ORDER
S.P. Khare, J.
1. This is a writ petition under Article 226 of the Constitution of India for a direction to the respondents to pay gratuity to the petitioner as per 'Executive Cadre Retirement Gratuity Scheme, 1974' on the death of her husband.
2. It is not in dispute that the petitioner's husband Hariom Upadhyay was an employee of respondent No. 2 South Eastern Coalfields Limited in Umaria Sub-area. He was appointed on December 6, 1991 and he was in the executive cadre. He died in harness on April 16, 2001. He was drawing emoluments of Rs. 21,377/- per month at the time of his death. The petitioner has been given an amount of Rs. 1,00,923/- as gratuity as per Payment of Gratuity Act, 1972 as amended in 1994 (hereinafter to be referred to as 'the Act'). There was a Scheme known as 'Executive Cadre Retirement Gratuity Scheme, 1974' (hereinafter to be referred to as 'the Scheme'). This Scheme was introduced in the year 1974 for making provision for payment of gratuity to the executives of the Coal India Limited and its subsidiary the respondent No. 2 as at that time they were not covered by the definition of 'employee' given in Section 2(e) of the Act. As per amendment in this definition in the year 1994 any person 'employed in a managerial or administrative capacity' was also included therein. The result was that the persons in executive cadre also came within its ambit and they became entitled to gratuity under the Act. The Scheme was therefore withdrawn as per memorandum dated January 14, 1998. According to the Scheme in case of death of an employee working in the executive cadre the amount of gratuity that was payable to his heirs was twelve months emoluments if he had completed five years of service. As per provisions of the Act, the amount of gratuity payable in such a case is much less than what was payable under the Scheme. But on retirement on attaining the age of superannuation the maximum amount of gratuity which was payable as per Scheme was rupees one lac but under the Act the ceiling on the amount of gratuity payable on retirement is rupees three and half lacs.
3. The petitioner's case is that the Scheme was prevalent at the time of appointment of the petitioner's husband in the year 1991 and therefore it became one of the terms of the 'contract' between him and the company that the amount of gratuity payable in the event of his death would be as per provisions of the Scheme and, therefore, the petitioner is entitled to gratuity as per Scheme which was more beneficial. It is pointed out that Section 4(5) of the Act provides that the employee is entitled to 'better terms of gratuity under any contract with the employer'. It is contended that the Scheme which was more beneficial could not be revoked in the year 1998.
4. The case of the respondents is that the Scheme was withdrawn because the executive cadre employees also came to be covered by the Act in the year 1994. It is submitted that the provisions relating to gratuity payable under the Act are more beneficial in many respects. It is denied that the Scheme was a part of the contract between the employees and the Company. There was no illegality in withdrawing the Scheme in the year 1998.
5. After hearing the learned counsel for both the sides this Court is of the opinion that the petitioner is not entitled to gratuity as per provisions of the Scheme which was withdrawn long before the death of her husband. The Scheme was not floated under any statutory provision. It was framed as a matter of policy in exercise of executive power of the Company to provide gratuity to the executive cadre employees who were not covered by the Act at that time. It was not a part of any agreement or contract with the employees. Section 4(5) of the Act provides: 'Nothing in this Section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer'. There was no agreement or contract between the parties in respect of the amount of gratuity. The executive cadre employees were given the benefit of the Scheme because of the status which they were holding in the Company and not under or in pursuance of any agreement or contract. There is no law which debarred the Company from withdrawing the Scheme after the executive cadre employees were covered by the provisions of the Act. It cannot be disputed that the provisions of the Act are in certain respects more beneficial to such employees. Section 4(5) of the Act is not attracted m the present case firstly because the Scheme was not a part of the contract between the employees and the employer and secondly because the Scheme could be legally withdrawn and it was not in force at the time the gratuity became payable to the petitioner. The State has a right to change its policy from time to time unless it is in conflict with any law. The Supreme Court in A.S. Sangwan v. Union of India, AIR 1981 SC 1545 : 1980 Supp SCC 559 held that a policy once formulated with regard to promotion of employees in a cadre of defence forces by the Union of India is not good for ever, it is perfectly within the competence of the Union to change it, re-change it, adjust it and readjust it according to the compulsions of circumstances and the imperatives of material considerations. There is no bar to its changing the policy formulated earlier if there are good and weighty reasons for doing so. It is entirely within the reasonable discretion of the Union of India. It may stick to the earlier policy or give it up but if it does change its policy it must do so fairly and should not give the impression that it is acting by any ulterior criteria or arbitrarily. Whatever, policy is made subsequently should be done fairly and made known to those concerned. The same view has been taken in State of Punjab v. Ramlubhaya Bagga, AIR 1998 SC 1703 : 1998 (4) SCC 117 : where it has been observed that the right of the State to change its policy from time to time under the changing circumstances is neither challenged nor could it be.
6. The petition is dismissed.