/2022 INSC 0268/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2260 OF 2022
(Arising out of Special Leave Petition(C) NO. 26844 OF 2016)
CHAIRMAN­CUM­MANAGING DIRECTOR 
FERTILIZER CORPORATION OF INDIA LTD. 
AND ANR.       …APPELLANT(S)
VERSUS
RAJESH CHANDRA SHRIVASTAVA AND 
ORS.             ...RESPONDENT(S)
WITH
Civil Appeal No. 2275 of 2022
(@ SLP(C) No. 35008/2016)
Civil Appeal No. 2305 of 2022
(@ SLP(C) No. 35713/2016)
Civil Appeal No. 2306 of 2022
(@ SLP(C) No. 35737/2016)
Civil Appeal No. 2310 of 2022
(@ SLP(C) No. 35731/2016)
Civil Appeal No. 2357 of 2022
(@  SLP(C) No. 797/2017)
Civil Appeal No. 2311 of 2022
(@ SLP(C) No. 35735/2016)
Civil Appeal No. 2313 of 2022
(@ SLP(C) No. 35732/2016)
1

Civil Appeal No. 2315 of 2022
(@ SLP(C) No. 35736/2016)
Civil Appeal No. 2318 of 2022
(@ SLP(C) No. 952/2017)
Civil Appeal No. 2319 of 2022
(@ SLP(C) No. 456/2017)
Civil Appeal No. 2320 of 2022
(@ SLP(C) No. 435/2017)
Civil Appeal No. 2321 of 2022
(@ SLP(C) No. 443/2017)
Civil Appeal No. 2322 of 2022
(@ SLP(C) No. 434/2017)
Civil Appeal No. 2323 of 2022
(@ SLP(C) No. 437/2017)
Civil Appeal No. 2324 of 2022
(@ SLP(C) No. 438/2017)
Civil Appeal No. 2325 of 2022
(@ SLP(C) No. 439/2017)
Civil Appeal No. 2326 of 2022
(@ SLP(C) No. 446/2017)
Civil Appeal No. 2327 of 2022
(@ SLP(C) No. 454/2017)
Civil Appeal No. 2328 of 2022
(@ SLP(C) No. 444/2017)
Civil Appeal No. 2329 of 2022
(@ SLP(C) No. 436/2017)
Civil Appeal No. 2330 of 2022
(@ SLP(C) No. 445/2017)
Civil Appeal No. 2331 of 2022
(@ SLP(C) No. 457/2017)
Civil Appeal No. 2332 of 2022
(@ SLP(C) No. 452/2017)
Civil Appeal No. 2333 of 2022
(@ SLP(C) No. 442/2017)
2

Civil Appeal No. 2334 of 2022
(@ SLP(C) No. 448/2017)
Civil Appeal No. 2335 of 2022
(@ SLP(C) No. 462/2017)
Civil Appeal No. 2336 of 2022
(@ SLP(C) No. 482/2017)
Civil Appeal No. 2337 of 2022
(@ SLP(C) No. 476/2017)
Civil Appeal No. 2338 of 2022
(@ SLP(C) No. 447/2017)
Civil Appeal No. 2339 of 2022
(@ SLP(C) No. 459/2017)
Civil Appeal No. 2340 of 2022
(@ SLP(C) No. 460/2017)
Civil Appeal No. 2341 of 2022
(@  SLP(C) No. 471/2017)
Civil Appeal No. 2342 of 2022
(@ SLP(C) No. 450/2017)
Civil Appeal No. 2343 of 2022
(@ SLP(C) No. 458/2017)
Civil Appeal No. 2344 of 2022
(@ SLP(C) No. 466/2017)
Civil Appeal No. 2345 of 2022
(@ SLP(C) No. 472/2017)
Civil Appeal No. 2346 of 2022
(@ SLP(C) No. 477/2017)
Civil Appeal No. 2347 of 2022
(@ SLP(C) No. 453/2017)
Civil Appeal No. 2348 of 2022
(@ SLP(C) No. 461/2017)
Civil Appeal No. 2349 of 2022
(@ SLP(C) No. 481/2017)
Civil Appeal No. 2350 of 2022
(@ SLP(C) No. 480/2017)
Civil Appeal No. 2351 of 2022
3

