S.B. Sinha, J. - (1.) Leave granted.
(2.) Appellant (Bank) is a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960. Respondents are its employees. On their superannuation they were entitled to payment of gratuity. A policy decision was taken by the Bank to extend the benefit of better rate of gratuity to a large number of its employees. A scheme was formulated therefore which was linked with a policy of Life Insurance Corporation of India who were on its roll on and from 1.12.1975. In terms of the said scheme, the rate of gratuity was to be calculated on one months salary for every completed years of service with ceiling limit of 20 months salary. It was operative from 1975 to 19.7.1996. The employees of the Bank accepted the said scheme and availed the benefits thereof. The said scheme was amended providing for payment of gratuity at the rate of 26 days salary for every completed year of service with a ceiling limit of 1.7 lakhs. The said scheme was operative from May, 1994 to 24.9.1997. Yet again, a scheme was floated raising the ceiling limit of Rs. 1.7 lakhs to Rs. 2.50 lakhs. Payment of Gratuity Act, 1972 (for short, 1972 Act) was enacted by the Parliament to provide for a scheme for the payment of gratuity to its employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. "Completed year of service" has been defined to mean continuous service for one year. Payment of gratuity is provided for in Section 4 thereof; the relevant portion whereof reads as under: 4. Payment of gratuity. - (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, - a) on his superannuation, or b) on his retirement or resignation, or c) on his death or disablement due to accident or disease: (2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned: (3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees. (4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced. (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. In terms of the provisions of the said Act, the ceiling limit of the amount of gratuity was raised to 2.50 lakhs. The rate of gratuity, however, was to be determined at the rate of 15 days salary for every completed year of service. The said ceiling limit, however, was later on increased to 3.50 lakhs by reason of an amendment made by Payment of Gratuity (Amendment) Act, 1998 (for short, 1998 Act), which was given a retrospective effect from September, 1997.
(3.) Respondents retired during the currency of the scheme of the Bank in terms whereof, although the rate of gratuity was to be calculated at the rate of 26 days salary for every completed year of service, the ceiling limit thereof was 1.7 lakhs and 2.50 lakhs between the period 20.7.1996 and 30.11.1999; and the period 1.12.1999 and 17.1.2005 respectively. The amount of gratuity offered to them in terms of the scheme was accepted. However, they raised a claim that they were entitled to the benefit of both the scheme as also the ceiling limit fixed under the 1998 Act. The said contention of Respondents was accepted not only by the Deputy Commissioner of Labour, Aurangabad by a judgment and order dated 12.7.2005, but also by the High Court in terms of its order dated 9.8.2005.;