“Premature Release on Compassionate Grounds Is Resignation for All Practical Purposes”: Madras High Court Sets Aside Order Granting Gratuity to Ex-Coast Guard Officer
Isabella Mariam
A Division Bench of the Madras High Court comprising Justice S.S. Sundar and Justice R. Hemalatha set aside the order of the Single Judge that had allowed gratuity benefits to a Coast Guard officer prematurely released from service on compassionate grounds. The Bench clarified that the officer was governed by the Central Civil Services (Pension) Rules, 1972, and the premature release would be treated as resignation, resulting in forfeiture of past services and disentitlement to gratuity under both CCS Rules and the Payment of Gratuity Act, 1972.
The respondent, an ex-Commandant in the Indian Coast Guard, had filed a writ petition seeking disbursement of gratuity after his premature release on compassionate grounds. Having joined the Coast Guard in August 1983, he served for over 16 years in various posts including Staff Pilot, Squadron Commander, and Commanding Officer. Recognized for his exemplary service, he was conferred awards such as the DGCG Commendation, Tatrakshak Medal, Proficiency Award, and Safety Award.
Owing to personal family circumstances, the respondent requested a transfer to Chennai which was not granted. Consequently, he sought premature release from service. His request was approved by the Government, and he was discharged with effect from 01.07.1999. However, his subsequent request for gratuity was rejected by the Coast Guard in 2000 and again in 2009.
The Coast Guard authorities cited Rule 27 of the Coast Guard (General) Rules, 1986, and Rule 26 of CCS (Pension) Rules, 1972. It was communicated that the officer's premature discharge, though on compassionate grounds, would be treated as resignation. As per Rule 26, resignation entails forfeiture of past service and non-entitlement to gratuity.
The officer challenged the rejection of gratuity, contending that he had contributed to the gratuity fund and completed more than the required five years of service under Section 4(1) of the Payment of Gratuity Act, 1972. A learned Single Judge accepted this argument and directed gratuity payment.
In response, the Union of India filed a writ appeal before the Division Bench. The Additional Solicitor General submitted that the respondent, as a member of the Coast Guard governed by CCS (Pension) Rules, 1972, could not invoke the Payment of Gratuity Act, 1972. Reference was made to Section 2(e) of the Payment of Gratuity Act, which excludes government servants governed by other gratuity-paying rules.
The respondent’s counsel attempted to sustain the Single Judge’s order by reiterating the respondent's long service, contributions, and circumstances leading to his release.
The Division Bench recorded that the learned Single Judge's reliance on Section 4(1) of the Payment of Gratuity Act, 1972, was misplaced since the respondent did not fall under the definition of "employee" under Section 2(e) of the Act. The Court observed:
"...does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity."
The Bench further noted that Coast Guard officers are governed by CCS (Pension) Rules, which contain specific provisions for gratuity, thereby excluding applicability of the Payment of Gratuity Act. It was observed:
"Under CCS (Pension) Rules, every Government servant who is covered by CCS (Pension) Rules and who has completed 5 years of qualifying service, and who is eligible for pension under CCS (Pension) Rules, is eligible for gratuity."
However, in the present case, Rule 26 of CCS (Pension) Rules applied as the respondent’s discharge was treated as resignation. Rule 26(1) clearly provides:
"Resignation from a service or a post, unless it is allowed to be withdrawn in the public interest by the appointing authority, entails forfeiture of past service."
The Court rejected the contention that premature release is distinct from resignation. Referring to Rule 27 of the Coast Guard (General) Rules, 1986, the Bench pointed out that premature release under compassionate grounds was within the discretionary powers of the Government and substantively similar to resignation in effect.
The judgment also stated:
"The term 'premature release' and 'resignation' are not specifically differentiated under the Coast Guard (General) Rules, 1986, for the purpose of gratuity... Rule 26 of CCS (Pension) Rules cannot be excluded from application in the case of the respondent/writ petitioner."
Finally, the Bench clarified that Section 14 of the Payment of Gratuity Act, which gives it overriding effect, does not come into play since the respondent is excluded from the Act’s coverage by virtue of Section 2(e).
The Division Bench allowed the Writ Appeal, stating:
"This Writ Appeal is allowed and the order of the learned Single Judge, dated 10.01.2022, made in W.P.No.14440 of 2009, is set aside. Consequently, the writ petition in W.P.No.14440 of 2009 stands dismissed. Connected miscellaneous petitions are closed."
Advocates Representing the Parties
For the Appellant: ARL Sundaresan, Additional Solicitor General, assisted by J. Madana Gopal Rao, Senior Panel Counsel
For the Respondent: Rajagopal, Senior Counsel for Vivekanandh
Case Title: The Director General of Coast Guard v. Capt. RC Rajan (Ex. Comdt 0080-E)
Case Number: W.A. No. 1173 of 2022
Bench: Justice S.S. Sundar and Justice R. Hemalatha
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