AI Drafter 
TaxTMI 
TaxTMI 
1961 (3) TMI 137
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....d on the lines of the model provident fund scheme drawn by the Government under the Employees' Provident Funds Act, 1952 (XIX of 1952), with a rate of contribution of 6 1/4 per cent of total wages. Both the gratuity scheme as drawn up and the directions as to the drawing up of a provident fund scheme are challenged by the appellant by its present appeal which it has brought to this Court by special leave. 2. In regard to the direction as to the gratuity scheme the argument which has been urged before us by Mr. Sen is that the problem of starting such a scheme should have been considered on an industry-cum-region basis and considerations relevant to the said basis should have been taken into account. In support of this argument he has....
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....or each year's service should be awarded as gratuity. Mr. Sen quarrels with this provision. He contends that no gratuity should be admissible under this clause until and unless fifteen years' service has been put in by the employee. In support of this argument Mr. Sen has referred us to certain observations made by this Court in the case of The Express Newspapers (Private) Ltd. & Anr. v. The Union of India & Ors.: (1961)ILLJ339SC , 154.]. In that case the provisions of s. 5(1)(a)(iii) of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (45 of 1955), was struck down on the ground that its provisions violated the fundamental right guaranteed by Art. 19(1)(g). The conclusion of this Court was that ....
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....with the principles on which gratuity claims are generally based. Gratuity which is in the nature of retiral benefit is based on long and meritorious service, and the argument is that if the service of an employee is terminated on the ground of misconduct it would not be open to him on principle to claim gratuity because misconduct puts a blot on the character of his service and that disqualifies him from any claim of gratuity. In this connection he has referred us to the definition of 'retrenchment' contained in s. 2(oo) of the Industrial Disputes Act. Retrenchment, according to the definition, means inter alia, the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inf....
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....pensation stand exactly on the same footing in regard to the effect of misconduct on the rights of workmen. The rule of the provident fund scheme shows not that the whole provident fund is denied to the employee even if he is dismissed but it merely authorises certain deductions to be made and then too the deductions thus made do not revert to the employer either. Therefore we do not think that it would be possible to accede to the general argument that in all cases where the service of an employee is terminated for misconduct gratuity should not be paid to him. It appears that in award which framed gratuity schemes sometimes simple misconduct is distinguished from gross misconduct and a penalty of forfeiture of gratuity benefit is denie....
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....aming of the provident fund scheme on the lines of the model provident fund scheme drawn by the Government in the Employees' Provident Funds Act. Mr. Sen contends that in issuing this direction the tribunal has not properly assessed the extent of the financial obligation which the scheme would impose upon the appellant and the limited nature of its financial capacity. It appears that when the appellant produced its balance-sheet and other relevant papers it claimed privilege under s. 21 of the Industrial Disputes Act. Inevitably the Tribunal could not discuss the figures disclosed by the said books in its award though it must have examined the said figures carefully. In the result the tribunal has naturally contented itself with the gen....