## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT:**
## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN**
**TUESDAY, THE 3RD DAY OF APRIL 2012/14TH CHAITHRA 1934**
## **WP(C).No. 6895 of 2012 (J) --------------------------**
## **PETITIONER(S):**
**-------------**
**NEYYATTINKARA GOVERNMENT SERVANTS CO-OPERATIVE SOCIETY LTD.NO.T.280, NEYYATTINKARA P.O. REPRESENTED BY ITS SECRETARY, V.BALACHANDRAN NEYYATTINKARA GOVERNMENT SERVANT'S CO-OPERATIVE SOCIETY LTD.NO.T.280.**
## **BY ADVS.SRI.POOVAPPALLY M.RAMACHANDRAN NAIR SRI.S.V.PREMAKUMARAN NAIR**
## **RESPONDENT(S):**
- **--------------**
**1. V.KRISHNAN ASSARI**
- **'ROHINI', VALIYAVILA, VAZHUTHOOR**
**NEYYATTINKARA - 695921.**
**2. STATE OF KERALA**
**REPRESENTED BY ITS SECRETARY, LABOUR DEPARTMENT GOVERNMENT SECRETARIAT**
**THIRUVANANTHAPURAM - 695001.**
**3. APPELLATE AUTHORITY,**
**(THE REGIONAL JOINT LABOUR COMMISSIONER,KOLLAM KOLLAM P.O - 691 001.**
**BY GOVERNMENT PLEADER, MR.G.GOPAKUMAR**
**THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03-04-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**SU/-**
**WP(C).No. 6895 of 2012 (J)**
## **APPENDIX**
## **PETITIONER(S) EXHIBITS**
- **EXT.P-1 TRUE PHOTOCOPY OF THE GRATUITY APPLICATION NO.29/2005. EXT.P-2 TRUE PHOTOCOPY OF THE WRITTEN STATEMENT NO.GA NO.29/2005**
- **EXT.P-3 TRUE PHOTOCOPY OF THE INDEMNITY BOND DATED 30-4-2003.**
- **EXT.P-4 TRUE PHOTOCOPY OF THE LETTER DATED 8-11-2005 OF THE MANAGER ,THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD.**
- **EXT.P-5 TRUE PHOTOCOPY OF THE ORDER DATED 11-2-2010 IN G.C.NO. 29/2005**
- **EXT.P-6 TRUE PHOTOCOPY OF THE NOTICE G.C.NO.29/09 OF THE CONTROLLING AUTHORITY.**
- **EXT.P-7 TRUE PHOTOCOPY OF THE AMOUNT REMITTANCE MEMO DATED 8-9-2010.**
- **EXT.P-8 TRUE PHOTOCOPY OF THE ORDER DATED 16-2-2012 IN G.A.NO. 36/2010 OF THE REGIONAL JOINT COMMISSIONER, KOLLAM.**
**RESPONDENTS' EXHIBITS NIL.**
**/TRUE COPY/**
**P.A TO JUDGE**
**SU/-**
## **P.N.RAVINDRAN, J.**
## **-------------------------------------WP(C)No.6895 of 2012 --------------------------------------Dated this the 3[rd] day of April, 2012**
## **J U D G M E N T**
The petitioner is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. The first respondent was the former Secretary of the petitioner society. He retired from service on attaining the age of superannuation on 30.9.2002. Upon retirement the first respondent was sanctioned the sum of Rs.2,61,120/- as gratuity under the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance of Corporation of India. From out of the said amount, the sum of Rs. 2,00,000/- was disbursed to the first respondent on 30.4.2003 on his executing the original of Ext.P3 Indemnity Bond. The first respondent thereafter filed an application, No.29/2005 before the Controlling Authority under the Payment of Gratuity Act, 1972 for an order directing payment of the sum of Rs.1,60,084/- being the balance amount of gratuity computed in terms of the provisions contained in the Payment of Gratuity Act, 1972 together with interest thereon at 12% per annum from 30.9.2002, the date of his retirement. In that application he contended that though under the Payment of Gratuity Act, 1972 he was entitled to receive the sum of Rs.3,00,684/-, the sum of Rs.2,00,000/- alone was paid to him
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on 30.4.2003 and that he is entitled to the balance amount of gratuity. The petitioner resisted the application by filing Ext.P2 written statement wherein it was contended that under the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance Corporation of India, the petitioner was entitled to receive only Rs.2,61,120/- by way of gratuity, that out of the said amount the sum of Rs.2,00,000/- was disbursed and that the balance amount payable is only Rs.61,120/-. The petitioner also contended that the sum of Rs.57,263.45 was due from the first respondent under 12 different heads and that after adjusting the said amount from the gratuity payable to the fist respondent, he is entitled to receive only the sum of Rs.3856.55. It was also contended that the first respondent is liable to pay the sum of Rs.46,523/- to Thiruvananthapuram District Cooperative Bank and the bank has in its letter dated 8.11.2005 requested the petitioner society to deduct the said amount from the gratuity and remit it to the bank. Alternatively it was contended that the maximum period of service that can be reckoned for the purpose of payment of gratuity is only 30 years that the petitioner is therefore entitled to receive only Rs.2,40,871/- towards gratuity and that he is liable to pay back the sum of Rs.16,932.45 to the society after adjusting the sum of Rs.3856.55 payable by the society to him.
