Statutory Gratuity Act provisions override inapplicable service rules and have primacy in calculating post-retiral benefits.

The petitioner was appointed as an Assistant in 1986 under BISCOLAMF and later allocated to JHASCOLAMF in Jharkhand

He superannuated on 31.01.2025 after more than 38 years of service

Upon retirement, the respondents released leave encashment for only 147 days instead of 300 days and paid Rs. 18,38,925/- as gratuity by applying the Jharkhand Pension Rules, 2000

The petitioner challenged this, claiming a higher gratuity amount (Rs. 21,21,836/-) based on the Payment of Gratuity Act, 1972, and full leave encashment

1. Whether the writ petition is maintainable despite the availability of an alternative remedy under the Payment of Gratuity Act?

2. Whether the petitioner's gratuity was wrongly calculated by applying Jharkhand Pension Rules instead of the Payment of Gratuity Act, 1972?

3. Whether the restriction of leave encashment to 147 days is sustainable in law?

The court primarily applied the Payment of Gratuity Act, 1972, noting it is a complete code with overriding effect over inconsistent rules for entities like Co-operative Societies and Federations

It relied on the principle that writ jurisdiction is exercisable despite alternative remedies when actions are arbitrary or involve patent illegalities

The court also applied Rule 298 of the Jharkhand Service Code, which mandates the employer to verify leave accounts and service books annually, placing the burden of record maintenance on the State/Employer rather than the employee

Reference was also made to Dr. Dudh Nath Pandey vs. State of Jharkhand & Ors. regarding the timely release of post-retiral benefits

The court rejected the respondents' preliminary objection on maintainability, holding that since the respondents failed to apply the statutory Act entirely and instead used inapplicable Pension Rules—which do not govern JHASCOLAMPF—it constituted a patent illegality

Regarding gratuity, the court found the respondents' formula (Basic + DA × ½ × half-years of service) per the Pension Rules was incorrect; the statutory formula under the Gratuity Act (Last Drawn Salary × Years of Service × 15/26) must prevail

Furthermore, the court noted that because DA exceeded 50%, the gratuity ceiling should have increased by 25% as per Memo No. 218/f dated 18.01.2017

On leave encashment, the court ruled that the petitioner cannot be penalized for missing records, as the duty to maintain and verify leave accounts lies with the Head of Office under Rule 298 of the Jharkhand Service Code

The respondents were directed to: (a) recalculate and pay the differential gratuity amount strictly under the Payment of Gratuity Act, 1972, with statutory interest; and (b) recalculate and pay leave encashment for the full 300 days. The exercise must be completed within six weeks.