G.R Vinod and others v. Kerala Financial Corporation and Union of India

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** ## **FRIDAY, THE 13[TH] DAY OF JANUARY 2023 / 23RD POUSHA, 1944** ## **WP(C) NO. 29756 OF 2018** ## **PETITIONERS:** - 1 G.R VINOD S/O.C.M.RAGHAVAN, VINEETH BHAVAN, AMPALAKARA P.O, VALAKOM-691532. - 2 MATHEW T.C., MIDHILA, VKRA-236, NEDIYAVILAKOM, VAZHOTUKONAM, VATTIYOORKAVU, THIRUVANANTHAPURAM. - 3 NATHEERA BEEVI M., NEST, PRA 145-A, PADAYANI ROAD, MARUTHANKUZHY, THIRUVANANTHAPURAM. - 4 MOHANACHANDRAN.S., KAILATHARA, DECENT JUNCTION P.O., KOLLAM- 691 577. - 5 R.JAYASANKAR, A-13, CHITRANAGAR, POOJAPPURA, THIRUVANANTHAPURAM- 695 012. - 6 MOHANAN K.K.,KANKAPARAMBIL HOUSE, CHEROOR P.O., THRISSUR- 680 008. - 7 SYAMALADEVI C.G.,VILAYIL VEEDU, VALACODE P.O., PUNALUR, KOLLAM- 691 331. - 8 THANKARAJU P.,RENGABHAVAN, PUTHENTHURA P.O., NEENDAKARA, KOLLAM- 691 582. - 9 REGITHA KUMARAN, ARAMAM, ALAYATH, KOTAKKAKOM, KOLLAM- 691013. - 10 N.HARIHARAN, TC 42/1440(29), 39 ANUGRUHAM, SREEVARAHA NAGAR, VALLAKADAVU P.O., THIRUVANANTHAPURAM- 695 008. - 11 E.K.CHANDRAN,ARAMAM, KUNNATHERU, NANMINDA P.O., KOZHIKODE- 673 613. - 12 BHAKTHA MEERA K., SANIPRIYA, ALUNGAL, THENHIPALAM, MALAPPURAM- 673636 - 13 M.R.HARIDAS, ARRA NO.5, SOPANAM, ASARI PARAMBU ROAD, EDAPALLY P.O., ERNAKULAM- 682024 - 14 AUGUSTINE BERARD T.C., THACHAPPILLY HOUSE, BOLGHATTY, MULAVUKAD P.O- 682504. - 15 MOHANAN V.G., VAZHATTU HOUSE, VELLAYAMKUDY P.O., KATTAPPANA , IDUKKI DISTRICT- 685 515. BY ADV M. SREEKUMAR WP(C) NO. 29756 OF 2018 2 ## **RESPONDENTS:** 1 THE KERALA FINANCIAL CORPORATION HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR 695010. 2 THE CHAIRMAN & MANAGING DIRECTOR, KERALA FINANCIAL CORPORATION,HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM, 695101. 3 THE UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT, MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES, DEPARTMENT OF PUBLIC ENTERPRISES, PUBLIC ENTERPRISES BHAWAN, BLOCK NO.14, C.G.O. COMPLEX, LODHI ROAD, NEW DELHI- 110005. BY ADVS. SRI.M.R.VENUGOPAL M.R.VENUGOPAL SRI.T.V.VINU, CGC DHANYA P.ASHOKAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 29756 OF 2018 3 ## **JUDGMENT Dated this the 13[th] day of January 2023** This writ petition is filed seeking the following relief: “(i) To issue a writ of mandamus or other appropriate writ direction or order commanding the respondents 1 & 2 to sanction gratuity to the petitioner at the rate of Rs.20 lakhs and to release the arrears of gratuity forthwith in the interest of justice”. 2. Heard the learned counsel appearing for the petitioners and the learned counsel appearing for the respondents. 3. It is submitted by the learned counsel appearing for the petitioners that the petitioners were persons who retired from service between 01.01.2017 and 28.03.2018. It is submitted that by Ext.P1 office memorandum dated 03.08.2017, the Government of India in its Ministry of Heavy Industries and Public Enterprises had revised the pay WP(C) NO. 29756 OF 2018 4 structure of board level and below board level executives of certain public sector enterprises with effect from 01.01.2017. It is stated that the ceiling of gratuity of the executives and non-unionised supervisors of central public sector enterprises was raised from Rs.10,00,000/- to Rs.20,00,000/- with effect from 01.01.2017. It is contended by the learned counsel for the petitioners that the respondent Corporation had been granting the benefits of revision in pay and other benefits at par with Central Public Sector Enterprises and that therefore, the revision in the quantum of gratuity as per Ext.P1 was to be made applicable to the employees of the Corporation also with effect from 01.01.2017. Ext.P2 order of revision of pay effected in the Corporation also specifically provided for enhancement of gratuity as per the Central Government notification to PSUs as and when it is issued subject to the decision of Board of the WP(C) NO. 29756 OF 2018 5 Corporation. It is therefore contended that since the gratuity payable to the employees of Central PSUs stood enhanced to Rs.20,00,000/- by Ext.P1, the same would be applicable to the employees of the respondent Corporation in view of Clause 6 of Ext.P2 and that therefore, the petitioners, who retired from service between 01.01.2017 to 28.03.2018, are also entitled to enhanced gratuity. 