(@ SLP(C) No. 464/2017)
Civil Appeal No. 2352 of 2022
(@ SLP(C) No. 474/2017)
Civil Appeal No. 2353 of 2022
(@ SLP(C) No. 473/2017)
Civil Appeal No. 2354 of 2022
(@ SLP(C) No. 479/2017)
Civil Appeal No. 2355 of 2022
(@ SLP(C) No. 470/2017)
Civil Appeal No. 2356 of 2022
(@ SLP(C) No. 475/2017)
Civil Appeal Nos. 2358­2359 of 2022
(@ SLP(C) Nos. 22174­22175/2018)
Civil Appeal No. 2317 of 2022
(@ SLP(C) No. 35728/2016)
Civil Appeal No. 2262 of 2022
(@ SLP(C) No. 31207/2016)
Civil Appeal No. 2269 of 2022
(@ SLP(C) No. 31475/2016)
Civil Appeal No. 2268 of 2022
(@ SLP(C) No. 31408/2016)
Civil Appeal No. 2264 of 2022
(@ SLP(C) No. 31264/2016)
Civil Appeal No. 2263 of 2022
(@ SLP(C) No. 31256/2016)
Civil Appeal No. 2267 of 2022
(@ SLP(C) No. 31374/2016)
Civil Appeal No. 2265 of 2022
(@ SLP(C) No. 31319/2016)
Civil Appeal No. 2261 of 2022
(@ SLP(C) No. 31156/2016)
Civil Appeal No. 2266 of 2022
(@ SLP(C) No. 31354/2016)
Civil Appeal No. 2270 of 2022
(@ SLP(C) No. 31987/2016)
4

Civil Appeal No. 2271 of 2022
(@ SLP(C) No. 33083/2016)
Civil Appeal No. 2272 of 2022
(@ SLP(C) No. 33085/2016)
Civil Appeal No. 2273 of 2022
(@ SLP(C) No. 33084/2016)
Civil Appeal No. 2274 of 2022
(@ SLP(C) No. 33086/2016)
Civil Appeal No. 2276 of 2022
(@ SLP(C) No. 35015/2016)
Civil Appeal No. 2285 of 2022
(@ SLP(C) No. 35009/2016)
Civil Appeal No. 2286 of 2022
(@ SLP(C) No. 35021/2016)
Civil Appeal No. 2287 of 2022
(@ SLP(C) No. 35011/2016)
Civil Appeal No. 2288 of 2022
(@ SLP(C) No. 35010/2016)
Civil Appeal No. 2289 of 2022
(@ SLP(C) No. 35023/2016)
Civil Appeal No. 2290 of 2022
(@ SLP(C) No. 35022/2016)
Civil Appeal No. 2291 of 2022
(@ SLP(C) No. 35013/2016)
Civil Appeal No. 2284 of 2022
(@ SLP(C) No. 35047/2016)
Civil Appeal No. 2292 of 2022
(@ SLP(C) No. 35025/2016)
Civil Appeal No. 2280 of 2022
(@ SLP(C) No. 35031/2016)
Civil Appeal No. 2278 of 2022
(@ SLP(C) No. 35019/2016)
Civil Appeal No. 2293 of 2022
(@ SLP(C) No. 35048/2016)
Civil Appeal No. 2294 of 2022
5

