K.V. Joseph and others v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** ## **WEDNESDAY, THE 15TH DAY OF OCTOBER 2014/23RD ASWINA, 1936** ## **WP(C).No. 19335 of 2010 (N)** ## **----------------------------** ## **PETITIONER(S):** - **--------------------------** ## **1. K.V.JOSEPH, AGED 59 YEARS,** **S/O.VARGHESE JOSEPH, KALAPPURACKAL HOUSE, UMBIDI P.O. THOTTAKKATTU, KOTTAYAM DISTRICT-, 686 539.** **2. M.S.RAMACHANDRA PANICKER, KAVITHA HOUSE, VAZHAPPALLI P.O., CHANGANACHERRY.-DIED** ## **3. K.C.THOMAS,** - **KIZHAKKEMATTATHIL, KOOTHATTUKULAM.** ## **4. P.N.SOMAN PILLAI,** - **PUNNAPARAMPIL, UNION CLUB ROAD, KOTTAYAM.** ## ***ADDL.PETITIONERS P5 TO 7 IMPLEADED** **ADDL.5. N PADMAKUMARI, AGED 55YRS, W/O M.S. RAMACHANDRA PANICKER, KAVITHA HOUSE, VAZHAPPALLI P.O., CHENGANACHERRY.** **ADDL.6. R.JAYASANKAR, AGED 28 YRS, S/O M.S. RAMACHANDRA PANICKER, KAVITHA HOUSE, VAZHAPPALLI P.O., CHENGANACHERRY.** - **ADDL.7. R.JAYAKRISHAN, AGED 25 YRS, S/O M.S. RAMACHANDRA PANICKER, KAVITHA HOUSE, VAZHAPPALLI P.O., CHENGANACHERRY.** ## **ARE IMPLEADED AS PER ORDER DATED 08.02.2011 IIN I.A 1854/11.** **BY ADVS.SRI.K.P.DANDAPANI (SR.) DR.K.P RAJAN** ## **RESPONDENT(S):** - **----------------------------** **1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY DEPARTMENT OF CO-OPERATION, SECRETARIAT THIRUVANANTHAPURAM.** ## **2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM.** **3. THE KOTTAYAM DISTRICT CO-OPERATIVE** **BANK LTD., REPRESENTED BY ITS GENERAL MANAGER.** ## **WP(C).No. 19335 of 2010 (N)** ## **R-1 & 2 BY GOVERNMENT PLEADER SRI RAFEEK V K R3 BY SMT MABLE C KURIAN,SC,DIST.CO-OP,BANK,KTM SRI.T.A.SHAJI** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 19335 of 2010 (N)** ## **APPENDIX** ## **PETITIONER's EXHIBITS:** **EXT.P1: COPY OF THE REPRESENTATION DATED 06.1.2010 SENT BY THE 1ST PETITIONER TO THE 3RD RESPONDENT.** - **EXT.P2: COPY OF THE REPRESENTATION DATED 06.01.2010 SENT BY THE 2ND PETITIONER TO THE 3RD RESPONDENT.** **EXT.P3: COPY OF THE REPRESENTATION DATED 04.01.2010 SENT BY THE 3RD PETITIONER TO THE 3RD RESPONDENT.** - **EXT.P4: COPY OF THE REPRESENTATION DATED 04.01.2010 SENT BY THE 4TH PETITIONER TO THE 3RD RESPONDENT.** **EXT.P5: COPY OF THE CIRCULAR NO.25/99 ISSUED BY THE 2ND RESPONDENT DATED 22.06.99.** - **EXT.P6: COPY OF THE LEGAL OPINION SUBMITTED BY ADV.SRI T A SHAJI TO THE 3RD RESPONDENT, DATED 25.05.2009.** - **EXT.P7: COPY OF THE JUDGMENT IN W.P.C 6095/08 DATED 28.03.2008.** - **EXT.P8: COPY OF THE COMMUNICATION DATED 10.06.2010 RECEIVED FROM THE WAYANAD DISTRICT CO-OPERATIVE BANK LTD.** - **EXT.P8(a): COPY OF THE COMMUNICATION DATED 17.07.2010 RECEIVED FROM THE KASARAGOD DISTRICT CO-OPERATIVE BANK LTD.** - **EXT.P8(b): COPY OF THE COMMUNICATION DATED 02.07.2010 RECEIVED FROM THE INFORMATIO OFFICER, R.I. ACT, IDUKKI DISTRICT CO-OPERATIVE BANK LTD.** - **EXT.P8(c): COPY OF THE COMMUNICATION DATED 30.06.2010 RECEIVED FROM THE KOLLAM DISTRICT CO-OPERATIVE BANK LTD.** - **EXT.P8(d): COPY OF THE COMMUNICATION DATED 11.06.2010 RECEIVED FROM THE THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD.** - **EXT.P9: COPY OF THE COMMUNICATION DATED 11.06.2010 RECEIVED FROM THE KOTTAYAM DISTRICT CO-OPERATIVE BANK LTD.** **EXT.P10: COPY OF JUDGMENT OF THIS HONOURABLE COURT, DATED 09.10.2013, RENDERED IN W.P.C NO.12127 OF 2011 M** **RESPONDENTS EXHIBITS: NIL** ## **/TRUE COPY/** **P.A TO JUDGE** **LSN** ## **A.K.JAYASANKARAN NAMBIAR, J. -----------------------------------W.P.