4. A statement has been placed on record by the 3[rd] respondent stating that the Department of Public Enterprises (DPE), being the nodal department of the Central Public Sector Enterprises, had issued broad guidelines with regard to pay and allowances, including payment of gratuity. It is submitted that since the Kerala Financial Corporation (KFC) is not a Central Public Sector Enterprise, the guidelines issued are not directly applicable to the employees of the KFC. It is stated that the 3[rd] respondent is WP(C) NO. 29756 OF 2018 6 therefore, only a formal party to this proceedings. 5. A counter affidavit has been placed on record by respondents 1 and 2 specifically stating that the respondent Corporation is formed under Section 3 of the State Financial Corporations Act, 1951 and is not a Central Public Sector Enterprise. It is further stated that the gratuity is being paid to the employees of the Corporation under the Payment of Gratuity Act, 1972. It is contended that Clause 6 of Ext.P2 provides that enhancement of gratuity will be considered as per the Central Government notification to PSUs as and when it is issued, subject to the decision of the Board of the Corporation. Ext.P2 is dated 04.04.2008. It is stated that when the memorandum of settlement, based on which Ext.P2 order was issued, was approved by the Board of Directors of the Corporation on 23.03.2018, the Payment of Gratuity (Amendment) Act, 2018 had not WP(C) NO. 29756 OF 2018 7 received the assent of the President of India. It is stated that the amendment was notified only on 29.03.2018 after getting the assent and from 29.03.2018 the enhanced gratuity of Rs.20,00,000/was paid to all the retirees after the said date. It is submitted that the Board of Directors of the respondent Corporation had not taken any decision to grant the enhanced gratuity to the employees who retired from 01.01.2017 onwards and that therefore, the enhancement would be applicable in the case of employees of the Corporation only with effect from 29.03.2018 when the amendment became effective. 6. A reply has been placed on record by the petitioners producing the orders by which the enhancements had been made available to the employees at earlier points of time in accordance with the orders applicable to the Central Public Sector Enterprises. It is contended that enhanced gratuity was granted to employees earlier in terms of WP(C) NO. 29756 OF 2018 8 the orders passed by the DPE without waiting for the amendment to be carried in the payment of Gratuity Act. 7. Having considered the contentions advanced on either side, it is not disputed before me, that the respondent Corporation is a State Financial Corporation formed under Section 3 of the State Financial Corporation Act, 1951 and is not a Central Public Sector Enterprise which was automatically covered by Ext.P1 directions issued by the 3[rd] respondent. The learned counsel appearing for respondents 1 and 2 would contend that the enhancement of the rate of gratuity would be applicable only with effect from the date when the amendment is notified and not from any earlier date except where the Board of Directors of the respondent Corporation takes a conscious decision to make the enhanced gratuity applicable from any WP(C) NO. 29756 OF 2018 9 earlier date. In the instant case, the specific case of