High Court of KeralaSingle Judge2023-10-20Petition allowed; proceedings to recompute and ...

O.K. SAILAJA and Others v KOYILANDY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD and Others

Case / Petition Number:WP(C)NO.16445OF2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Raja Vijayaraghavan V.
Judgment Date: 2023-10-20
Court Decision / Holding: The writ petition is allowed. Exts. P15–P20 are quashed. Respondents are to reconsider Exts. P1–P6 in light of Chandrasekharan Nair (supra) and issue fresh orders. The amounts due, after deducting sums already paid, must be disbursed within two months from receipt of this judgment. If payment is delayed, interest at 6% per annum from the date the amount became due shall be payable.
Final Disposition: Petition allowed; proceedings to recompute and pay balance gratuity with interest; refunds and adjustments to be completed within two months; 6% interest if delayed, from due date.

Parties to the Case

Appellants / Petitioners

O.K. SAILAJA, AGED 66 YEARS D/O. O.K. GOPALAN, RESIDING AT 'ANJASS', NADAVANNUR P.O, KOYILANDI TALUK KOZHIKODE DISTRICT, PIN - 673614
RAVEENDRAN.K, ATHIRA, P.O. VATTOLI BAZAR, BALUSSERY VIA, KOZHIKODE DISTRICT, PIN - 673612
GANGADHARAN NAIR V, PREKRITHI HOME, KOKKUR P.O, BALLUSSERY VIA, KOZHIKODE DISTRICT, PIN - 673612
P.K. RAJAGOPALAN PUNATHIL HOUSE, P.O, BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612
K.P. BALAKRISHNAN JAYA HOUSE, P.O. BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612
K.V. ALI, MANIYOTE HOUSE, P.O. PANAGAD, BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612

Respondents

KOYILANDY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD NO. D 2020 BALUSSERY P.O, KOZHIKODE DISTRICT REPRESENTED BY ITS SECRETARY, PIN - 673612
BOARD OF MANAGEMENT OF THE KOYILANDY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD NO. D 2020 BALUSSERY P.O, KOZHIKODE DISTRICT REPRESENTED BY ITS PRESIDENT., PIN - 673612
THE MANAGER, LIFE INSURANCE CORPORATION OF INDIA JEEVAN PRAKASH, 8TH FLOOR, HUSOOR ROAD, KOZHIKODE 673 612.

Legal Representation & Advocates

Counsels for Petitioners

• P. V. Baby

Counsels for Respondents

• P. CSASIDHARAN
• SAHASRANAMANPB
• T.S.HARIKUMAR(K/782/1989)
• SRI.JIMMYGEORGE,SR.GP

Case Synopsis & Summary

Petitioners are six former employees of the Koyilandy Co-operative Agricultural and Rural Development Bank Ltd (D-2020). They superannuated on dates spanning 2005-2015 after more than three decades of service. They contend that after retirement the Bank secured a Group Insurance Policy with the Life Insurance Corporation of India (LIC) and that LIC’s payout formed the basis for gratuity calculation under Rule 59 of the Kerala Co-operative Societies Rules, 1969 read with Section 4(2) of the Payment of Gratuity Act, 1972. The petitioners assert that if LIC has paid only the prescribed ceiling amounts (3.5 Lakhs, 10 Lakhs, 20 Lakhs), the balance gratuity, if any, must be paid in accordance with Sections 4 and 5 of the central Act. They rely on Chandrasekharan Nair G. and Others v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. and Others (supra), contending that the central provision enables higher gratuity and prevails over the Kerala Rules. The petitioners seek certiorari to quash Exts. P15–P20, a declaration of entitlement to balance gratuity with interest, and a mandamus to effect payment. Respondents contend writ petitions cannot adjudicate higher gratuity under Article 226, that liability to pay beyond the ceiling lies with the employer, and that policy payments may suffice. The court followed Chandrasekharan Nair, held that the central Act prevails, allowed the petition, quashed Exts. P15–P20, directed reconsideration of Exts. P1–P6, and ordered payment of the balance within two months with 6% interest if delayed.

