In Brief
An employee of Indian Overseas Bank retired in May 1994 and received gratuity capped at Rs. 1,00,000 under the Payment of Gratuity Act, 1972. Though he received arrears of salary based on a revision effective July 1993, the bank fixed November 1, 1994 as the cut-off date for computing gratuity on the revised salary. The employee claimed Rs. 85,400 as the difference. The High Court upheld the claim. The Supreme Court held that fixation of cut-off dates for statutory benefits is valid and constitutional provided it is rational, not arbitrary. The cut-off date for wage revision and gratuity payment are distinct concepts. The appeal was allowed, though the bank was precluded from recovering the small amount if already paid.
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