Retrospective gratuity revision does not apply to past retirees absent express or implied extension in the governing notification.

An upward revision of gratuity does not operate retrospectively for persons who had already retired unless the governing notification or rule expressly or by necessary implication so provides. Gratuity was treated as a one-time terminal benefit that crystallises on retirement, unlike pension, and earlier authorities on liberalised pension did not control revised gratuity claims. The principle in D.S. Nakara was held not to require retrospective extension of gratuity benefits, and the Court treated its earlier reasoned orders as binding under Article 141. Accordingly, members of the All India Services who retired before 1.1.1973 were not entitled to claim gratuity at the revised rates under the 24.1.1975 notification.

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Issues: Whether members of the All India Services who retired before 1.1.1973 were entitled to gratuity at the revised rates under Notification No. 33/12/73-AIS (ii) dated 24.1.1975.

Analysis: The revised gratuity scheme did not expressly or by necessary implication extend the enhanced benefit to those who had already retired before the effective date. The Court distinguished pension from gratuity, holding that gratuity is ordinarily a one-time terminal benefit that crystallizes on the date of retirement, unlike pension which may be periodically payable. It also held that the earlier decisions relied upon by the Tribunal, including those dealing with liberalised pension, did not govern gratuity, and that the principle in D.S. Nakara did not require retrospective extension of revised gratuity benefits. The Court further treated its earlier reasoned orders as binding under Article 141.

Conclusion: Members of the All India Services who retired prior to 1.1.1973 were not entitled to claim gratuity on the basis of the notification dated 24.1.1975.

Ratio Decidendi: An upward revision of gratuity does not apply retrospectively to persons who had already retired unless the governing notification or rule expressly or by necessary implication so provides; the benefit of a revised gratuity scheme is not automatically governed by the principle applicable to pension.

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