Gratuity

Succession certificate for seeking family pension was allowed in favour of un-married sister of real deceased brother (Head Clerk serving with the Railways) ; she filed constitution petition, as time and again she approached the respondents /Railways for seeking family pension, but the needful had not been done

Contention of the respondents / Railways, relying on Rr. 4.7 & 4.8 of the West Pakistan Civil Services Pension Rules, 1963, was that the petitioner was not entitled to family pension as she was not nominated by the deceased to receive family pension

Held, that contention of the respondents was misplaced for the reason that the provisions of Rr. 4.7 & 4.8 of the West Pakistan Civil Services Pension Rules, 1963, dealt with payment of gratuity and for that the concept of "nomination" was available, whereas, R.4.10 of the Rules, 1963 was applicable in the present case, which specifically dealt with family pension and nomination by the deceased employee for receiving family pension was not required

Moreover, while promulgating R. 4.10 of the Rules, 1963, the competent authority had in fact added certain categories of the relatives to the definition of family as defined in Rr. 4.7 & 4.8 of the Rules, 1963 only for the payment of family pension (and not gratuity) and, thus, had amplified and extended the definition

High Court directed the respondents/Railways to pay the family pension of the deceased to the petitioner within a period of 30 days

Constitution petition, filed by un-married sister of deceased employee, was allowed, in circumstances.

Plaintiffs filed suit for declaration claiming that they, along with defendants, all being legal heirs of deceased, who had embraced martyrdom, were entitled to their shares in amounts on account of shahada package, gratuity and pension

Both trial court and appellate court dismissed the suit on ground that only widow and children were entitled to share in disputed amount

Contention raised by plaintiffs was that as Guardian Court had issued succession certificate in favour of said persons regarding amount left by deceased, which was lying with Bank, so they were also entitled to share disputed amount

Respondents took plea that under Rr.4.7 & 4.10 of West Pakistan Civil Servants Pension Rules, 1963, only wife and children of deceased civil servant were entitled to pension and gratuity, and that disputed amount on account of shahada package was in shape of grant which had been awarded after death of deceased and the same, therefore, could not be treated as inheritable by all legal heirs of deceased, except widow and children of deceased

Validity

Shahada package was service benefit and was not due to deceased during his life, and the same was in nature of grant payable after his death

Shahada package, therefore, could not be treated inheritable by all legal heirs, except widow and children, who were nearer beneficiaries and remained dependent mainly on deceased

Widow and children of deceased deserved to receive benefit of shahada package to exclusion of other legal heirs, including plaintiffs

Amount on account of shahada package , gratuity and pension were not legacy of deceased employee as he was not owner of the same during his life, and only widow and children were entitled to the same

Under Pension-cum-Gratuity Scheme, 1954, word 'family' had been defined as consisting of husband, widow and children, who were entitled to gratuity and pension in case of death of employee

Plaintiffs, as parents of deceased employee, were not entitled to get any share in shahada fund, pension and gratuity

No illegality, infirmity misreading or non-reading was pointed out in concurrent findings of courts below

Revision petition was dismissed in circumstances.

Expenses were held to be inadmissible deduction on the ground that taxpayer paid gratuity to its employees on which tax was not deducted at source

Taxpayer contended that Taxation Officer had wrongly found that payment of gratuity was made to employees but payment had been made to gratuity ,fund which was established by the company also approved 'by the Commissioner of Income Tax

Controversy whether the expense on account of gratuity was incurred by way of payment to approved gratuity fund or to employees could be resolved through further investigation

Orders of the authorities below were vacated by the Appellate Tribunal and case was remanded to Taxation Officer with the direction to ascertain the factual position in that .regard

If payment was found to have been made to approved gratuity fund same should be allowed as deduction.

First Appellate Authority had rightly disallowed the same which was confirmed by the Appellate Tribunal.

Indian Income Tax Act, 1961, S.40A.

S. O. 12 (6)-Gratuity-Calculation of-On basis of "wages" and not merely basic pay-Wages include all allowances except those excluded vide S. 2 (ii) of Payment of Wages Act, 1936-Puniab Road Transport Board rules providing payment of gratuity @ 45 days pay per year-Employee of P. R. T. B., held, entitled to gratuity @ 45 days instead of 20 days pay per year as provided in S. O. 12 (6)-Rules of P. R. T. B. providing admissibility of earned leave and sick leave encashment-Order of Labour Court allowing such encashment also upheld by Appellate Tribunal-Industrial Relations Ordinance (XXIII of 1969), Ss. 25-A & 38 (3).

For purpose of computing amount of gratuity, held, length of service was made basis and not factum of employee being confirmed one or temporary.

S. O. 12 (6) read with Employees' Cost of Living (Relief) Acts (I of 1974), S. 7 -Gratuity-Calculation of-Calculation of wages for purposes of gratuity on basis of basic pay plus cost of living allowance from date of employment of workman and not from 1st May, 1977 (date of amendment of S. 7 of Act of 1974)

Held, in accordance with S. O. 12 (6) of Ordinance.

Gratuity-Dismissal for misconduct-Demand for gratuity to dismissed workers-Dismissal for misconduct relating to misappropriation or embezzlement-Amount involved in such misconduct to be deducted and balance of gratuity admissible in terms of settlement, held, to be paid.

- Gratuity - Award of - Principles-Qualifying period for gratuity on termination of service by employer-Reduction from ten to eight years-Not justified without substantial reason.

Gratuity -Scheme Award, held, "arbitrary", where employer's balance-sheets did not show "inordinately large profits"-[Quetta Electric Supply Co. Workers' Union v. The Quetta Electric Supply Co. .1961 P L C 1247 ref.].

Gratuity Gratuity - Provident fund scheme-Both schemes cannot be run in Local Bodies which function for people and do not make huge profits on profit and loss basis.

Gratuity Gratuity-Enlargement of scheme-Refused due to financial is incapacity.

Not awarded due to bad financial position.

Principles-Scheme of gratuity for establishment on verge of closure-Unwarranted.

Gratuity Gratuity-Principles for award-Fixation of ceiling on amount of gratuity-Award of more than 15 days' wages per year of service

Not unjustified:

Whether financial position of previous employer can be taken into account-Matters to be taken into consideration.

Award-One month's basic salary for each year of service to permanent employee putting in 5 years service on termination which is not for misconduct-Creation of both benefits side by side when finances permit, ordered.

Gratuity Gratuity-Existence of Provident Fund Scheme-No bar to introduction of gratuity scheme-Onerous burden of gratuity scheme cannot be imposed on concern not in sound financial position.

Gratuity Gratuity-Depends upon employer's financial capacity Factory running at loss-Demand for gratuity refused.

Wage-structure-Dearness allowance-Gratuity-Determination and award-Principles-Long-range effect on financial position of employer-How far relevant-Probability of betterment of financial position by change of business-Cannot be basis of award Comparison with similar concerns-Relevant facts to be considered.

Gratuity Gratuity-Cement industry-Award of double benefit of provident fund and gratuity-Capacity of employer to bear burden Determination.

Gratuity Gratuity-Award-Financial position of employer-How far relevant-Industrial Tribunal finding that financial position would justify reduction of wages-Whether can increase liability for gratuity.