Kamalasanan P.S. v. Pathanamthitta District Co-operative Bank; District Labour Officer, Pathanamthitta; Manager, Life Insurance Corporation of India (LIC) Jeevan Jyothi Pension Scheme, Star Junction, Kottayam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **MONDAY, THE 18TH DAY OF MARCH 2013/27TH PHALGUNA 1934** **WP(C).No. 166 of 2012 (U) -------------------------** **PETITIONER(S): --------------------------** **KAMALASANAN P.S., RETIRED EXECUTIVE OFFICER, PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK, RESIDING AT PUTHUVELIL HOUSE, VELLAPPARA P.O., VIA. KONNI, PATHANAMTHITTA - 689 691.** **BY ADVS.SRI.P.N.MOHANAN, SMT.I.VINAYAKUMARI.** **RESPONDENT(S):** **-------------------------** **1. PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK, REPRESENTED BY GENERAL MANAGER, PATHANAMTHITTA - 689 691.** **2. DISTRICT LABOUR OFFICER, PATHANAMTHITTA-689 691.** ## **3. MANAGER,** **LIFE INSURANCE CORPORATION OF INDIA, JEEVAN JYOTHI PENSION SCHEME, STAR JUNCTION, KOTTAYAM - 686 001.** **R1 BY ADVS. SRI.JACOB P.ALEX,SC. SRI.P.C.SASIDHARAN,SC. R2 BY GOVT. PLEADER SMT.LILLY K.T. R3 BY ADVS. SRI.P.B.SAHASRANAMAN, SRI.T.S.HARIKUMAR, SRI.K.JAGADEESH.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-03-2013, ALONG WITH W.P.(C) NO. 253 OF 2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs.** ## **WP(C).No. 166 of 2012 (U)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **EXT.P-1 A TRUE COPY OF THE PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.** **EXT.P-2 A TRUE COPY OF THE ORDER DATED 22.09.2011 OF THE DISTRICT LABOUR OFFICER, PATHANAMTHITTA.** ## **RESPONDENT'S EXHIBITS:-** **EXT.R1A COPY OF THE COMMITTEE RESOLUTION NO.150 DATED 23/05/2005 OF PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK.** **EXT.R1B COPY OF THE LETTER BEARING NO.5352 DATED 26/05/2005 ISSUED TO THE 3RD RESPONDENT.** **//TRUE COPY//** **P.S. TO JUDGE** **rs.** A.M.SHAFFIQUE, J. ---------------------------------------------------- **==> picture [285 x 72] intentionally omitted <==** **J U D G M E N T** These two writ petitions arise in common justice and hence decided by a common judgment. 2. The petitioners were working as employees of the 1[st] respondent Bank. They retired from service and they were paid their gratuity amount payable to them. 3. The contention of the petitioners is that as per S.4(2) of the Payment of Gratuity Act per day wages has to be computed by dividing the monthly rate of wages last drawn by a deviser of 26 and multiplying the quotient by fifteen. After calculated on that basis, they would have obtained more amount as gratuity, whereas petitioners allege that the Bank had taken a different calculation and they had taken deviser as 30 as such the gratuity amount payable for less than 2 W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F what was actually due. Learned counsel for the petitioners also relied upon the judgment of this Court in **Julius K.J.** v. **Union of India** (2009(1) KLJ 882) in order to contend for the position that the “Per day wages” has to be computed by dividing the monthly wages by deviser of “26” in terms of the explanation provided under S.4 (2) of the Payment of Gratuity Act. 4. On the other hand, learned counsel for the respondents relying upon the averments in the counter affidavit submits that, at the time of retirement, the employees have entered into a contract or rather exercised an option to obtain gratuity at a higher amount in terms of S. 4(3) of the Payment of Gratuity Act and had opted to receive higher amount than the statutory limit of Rs.3.5 lakhs. Accordingly, they were paid the higher amount taking W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F 3 the deviser as 30 instead of 26. Since they have exercised option for a higher amount and higher amount had been paid to them. The learned counsel for the respondent Bank also relied upon the judgment of the Supreme Court in **Beed District Central Cooperative Bank** v. **State of Maharashtra** [(2006) 8 SCC 514] wherein the Supreme Court held that the terms of contract by which the employees had opted for a better gratuity will have to be taken into consideration and no deviation could be made from the terms of the said contract. Paragraph 14 and 15 are relevant which reads as under: “14. Applying the “golden rule of interpretation of statute”, to us it appears that the question should be considered from the point of view of the nature of the Scheme as also the fact that the parties agreed to the terms thereof. When better W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F 4 terms are offered, a workman takes it as a part of the package. He may volunteer therefore, he may not. Sub-section (5) of Section 4 of the 1972 Act provides for a right in favour of the workman. Such a right may be exercised by the workman concerned. He need not necessarily do it. It is the right of individual workman and not all the workmen. When the expression “terms” has been used, ordinarily iit must mean “all the terms of the contract”. While interpreting even a beneficent statute, like, the Payment of Gratuity Act, we are of the opinion that either contract has to be given effect to or the statute. The provisions of the Act envisage for one Scheme. It could be segregated. Subsection (5) of Section 4 of the 1972 Act does not contemplate that the workman would be at liberty to opt for better terms of the contract, while keeping the option open in respect of a part of the statute. 5 W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F While reserving his right to opt for the beneficent provisions of the statute or the agreement, he has to opt for either of them and not the best of the terms of the statute as well as those of the contract. He cannot have both. If such an interpretation is given, the spirit of the Act shall be lost. Even in Shin Satellite, this Court stated: (SCC pp. 637-38, para 27) “27. The proper test for deciding validity or otherwise of an agreement or order is 'substantial severability' and no 'textual divisibility'. It is the duty of the court to sever and separate trivial or technical parts by retaining the main or substantial part and by giving effect to the latter if it is legal, lawful and otherwise enforceable. In such cases, the court must consider the question whether the parties could have agreed on the valid terms of the agreement had they known that the W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F 6 other terms were invalid or unlawful. If the answer to the said question is in the affirmative, the doctrine of severability would apply and the valid terms of the agreement could be enforced, ignoring invalid terms. To hold otherwise would be 'to expose the covenanter to the almost inevitable risk of litigation which in nine cases out of ten he is very ill-able to afford, should he venture to act upon his own opinion as to how far the restraint upon him would be held by the court to be reasonable, while ijit may give the covenantee the full benefit of unreasonable provisions if the covenanter is unable to face litigation' “15. It is significant that in the event the amount of gratuity is calculated as the rate of 26 days' salary for every completed year W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F **==> picture [7 x 9] intentionally omitted <==** of service, vis-a-vis, 15 days' salary therefore, the tenure of an employee similarly situate will vary. Whereas in the former cases an employee may receive the entire amount of gratuity while working for a lesser period, in the latter case an employee drawing the same salary will have to work for a longer period”. 5. Having regard to the aforesaid facts and circumstances, and the law laid down by the Supreme Court, in view of the admitted fact that the petitioners have opted for higher gratuity as envisaged under S. 4 (5) of the Gratuity Act, I do not think that at this point of time, the petitioners can now seek modification of the gratuity payable by contending that the divisor alone should be changed as 26 instead of 30. In that view of the matter, I do not think that the 8 W.P.(C) Nos. 166 of 2012 - U & 253 of 2012 - F petitioners are entitled for any relief. According writ petitions are dismissed. (x) No doubt, if the petitioner was not served with a notice for sale, definitely the contention raised can be appreciated.) ## **A.M.SHAFFIQUE, JUDGE.** rka