This paper is an exploration of a landmark case of the Supreme Court of India on the issue of gratuity entitlement of teachers in aided schools. The case explains the application of the Payment of Gratuity Act, 1972, in comparison to the Maharashtra Civil Services (Pension Rules), 1982, in relation to such teachers and tackles the basic crux of the matter of heirship and sharing of benefits.
The Case background
The case, Vikram Bhalchandra Ghongade Vs. Headmistress Girls High School and Junior College, Anji (Mothi), Tah. and Distt. Wardha & Ors.
occurred due to a Special Leave Petition (C) no. 19436 of 2024. The petitioner Vikram Bhalchandra Ghongade is a son of a teacher who had died on service in an aided school. He claimed gratuity as legal heir within the provisions of the Payment of Gratuity Act, 1972. The first authorities, and the authorities on appeal, under the Act, had declined to agree with his claim, which the High Court, in turn, declined also to accept. This made him go to the Supreme Court of India.
For More Updates & Regular Notes Join Our Whats App Group (https://chat.whatsapp.com/DkucckgAEJbCtXwXr2yIt0) and Telegram Group ( https://t.me/legalmaestroeducators ) contact@legalmaestros.com.
The petitioner claimed that he was already referred to as a nominee of the General Provident Fund dues, and there was no need of a legal heirship certificate. He also argued that the
Birla Institute of Technology v. The consideration of the State of Jharkhand judgment predetermined the eligibility of teachers to certain gratuity under the 1972 Act which supersedes earlier verdicts. He further claimed that unless there was some particular exemption of School in Maharashtra the Gratuity Act would have to be applied and that the benefit was higher under the 1972 Act as compared with the 1982 Rules.
On the contrary, the Government Advocate handed over that the employees served in an aided school, their salary and pensionary benefits, including Death-cum-Retirement Gratuity (DCRG), were paid in terms of Maharashtra Civil Services (Pension Rules), 1982, which was enacted under Article 309 of the Constitution of India. Thus they maintained that the 1972 Act did not apply. The other charge the government came up with was that the father of the petitioner was still alive so a legal heir certificate is required and his claim would have to be considered. Indeed, the High Court had made such consideration when an application was submitted along with the necessary documents.
The original power under the Payment of Gratuity Act has found the claim ineligible initially since there was a difference between the amount of Dearness Allowance (DA) claimed by the petitioner and that being claimed in the last pay certificate. They also believed that although the 1972 Act was applicable to teachers in general there was need to have an exclusion on the definition of employee to the teachers holding posts under the Central or State Government which in their opinion the late teacher fell under. This decision was maintained by the appellate authority, which also cited that the petitioner lacked the necessary documentations. The High Court had also instructed the claim to be processed when certain documents were produced such as photograph and an indemnity undertaking.
Gratuity Schemes are applicable in situations such as;
One of the main issues of dispute was as to which law, Payment of Gratuity Act, 1972 or the Maharashtra Civil Services (Pension Rules), 1982, was to apply in controlling the gratuity to be paid to aided school teachers. The Supreme Court admitted that the
The Birla Institute of Technology case had determined the entitlement of teacher in general to gratuity. The question, however, on which legal entity the late teachers of the aided schools stood was still there.
The State claimed that aided school employees were not included in the definition of the term employee in their 1972 Act. But the respondent answered, by a petitioner, that the exemption was limited only to persons who hold posts directly under either the Central or State Government and the school teachers are not provided.
The Court noticed that the teachers in aided schools are practically like other teachers who have a post in the State Government. The government approves or sanctioned their positions and the government pays them and their allowances. Moreover, the aided school teachers get service conditions of such nature such as pension, provident fund, and gratuity, applicable to the government teachers under section 309 of the Constitution of India. They may not be strictly government employees but their salaries and pensions resemble those of the government workers.
Benefti Comparisons of the Schemes
Arguing the advantages of the 1972 Act and the issue, the Court also undertook a comparison of advantages the two had and of which Section 4(5) of 1972 Act makes it inapplicable when their employees have a right under an award, agreement, or contract to a better term concerning gratuity. The Court made it clear that it is not the cast off the benefits but the whole scheme that had to be taken into consideration in deciding which is beneficial.
As per the 1972 Act gratuity is computed on the last drawn wages at the rate of 15 days wages per year of service completed (or part thereof in excess of six months to turn of the year). This is the amount that should be paid not less than five years of uninterrupted service and the five years restriction should be overridden only upon the event of death or disablement.
The 1982 Rules by contrast give DCRG one-fourth of the last pay drawn on completion of each six-monthly period of qualifying service to amaximum of 16.5 years, computed on the basis of all qualifying periods completed at both times, ignoring all periods between such times. More importantly, the DCRG under the 1982 Rules is payable even when the services of the government employee ends before five year period of minimum service. The Court pointed out that where death occurs during the service before the completion of five years, the gratuity given as per the 1982 Rules is quite high as compared to the gratuity given as per the 1972 Act. In an example, a twelve-month of qualifying service would earn 2.5 months of pay as that of death gratuity raising with every one-year contribution up to 10 months of pay upon four years of service.
The Court also observed that government servants including the teacher of government schools must get gratuity under 1982 Rules and there cannot be a different computation in favor of aided school teachers under the 1972 Act. Further, the 1982 Rules not only cover DCRG, but also pension benefits, which not be continuously provided to the labor-days covered by the 1972 Act. On a thorough comparison, the Court held that the 1982 Rules favored more to the dependants of the employees, particularly in event of early death.
Heirship and Writing out
In the case of the particular claim of the petitioner, the Government Advocate had put forward a case to have legal heirship certificate as it still involved a husband of a deceased teacher who was still alive. However, the petitioner was able to say that he had estranged and long separated parents. The Court made it clear that the unworthiness of receiving benefits does not disqualify the family to receive benefit on behalf of the husband merely based on the reason that he and his wife are estranged.
The Court also dealt with the circumstances that the petitioner was already in receipt of provident fund dues as a nominee. The judgment also made it clear that no one saw it necessary to order the petitioner to furnish parade a legal heirship certificate. The reason being that when payment is made to a nominee or one of the legal heirs when there are other legal heirs, such a payment is deemed to be held in trust. Its nomination by the late employee is merely a jettison of the duty of the employer to first discover the legal heir to share with him in case of the demise of the deceased employee.
Death of teacher was unquestionable hence, the need of death certificate also was found unnecessary.
Finally the apex court held that aided school teachers who service terms are under the control of the State Government are included in the Maharashtra civil service pension rule 1982. This is strengthened by the Rule 2(a) of 1982 Rules that applies to any person whose appointment and conditions of employment are by or under some law and is in force at a given time. This is obviously a provision that is extendable to teachers in aided schools whose remuneration, allowances and conditions of service are controlled by the Government.
The court granted the Special Leave Petition on alterations. It ordered the petitioner to make application to the first respondent to DCRG on the basis of the Rules of 1982. This application should be supported by a notarial affidavit to indemnify the Government as well as the aided school society against any claim of other legal heir/s. The application will then be submitted to the Education Officer awaiting speedy payment. Also, the Court directed the payment of simple interest at the rate of 7 percent per annum, to the petitioner which would be calculated beginning one month after the death of the employee up to the date of payment. This outstanding decision provides clarity and legitimate benefits to the family and the teachers in aided schools under the more beneficial rules of pensions.
