BCH ELECTRIC LIMITED Vs. PRADEEP MEHRA
LAWS(SC)-2020-4-40
SUPREME COURT OF INDIA (FROM: DELHI)
Decided on April 29,2020

Bch Electric Limited Appellant
VERSUS
Pradeep Mehra Respondents




JUDGEMENT

UDAY UMESH LALIT, J. - (1.)Leave granted.
(2.)This appeal challenges the judgment and order dated 12.2.2019 passed by the High Court[1] dismissing Letters Patent Appeal No.97 of 2019 and thereby affirming the decision of the Single Judge of the High Court in Writ Petition No.10318 of 2017.
[1] The High Court of Delhi at New Delhi

(3.)By Trust Deed executed on 19.03.1979 between the appellant, a company registered under the Indian Companies Act, 1956 on one hand and three trustees on the other, an "Approved Gratuity Fund" was constituted "for the purpose of providing Gratuities to the employees of the Company under the Payment of Gratuity Act, 1972 (hereinafter referred to as 'the Act') and the Gratuity Scheme of the Company".
Clauses 4, 11 and 15(a) of the Trust Deed are as under:-

"4. RULES:

The Fund shall be governed by the Rules and any reference to the Rules in these presents shall mean the Rules for the time being in force which shall be binding on the Members, their Beneficiaries and on the Company. A copy of the current Rules is annexed to and the same shall be deemed to form part of these presents.

11. MEMBERS TO HAVE NO LEGAL RIGHT Except as provided in these presents and in the Rules, no Member or his Beneficiary shall have any legal claim, right or interest in the Fund. Provided always that the Trustees shall administer the Fund for the benefit of the Members and their Beneficiaries in accordance with the provisions of these presents and the Rules.

15. PAYMENT OF GRATUITY:

(a) On behalf of the Company, the Trustees shall provide for the payment of gratuity on termination of service, on death or retirement of the Member or otherwise as provided in the Rules of Scheme."

3.1 In the Rules appended to the Scheme the expressions "Company", "Employee" and "Gratuity" are defined as under:-

"2. (a) "Company" shall mean Bhartia Cutler Hammer Limited and its successors or assigns or any Company or body corporate which may by purchase or amalgamation acquire or take over in whole or in part, the undertaking of the company and with the previous approval of the Commissioner undertakes to perform the obligations of the Company under the Trust Deed or the Rules.

(b) "Employee" shall mean a person in the permanent, whole-time and bona fide employment of the Company, including a whole-time Director, but shall not include (i) any member of the staff who is or may be on probation or who is temporary or part-time (ii) any apprentice or (iii) a personal or domestic servant.

(m) "Gratuity" shall mean Gratuity payable under these Rules."

3.2 Rules 4(b) and 6 of the Rules are as under:-

"4. (a).........

(b) The Company shall pay to the Trustees in respect of each member an ordinary annual contribution in each year based on an actuarial valuation by a Qualified Actuary subject to Rule 103 of the Income Tax Rules 1962 or any statutory enactment or any modification thereof from time to time.

6. A member on ceasing to be a member of the Fund shall be entitled to be paid by the Trustees, the amount due as computed in the manner laid down hereunder in this Scheme: -

(a) The amount of Gratuity payable to the beneficiary shall be calculated in the manner provided in the Company's Gratuity Scheme.

(b) Notwithstanding the provision herein contained, if any member is covered by the provisions of the Payment of Gratuity Act 1972, the amount of gratuity shall be calculated in accordance with the provisions of that Act."

3.3 The Appendix to the Scheme prescribes the rates at which gratuity will be payable as under:-

"Gratuity will be payable to the Employees to whom the Payment of Gratuity Act, 1972 applies as per the rates prescribed by the said Act. Gratuity will be payable to the other employee of the company at the following rates:-

(a) On the death or permanent total physical disablement, while in the service of the Company, or retirement at the age of 55 years or if retained by the Company after 55 years, then at the time of separation from the Company:

15 days basic salary for each completed year of service subject to maximum of 20 months basis pay, payable to the employees or payable to his heirs, executors or nominee in case of death of the employee.

(b) On termination of Service:

i. Beyond five years upto 8 years of continuous service at the rate of 5 (five) days basic pay for every completed year of service.

ii. Beyond 8 years upto 10 years of continuous service at the rate of 10 days (ten) basic salary for every completed year of service.

iii. Beyond 10 years upto 15 years of continuous service at the rate of 12 (twelve) days basic salary for every completed year of service.

iv. Beyond 15 years of continuous service at the rate of 15 (fifteen) days basic salary for every completed year of service subject to maximum of 20 months basic salary.

(c) On resignation or voluntary retirement:

After completion of 5 years of continuous service or more at the rate of 15 days basic salary per year of completed service, subject to maximum of 20 months basic pay provided that the management is satisfied that such resignation or voluntary retirement is in the interest of the administration.

The rate of basic salary for payment of Gratuity shall be the last pay drawn by the employee."

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