A.C. Radhakrishnan and others v. Thrissur Co-Operative Spinning Mills Ltd and others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V THURSDAY, THE 7[TH] DAY OF SEPTEMBER 2023 / 16TH BHADRA, 1945`** ## **`WP(C) NO. 7204 OF 2023`** ## **`PETITIONER/S:`** ``` 1A.C.RADHAKRISHNAN AGED65YEARS S/OCHELLAPPANNAIR, THEKKANANTHOLILHOUSE,MUPPATHADAMP.O, - ALUVA,ERNAKULAMDISTRICT,PIN683110 2V.K.SURENDRAN AGED62YEARS S/OKRISHNAN, VADUKOOTHOUSE,AVINISERRYP.O, - THRISSURDISTRICT,PIN680306 3THILAKANV.K AGED60YEARS S/OKUNUIKORAN, VATTAPPULLYHOUSE,PANAMUKKU, P.O.NEDUPUZHA,KURKANCHERIS.O, - THRISSURDISTRICT,PIN680007 4K.GOVINDANKUTTY AGED64YEARS S/OKRISHNANKUTTYNAIR, KOCHATTILHOUSE,KANINOORP.O, - THRISSURDISTRICT,PIN680014 5M.D.BABU AGED61YEARS S/ODEVASSY, MECHERYHOUSE,CHIYYARAMP.O, - THRISSURDISTRICT,,PIN680026 BYADVS. ABRAHAMMATHAN C.B.JITHIN ``` ``` WP(C)NO.7204OF2023 ``` ``` 2 ``` ## **`RESPONDENT/S:`** ``` 1THRISSURCO-OPERATIVESPINNINGMILLSLTD VIRUPPAKKA,P.O.VAZHANI,WADAKKANCHERY, THRISSURDISTRICT, - REPRESENTEDBYITSMANAGINGDIRECTOR.,PIN680589 2THEMANAGINGDIRECTOR THRISSURCO-OPERATIVESPINNINGMILLSLTD. VIRUPPAKKA,P.O.VAZHANI,WADAKKANCHERY, - THRISSURDISTRICT,,PIN680589 3THEDEPUTYLABOURCOMMISSIONER THRISSUR (CONTROLLINGAUTHORITYUNDERTHEPAYMENTOFGRATUITY ACT,1972) OFFICEOFTHEDEPUTYLABOURCOMMISSIONER, - THRISSUR,,PIN680020 BYADVLATHAANAND SRI.RAJEEVJYOTHISGEORGE,GP& SMTLATHAANAND,FORR1ANDR2. THISWRITPETITION(CIVIL)HAVINGCOMEUPFOR ADMISSIONON07.09.2023,THECOURTONTHESAMEDAY DELIVEREDTHEFOLLOWING: ``` ``` WP(C)NO.7204OF2023 ``` ``` 3 ``` ## **JUDGMENT** The petitioners herein are septuagenarians. They attained superannuation after working for over three decades in the Thrissur Co-Operative Spinning Mills Ltd. When the gratuity due to them under the Payment of Gratuity Act, 1972 was not disbursed, they approached the Controlling Authority and filed separate applications under Section 7(4) of the Payment of Gratuity Act, 1972, seeking to disburse their gratuity claims for the eligible years. After considering the oral and documentary evidence, the Authority has passed separate orders awarding the amount due together with interest at the rate of 10%. The copies of the orders issued by the controlling authority have been placed before this Court as Exts.P2 to P5. The petitioners' grievance is that despite the orders passed by the controlling authority, 1st respondent refuses to pay the amounts awarded. It is in the afore circumstances that the petitioners are before this Court seeking issuance of directions to respondents 1 and 2 to disburse the amount of gratuity due to the petitioners as ordered by the 3rd respondent in an expeditious manner. 2. Respondents 1 and 2 have filed a counter affidavit. It is stated therein that the 1st respondent is running at a heavy loss and is under intermittent layoff. It is stated that the last time the 1st ``` WP(C)NO.7204OF2023 ``` ``` 4 ``` respondent had paid gratuity due to the employee was in 2019. It is further stated that the statutory dues have mounted to over 41 crores, and the 1st respondent is finding it difficult to run the mill. In the year 2015, steps were taken to modernize the mill, and the amount allotted has been received only recently. If the 1st respondent is saddled with additional liability to pay gratuity, it would virtually lead to disruption of all attempts to resuscitate the mill. Finally, it is stated that the controlling authority has granted interest at the rate of 10%, which is on the higher side. It is further stated that the non-payment of gratuity is not due to any wilful default but due to the extreme financial difficulty faced by the 1st respondent. 3. Sri. Abraham Mathan, the learned counsel appearing for the petitioner, submitted that the Payment of Gratuity Act is a piece of social service legislation enacted to protect workers who have rendered long years of service under the management. According to the learned counsel, the right to receive gratuity is a statutory right, and the 1st respondent is not justified in refusing to pay the amount awarded by the controlling authority. It is further submitted that a learned Single Judge of this Court in identical circumstances has rendered Ext.P6 judgment ordering the payment of gratuity awarded by the controlling authority. ``` WP(C)NO.7204OF2023 ``` ``` 5 ``` 4. I have heard the learned standing counsel appearing for the 1st respondent, who reiterated the contentions in the counter. 