided school teachers cannot be placed on a different computation. (¶¶ 8, 9)
- Aided school teachers governed by service conditions laid down by the State Government are covered by the Rules of 1982 by virtue of Rule 2(a). (¶ 10)
- The petitioner need not produce a legal heirship certificate: estrangement does not disentitle the surviving husband, but a nominee or one legal heir who receives payment holds it in trust for the other heirs, and the nomination only absolves the employer from identifying and apportioning among heirs. Since the death is undisputed, no death certificate is required either. (¶¶ 11, 12)
- The controlling authority's rejection on the ground of a discrepancy in dearness allowance between the application and the last pay certificate was not accepted; the DA is to be ascertained from the last pay certificate issued by the employer. (¶ 4)
Result
Special leave petition allowed with modification: the petitioner is to apply to the first respondent for DCRG under the Rules of 1982 with a notarised affidavit undertaking to indemnify the Government and the school society against claims by any other legal heir; the application to be forwarded to the Education Officer for expeditious payment, with simple interest at 7% per annum from one month after the date of death till payment. Pending applications disposed of.