Prakash Krishna, J.
1. All the above five writ petitions were heard together and are being disposed of by a common judgement. The learned Counsel for the parties jointly agreed that common questions of law and facts are involved in these petitions. The writ petition No. 11523 of 2004 was considered by them as a leading case and the arguments were advanced with respect to the facts of this writ petition.
2. The Bank of Baroda, a nationalized bank, is engaged in the business of banking and is a lead bank in the State of Uttar Pradesh. Shri Bhola Prasad, the respondent No. 3, herein was the erstwhile employee of the Banaras State Bank Limited. Under a scheme of amalgamation, the Central Government Ministry of Finance, Department of Economic Affairs provided amalgamation of Banaras State Bank Limited with the Bank of Baroda. The said scheme provides that the Banaras State Bank Limited shall be amalgamated w.e.f. 20th of July, 2002, the date specified in the official gazette under the amalgamation scheme called as Banaras State Bank Limited (Amalgamation with Bank of Baroda) Scheme 2002. 22nd day of January, 2002 was the date fixed of moratorium under the amalgamation scheme. The employees of the erstwhile Banaras State Bank Limited (hereinafter referred to as EBSBL) were taken over by the Bank of Baroda as per scheme provided therein after receipt of their acceptance for continuance in service of Bank of Baroda. Clause 8(1) of the amalgamation scheme provides the terms and conditions of continuation of services of the employees of EBSBL. Under Sub-clause 3 of Clause 8 a period of three years time has been provided for to the Bank of Baroda to pay or grant to the employees of EBSBL whose services are continue in the Bank of Baroda the same remuneration and same terms and conditions of service as are applicable to the employees of corresponding rank or status of Bank of Baroda.
3. The employees of EBSBL were entitled to get the gratuity as per the Scheme. In the present case, the respondent Bhola Prasad, attained the age of superannuation on 31st of August, 2002 and was paid the gratuity amount on 31st of November, 2003. According to him, he was entitled for more amount of gratuity than the amount actually paid, therefore, he served a notice dated 20th of March, 2003 to the petitioner bank to pay the shortfall, failing which he filed an application before the Controlling Authority, respondent No. 1, appointed under the Payment of Gratuity Act, 1972, claiming that he is entitled to a sum of Rs. 3,41,220.44, as difference amount amounting to Rs. 1,35,140.44 towards the gratuity was claimed.
4. In response to the notice issued by the Controlling Authority, the petitioner bank came up with the case that the gratuity amount paid by them to the employee is correct. It was pleaded that the Payment of Gratuity Act is not applicable to the EBSBL employees and they were entitled to get the gratuity amount calculated as per the Group Gratuity Life Assurance Scheme (hereinafter called as Scheme) applicable to the employees of Banaras State Bank Limited. Shn Bhola Prasad, the respondent No. 3, attained the age of superannuation on 31st of August, 2002 i.e. before three years period as provided for in Clause 8(1) of the Amalgamation Scheme, shall continue to be governed by the service conditions as applicable to the employees of the Banaras State Bank Limited. He was not absorbed in the Bank of Baroda and before he could be absorbed he reached the age of superannuation. The payment of gratuity as per the Scheme was sought to be justified by them.
5. The Controlling Authority as well as the Appellate Authority appointed under the Payment of Gratuity Act, found that the provisions of the Payment of Gratuity Act are clearly attracted. It has also been found that the petitioner Bank has inaccurately calculated the amount of gratuity as the wages include D.A. also even in the Scheme. The petitioner Bank, it was held, wrongly left out from consideration the amount of D.A. payable to the employee. The provisions of the Payment of Gratuity Act are more beneficial than the Scheme. The Central Government has not issued any exemption notification exempting the operation of the Payment of Gratuity Act to the petitioner Bank.
6. Heard Shri V.B. Singh, the learned senior Counsel along with Shri Vijai Sinha, the learned Counsel for the petitioner bank and Shri Ravi Kant, senior advocate, along with Shri J. Nagar, the learned Counsel for the contesting respondent No. 3/employee.
