Managing Director, Food Corporation of India v. Deputy Chief Labour Commissioner (Central), Kendriya Shram Sadan, Olimgal, Kakkanad; Controlling Authority under the Payment of Gratuity Act and Assistant Labour Commissioner (Central), Kendriya Shram Sadan, Olimgal, Kakkanad; Velappan Nair; V. I. Gracy

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **MONDAY, THE 20TH DAY OF JANUARY 2020 / 30TH POUSHA, 1941** ## **WP(C).No.35968 OF 2019(U)** ## **PETITIONER:** **MANAGING DIRECTOR, FOOD CORPORATION OF INDIA 16/20,BARAKHAMBA LANE,NEW DELHI-110001, REPRESENTED BY P.R.PRASAD,DIVISIONAL MANAGER, FCI,KOCHI-682011.** **BY ADVS.** **SRI.JOSE KURIAKOSE (VILANGATTIL) SRI.BIJO FRANCIS** ## **RESPONDENTS:** - **1 DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL) KENDRIYA SHARAMSADAN,OLIMUGAL, KAKKANAD-682030.** - **2 CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT AND ASSISTANT LABOUR COMMISSIONER(CENTRAL), KENDRIYASHARAMSADAN,OLIMUGAL, KAKKANAD-682030.** - **3 SRI.VELAPPAN NAIR, HOUSE NO.57/3540,VINOBA NAGAR NO.170,CHILAVANNOOR,KADAVANTHRA, KOCHI-682020.** - **4 SMT.V.I.GRACY, KANATT PUTHENVEETTIL, ANRA-117,PANORAMA NAGAR,KADAVANTHRA,KOCHI-682020.** **R1-2 BY ADV. SHRI.P.VIJAYAKUMAR, ASG OF INDIA R3-4 BY ADV. SRI.N.SATHEESH ADV. SRI.K.JANARDHANA SHENOY ADV. SMT.S.RAKHEE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.35968 of 2019 2 ## **J U D G M E N T** This writ petition is filed challenging Ext.P6 order passed by the appellate authority as per which the petitioner herein was advised to deposit the amount in compliance with Section 7(7) of the Payment of Gratuity Act, 1972 (for brevity 'the Act') within a period of 15 days. 2. The facts leading to the filing of the Writ Petition are that the respondents 3 and 4 approached the 2[nd] respondent and filed an application under Section 7 of the Act. They contended that they had retired in the year 2007 and was paid only a sum of Rs.3.5 lakhs as gratuity. According to them, on the revision of pay scales from CDA pattern to IDA pattern, the employees including the respondents 3 and 4 were switched to the IDA pattern. They thus became eligible to draw a sum of Rs.10 lakhs as gratuity amount on par with other retired employees who were in service at the time when the shifting of pay pattern had come into effect. They also contended that all the retired employees were paid the amount and they were sidelined. 3. The controlling authority by Ext.P4 order allowed the W.P.(C) No.35968 of 2019 3 petition and ordered the opposite party/the petitioner herein to pay the balance amount of Rs.6,50,000/- together with simple interest at 10% from the date on which gratuity became payable. 4. The petitioner submitted Ext.P5 appeal before the 1[st] respondent against the orders passed by the 2[nd] respondent. Along with the appeal, they filed an application seeking to exempt the petitioner herein from depositing any amount to be deposited as mandated under Section 7(7) of the Act of 1972. The appellate authority by the impugned order rejected the application holding that Section 7(7) of the Act is clear and that it specifies under its proviso that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub section (4) or deposits with appellate authority, such amount. 5. It is the case of the petitioner that the amount due to the respondents 3 and 4 were released at the time of superannuation itself and therefore, the proviso to Section 7(7) of the Payment of Gratuity Act will have to be interpreted in such a manner that the liability of the W.P.(C) No.35968 of 2019 4 petitioner is only that amount which the employer admits to be payable by him as gratuity and does not envisage in any way the amounts determined by the controlling authority. It is further contended that in view of the pendency of W.P.(C) No.7659 of 2011 and W.P.(C) No. 3365 of 2012 before the High Court of Delhi, the right of the respondents cannot be said to have been crystallized. It is in the afore circumstances that this Writ Petition is filed seeking to quash Ext.P6 and for a further declaration that the petitioner is not liable to pay any further amount under Section 7(7) r/w. Section 7(4) of the Act of 1972 and for incidental reliefs. 6. Sri.Jose Kuriakose, the learned counsel appearing for the petitioner would contend that the Food Corporation of India functions on public money purely on food subsidy of the Central Government and if the amounts as determined by the Controlling Authority are ordered to be released, it would result in great hardship. The learned counsel would also refer to Section 7(4)(a) of the Act and it was urged that the petitioner herein is bound as per the provisions of the Act to deposit with the Controlling Authority only such amount as it admits to be paid by them as gratuity and nothing more. The admitted amount has already been released to the respondents 3 and 4 and in that view of W.P.