(@ SLP(C) No. 35020/2016)
Civil Appeal No. 2277 of 2022
(@ SLP(C) No. 35017/2016)
Civil Appeal No.2283 of 2022
(@ SLP(C) No. 35043/2016)
Civil Appeal No. 2295 of 2022
(@ SLP(C) No. 35032/2016)
Civil Appeal No. 2282 of 2022
(@ SLP(C) No. 35041/2016)
Civil Appeal No. 2279 of 2022
(@ SLP(C) No. 35029/2016)
Civil Appeal No. 2296 of 2022
(@ SLP(C) No. 35039/2016)
Civil Appeal No. 2297 of 2022
(@ SLP(C) No. 35034/2016)
Civil Appeal No. 2298 of 2022
(@ SLP(C) No. 35027/2016)
Civil Appeal No. 2299 of 2022
(@ SLP(C) No. 35037/2016)
Civil Appeal No. 2300 of 2022
(@ SLP(C) No. 35038/2016)
Civil Appeal No. 2281 of 2022
(@ SLP(C) No. 35035/2016)
Civil Appeal No. 2301 of 2022
(@ SLP(C) No. 35033/2016)
Civil Appeal No. 2303 of 2022
(@ SLP(C) No. 35718/2016)
Civil Appeal No. 2307 of 2022
(@ SLP(C) No. 35723/2016)
Civil Appeal No. 2302 of 2022
(@ SLP(C) No. 35716/2016)          
Civil Appeal No. 2308 of 2022
SLP(C) No. 35719/2016
Civil Appeal No. 2309 of 2022
(@ SLP(C) No. 35721/2016)
6

Civil Appeal No. 2312 of 2022
(@ SLP(C) No. 35724/2016)
Civil Appeal No. 2304 of 2022
(@ SLP(C) No. 35727/2016)
Civil Appeal No. 2314 of 2022
(@ SLP(C) No. 35720/2016)
Civil Appeal No. 2316 of 2022
(@ SLP(C) No. 35725/2016)
J U D G M E N T
V. RAMASUBRAMANIAN, J.
1. The common question that arises for consideration in this batch
of  appeals,  is as  to   whether  an   ad  hoc   payment  made to  the  workers
pursuant   to   the   interim   orders   passed   by   this   Court   in   a   previous
round   of   litigation   could   form   part   of   “wages”   within   the   meaning   of
the expression under Section 2(s) of the Payment of Gratuity Act, 1972
(hereinafter   referred   to   as   the   “Act ”),   for   the   purpose   of   calculating
gratuity.
2. We have heard learned counsel for the parties.
3. The scales of pay of the employees of public sector undertakings
were revised w.e.f. 01.01.1992. When the benefit of such revision was
not made available to the employees of Fertiliser Corporation of India
7

Limited and Hindustan Fertiliser Corporation Limited, their employees
moved writ petitions in various High Courts, in the year 1996.
4. At  the  instance  of the  Union  of India,  the writ  petitions  pending
on the file of various High Courts were transferred to this Court. By an
interim order dated 18.08.2000, this Court directed an  ad hoc monthly
payment   of   Rs.1500/­,   Rs.1000/­,   Rs.750/­   and   Rs.500/­,
respectively   to   four   different   categories   of   employees,   as   an   interim
measure, subject to the final outcome of the writ petitions which stood
transferred   to   this   Court.   The   said   interim   order   dated   18.08.2000
reads as follows:­
“Having   heard   learned   Solicitor   General   for   the   applicant­
Union  of  India  and  Learned  Senior  Counsel,  Mr.  Sanyal,  for
the   contesting   Respondents,   purely   as   an   adhoc   measure
and   without   prejudice   to   the   rights   and   contentions   of   the
parties   in   the   main   matter,   we   deem   it   fit   in   the   interest   of
justice to modify our order dated 19.01.2000 to the following
effect:
(i) The   authorities   shall   pay   as   an   adhoc   measure   and  
on   account   Rs.   1,500/­   to   Class­I   employees;   Rs.  
1,000/­   to   Class­II   employees;   Rs.   750/­   to   Class­III  
employees;   Rs.   500/­   to   Class­IV   employees  
consisting   of   various   categories   in   each   of   the  
Classes;   per   month   with   effect   from___.   This  
payment   will   be   without   prejudice   to   the   rights   and  
contentions of the parties in the pending matters.
(ii) We   make   it   clear   that   this   order   will   not   affect  
whatever   payment   by   way   of   HRA   is   being   released  
8