7. The only pointed mooted by the learned senior Counsel for the petitioner is that on a correct interpretation of Clause 8 of the amalgamation scheme, the employees of EBSBL who have not completed three years in service after the date of amalgamation will continue to be governed by the service conditions as applicable to the employees of the Banaras State-Bank Limited (hereinafter referred to as BSBL). In other words, he submits that unless an employee of BSBL is absorbed in the Bank of Baroda for which three years period has been provided for in the amalgamation scheme, the employee shall continue to be treated so far as service conditions is concerned, as employee of BSBL. In the case on hand, since the employee reached the age of superannuation, before he could be absorbed, the provisions of Payment of Gratuity Act shall not apply and therefore, the gratuity amount paid to the employee as per the Scheme which was prevalent in BSBL is perfectly justified.
8. Shri Ravi Kant, the learned senior Counsel for the employee, on the other hand, submits that Section 14 of the Payment of Gratuity Act gives overriding effect to the provisions of the Act over other enactments, statutes and the instruments. The D.A. amount is part of the wages as defined under the Act and or the 'wages' include 'D.A.' also. To put it in simple terms, for the purposes of calculation of gratuity amount, the amount paid to the employee towards the D.A. is also to be taken into account.
9. Considered the respective submissions of the learned Counsel for the parties and perused the record. Evidently, the controversy centres round the Clause 8 of the amalgamation scheme and it is apt to reproduce it:
Rights and obligations of the Employees of transferor Bank
8. Continuation of services of the employees:
(1) All the employees of transferor bank shall continue in service and be deemed to have been appointed in the transferee bank at the same remuneration and on the same terms and conditions of service, as were applicable to such employees immediately before the close of business on the 22 January, 2002.
(2) ...
(3) The transferee bank shall, on the expiry of a period not longer than three years from the date on which the scheme is sanctioned, pay or grant to the employees of the transferor bank whose services are continued in the transferee bank under sub paragraph (1) the same remuneration and the same terms and conditions of service as are applicable to the employees of corresponding rank or status of the transferee bank subject to the qualifications and experience of the said employees of the transferee bank;
Provided....
The submission of the learned Counsel for the petitioner is that under Sub-clause (3) of Clause 8 a three years holiday period has been provided for to the petitioner Bank to pay or grant to the employees of BSBL whose services are continued in petitioner bank, the same remuneration and accord the same terms and conditions of service as are applicable to the employees of the Bank of Baroda of corresponding rank or status. The said scheme came into force w.e.f. 20th July, 2002. The employee reached the age of superannuation before that i.e. on 31st of August, 2002 i.e. before the expiry of the aforesaid three years period. The said argument is although attractive but on a deeper scrutiny does not hold water, keeping in view the provisions of the Act. It is expedient to have bird's eye of view of different provisions of the Act. Section 2(h) defines 'wages' which means all emoluments which are earned by the employee while on duty or on leave in accordance with the terms and conditions of his employment and includes besides other things the D.A. allowance. Section 4 is the charging Section and it provides when gratuity shall be payable to an employee. An employee on his superannuation is entitled to gratuity. Sub-section (2) thereof provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to the employee at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned. Sub-section (5) is material for the present purposes. It reads as follows:
(5). Nothing in this Section shall affect the right of an employee to receive better term of gratuity under any award or agreement or contract with the employer.
Sub-section (5) of Section 4 is an exception to the main Section under which gratuity is payable to the employee. In all welfare legislatures, the amount payable to the employees or labourers is fixed at the minimum rate and there will not be any prohibition for the employer to give better perquisites or amount than what is fixed under law. The employer, who is more concerned with the industrial peace and better employer employee relations, can always give benefit to the employees irrespective of any statutory minimum prescribed under law in respect of such reliefs vide DTC Retired Employees' Association and Ors. v. Delhi Transport Corporation and Ors. : (2001)IILLJ258SC .
10. On a plain and simple reading of Sub-section (5) of Section 4, the intention of legislature is axiomatic. It is evident that the legislature intended that more beneficial scheme of payment of gratuity would be enforced notwithstanding the provisions of Gratuity Act or the scheme either. The above view is further fortified and finds support from Section 5 which deals with the power to exempt. Under the said section, power has been conferred on the appropriate government to issue exemption notification exempting any employee or class of employees etc. if in the opinion of the appropriate government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under the Act. The scheme envisaged by the Gratuity Act secures the minimum for employee in that behalf and express provisions are found in the Act under which better terms of gratuity is already existing, are not only preserved but better terms could be conferred on the employee in future vide Workmen of Metro Theatre Ltd. Bombay v. Metro Theatre Ltd. Bombay : (1981)IILLJ348SC .
