Canara Bank vs Rakesh Kumar Sharma And Others
- Court
- Punjab and Haryana High Court
LPA-3028-2026(O&M)
- 1-
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
114
LPA-3028-2026(O&M)
Canara Bank
... Appellant
Versus
Rakesh Kumar Sharma and others
... Respondents
Judgment
Reserved on
Judgment
Pronounced on
Judgment
Uploaded on
Whether only
the operative
part of the
judgment is
pronounced
Whether the full
judgment is
pronounced
15.10.2026 02.11.2026 04.11.2026 No Yes
CORAM:- HON’BLE MR. JUSTICE SUVIR SEHGAL
HON’BLE MR. JUSTICE RAJESH GAUR
Present:- Ms. Rahish Pahwa, Advocate
for the appellant (THROUGH V.C.).
SUVIR SEHGAL, J.
1. This appeal has been filed under Clause X of the Letters
Patent, impugning Judgment dated 20.08.2026, passed by a learned Single
Judge, whereby a writ petition preferred by the appellant - bank challenging
orders dated 26.06.2024 and 26.05.2026, Annexures P1 and P2, passed by the
authorities under the Payment of Gratuity Act, 1972 (hereinafter referred to as
‘the Act of 1972’), has been dismissed.
BRIJ MOHAN BHALLA
2026.11.04 11:07
I attest to the accuracy and
authenticity of this order/judgment.
High Court, Sector-1, Chandigarh.
LPA-3028-2026(O&M)
- 2-
2. Facts leading to the filing of the appeal are that respondent
No.1 was engaged on 15.12.1988 as a Deposit Collector/NND Agent with
Syndicate Bank and continued to work as such till 04.05.2020. He completed
31 years and 4 months of engagement. He was not a regular employee of the
bank and was paid remuneration on commission basis under the Pigmy
Deposit Collection Scheme. In the interregnum, Syndicate Bank merged with
the Canara Bank, appellant herein. Upon cessation of engagement, appellant -
bank paid an amount of Rs 2,92,956/- towards gratuity, which was calculated
on the basis of an award dated 22.12.1988, rendered by Industrial Tribunal,
Haryana, subsequently, modified by judgment dated 28.03.1997 of the High
Court of Andhra Pradesh and affirmed by the Supreme Court on 13.02.2001,
Annexure P6. Being dissatisfied, respondent No. 1 approached the Controlling
Authority under the Act of 1972, claiming differential gratuity. Vide order
dated 26.06.2024, Annexure P1, Controlling Authority determined his
entitlement at Rs 3,38,027/- by taking the average monthly commission
of Rs.18,900.45 as the basis of computation. After adjusting the amount
already disbursed, bank was directed to pay the balance amount of Rs 45,071/-
along with simple interest at the rate of 10% per annum w.e.f. 05.05.2022 till
payment. Statutory appeal preferred by the appellant was dismissed by the
Appellate Authority on 26.05.2026, Annexure P2. Challenge to both the orders
passed by the statutory authorities remained unsuccessful before the learned
Single Judge.
3. Ms. Rahish Pahwa, counsel for the appellant has argued
BRIJ MOHAN BHALLA
2026.11.04 11:07
I attest to the accuracy and
authenticity of this order/judgment.
High Court, Sector-1, Chandigarh.
LPA-3028-2026(O&M)
- 3-
that respondent No. 1 was being paid on commission basis and could not be
equated with a regular employee of the bank. It is her contention that the
entitlement of respondent No.1 to gratuity stood determined by award of the
Industrial Tribunal as subsequently modified and affirmed by superior Courts.
She asserts that the authorities under the Act of 1972 could not have
determined any additional amount. Still further, in the alternative, she urges
that the authorities have erred in treating the average monthly commission of
the preceding 12 months at Rs.18,900.45 as actual commission earned by
respondent No.1 during the last month of engagement was Rs.14,312/-, which
ought to have formed the basis of computation.
4. Having considered the submissions made by the counsel
and examining the impugned judgment as well as the record, we do not find
any ground warranting interference in the impugned judgment.
5. It may be noticed that merely because respondent No. 1
was working as a Deposit Collector and he was not entitled to absorption,
regular pay or other service benefits available to a permanent employee, does
not mean that he is not entitled to gratuity. Section 4 of the Act of 1972,
provides thus:
“4. Payment of gratuity
(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five
years,-
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
BRIJ MOHAN BHALLA
2026.11.04 11:07
I attest to the accuracy and
authenticity of this order/judgment.
High Court, Sector-1, Chandigarh.
LPA-3028-2026(O&M)
- 4-
Provided that the completion of continuous service of five years shall not be
necessary where the termination of the employment of any employee is due
to death or disablement:”
6. A perusal of the aforesaid statutory provision clearly
shows that an employee, who has rendered minimum of 5 years of service, will
be entitled to payment of gratuity regardless of the fact as to whether he is a
permanent or a casual employee or working on commission basis. In Indian
Banks Association Versus Workmen of Syndicate Bank and others, 2001(3)
SCC 36 , Hon’ble Supreme Court recognized the status of Deposit Collectors
as workman for the purposes of industrial disputes and upheld the award of
gratuity and other benefits while declining to equate them with regular
employees for the purposes of absorption, pay scale and allowances etc.
7. Appellant - bank has prescribed the method of
computation of gratuity under circular No.160/2005 dated 23.06.2005,
Annexure P8. This circular provides for calculating of the average commission
earned by a Deposit Collector during the 12 months immediately preceding the
cessation of engagement. Bank has calculated and paid gratuity of
Rs.2,92,956/- by adopting average monthly commission of Rs.18,900.45. The
same figure has been adopted by the Controlling Authority while determining
the gratuity payable to respondent No.1. Having itself applied the method
under circular Annexure P8, bank is estopped from questioning the
determination of the gratuity on the basis of the average monthly commission.
Remuneration of a Deposit Collector is based upon the commission earned by
him which is likely to fluctuate from month to month. The average of the
BRIJ MOHAN BHALLA
2026.11.04 11:07
I attest to the accuracy and
authenticity of this order/judgment.
High Court, Sector-1, Chandigarh.
LPA-3028-2026(O&M)
- 5-
preceding 12 months provides a representative measure of such remuneration,
which is consistent with the method prescribed by the bank. Learned Single
Judge has examined the aforesaid aspect and has not found any perversity in
the concurrent conclusions arrived at by the authorities under the Act of 1972.
We do not find any reason to disagree with the said view and do not find any
ground warranting interference in intra - Court appeal.
8. Finding no merit in the Letters Patent Appeal, it is
dismissed with no order as to costs
9. Pending miscellaneous application(s), if any, shall also
stand disposed of.
(SUVIR SEHGAL)
JUDGE
(RAJESH GAUR)
JUDGE
02.11.2026
Brij
Whether Speaking/Reasoned Yes/No
Whether Reportable Yes/No
BRIJ MOHAN BHALLA
2026.11.04 11:07
I attest to the accuracy and
authenticity of this order/judgment.
High Court, Sector-1, Chandigarh.