Provisions of Law Cited

Section 4(2) of the Payment of Gratuity Act, 1972Section 4(5) of the Payment of Gratuity Act, 1972Rule 59(iii) of the Kerala Co-operative Societies Rules, 1969

Legal Doctrines & Maxims

Section 4(5) of the Central Act enables an employee to opt for better terms of gratuity.
Law laid down in Chandrasekharan Nair G. and Others v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. and Others (supra), that Section 4(5) prevails over the Second Proviso to Rule 59(iii) of the Kerala Co-operative Societies Rules, 1969.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend their gratuity eligibility must be calculated under Rule 59(iii) of the Kerala Co-operative Societies Rules, read with Section 4(2) of the Payment of Gratuity Act, 1972. They assert that if the LIC paid only the prescribed ceiling amounts, the balance gratuity due must be paid under Sections 4 and 5 of the Act, and rely on Chandrasekharan Nair G. (supra) to argue that the central provision prevails over the Kerala Rules. They pray for quashing Exts. P15–P20 and payment of balance gratuity with interest, directing the respondents to recompute and disburse the amounts due within two months.

Contentions of Respondents

The respondents counter that a writ petition under Article 226 cannot entertain higher gratuity claims; the petitioners should approach the appropriate authority; the master policy ceiling has already disbursed amounts; liability to pay beyond the ceiling lies with the employer per Chandrasekharan Nair. They contend no further amounts are due.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Chandrasekharan Nair G. and Others v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. and Others	2017 (4) KLT 276	Positive	Full Bench held that Section 4(5) of the Central Act prevails over the Second Proviso to Rule 59(iii) of the Kerala Co-operative Societies Rules, 1969, enabling higher gratuity under the central Act.
W.P(C) NO.18089/2022	W.P(C) No. 18089/2022	Mentioned Only	Judgment cited in Exhibit P13; the document does not discuss its contents or treatment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

``` INTHEHIGHCOURTOFKERALAATERNAKULAM PRESENT THEHONOURABLEMR.JUSTICERAJAVIJAYARAGHAVANV FRIDAY,THE20[TH]DAYOFOCTOBER2023/28THASWINA,1945 WP(C)NO.16445OF2023 ``` ## **`- PETITIONERS :`** - **`1 O.K. SAILAJA, AGED 66 YEARS D/O. O.K. GOPALAN, RESIDING AT 'ANJASS', NADAVANNUR P.O, KOYILANDI TALUK KOZHIKDOE DISTRICT, PIN - 673614`** - **`2 RAVEENDRAN.K, ATHIRA, P.O. VATTOLI BAZAR, BALUSSERY VIA, KOZHIKODE DISTRICT, PIN - 673612`** - **`3 GANGADHARAN NAIR V, PREKRITHI HOME, KOKKUR P.O, BALLUSSERY VIA, KOZHIKODE DISTRICT, PIN - 673612`** - **`4 P.K. RAJAGOPALAN PUNATHIL HOUSE, P.O, BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612`** - **`5 K.P. BALAKRISHNAN JAYA HOUSE, P.O. BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612`** - **`6 K.V. ALI, MANIYOTE HOUSE, P.O. PANAGAD, BALUSSERY, KOYILANDI TALUK, KOZHIKODE DISTRICT, PIN - 673612`** ## **`BY ADV P.V.BABY`** ## **`- RESPONDENTS :`** - **`1 KOYILANDY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD NO. D 2020 BALUSSERY P.O, KOZHIKODE DISTRICT REPRESENTED BY ITS SECRETARY, PIN - 673612`** - **`2 BOARD OF MANAGEMENT OF THE KOYILANDY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD NO. D 2020 BALUSSERY P.O, KOZHIKODE DISTRICT REPRESENTED BY ITS PRESIDENT., PIN - 673612`** - **`3 THE MANAGER, LIFE INSURANCE CORPORATION OF INDIA JEEVAN PRAKASH, 8TH FLOOR, HUSOOR ROAD, -`** - **`KOZHIKODE 673 612.`** ``` WP(C)NO.16445of2023 ``` ``` 2 ``` ``` BYADVS. P.CSASIDHARAN SAHASRANAMANPB T.S.HARIKUMAR(K/782/1989) SRI.JIMMYGEORGE,SR.GP ``` ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSION ON20.10.2023,THECOURTONTHESAMEDAYDELIVEREDTHE FOLLOWING: ``` ``` WP(C)NO.16445of2023 ``` ``` 3 ``` ## **JUDGMENT** The petitioners state that they are former employees of the Koyilandy Co-operative Agricultural and Rural Development Bank Ltd. D-2020. They attained superannuation on 30.11.2013, 31.01.2015, 30.09.2005, 30.11.2012, 31.10.2015, and 28.02.2010, respectively, after having served for more than three decades. 