The Chairman cum Managing Director vs V.Venkataraman
- Court
- Madras High Court
- Case type
- WA
- Decided on
- 23-02-2026
2026:MHC:782
W.A.Nos.1178 and 1183 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23-02-2026
CORAM
THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAM
AND
THE HON'BLE MR.JUSTICE C.KUMARAPPAN
W.A.Nos.1178 and 1183 of 2022 and
C.M.P.Nos.7441 and 7477 of 2022
The Chairman-cum-Managing Director,
Madras Fertilizers Ltd.,
Manali, Chennai-68.
..Appellant
-vs-
1. V.Venkataraman
2. K.Vaidyanathan
3. D.Boobalan
4. S.Devaraj
5. R.Ponusamy
6. S.Subramaniam
7. R.Parthasarathy
8. D.Venkatesan
9. B.Muralimohan
10. V.Purushothaman
11. V.Geetha
12. Awatiger M.B
13. M.S.Satyanarayana
14. S.Nagalingam
The Writ Petition in respect of the 15th
Petitioner stand dismissed as withdrawn as per
order dated 23/03/2016
15. T.Maheswaran
16. M.Mane
17. S.ShanmugaSudaram
18. P.Purushotham
19. K.Kannaiyan
20. P.S.Kalirajan
21. The Government of India
Rep. by its Joint Secretary (P and A) and CVO,
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W.A.Nos.1178 and 1183 of 2022
Dept. of Fertilizers,
Ministry of Chemicals and Fertilizers,
Room No.221-A Wing, Shastri Bhavan, New
Delhi.-110001
22. The Government of India
Rep. By its Secretary,
Department of Public Enterprises,
Ministry of Heavy Industries and Public
Enterprises, Public Enterprises Bhavan, Block
No.14, CGO Complex, Lodhi Road, New Delhi
– 110 003.
..Respondent(s)
WA No. 1183 of 2022
1. The Chairman-cum-Managing Director
Madras Fertilizers Ltd.,
Manali, Chennai-68.
2. The Deputy General Manager-P&A,
Madras Fertilizers Ltd.,
Manali, Chennai-68.
..Appellants
Vs
1. Ct. Meyyappan
2. The Government of India
Rep. by its Joint Secretary (P and A) and CVO,
Dept. of Fertilizers, Ministry Of Chemicals And
Fertilizers, Room No.221-A Wing, Shastri
Bhavan, New Delhi.-110001
3. The Government of India
Rep. by its Secretary , Department of Public
Enterprises, Ministry of Heavy Industries and
Public Enterprises, Public Enterprises Bhavan,
Block No.14, CGO Complex, Lodhi Road,
New Delhi-110003
..Respondent(s)
WA No. 1178 of 2022
Prayer: To set aside the order dated 15.03.2022 in WP.No. 32505 of 2012.
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W.A.Nos.1178 and 1183 of 2022
WA No. 1183 of 2022
Prayer: To set aside the order dated 15-03-2022 in W.P.No.32297 of 2012.
For Appellant(s): Mr.Jayesh B.Dolia, Senior Counsel
For M/s.Aiyar And Dolia (in both)
For Respondent(s): Mr.K.S.Viswanathan, Senior Counsel
For Mrs.T.Hemalatha for R1, 3 to 5, 7 to 20 (in
WA 1178/2022) and for R1 (in WA1183/2022)
Mr.R.Subramanian, ACGSC for R21 & 22 (in WA
1178/2022) and for R2 & R3 (in WA1183/2022)
R2 & 6 - Died- Steps Due.
*
J U D G M E N T
(Judgment of the Court was delivered by S.M.Subramaniam J.)
The present Intra Court Appeals under Clause-15 of the Letters
Patent have been instituted to assail the Writ Order dated 15.03.2022 in
W.P.Nos.32505 and 32297 of 2012.
2. Madras Fertilizers Limited has filed the present Writ Appeals
mainly on the ground that the Payment of Gratuity Act, 1972 has been
amended to substitute words "Rupees Three Lakhs and Fifty Thousand" with
words "Rupees Ten Lakhs" under sub-Section 3 of Section 4 of the Act. An
Office Memorandum was notified on 24.05.2010 and Respondents /
Employees retired from service prior to the amendment. Therefore, their claim
seeking gratuity amount of Rs.10,00,000/- is untenable.
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W.A.Nos.1178 and 1183 of 2022
3. Mr.Jayesh B.Dolia, learned Senior Counsel appearing for the
Appellant would contend that when the Office Memorandum was notified on
24.05.2010, the said Memorandum would not have retrospective application
so as to claim enhanced gratuity amount in respect of the employees, who
retired prior to the amendment. Learned Senior Counsel drew the attention of
this Court with reference to the Government of India Office Memorandum
dated 26.11.2008, wherein revision of scale of pay with effect from 01.01.2007
was granted to Board level and below Board Level Executives and non-
Unionised Supervisors in Central Public Sector Enterprises (CPSEs). The
appellant had already extended the benefit of revised scale of pay and all
other benefits under the said Scheme. Therefore, the gratuity alone has been
denied on the ground of affordability, which is contemplated under the very
same Government Office Memorandum dated 26.11.2008. He would rely on
Clause 3 of the said Memorandum dated 26.11.2008 to establish that
affordability for implementation of pay revision is the discretion of the appellant
and they have exercised the discretion only to the extent of limiting the
gratuity. Therefore, Writ Court has committed an error in not considering the
same.