the respondents is that there was no such decision taken by the Board of the Corporation to grant the advanced gratuity from any earlier date and that on the amendment being incorporated in the payment of Gratuity Act with effect from 29.03.2018, it has been made applicable to the employees of the Corporation as well. 8. The learned Standing Counsel would also place reliance on a judgment of a Division Bench of the Madras High Court in **Srinivasan and others vs. Government of India and others** [(1999) LLJ 986 Mad]. The Division Bench of the Madras High Court after considering the provisions of the guidelines issued by the DPE held that even in case of Central Public Sector Enterprises, the guidelines would not be automatically applicable and would be made applicable only on a decision being taken by WP(C) NO. 29756 OF 2018 10 the Board of the concerned enterprise to make the scheme applicable. 9. In any view of the matter, I notice that there is no decision taken by the Board in the instant case to make the enhancement of the gratuity applicable from any date before 29.03.2018. Clause 6 of Ext.P2 dated 04.04.2018 cannot be relied on by the petitioners in this writ petition to contend that Ext.P1 would be applicable to the employees of the 2[nd] respondent even without such a decision being taken by the Board of the 2[nd] respondent. In the above view of the matter, I am of the opinion that the prayers as sought for cannot be granted. The writ petition fails and the same is, accordingly, dismissed. **Sd/ANU SIVARAMAN JUDGE** SSK/24/01 WP(C) NO. 29756 OF 2018 11 ## **APPENDIX OF WP(C) 29756/2018** ## PETITIONER EXHIBITS |EXHIBIT P1|TRUE COPY OF THE OFFICE MEMORANDUM| |---|---| ||NO.W-02/0028/2017-DPE(WC)-GL-XIII/17| ||DATED 03.08.2017 ISSUED BY 3RD| ||RESPONDENT.| |EXHIBIT P2|TRUE COPY OF ORDER NO.14 DATED| ||04.04.2018 OF 1ST RESPONDENT.| |EXHIBIT P3|TRUE COPY OF REPRESENTATION FILED BY| ||1ST PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 08.06.2018.| |EXHIBIT P4|TRUE COPY OF REPRESENTATION FILED BY| ||2ND PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 19.05.2018.| |EXHIBIT P5|TRUE COPY OF REPRESENTATION FILED BY| ||3RD PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 05.07.2017.| |EXHIBIT P6|TRUE COPY OF REPRESENTATION FILED BY| ||4TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 16.05.2018.| |EXHIBIT P7|TRUE COPY OF REPRESENTATION FILED BY| ||5TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 17.05.2018.| |EXHIBIT P8|TRUE COPY OF REPRESENTATION FILED BY| ||6TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 20.05.2018.| |EXHIBIT P9|TRUE COPY OF REPRESENTATION FILED BY| ||7TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| |EXHIBIT P10|TRUE COPY OF REPRESENTATION FILED BY| ||8TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| WP(C) NO. 29756 OF 2018 12 |EXHIBIT P11|TRUE COPY OF REPRESENTATION FILED BY| |---|---| ||9TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| |EXHIBIT P12|TRUE COPY OF REPRESENTATION FILED BY| ||10TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| |EXHIBIT P13|TRUE COPY OF REPRESENTATION FILED BY| ||11TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| |EXHIBIT P14|TRUE COPY OF REPRESENTATION FILED BY| ||12TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED NIL.| |EXHIBIT P15|TRUE COPY OF REPRESENTATION FILED BY| ||13TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 18.05.2018.| |EXHIBIT P16|TRUE COPY OF REPRESENTATION FILED BY| ||14TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED NIL.| |EXHIBIT P17|TRUE COPY OF REPRESENTATION FILED BY| ||15TH PETITIONER BEFORE THE 2ND| ||RESPONDENT DATED 21.05.2018.| |EXHIBIT P18|TRUE COPY OF THE ORDER NO.3798/07| ||DATED 26.11.2007 ISSUED BY THE 1ST| ||RESPONDENT.| |EXHIBIT P19|TRUE COPY OF THE ORDER NO.1520 DATED| ||13.6.2013 OF THE 1ST RESPONDENT.|