11. The next provision which is material is Section 14 of the Act which provides an overriding effect over other enactments etc. For the sake of convenience the said Section is reproduced below:
14. Act to override other enactments, etc.- The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.
12. In view of the above quoted section, it is clear that the provisions of the Act will prevail over the other enactments, instruments or contract. Strikingly, it provides overriding effect to 'instruments' or 'contract' also. It has been so held that the expression 'instrument' in Section 14 covers trust deed vide Som Prakash Rekhi v. Union of India . Similar view has been taken in Calcutta Dock Labour Board v. Sandhya Mitra : (1993)IIILLJ412SC .
13. Having set out the scheme of the Act, reverting back to the facts of the present case, the argument of the learned senior Counsel for the petitioner that the employee herein will not be entitled to get the gratuity as per the provisions of the Gratuity Act, requires consideration. The Controlling Authority accepted the contention of the employee that while calculating the amount of gratuity, the portion of DA amounting to Rs. 4,703.69 should be included in wages. It has also been found that 'the provision under the EBSBL scheme with regard to the definition of the wages is similar to the provision under Section 2(s) of Payment of Gratuity Act, 1972.' Resultantly, in any case under the Scheme as well as under the Act, D.A. component is part of 'wages'.
14. The petitioner bank did not include the D.A. component while calculating the gratuity amount amounting to Rs. 2,680/-. Thus, it is established that the petitioner bank wrongly and inaccurately calculated the gratuity amount payable to the employee by excluding the deamess allowance (D.A.).
15. At the cost of repetition, it may be added that the DA amount was also required to be taken into consideration while calculating the gratuity amount even under the Scheme which was not done. It may also be brought on record that the learned senior Counsel for the petitioner during the course of his argument did not dispute or challenge the said part of the order of the authorities below. Nor did he challenge the determining rate of 15 days of wages for the purposes of calculation of the gratuity payable to the employee. The said rate has been determined by the authorities below as per the provisions under Section 4 of the Act. This being the position, obviously there is a shortfall in the amount paid to the employee as gratuity.
16. The only point mooted by the learned senior Counsel for the petitioner was the inapplicability of the Act in the case of the employee, the respondent No. 3.
17. A conjoint reading of Section 4(5) and 14 of the Act makes it clear that the provisions of the Payment of Gratuity Act will be attracted ipso facto in the absence of any exemption notification and it will have overriding effect over any Scheme including the present one which is less favourable to the employee as also on Amalgamation Scheme. The petitioner bank is a nationalized bank and is vested with Central Government under the Banking Regulation Act, 1949 and under the Banking Company (Acquisition and Transfer) Undertaking, 1970, as per para 2 of the writ petition. It is expected from it that it will act as a role model employer. Under Clause 8(3), the maximum period of three years has been provided, as a transitory period, but it does not mean that the respondent No. 3 has not retired as an employee of the petitioner bank. In the absence of any contrary order, the employee is deemed to have been absorbed in the petitioner bank.
18. No other point was pressed. There is no merit in the writ petition. The writ petition is liable to be dismissed.
19. In para 28 of the writ petition it has been stated that entire amount of gratuity is in deposit. The petitioners on 22nd of March, 2004 obtained a stay order staying the operation of the impugned orders, annexures 6 and 10 to the writ petition. Consequently, the employee who has already retired could not reap the fruits of the impugned orders during all this period and has suffered loss and damage. It is desirable that the petitioner bank should be asked to pay interest at simple rate of 12 per cent per annum on the said amount from the date of deposit to the date of actual payment to compensate the contesting respondent No. 3. It has been so held in various judicial pronouncements that a citizen is entitled to payment of interest due to delay even if there is any statutory provision in this regard.
20. In view of the above discussion, all the writ petitions are hereby dismissed with cost of Rs. 5,000/- (Rupees Five Thousands only) in each case, payable to each contesting private respondent, by the petitioner bank.