The panel comprising Justice Abhinand Kumar Shavili and Justice Laxmi Narayana Alishetty set aside the verdict of a single judge and ruled that the calculations were not faulty
Hyderabad: A two-judge panel of the Telangana High Court allowed two writ appeals filed by the South Central Railway (SCR), Rail Nilayam, on the question of payment of gratuity to its retired employees. The crux of the controversy related to whether employees of the SCR were entitled to pension under the P&G (Central) Rules of Railway Services (Pension Rules).
The panel comprising Justice Abhinand Kumar Shavili and Justice Laxmi Narayana Alishetty set aside the verdict of a single judge and ruled that the calculations were not faulty. Earlier, the concerned employee had filed a petition before the controlling authority under the Payment of Gratuity Act. The authority allowed the application and directed the Railways to make the balance payments. The Railways unsuccessfully challenged the order before a single judge.
It is the case of the Railways that it has its own rules, in the form of the Railway Services (Pension) Rules, 1993. Therefore, the order dated 10.09.2015 passed by the controlling authority under the Act, 1972, as well as the impugned order dated 26.07.2016 passed by the single judge, were liable to be set aside. It was the case of the employees that, under the Railway Rules, 1993, less gratuity was being paid than what was payable under the Act, 1972.
In contrast, the Railways contended that all its employees were governed by the Rules, 1993, and the employees are being paid retiral benefits, including gratuity, pension, and all other benefits, under them. A perusal of the Amendment Act indicated that any person who holds a post under the Central government or a state government and is governed by any other Act or by any rules providing for the payment of gratuity is not covered under the definition of "employee" under Section 2(e) of the Act, 1972. Therefore, the respondents, who are employees of the railways under the ministry of railways, are not covered under Section 2(e) of the Act, 1972.
The panel proceeded to refer to various judgments of the apex court and declared that the employees of the railways are not covered under the definition of "employee" under Section 2(e) of the Act, 1972, after the amendment, and thus, they are exempted from the provisions of the Act, 1972. Therefore, in view of the amendment to Section 2(e) of the Act, 1972, the respondents are not covered under the Act, 1972, but are governed by the Railway Services (Pension) Rules, 1993.
