The Himachal Pradesh High Court has held that employees of the Himachal Pradesh State Co-operative Marketing and Consumers Federation Limited (HIMFED) who retired before March 29, 2018 are not entitled to the enhanced gratuity ceiling of ₹20 lakh.

The Court observed that since the Payment of Gratuity Act, 1972 was amended with effect from March 29, 2018, employees who had superannuated before that date could not claim the benefit of the amendment.

A Division Bench comprising Justice Ajay Mohan Goel and Justice Yogesh Jaswal remarked that:“as the Payment of Gratuity Act, 1972 stood amended w.e.f. 29.03.2018, any incumbent who stood superannuated before 29.03.2018, is not entitled for the benefit of the said amendment.”

Background of the Case

The petitioners were former employees of the Himachal Pradesh State Co-operative Marketing and Consumers Federation Limited (HIMFED), who had retired between January 1, 2016 and March 29, 2018.

They challenged HIMFED's decision to extend the enhanced gratuity ceiling of ₹20 lakh only from March 29, 2018, contending that they were also entitled to the benefit from January 1, 2016, in terms of the Himachal Pradesh Government's Office Memorandum dated February 25, 2022.

They sought quashing of HIMFED's notification and a direction to grant them the enhanced gratuity along with arrears and interest.

Findings:

The High Court held that HIMFED's decision to extend the enhanced gratuity ceiling of ₹20 lakh from March 29, 2018was neither arbitrary nor discriminatory, as the Payment of Gratuity Act, 1972 itself was amended with effect from that date. Employees who had retired before March 29, 2018 were therefore not entitled to the enhanced benefit.

The Court further held that the State Government's decision to grant enhanced gratuity to its employees from January 1, 2016 did not automatically confer the same benefit upon HIMFED employees, whose gratuity entitlement was governed by the Gratuity Act under Rule 3.10 of the Federation's Service Rules.

Accordingly, the Court dismissed the writ petition, while granting the petitioners liberty to pursue their claims concerning revised pay-scale arrears and leave encashment through independent proceedings.

Date of Decision: 22.09.2026