2. The petitioners contend that respondents 1 and 2 had secured a Group Insurance Policy with the Life Insurance Corporation of India. On their retirement, the petitioners were paid the amount received from the LIC. They contend that the eligibility of the petitioners to receive gratuity is based on a calculation as mentioned in Rule 59 of the Kerala Cooperative Societies Rules read with Section 4 (2) of the Payment of Gratuity Act, 1972. They assert that in view of the law laid down in **Chandrasekharan Nair G. and Others** ## **v. Kerala State Co-operative Agricultural and Rural Development** **Bank Ltd. and Others[1]** , if on retirement, the LIC has paid only the prescribed amount of 3.5 Lakhs, 10 Lakhs, and 20 Lakhs respectively, but if the employee is entitled to higher amounts, the higher amount has to be paid in view of Section 4 and 5 of the Act. 3. In the said circumstances, they approached this Court and in > 1 [2017 (4) KLT 276] ``` WP(C)NO.16445of2023 ``` ``` 4 ``` pursuance to the directions issued, their representation was considered and the same was rejected by the exhibit P15 to P20 orders. Challenging the above orders, the petitioners have approached this Court seeking the following reliefs. “i). Issue a writ of certiorari or other appropriate order or direction calling for records leading to Ext.P15 to P20 issued by the 1st respondent and quash the same. ii). Declare that all the petitioners are entitled to receive the balance gratuity as stated in Exts.P1 to P6, along with interest @ 9% p.a till payment. iii). Issue a writ of mandamus, writ order, or direction directing the respondents to pay to the petitioners amounts mentioned in Exts.P1 to P6 towards balance gratuity along with interest at 9% p.a. from the respective dates of retirement of the petitioners till payment.“ 4. A counter affidavit has been filed by the 3rd respondent as per the prevailing gratuity ceiling and in terms of the master policy. It is further stated that in view of the law laid down in Chandrasekharan Nair, the liability to pay the balance amount of gratuity over and above the ceiling limit will be with the employer and not the LIC. 5. The respondents 1 and 2 have filed counter affidavit contending that the claim for payment of a higher amount of gratuity cannot be entertained by this Court in a writ petition filed under article 226 of the Constitution of India. It is further stated that the petitioner be relegated to ``` WP(C)NO.16445of2023 ``` ``` 5 ``` the jurisdictional authority and advance their claim. The amount due to the petitioners as per the master policy has been disbursed to them and no further amounts are due. 6. I have heard the learned counsel appearing for the petitioners and the learned standing counsel appearing for the respondents. 7. I have considered the submissions advanced. A Full Bench of this Court in **Chandrasekharan Nair G. and Others** (supra) had occasion to hold that Section 4(5) of the Central Act, which enables an employee to opt for better terms of gratuity, will prevail over the Second Proviso to 59(iii) of the Kerala Co-operative Societies Rules,1969. It was also held that the employee is entitled to a higher amount if he has opted in terms of Section 4(5) of the Central Act, even if a lesser amount is due under Section 4(2) thereof. In that view of the matter, if on retirement, the LIC has paid only the prescribed amount of 3.5 Lakhs, 10 Lakhs, and 20 Lakhs, respectively, but if the employee is entitled to higher amounts, the higher amount has to be paid in view of Section 4 and 5 of the Act. If any higher amount is due, the respondents are bound to pay the amount to the petitioners. In that view of the matter, this writ petition will stand allowed. Ext. P15 to 20 will stand quashed. There will be a direction to respondents 1 and 2 to reconsider Exts.P1 to P6 adverting to the law laid down in **Chandrasekharan Nair** (supra). Thereafter, fresh orders shall be passed, ``` WP(C)NO.16445of2023 ``` ``` 6 ``` and the amounts due to the petitioners less the amount already paid to them shall be disbursed within two months from the date of receipt of a copy of this judgment. If the amounts are not paid, as directed above, the same shall carry interest at the rate of 6% p.a. on and from the date on which the amount became due. Sd/- **RAJA VIJAYARAGHAVAN V, JUDGE** SMA ``` WP(C)NO.16445of2023 ``` ``` 7 ``` ## **`APPENDIX OF WP(C) 16445/2023`** |**`PETITIONER `**|**`EXHIBITS :-`**||||| |---|---|---|---|---|---| |**`Exhibit P1`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`27/1/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`1ST`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P2`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`27/1/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`2ND`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P3`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`17/3/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`3RD`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P4`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`27/1/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`4TH`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P5`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`27/1/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`5TH`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P6`**|**`A`** **`TRUE`** **`PHOTOCOPY`**|**`OF`**|**`THE`**|**`REPRESENTATION`**|**`DATED`**| ||**`27/1/2022`** **`SUBMITTED`**|**`BY`**|**`THE`**|**`6TH`** **`PETITIONER`**|**`TO`** **`THE`**| ||**`1ST RESPONDENT`**||||| |**`Exhibit P7`**|**`A TRUE PHOTOCOPY OF `**|**`THE `**|**`DECISION DATED 5/3/2022 OF`**||| ||**`THE`** **`2ND`** **`RESPONDENT `**|**`ALONG WITH COMMUNICATION DATED`**|||| ||**`15/3/2022 ISSUED BY `**|**`THE `**|**`1ST `**|**`RESPONDENT AND RECEIVED`**|| ||**`BY THE 1ST PETITIONER`**||||| |**`Exhibit P8`**|**`: A TRUE PHOTOCOPY `**|**`OF THE DECISION DATED 5/3/2022`**|||| ||**`OF`** **`THE`** **`2ND`** **`RESPONDENT`**||**`ALONG`** **`WITH`** **`COMMUNICATION`**||| ||**`DATED`** **`15/3/2022`** **`ISSUED`**||**`BY`**|**`THE`** **`1ST`** **`RESPONDENT`** **`AND`**|| ||**`RECEIVED BY THE 2ND `**|**`PETITIONER`**|||| |**`ExhibitP9`**|**`A TRUE PHOTOCOPY OF `**|**`THE `**|**`DECISION DATED 5/3/2022 OF`**||| ||**`THE`** **`2ND`** **`RESPONDENT `**|**`ALONG WITH COMMUNICATION DATED`**|||| ||**`21/3/2022 ISSUED BY `**|**`THE `**|**`1ST `**|**`RESPONDENT AND RECEIVED`**|| ||**`BY THE 3RD PETITIONER`**||||| |**`Exhibit P10`**|**`A TRUE PHOTOCOPY OF `**|**`THE `**|**`DECISION DATED 5/3/2022 OF`**||| ||**`THE`** **`2ND`** **`RESPONDENT `**|**`ALONG WITH COMMUNICATION DATED`**|||| ``` WP(C)NO.16445of2023 ``` ``` 8 ``` ``` 15/3/2022ISSUEDBYTHE1STRESPONDENTANDRECEIVED BYTHE4THPETITIONER ``` - **`Exhibit P11 A TRUE PHOTOCOPY OF THE DECISION DATED 5/3/2022 OF THE 2ND RESPONDENT ALONG WITH COMMUNICATION DATED 15/3/2022 ISSUED BY THE 1ST RESPONDENT AND RECEIVED BY THE 5TH PETITIONER`** - **`Exhibit P12 A TRUE PHOTOCOPY OF THE DECISION DATED 5/3/2022 OF THE 2ND RESPONDENT ALONG WITH COMMUNICATION DATED 15/3/2022 ISSUED BY THE 1ST RESPONDENT AND RECEIVED BY THE 6TH PETITIONER`** - **`Exhibit P13 A TRUE PHOTOCOPY OF THE JUDGMENT DATED 5/7/2022 IN W.P(C) NO. 18089/2022 BEFORE THIS HON'BLE COURT`** - **`Exhibit P14 A TRUE PHOTOCOPY OF THE REPRESENTATION DATED 19/8/2022 SUBMITTED BY THE PETITIONERS BEFORE THE BANK`** - **`Exhibit P15 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 1ST PETITIONER FROM THE BANK`** - **`Exhibit P16 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 2ND PETITIONER FROM THE BANK`** - **`ExhibitP17 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 3RD PETITIONER FROM THE BANK`** - **`Exhibit P18 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 4TH PETITIONER FROM THE BANK`** - **`Exhibit P19 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 5TH PETITIONER FROM THE BANK`** - **`Exhibit P20 A TRUE PHOTOCOPY OF THE ORDER DATED 19/8/2022 RECEIVED BY THE 6TH PETITIONER FROM THE BANK`**