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2. The Controlling Authority under the Payment of Gratuity Act, 1972 considered the rival contentions and passed Ext.P5 order dated 11.2.2010 where by the Controlling Authority directed payment of the sum of Rs.1,00,684/- together with simple interest at 12% per annum from 1.10.2002. Aggrieved thereby, the petitioner society filed an appeal before the Appellate Authority under the Payment of Gratuity Act, 1972. By Ext.P8 order passed on 16.2.2012, the Appellate Authority dismissed the appeal. Hence this writ petition challenging Exts.P5 and P8 orders.
3. Shorn of details, the case set out by the petitioner is that the first respondent was covered by the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance of Corporation of India and under the said scheme, he was entitled to receive only the sum of Rs.2,61,120/-, that out of the said amount the sum of Rs.2,00,000/- was disbursed to him by way of gratuity upon executing Ext.P3 indemnity bond and that the balance amount of Rs.61,120/-was retained as it was liable to be adjusted against the sum of Rs.57,263.45 stated to be the amount due from the first respondent under various heads. It is contended that under the Group Gratuity cum Life Assurance Scheme, the balance amount payable to the first respondent is only Rs.3856.55 and that even that amount is not liable
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to be paid in view of the fact that large amounts are due from him to the Thiruvanathapuram District Co-operative Bank.
4. I have considered the submissions made at the Bar by the learned counsel appearing for the petitioner. I have also gone through the pleadings and the materials on record. Sub-section (2) of section 4 of the Payment of Gratuity Act stipulates that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days wages based on the rate of wages last drawn by the employee concerned. Subsection (3) of section 4 of the Payment of Gratuity Act as it stood in force at the relevant time stipulated that the amount of gratuity payable to an employee shall not exceed Rs.3,50,000/-. A learned Single Judge of this Court considered the question whether employees of co-operative societies can claim better terms of gratuity under the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance of Corporation of India in **Ratnavalli v. Ambalapadu Service Co-operative Bank Ltd. (2005 (3) KLT 320)** . and held that if better terms of gratuity are available, the employees entitled to the benefits there under. The same view was reiterated by a Division Bench of this Court in **Nedupuzha Service Co-operative Bank Ltd. V.Rugmini (2011 (3) KLT 134)** . In the instant case, it is not in
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dispute that under the Payment of Gratuity Act, 1972 the petitioner is entitled to receive the sum of Rs.3,01,684/- as against the sum of Rs.2,61,120/- which he was entitled to receive under the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance of Corporation of India. On the terms of the Payment of Gratuity Act, 1972 it cannot be said that the petitioner's entitlement is limited to the amount payable under the Group Gratuity cum Life Assurance Scheme. In such circumstances, it has to be necessarily held that he was entitled to receive higher amount of gratuity under the Payment of Gratuity Act, 1972 subject of course to the upper limit therein stipulated in sub-section (3) of section 4. Then the only other question is whether the bank is entitled to withhold payment of the balance amount of gratuity on the ground that large amounts are due from the first respondent to it and also to the Thiruvanathapuram District Co-operative Bank. Both the authorities below rejected the said contention on the ground that no order forfeiting the gratuity has been passed with notice to the employee and therefore, the petitioner cannot withhold payment of the balance amount of gratuity. It was also held that an order of forfeiture contemplated in sub-section (6) of section 4 of the Act can be passed only in a case where the service of the employee has been terminated and not in a case where he has
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retired from service on attaining the age of superannuation in view of the stipulations in subsection (6) of section 4 of the Payment of Gratuity Act. The stand taken by the authorities under the Payment of Gratuity Act cannot be said to be illegal or perverse. The writ petition fails and is dismissed. Though the learned counsel appearing for the petitioner contended relying on section 34 of the Code of Civil Procedure that interest should be limited to 6%, I am of the opinion that the said contention is without any merit.
I accordingly hold that there is no merit in the challenge to the impugned orders. The writ petition fails and is dismissed.
Sd/-
**P.N.RAVINDRAN, JUDGE.**
Rkc
// true copy//
PA to Judge