5. The Act is a piece of social welfare legislation and deals with the payment of gratuity which is a kind of retiral benefit like pension, provident fund etc. Gratuity in its etymological sense is a gift, especially for services rendered, or return for favours received. It has now been universally recognized that all persons in society need protection against loss of income due to unemployment arising out of incapacity to work due to invalidity, old age etc. For the wage-earning population, security of income, when the worker becomes old or infirm, is of consequential importance. The provisions contained in the Act are in the nature of social-security measures like employment insurance, provident fund and pension. The Act accepts, in principle, compulsory payment of gratuity as a social-security measure to wage-earning population in industries, factories and establishments. The main purpose and concept of gratuity is to help the workman after retirement, whether retirement is a result of rules of superannuation or physical disablement or impairment of a vital part of the body. The expression “gratuity” itself suggests that it is a gratuitous payment given to an employee on discharge, superannuation or death. Gratuity is an amount paid unconnected with any consideration and not resting upon it, and has to be considered as something given ``` WP(C)NO.7204OF2023 ``` ``` 6 ``` freely, voluntarily or without recompense. It is a sort of financial assistance to tide over post-retiral hardships and inconveniences. (See **Ahmedabad (P) Primary Teachers' Assn. v. Administrative Officer,** [(2004) 1 SCC 755]. 6. The provisions of the Payment of Gratuity Act, 1972 (as amended from time to time) and the payment of gratuity under the Act is no longer in the realm of charity but a statutory right provided in favour of the employee. ( **Balbir Kaur v. SAIL,** [(2000) 6 SCC 493]. 7. In the case on hand, being aggrieved by the non-payment of the activity, the petitioners approached the controlling authority, and after hearing both sides, orders were issued. The only reason for non-payment pleaded for by the 1st respondent is financial constraints and difficulties. The law on that issue is well settled that no amount of financial constraints or difficulties faced by the employer can be a ground to deny the gratuity to a retired employee. It is a statutory and property right, and the employees are not at the employer's mercy. The next contention is regarding the interest that has been ordered. I find that even as of date, not a penny has been paid to the petitioners. In the case of the 1st petitioner, the amounts became due in the year 2016, in the case of the 2nd petitioner, it was from 13.10.2015, and so on. The central government, in terms of Section 7 (3-A), has notified the interest for ``` WP(C)NO.7204OF2023 ``` ``` 7 ``` delayed payment of gratuity as 10%. Of course, a Division Bench of this Court in **Viswanathan v Fertilisers and Chemicals Travancore Ltd.** [2021 (2) KLT 899] had occasion to hold that the notification of the central government prescribing the rate of 10% is the maximum rate and it is not mandatory that the maximum rate should be granted in all cases. In the case on hand, I do not think any case is made out for reducing the interest granted by the authority. 8. I find that this Court in W.P. (C) No. 8901/2019 and Exhibit P6 judgment have issued directions invoking the powers under Article 226 of the Constitution of India to the respondents to disburse the amount of gratuity due to the employees of the first respondent. I am inclined to follow the views of their Lordships and grant the prayer sought for. In that view of the matter, this writ petition is disposed of directing respondents 1 and 2 to disburse the amount of gratuity ordered by the controlling Authority as per Exts. P1 to P5, expeditiously, at any rate, within a period of six months. ## **Sd/-** ## **RAJA VIJAYARAGHAVAN V** ## **JUDGE** ``` avs ``` ``` WP(C)NO.7204OF2023 ``` ``` 8 ``` ## **`APPENDIX OF WP(C) 7204/2023`** ## **`PETITIONER EXHIBITS`** ``` Exhibit-P1TRUECOPYOFTHEORDERDATED11.10.2022INGC 135OF2021OFTHE3RESPONDENT ``` ``` Exhibit-P2TRUECOPYOFTHEORDERDATED13.01.2023INGC 154OF2021OFTHE3DRESPONDENT ``` ``` Exhibit-P3TRUECOPYOFTHEORDERDATED18.10.2022INGC 222OF2021OFTHE3'"RESPONDENT Exhibit-P4TRUECOPYOFTHEORDERDATED14.09.2022INGC 222OF2022OFTHE3DRESPONDENT Exhibit-P5TRUECOPYOFTHEORDERDATED07.05.2022INGC 181OF2021OFTHE3RESPONDENT Exhibit-P6TRUECOPYOFTHEORDERDATED04.05.2021IN W.P.(C).NO.2194OF2021 ```