Gratuity entitlement of aided school teachers not under Gratuity Act but under State rules: Supreme Court

The Supreme Court has held that teachers employed in government-aided schools are not entitled to gratuity under the Payment of Gratuity Act, 1972, and that their retiral benefits would be governed by rules framed under Article 309 of the Constitution of India instead [Vikram Bhalchandra Ghongade v. The Headmistress, Girls High School and Junior College, Anji (Mothi) and ors]

A Bench of Justices Sudhanshu Dhulia and K Vinod Chandran passed the ruling in a case concerning an aided school teacher from Maharashtra who died while in service.

The top court ruled that her retiral benefits, payable to her nominee following her death, would be governed by the Maharashtra Civil Services (Pension) Rules, 1982 (rules framed under Article 309), not the Gratuity Act.

“Aided school teachers who are governed by the service conditions brought out by the State Government are also covered under the Rules of 1982,” the Court said.

It explained that while aided school teachers may not strictly be government employees, their positions are comparable for all practical purposes.

"A teacher in an aided school for all practical purposes is akin to a post under the State Government. Pertinent is the fact that the posts in aided schools are either sanctioned by the Government or approved in accordance with the Rules and pay and allowances are also paid by the Government. The aided school teachers are also entitled to some of the conditions of service as are applicable to Government teachers, with entitlement of pension, provident fund and gratuity as applicable, in accordance with the Rules brought out under Article 309 of the Constitution of India. Though strictly speaking the teachers may not be holding a post under the State Government, it is akin to a post under the State Government, at least for the monetary benefits of pay and allowances, while in service, as also pension and other benefits on retirement," the July 14 judgment stated.

The Court made the observation on a plea by Vikram Bhalchandra Ghongade (petitioner), whose mother was a teacher in an aided school. She passed away while in service. The petitioner, her son, claimed gratuity under the 1972 Act, but his claim was rejected by the controlling and appellate authorities, and the Bombay High Court.

The Court noted that the 1982 rules were more beneficial in cases where an employee dies in service.

“On death prior to five years of service, the benefits under the Rules of 1982 would be more beneficial to the dependents of the employees,” it said.

It proceeded to hold that aided school teachers and government school teachers are similarly placed when it comes to the payment of retirement benefits like gratuity.

“There cannot be a situation where the teachers of aided schools are entitled to a different computation of gratuity under the Act of 1972," it ruled.

Therefore, it concluded that the petitioner was entitled to make a claim for gratuity under the 1982 rules, and not the 1972 Act. It directed him to make an application for the same under these rules.

The Court also rejected the authorities’ insistence that the petitioner provide a legal heirship certificate before any gratuity claim by him could be allowed.

The authorities had raised such an issue since the deceased teacher's estranged husband was still alive, raising concerns about whether he was the rightful heir to her post-retirement benefits after her death.

The Court, however, dismissed these concerns on noting that the teacher had already nominated her son as her legal heir. The petitioner had also received provident fund dues as a nominee.

“We find absolutely no reason to direct the petitioner to produce a legal heirship certificate .. The nomination made by the deceased employee while she was alive only absolves the employer from finding out the different legal heirs for the purpose of making payments apportioning their separate shares,” the Court said.

However, the Court directed the petitioner to submit an indemnity affidavit to make good any duplicate claims.

“The petitioner shall approach the first respondent with an application for payment of DCRG in accordance with the Rules of 1982 along with an undertaking to indemnify the Government and the Society which runs the aided school from any claims made by any other legal heir, by a notarised affidavit. The same shall be forwarded to the Education Officer, who shall make the payment expeditiously,” it ordered.

Simple interest at 7 per cent per annum is also to be paid to the petitioner along with the gratuity payment, starting from one month after the date of the teacher’s (petitioner's mother) death until the date of actual payment.

The petition was allowed with these directions.

[Read Judgment]