In Brief
Two municipal corporations in Uttar Pradesh (Kanpur and Gorakhpur) appealed against orders requiring them to pay gratuity to former employees under the Payment of Gratuity Act, 1972, rather than under their own regulations. The corporations argued gratuity was payable only under their internal Retirement Benefits Regulations, which provided lower amounts. The Supreme Court upheld the lower courts' decisions, holding that the Central Government's 1982 notification extended the Gratuity Act to municipal bodies employing ten or more persons. Section 14 of the Act overrides conflicting state laws. As the central law provides more generous benefits, it must apply. The appeals were dismissed.
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