or   was   released   by   the   authorities   to   the   employees  
concerned.
(iii) The direction about payments as earlier issued by us  
on   19.04.2000   will   stand   modified   by   the   present  
order.
(iv) According   to   this   order   all   arrears   with   effect   from  
01.04.2000   to   31.07.2000   will   be   cleared   within   ten  
weeks   from   today   and   the   current   payment   he   made  
with   effect   from   01.08.2000   along   with   the   salary  
payable for the month of August, 2000.
(v)  Future   payments   shall   accordingly   be   made   from  
month   to   month   regularly   along   with   usual   salaries  
payable to them. 
This   order   is   passed   purely   as   an   ad   hoc   measure   and   will
not   come   in   the   way   of   the   ultimate   decision   of   this   Court.
This   order   will   also   not   be   treated   as   a   precedent   in   any
matter   in   view   of   the   special   facts   of   the   present   case.   We
express  no  opinion  about   the nature  of  the  order   passed  by
learned   Single   Judge   of   the   High   Court.   That   question   will
abide   by   the   decision   in   the   main   matter.   In   view   of   the
present order, I.A.S. are disposed off…”
5. In the year 2002, the Government of India ordered the closure of
the fertiliser units of these public sector undertakings and introduced
a Voluntary Separation Scheme (for short “ the Scheme ”). According to
the   Management   of   these   companies,   5675   out   of   5712   employees   of
Fertiliser   Corporation  opted  to  go  out   under  the   Scheme.  Due  to  this
development,   the   writ   petitions   which   got   transferred   to   this   Court
were   eventually   dismissed   by   a   final   order   dated   25.04.2003.   In   the
said   final   order,   this   Court   recorded   that   economic   viability   or   the
9

financial capacity of the employer is an important factor which cannot
be   ignored   while   fixing   the   wage   structure   and   that   the   materials   on
record clearly revealed that both these companies were suffering heavy
losses for several years. It was also recorded in the final order passed
by   this   Court   that   the   interim   relief   was   purely   an   ad   hoc   measure.
The relevant portion of the final order of this Court dated 25.04.2003
reads as follows:­
“…The   order   passed   by   this   Court   on   19.04.2000
clearly   recorded   that   a   limited   relief   to   all   the
employees   of   the   two   companies   was   being   granted
purely as ad hoc measure and without prejudice to the
rights   and   contentions   of   all   concerned.     This   was
reiterated   in   the   subsequent   order   dated   18.08.2000
when   it   was   said   that   the   order   was   being   passed
purely as ad hoc measure and will not come in the way
of   the   ultimate   decision   of   the   Court.     The   principal
relief   claimed   by   the   petitioners   is   against   Union   of
India and Secretary, Department of Public Enterprises
(respondent nos. 3 and 4) as it is they who have issued
the   impugned   memorandum   dated   19.07.1995   which
places   embargo   upon   the   revision   of   pay   scale   of
employees   of   sick   PSUs   registered   with   BIFR.
Factually there being  no compromise or settlement on
behalf   of   respondent   nos.   3   and   4   for   payment   of
revised   salary   as   they   had   never   agreed   to   do   so   and
the   orders   passed   by   this   Court   on   19.04.2000   and
18.08.2000   having   clearly   indicated   that   they   were
being  passed  by  way  of ad hoc  measure  and  were not
to   come   in   any   way   in   the   ultimate   decision   of   the
case,   it   is   not   possible   to   hold   that   there   was   any
compromise   or   settlement   at   any   earlier   state   which
entitled the petitioners to get revised salary…”
10

6. Once   the   curtain   was   finally   drawn   on   their   very   employment,
the   employees   started   filing   applications   before   the   Controlling
Authority   under   the   Act.   In   their   applications   before   the   Controlling
Authority, the employees included the  ad hoc  payment made pursuant
to the interim orders of this Court, as part of the wages.
7. The   Controlling   Authority   started   passing   orders   in   the
applications   filed   by   the   employees   individually,   treating   the   ad   hoc
payment as part of the wages.
8. One of the orders so passed by  the Controlling Authority  was in
respect of an employee by name Shri Kashi Prasad  Tripathi.
9. Since the orders of the Controlling Authority were contrary to the
interim   orders   as   well   as   the   final   orders   passed   by   this   Court,   the
Management   of   these   companies   moved   an   application   before   this
Court for clarification/modification of the order. But by an order dated
01.05.2008,   this   Court   disposed   of   the   interim   application   by   just
observing   that   when   the   final   order   is   passed,   the   interim   order
automatically comes to an end.
11

