—(1) Where the member fails to complete the full period of his contract for reasons other than those specified in regulation 30(1), or on medical grounds not due to causes within his own control, a gratuity may be granted at the rate specified in regulation 27 for the period which he has actually served under his contract less any period or periods that are deducted under regulation 18 as if the member was in the pensionable service.
(2) If a member does not complete the full period of his contract by reason of the conversion of his service to the pensionable or non-pensionable service, the Armed Forces Council may, when granting a gratuity under paragraph (1), impose a condition that the member shall —
serve, after the conversion to the pensionable or non- pensionable service, a period equal to the difference between the full period of the contract and the period of the contract which the member had served before his conversion to the relevant service; and
if he fails to serve the period referred to in sub-paragraph (a), refund the gratuity, together with interest at a rate to be determined by the Armed Forces Council not later than the time the gratuity is granted.
(3) The gratuity, together with the interest, if any, that is refundable under paragraph (2)(b), shall be recoverable as a debt due to the Government and may be set off against any sum that may be payable by the Government to the member.
(4) The gratuity so granted may be in addition to any award payable in accordance with Part V.