(C). No. 19335 of 2010** **---------------------------------------------------** Dated this the 15[th] day of October 2014 ## **J U D G M E N T** The petitioners are persons, who entered the service of the 3[rd] respondent as Steno-Typist /Cashier-Clerk and retired from the services of the 3[rd] respondent Bank in the year 2009, after completing more than 30 years of service with the said Bank. The issue involved in the writ petition is with regard to the entitlement of the petitioners to gratuity upon their retirement from the Bank. It would appear that the petitioners, based on Section 62 of the Kerala Co-operative Societies Act r/w Rule 59 of the Kerala Co-operative Societies Rules, 1969, sought for the payment of gratuity based on the calculation provided for in the rules and disbursal of the same to the petitioners on their retirement, without referring to any ceiling limit for the payment of gratuity. It is the specific contention of the petitioners that, when the payment of gratuity was made to them subsequent to their retirement, the 3[rd] respondent Bank limited the payment to a maximum of Rs.3.5 lakhs each although, going by the computation that was envisaged in Rule 59 of the Kerala Co-operative Societies Rules, they stood to get higher amounts by way of gratuity. **W.P.(C). No. 19335 of 2010** **2** The prayer in the writ petition is for a declaration that the petitioners are entitled to the gratuity amount, ignoring any limit fixed by the 3[rd] respondent Bank on the said payment inter alia by referring Ext.P5 circular dated 22.06.1999 issued by the Registrar of Co-operative Societies. 2. A counter affidavit has been filed by the 3[rd] respondent, wherein it is stated that before the amendment of the Payment of the Gratuity Act, 1972 in the year 2010, the respondent Bank was guided by the fixation of Rs.3.50 lakhs as the limit of payment of gratuity by the Registrar of the Cooperative Societies. In view of the instructions received from the Registrar of the Co-operative Societies, the Bank was remitting annual premium to the Life insurance Corporation (L.I.C) only for the above amount. It is pointed out that when an employee retired from the service of the Bank, the L.I.C releases the respective amount to the Bank and the bank makes payment to the employee through cheque. It is the contention of the respondents that in so far as, in discharge of their obligations under the Kerala Co-operative Societies Act and Rules, they had entered into an arrangement with the L.I.C for the payment of gratuity amount up to the maximum of Rs.3.5 lakhs in respect of a single employee, and had paid **W.P.(C). No. 19335 of 2010** **3** premium to the L.I.C on that basis, the petitioners could not insist on payment of any higher amount by way of gratuity than the amount for which the premium was paid by the Bank to the L.I.C. A reply affidavit has also been filed on behalf of the petitioners wherein, Ext.P8 series of documents have been produced to show that in various other District Co-operative Banks, gratuity amounts in excess of Rs.3.5 lakhs have been paid to the retired employees. Ext.P9 is also produced to substantiate the contention that the 3[rd] respondent Bank itself has effected payments of gratuity in excess of the amount of Rs.3.5 lakhs to employees who retired therefrom in the past. 3. I have heard Dr.K.P. Rajan, the learned counsel for the petitioners and Smt. Mable C. Kurian, learned Standing Counsel appearing on behalf of the 3[rd] respondent Bank/Society and Sri. Rafeek V.K, learned Government Pleader on behalf of the respondents 1 and 2. 