Failure to opt for retirement at 60 cannot alone disentitle an employee to gratuity.

The petitioner was appointed as an Assistant Teacher at a Madarsa on 16 August 1992 and retired on 31 March 2019, having continued in service until age 62.

The State rejected her gratuity claim on 13 September 2023 because she had not opted to retire at age 60.

After an earlier writ petition resulted in a direction to submit a comprehensive representation, she did so, but her claim was again rejected.

The respondents maintained that the Madarsa-specific Government Orders and service rules applied and that she had not submitted the required option.

1. Whether the petitioner could be denied gratuity solely because she had not opted to retire at age 60 and continued in service until age 62.

2. Whether she was entitled to interest on the unpaid gratuity and, if so, at what rate and from what date.

The Court relied on its decision in University College Retired Teachers Welfare Association v. State of U.P., Writ-A No. 5724 of 2024, which quashed specified Government Orders insofar as they denied gratuity to teachers who exercised an option to continue in service for an extended period and directed payment with 6% interest.

It also considered the Supreme Court’s dismissal of the State’s appeal in State of U.P. v. Smt. Priyanka, concerning death-cum-retirement gratuity under a benevolent scheme.

The Court’s governing principle was that continuation in service beyond the prescribed age, or failure to exercise the relevant option, could not by itself justify denying gratuity where the employee had been permitted to continue and the applicable rules otherwise entitled her to the benefit.

The Court also recognized that entitlement remained subject to qualifying service and the applicable rules and orders.

The petitioner had rendered long service and the respondents had permitted her to remain in service until 31 March 2019.

The impugned order relied essentially on her failure to opt for retirement at age 60, without independently addressing her gratuity entitlement in light of the subsequent judicial decisions.

The Court considered that the State had not established another sustainable ground for withholding gratuity, and that payment of other service dues did not resolve the distinct gratuity claim.

It therefore held that the absence of the option could not, by itself, defeat her claim, while leaving calculation of the admissible amount to the competent authority under the governing rules and orders.

The respondents were directed to calculate and release the gratuity legally payable, without denying it solely for failure to opt for retirement at age 60, within three months after production of a certified copy of the judgment.

The petitioner was also awarded 6% annual interest from 31 March 2019 until actual payment.