(C) No.35968 of 2019 5 the matter, the amount which has been arrived at by the Controlling Authority cannot be ordered to be paid. 7. Sri.N.Satheesh, the learned counsel appearing for the respondents 3 and 4 submits that the Writ Petition pending before the High Court has nothing to do with the claim raised by the respondents 3 and 4. He would further contend that the Controlling Authority has noted that the stay granted by the Delhi High Court has been vacated and there was no embargo in the application being considered on its merits. He would then contend that the question raised by the petitioner herein has already been decided against the petitioners by this Court in the decision reported in **Managing Director, Kerala State Co-operative Coir Marketing Federation Ltd[1]** . The learned counsel also relied on another judgment of a learned Single Judge in W.P.(C) No. 21488 of 2013 and also the principles laid down in **Standard Stonewares and Tiles vs Appellate Authority[2]** . 8. I have considered the submissions advanced and have perused the records. The very same question raised by the petitioner was considered by a learned Single Judge in **Managing Director** 1 [2015(1)KLT 844] 2 [2004 (2) KLT 519] W.P.(C) No.35968 of 2019 6 ## **Kerala State Co-operative Coir Marketing Federation Ltd** . (supra). In the said case an employee who had retired on superannuation, and who was paid some amount by way of gratuity , raised a dispute that the gratuity was paid computing his period of service as 25 years instead of 29 years. The claim was allowed by the Controlling Authority directing the payment of amounts which was recalculated taking the period of service as 29 years. The employer approached the appellate authority in appeal and refused to deposit the amount ordered by the Controlling Authority. The appeal was not taken on file on the ground that pre-deposit, which is mandatory under second proviso to Sub-section 7 of Section 7 of the Act, has not been made. A contention was taken that since the admitted amounts have already been paid, there is no requirement of any pre-deposit. It was also contended that the admitted amount as per Sub-clause (a) of Subsection (4) of Section 7 of the Act is only that admitted by the employer. Rejecting the said contentions, a learned Single Judge of this Court relying on the principles in **Standard Stonewares** ( Supra ) held as follows: “When the Controlling Authority has decided on the issue, sub clause (c) of Sub-section (4) comes into place. As per sub clause (c) of sub-section (4) after adjudicating the dispute and determining the amount of gratuity payable; the Controlling Authority has the power W.P.(C) No.35968 of 2019 7 to “direct the employer to pay such amount or as the case may be such amount as reduced by the amount already deposited by the employer”. On an order being passed after adjudication of the dispute and a direction being issued in terms of the above provision, necessarily, the amount required to be deposited under sub-section (4) would be the amount adjudicated upon with interest thereon. The order declining waiver of deposit of amounts adjudicated upon is upheld. 9. In that view of the matter, I find absolutely no reason to interfere with the order passed by the appellate authority. The petitioner will have to either produce a certificate of the Controlling Authority to the effect that the petitioner has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4) of Section 7 on his depositing with the Appellate Authority such amount. 10. At this stage, the learned counsel appearing for the petitioner submits that the appeal be ordered to be considered on its merits on the petitioner making deposit of the entire amount as ordered under Ext.P6 within a period of two weeks from today. In view of the said submission it is ordered that on payment being made as ordered by the appellate authority within a period of two weeks from today, the appellate authority shall take the appeal back on file and decide the same in accordance with law within a further period of three months. If W.P.(C) No.35968 of 2019 8 any coercive proceedings are initiated against the petitioner the same shall be kept in abeyance for a period of three weeks from today. This writ petition is dismissed, however, with the above directions. ## **Sd/-** **RAJA VIJAYARAGHAVAN V** **JUDGE** pkk W.P.(C) No.35968 of 2019 9 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE APPLICATION NO.48/17/2018/D 1 FILED BY THE 3RD RESPONDENT BEFORE THE 2ND RESPONDENT** **EXHIBIT P2** **THE TRUE COPY OF THE WRITTEN STATEMENT DT.10.01.2019 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT IN APPLICATION NO.48/17/2018/D1** - **EXHIBIT P3 TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT IN APPLICATION NO.48/17/2018/D1 DT.30.09.2019.** - **EXHIBIT P4 TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT IN APPLICATION NO.48/13/2018/D1 DT.30.09.2019.** - **EXHIBIT P5 THE TRUE COPY OF THE I.A.SEEKING EXEMPTION FROM DEPOSITING AN AMOUNT UNDER SEC.7 (7)DT.07.12.2019.** - **EXHIBIT P6** **THE TRUE COPY OF THE ORDER DT.12.12.2019 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.**