4. Considering the facts and circumstances of the case and the submissions made across the Bar, I find that this is a case were the 3[rd] respondent Bank had a scheme in place that governed the payment of gratuity to its employees. As per the scheme, the obligations of the 3[rd] respondent Bank in respect of gratuity payments to the employees on their **W.P.(C). No. 19335 of 2010** **4** retirement, as contemplated by Section 62 of the Kerala Cooperative Societies Act r/w Section 59 of Kerala Co-operative Societies Rules, was met by entering into an arrangement with the L.I.C whereby, premium payments were effected by the 3[rd] respondent Bank taking into account the ultimate liability of the 3[rd] respondent, to the retiring employees, by way of gratuity. The premium payments were made in respect of the amount that was determined as payable to the employees on their retirement. It is borne out from the counter affidavit filed by the 3[rd] respondent Bank, that the payments they have effected by way of premium to the L.I.C were on the basis that the retiring employee would get a maximum amount of Rs.3.5 lakhs, at the time of his retirement, towards gratuity. In this view of the matter therefore, the scheme of gratuity that prevailed in the 3[rd] respondent Bank, and the benefit of which the petitioners claim, contemplated a payment of gratuity to a retired employee, subject to a maximum of Rs.3.5 lakhs. No doubt, under the provisions of the Payment of the Gratuity Act, 1972, Section 4(5) contemplates that it is open to an employee to receive better terms of gratuity under any award or agreement or contract with the employer and to that extent an employee can opt to receive better terms of gratuity than **W.P.(C). No. 19335 of 2010** **5** what is contemplated under the Payment of Gratuity Act, 1972. In the instant case, however, even under the gratuity scheme prevailing in the 3[rd] Bank, the payment of gratuity was subjected to the same ceiling limit of Rs.3.5 lakhs as stood under the Payment of Gratuity Act, 1972, prior to its amendment in 2010. Thus, the right of the petitioner to receive any amount in excess of Rs.3.5 lakhs by way of gratuity at the time of his retirement, is not established in this case. It may also be useful to refer, in this connection, to a Division Bench judgment of this Court reported in **- Travancore Cements Employees Co operative Bank Ltd., v. Ramachandran Nair E.V and Others (2014 KHC 174),** where, taking note of the fact that a Bank, that was governed by the Kerala Co-operative Societies Act and Rules, 1969, had enrolled in the Group Gratuity Cash Accumulation Scheme of the L.I.C and had effected contribution of premium to the L.I.C on the specific understanding that the maximum gratuity payable to a retiring employee would be Rs.3.5 lakhs, it was held that the employees retiring from the said Bank could not claim any amount higher than Rs.3.5 lakhs, which was the basis on which premium was paid by the Bank to the L.I.C and formed the basis for the disbursement of the gratuity **6** ## **W.P.(C). No. 19335 of 2010** amount to the retiring employees. The fact in the instant case being similar and the petitioners not having impugned the scheme applicable in the 3[rd] respondent Bank as, in any manner violative of the statutory prescription under Section 62 of the Kerala Co-operative Societies Act r/w Rule 59 of the Kerala Co-operative Societies Rules, I follow the ratio laid down in the aforesaid decision of the Division Bench of this court and dismiss this writ petition as devoid of merit. ## Sd/- **A.K.JAYASANKARAN NAMBIAR JUDGE** lsn