10. Understanding  the said order differently, the Appellate authority
under   the   Act   dismissed   the   appeals   filed   by   the   Management.
Therefore,   the  Management   filed   writ   petitions   on   the   file   of  the   High
Court.
11. In so far as the case of Shri Kashi Prasad Tripathi is concerned,
the   Management   filed   a   writ   petition   in   W.P.No.798   of   2009   which
came   to   be   allowed   by   a   learned   Single   Judge   of   the   Allahabad   High
Court,   based upon a judgment of a Division Bench of the Patna High
Court.   Shri   Kashi   Prasad   Tripathi,   unsuccessfully   challenged   the
orders of the learned Single Judge before a Division Bench. Therefore,
Shri   Kashi   Prasad   Tripathi   filed   a   special   leave   petition   in   SLP(C)
No.972 of 2014. This SLP was allowed by this Court by an order dated
05.05.2015   in   C.A.No.4258   of   2015.   The   order   of   this   Court   in   the
case   of   Shri   Kashi   Prasad   Tripathi   in   C.A.No.4258   of   2015   dated
05.05.2015 reads as follows:­
“Leave granted.
The appellant, aggrieved by the order of the High Court
wherein the controlling authority and the appellate authority
have   calculated   the   payment   of   gratuity   payable   to   the
appellant herein, in exercise of its power under Article 227 of
the Constitution, without considering the computation made
12

which,   in   our   considered   opinion,   is   not   under   the
jurisdiction of the High Court. Having regard to the facts and
circumstances   of   the   case,   the   material   available   on   record
and   the   rival   legal   submissions,   we   are  of   the   view   that   the
High Court should not have interfered with the calculation of
payment   of   gratuity   and   ad   hoc   payment   with   interest.
Hence,   the   appellant   shall   succeed   2   in   this   appeal.
Accordingly, the appeal is allowed. 
It   is   needless   to   mention   that   the   question   raised   by
respondent no. 2 is kept open.” 
12. The  Management  filed a  petition  for   review.  It  was  dismissed  on
13.08.2015. The curative petition was also dismissed on 03.03.2016.
13. Following the order passed by this Court in C.A.No.4258 of 2015
on   05.05.2015,   in   the   case   of   Shri   Kashi   Prasad   Tripathi,   the   High
Court   of   Allahabad   dismissed   all   the   writ   petitions   filed   in   respect   of
the other employees. Therefore, challenging such orders in the case of
other   employees,   the   Management   of   the   Fertiliser   Corporation   has
come   up   with   a   batch   of   98   appeals.   The   Hindustan   Fertiliser
Corporation   has   come   up   with   one   appeal   that   arises   out   of   similar
judgment of the Calcutta High Court.
14. Therefore, the short question that arises for consideration is as to
whether   the   ad   hoc   monthly   payment   made   by   the   Management
pursuant to the interim orders passed by this Court on 18.08.2000, is
13

liable  to  be  treated  as  part  of  the  wages within  the  sweep  of  the  said
expression under  Section 2(s) of the Act, especially in the light of the
order passed by this Court in the case of Shri Kashi Prasad Tripathi.
15. We   have   already   extracted   the   order   passed   by   this   Court   on
05.05.2015   in   C.A.No.4258   of   2015   in   the   case   of   Shri   Kashi   Prasad
Tripathi.   The   said   order   does   not   deal   with   this   question.   The   said
order  has   gone   on  the   basis   that   the   computation   of   the  quantum   of
gratuity  is exclusively  within the  domain  of the authorities under  the
statute and that the High Court is not competent to interfere with the
same. Therefore, the order passed in the case of Kashi Prasad Tripathi
cannot   be   taken   to   have   laid   down   any   law   to   the   effect   that   the   ad
hoc   payment   will   form   part   of   wages.   The   respondents,   therefore,
cannot really take advantage of the order passed in the case of Kashi
Prasad Tripathi, merely on the ground that the very same question of
law was raised by the Management in the civil appeal and thereafter in
the   petition   for   review   and   curative   petition.   At   times,   this   Court
refuses to go into the questions of law, when a single individual armed
with  an  order  in   his  favour   from   the  High  Court  is  pitted  against  the
14

