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Issues: Validity of gratuity payment, Authority of General Body and Board of Management
In the judgment delivered by the High Court of Madras, the primary issue was whether the gratuity payment of Rs. 1,295 made to the ex-secretary by the bank was valid. The appellant argued that the payment was illegal as the ex-secretary did not meet the conditions stipulated in the Gratuity Rules. The Board of Management had amended the by-laws to allow for gratuity payments in cases of permanent incapacitation without a medical certificate, seeking approval from the General Body for the payment. The General Body approved the payment, leading to the question of the legality of the retrospective operation of the amended by-law. The court analyzed the circumstances and concluded that the General Body had the authority to sanction the gratuity payment, even in cases not covered by the by-laws set by the Board of Management. The court held that the General Body acted within its powers and that the payment was valid. Regarding the authority of the General Body and the Board of Management, the appellant contended that once the Board of Management framed by-laws regarding gratuity payments, both bodies were bound by them. However, the court disagreed, stating that the General Body retained the power to approve gratuity payments in exceptional cases not covered by the by-laws set by the Board of Management. The court emphasized that the delegation of power to frame by-laws did not restrict the General Body's authority to sanction payments outside the by-laws. The court found both contentions raised by the appellant to be unsustainable and dismissed the appeal, upholding the validity of the gratuity payment. The court also awarded costs to the respondent and refused leave to appeal.
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