4. Mr.K.S.Viswanathan, learned Senior Counsel assisted by
Mrs.T.Hemalatha, learned counsel for R1, 3 to 5 and 7 to 20 would oppose, by
stating that the part implementation of Office Memorandum dated 26.11.2008
would defeat the purpose and objectives of the Scheme. Admittedly,
respondent employees received revised scale of pay and all other benefits
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granted in the said Memorandum. Once revised scale of pay and the
consequential monetary benefits are ordered by the appellant, they cannot
deny gratuity alone, since gratuity is calculated based on the number of years
of services rendered as well as the revised scale of pay received by
employees. Gratuity being a consequential benefit arouse on account of
revision of pay effected pursuant to the Office Memorandum dated
26.11.2008, Writ Court has rightly considered the issue and thus, the present
appeals are to be rejected.
5. This Court has considered the rival submissions made between
the parties to the lis .
6. Clause-13 of the Office Memorandum dated 26.11.2008 reads
as under:
"13. Gratuity: The ceiling of gratuity of the executives and
non-unionised supervisors of the CPSEs would be raised to Rs.10
lakhs with effect from 01.01.2007."
7. Clause-3 speaks about affordability for implementation of pay
revision. Clause-17 is about the Issue of Presidential Directive, effective date
of implementation and payment of allowances, etc. Once revised scale of pay
has been given without reference to the affordability under Clause-3 r/w
Clause-17, then the benefit of gratuity under Clause-13 cannot be denied to
employees, more specifically, Clause-3 is all about revision of pay scale. Once
affordability has not been raised for revising the scale of pay and for grant of
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increment, Dearness Allowance, House Rent Allowance, Lease
Accommodation, City Compensatory Allowance and other allowances / perks,
consequential benefit of gratuity, which is granted based on number of years
of services rendered by an employee and the scale of pay cannot be denied.
Such implementation would completely weed out the spirit of the
Memorandum and would defeat its objectives. Affordability, if at all, must be
considered during appropriate time by the Management. Once they have
taken a decision regarding affordability and extended the benefit of revision of
scale of pay along with all other consequential monetary benefits, then the
gratuity as contemplated under Clause-13 of the Office Memorandum alone
cannot be denied. Therefore, Writ Court has rightly considered the issue in a
right perspective and more specifically relying on the principles laid down by
the Apex Court of India.
8. Mr.Jayesh B.Dolia, learned Senior Counsel would also rely on
the judgment of the Supreme Court in the case of Krishna Gopal Tiwary and
1
another vs. Union of India and others . Factually, the case is
distinguishable, since in the case before Apex Court, the issue raised was
about payment of tax deducted at source on gratuity amount paid to
employees. However, in the present case, it is all about payment of gratuity
and thus, the said case is of no avail to the appellant.
1
(2022) 18 SCC 555
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9. Mr.K.S.Viswanathan, learned Senior Counsel would submit
that in respect of Bharath Earth Movers Limited at Bangalore, the High Court
of Karnataka has already taken a similar view that enhanced gratuity under
Clause-13 of the Memorandum dated 26.11.2008 has been paid. The said
decision of the Single Judge of the Karnataka High Court was affirmed by the
Division Bench of the High Court in W.A.No.443 of 2019 dated 05.03.2021
and the said judgment was confirmed by the Supreme Court of India in
Special Leave to Appeal (C) Nos.16004-16005 of 2021dated 15.11.2021.
10. The Apex Court modified the judgment of the Division Bench
of Karnataka High Court in respect of payment of rate of interest and it is
clarified that interest on the short fall in payment of gratuity would be payable
at the rate of 8.5% per annum and not at the rate of 8.5% per month.
Therefore, in the present case, the interest would be payable at the rate of
8.5% per annum as decided by the Apex Court of India.
11. Mr.Jayesh B.Dolia, learned Senior Counsel for the appellant
would submit that interest has not been claimed by the respondent employees
in the writ proceedings. Interest on payment of gratuity is a statutory
requirement and belated settlement of gratuity would attract interest. However,
the Apex Court has restricted the rate of interest to 8.5% per annum and the
said interest is to be paid to the respondent employees, while settling the
balance amount of gratuity payable by the appellant.
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12. In view of the above discussions, this Court is of the view that
Writ Court has considered the issue in a right perspective and in consonance
with the principles to be applied.
13. Consequently, both Writ Appeals stand dismissed. No costs.
Connected Miscellaneous Petitions are closed.
(S.M.S.,J.) (C.K.,J.)
23-02-2026
Index: Yes
Speaking order
Neutral Citation: Yes
AR
To:
1. The Joint Secretary (P and A) and CVO,
Government of India
Dept. of Fertilizers,
Ministry of Chemicals and Fertilizers,
Room No.221-A Wing, Shastri Bhavan, New Delhi.-110001
2. The Secretary,
Government of India
Department of Public Enterprises,
Ministry of Heavy Industries and Public Enterprises,
Public Enterprises Bhavan,
Block No.14, CGO Complex,
Lodhi Road, New Delhi – 110 003.
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W.A.Nos.1178 and 1183 of 2022
S.M.SUBRAMANIAM J.
AND
C.KUMARAPPAN J.
AR
W.A.Nos.1178 and 1183 of 2022
23-02-2026
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