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of <h1>Railway Employee Not Entitled to Gratuity under 1972 Act - Supreme Court Clarifies</h1> <h3>Union of India Versus Manik Lal Banerjee</h3> The Supreme Court held that the respondent, a retired Station Master, was not entitled to gratuity benefits under the Payment of Gratuity Act, 1972, as ... - Issues Involved:1. Applicability of the Payment of Gratuity Act, 1972 to railway employees.2. Interpretation of Section 2(e) of the Payment of Gratuity Act, 1972.3. Applicability of Railway Services (Pension) Rules, 1993 to the respondent.4. Binding nature of the decision in Pritam Singh's case.5. Relevance of the Fifth Pay Commission's recommendations.Issue-wise Detailed Analysis:1. Applicability of the Payment of Gratuity Act, 1972 to railway employees:The respondent, a retired Station Master, claimed gratuity benefits under the Payment of Gratuity Act, 1972 (the 1972 Act), similar to those received by another employee, Pritam Singh. The Tribunal and the High Court initially ruled in favor of the respondent, directing the payment of gratuity as per the 1972 Act. However, the Supreme Court concluded that the respondent's case was governed by the Railway Services (Pension) Rules, 1993 (the 1993 Rules), not the 1972 Act.2. Interpretation of Section 2(e) of the Payment of Gratuity Act, 1972:Section 2(e) of the 1972 Act defines 'employee' and excludes those holding civil posts under the Central Government and governed by other gratuity rules. The Supreme Court emphasized that railway employees, being Central Government employees covered under the 1993 Rules, are excluded from the 1972 Act's purview. The High Court's interpretation, which failed to recognize this exclusion, was deemed erroneous.3. Applicability of Railway Services (Pension) Rules, 1993 to the respondent:The 1993 Rules, specifically Rule 70, govern the payment of gratuity to railway employees. The Supreme Court highlighted that the respondent's gratuity calculation should align with these rules, which provide a distinct method for computing retirement benefits, including the inclusion of dearness pay as per the Fourth Pay Commission's recommendations.4. Binding nature of the decision in Pritam Singh's case:The Tribunal and the High Court relied heavily on the Pritam Singh case, where the Tribunal had granted gratuity benefits under the 1972 Act. However, the Supreme Court clarified that the Pritam Singh decision did not consider the exclusionary clause in Section 2(e) of the 1972 Act and was rendered per incuriam. Therefore, it did not constitute a binding precedent.5. Relevance of the Fifth Pay Commission's recommendations:The respondent contended that the Fifth Pay Commission's interim report, recommending 90% dearness allowance for retirees between 1.4.1995 to 31.12.1995, should apply to him. However, the Supreme Court noted that the respondent retired on 31.1.1995, and the Fifth Pay Commission's recommendations were effective prospectively from 1.4.1995. Thus, these recommendations were inapplicable to the respondent's case.Conclusion:The Supreme Court set aside the impugned judgment, ruling that the respondent's gratuity entitlement was governed by the 1993 Rules, not the 1972 Act. The appeal was allowed, and no costs were awarded.
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