State.   Whenever  the  State  or  instrumentalities   of  State   come   up
with   appeals   challenging   small   benefits   granted   to   individual
litigants,   this   Court   applies   the   test   of   proportionality   to   see
whether   the   quantum   of   benefits   granted   to   the   individual
concerned,   justifies   the   examination   of   the   question   of   law,   at
the   cost   of   that   little   man   from   a   far   off   place.   The   refusal   of
this Court to go into the question of law in such cases, cannot be
treated as tantamounting to answering the question of law in a
particular   manner.   Therefore,   dehors   order   of   this   Court   in   Kashi
Prasad   Tripathi,   we   are   obliged   to   deal   with   the   question   of   law   that
arises in this batch.
16. Section 2(s) of the Act defines wages, as follows:­
“2.   Definitions.—In   this   Act,   unless   the   context
otherwise requires,—
Xxx                                 xxx                            xxx
(s)   “wages”   means   all   emoluments   which   are   earned   by
an   employee   while   on   duty   or   on   leave   in   accordance
with   the   terms   and   conditions   of   his   employments   and
which   are   paid   or   are   payable   to   him   in   cash   and
includes   dearness   allowance   but   does   not   include   any
bonus,   commission,   house   rent   allowance,   overtime
wages and any other allowance.”
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17. The   definition   of   the   expression   is   in   3   parts,   the   first   part
indicating   the   meaning   of   the   expression,   the   second   part   indicating
what   is   included   therein   and   the   third   part   indicating   what   is   not
included therein. In the first part of the definition, the emphasis is on
what is earned by the employee “ in accordance with the terms and
conditions of employment”  .
18. Irrespective   of   whether   what   was   earned   has   been   paid   or
remained  payable, the same is included in  the definition,   provided  it
is in accordance with the terms and conditions of his employment .
19. Keeping  in  mind  the  above definition, if we go back to  historical
facts, it would be clear that the employees initiated the first round of
litigation   before   various   High   Courts,   for   the   grant   of   the   benefit   of
revision of pay scales, way back in the year 1996, on the ground that
the  employees of other  PSUs  have been  granted revision  on par  with
the Government servants. It will thus be clear that what was claimed
in   the   first   round   of   litigation   was   not   what   was   payable   in
accordance with the terms and conditions of employment. Therefore,
this Court was clear in its interim order dated 18.08.2000 as to how
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the   ad   hoc   payment   ordered   there   under   should   be   treated.   Even   in
the final order, this Court made it clear that what was paid was only
ad hoc.
20. It   is   a   fundamental   principle   of   law   that   a   party   who   is   in
enjoyment   of   an   interim   order,   is   bound   to   lose   the   benefit   of   such
interim   order   when   the   ultimate   outcome   of   the   case   goes   against
him.  Merely  because  of  the  fortuitous  circumstance  of  the  Voluntary
Separation   Scheme   coming   into   effect   before   the   transferred   cases
were   finally   dismissed   by   this   Court   by   an   order   dated   25.04.2003,
creating   an   illusion   as   though   the   last   drawn   pay   included   this   ad
hoc   payment,   it   is   not   possible   to   go   against   the   fundamental   rule
that the benefits of an interim order would automatically go when the
party who secured it, failed in the final stage.
21. In  The Straw Board Manufacturing Co. Ltd . vs.  Its Workmen 1
this   Court   clarified   the   meaning   of   the   expression   “wages”   under
Section 2(s) of the very same enactment, as follows:  “We clarify that
1    (1977) 2 SCC 329
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wages   will   mean   and   included   basic   wages   and   Dearness
Allowance and nothing else” .
22. In   view   of   the   above,   the   appeals   are   allowed   and   the   orders   of
the High Court, the Controlling Authority and the Appellate Authority
under the Act, holding that the  ad hoc  payment made pursuant to the
interim orders by this Court will form part of the wages, are set aside.
However, in view of the efflux of time and taking into account the fact
that few employees are now  no more, we direct the  Management not
to effect any recovery, if payment has already been made to any of the
respondents or their families. There will be no order as to costs.
………………………………….J.
(Hemant Gupta)
………………………………….J.
(V. Ramasubramanian)
New Delhi
April  7, 2022
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