P. Moosa and P. Moidutty v. C Ravindranathan

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: AMIT RAWAL
Judgment Date: 2022-03-23
Court Decision / Holding: Contempt petition dismissed; rule discharged; petitioners at liberty to claim any residual amount by approaching the respondents with appropriate details.
Final Disposition: Contempt petition dismissed; rule discharged; liberty to petitioners to pursue further amounts through proper channels.

Parties to the Case

Appellants / Petitioners

P. Moosa
P. Moidutty

Respondents

C Ravindranathan, Secretary, The Urban Co-operative Bank Ltd, Perinthalmanna No. 1758, Perinthalmanna P.O, Malappuram District 679 322

Legal Representation & Advocates

Counsels for Petitioners

• P. V. Baby

Counsels for Respondents

• V. Krishna Menon
• J. Surya

Case Synopsis & Summary

This Contempt of Court petition challenges non-compliance with directions issued in a writ petition (WP(C) 35127/2011) and is grounded in the Full Bench judgment Chandrasekharan Nair v. Kerala State Cooperative Agricultural and Rural Development Bank Ltd. (2017 (4) KLT 276 (F.B.)). The petitioners, retired chief accountants of The Urban Co-operative Bank Ltd., Perinthalmanna, contend that the employer-bank fixed their gratuity liability at Rs. 3,50,000 instead of the amount mandated by law and as observed in the Full Bench decision (para. 5). The respondent-bank counters that the petitioners retired before the 2018 amendment to the Central Act (Section 4) and that, as of retirement, the maximum gratuity then payable under the Central Act was Rs. 3,50,000; the bank asserts it has already paid that amount and that any excess liability would only arise under the 2018 amendment, which is not retroactive. It is stated that LIC indemnified the employer for amounts exceeding the pre-amendment limit, and petitioners may claim the balance if they provide details. The court reiterates the Full Bench interpretation: the liability to pay gratuity cannot be shifted to the insurer, and the employer bears responsibility for any deficit; the Central Act’s override (S.14) prevails. The contempt petition is dismissed, with liberty to the petitioners to pursue any further amounts by other appropriate means.

Provisions of Law Cited

Section 4 of the Payment of Gratuity Act, 1972S.4(2)S.4(5)S.4AS.14Rule 59(iii) of the Co-operative Societies Rules, 1969

Legal Doctrines & Maxims

Act to override other enactments (S.14)
Overriding effect of the Central Act over other enactments

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners argue that the employer-fixed gratuity liability of Rs. 3,50,000 is inconsistent with Rule 59(iii) of the Co-operative Societies Rules, 1969 and with observations in the Full Bench judgment. They submit that, following the Central Act (S.4) and its amendments, the liability cannot be capped by the master policy and must consider the proportional liability of the employer; non-compliance with the Bid Bench directions constitutes contempt. They seek enforcement of the Full Bench directions and payment of any amounts due under the statute.

Contentions of Respondents

The bank contends that the petitioners retired before the 2018 amendment to Section 4 and that the maximum gratuity payable at retirement was Rs. 3,50,000; the bank has already paid that amount and there is no retroactive application of the amended provision. It is further argued that LIC indemnity covers amounts beyond Rs. 3,50,000, and petitioners may approach the bank with their bank details to receive any excess along with interest; hence contempt is not maintainable and the petition is disposed.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Chandrasekharan Nair v. Kerala State Cooperative Agricultural and Rural Development Bank Ltd.	2017 (4) KLT 276 (F.B.)	Positive	Relied upon to interpret liability under the Central Act and the non-shiftability of gratuity liability to an insurer as per the Full Bench judgment.

Extracted Judgment Text

Exact text extracted from official judgment records.

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 23[RD] DAY OF MARCH 2022 / 2ND CHAITHRA, 1944 CON.CASE(C) NO. 232 OF 2022 AGAINST THE ORDER/JUDGMENT DATED IN 17.12.2020 IN WP(C) 35127/2011 OF HIGH COURT OF KERALA ``` ## **`PETITIONERS/1ST AND 2ND PETITIONERS:`** ``` 1P MOOSA, AGED 62 YEARS, S/O. MOIDU POOVAKURISSI, RESIDING AT POOVAKURISSI HOUSE, MOORKANAD P.O, PERINTHALMANA, MALAPPURAM DISTRICT 679 338 (RETIRED CHIEF ACCOUNTANT, THE URBAN CO-OPERATIVE BANK LTD, PERINTHALMANNA) 2P. MOIDUTTY, AGED 62 YEARS, S/O. MOHAMMED, PATTUKUTH, CHERUKARA P.O, PERINTHLAMANNA, MALAPPURAM DISTRICT (RETIRED CHIEF ACCOUNTANT, THE URBAN CO-OPERATIVE BANK LTD, PERINTHALMANNA) BY ADV P.V.BABY ``` ## **`RESPONDENT/1ST RESPONDENT IN WP(C):`** **==> picture [78 x 115] intentionally omitted <==** ``` C RAVINDRANATHAN, S/O. KRISHNAN, SECRETARY, THE URBAN CO-OPERATIVE BANK LTD, PERINTHALMANNA NO. 1758, PERINTHALMANNA P.O, MALAPPURAM DISTRICT 679 322 ``` ``` BY ADVS. V.KRISHNA MENON J.SURYA ``` ``` THIS CONTEMPT OF COURT CASE (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -2- ``` ## **`JUDGMENT`** Grievance of the petitioners in the Contempt petition is on account of the non compliance of the direction of this Court whereby the writ petition was allowed in terms of the directions and the observations contained in the Full Bench judgment of this Court titled as **Chandrasekharan Nair v. Kerala State Cooperative Agricultural and Rural Development Bank Ltd.** ( **2017 (4) KLT 276 (F.B.).** 2. Learned counsel representing the petitioners submits that as per the counter affidavit filed by the respondents the liability of the gratuity of the petitioners by the employer has been fixed as Rs.3,50,000/- (Rupees three lakh fifty thousand only) though the petitioners are entitled to as per Rule 59(iii) of the Co-operative Societies Rules, 1969 and also in terms of the observations recorded in paragraph No.5 ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -3- ``` of the judgment. There is a rampant and blatant defiance to the direction of this Court and therefore the respondents are liable to be proceeded under the provisions of the Contempt of Courts Act, 1971. 3. On the other hand learned counsel representing the Bank emphatically relied upon the averments made in paragraph Nos. 6, 7 & 8 of the counter affidavit saying that both the petitioners had retired prior to the amendment caused to Section 4 of the Central Act i.e., 29.03.2018 as their date of retirement is 30.06.2009 and 30.03.2010 and at relevant point of time the maximum gratuity was Rs.3,50,000/- which has already been paid to the petitioners and thus there is no further liability of the employer towards the petitioners. 4. I have heard learned counsel for the parties and appraised the paper book. 5. Paragraph No.5 of the aforementioned ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -4- ``` ## judgment of the Full Bench reads as under: ”5. The liability to pay gratuity does not get shifted to the insurer by the compulsory insurance and the effect is only that the maturity value of the master policy would go to the credit of the dues of the employee. Any amount in excess of the gratuity due would also go to the employee since the contract of insurance would fall within the ambit of S.4(5) of the Central Act. Any deficit in the amount due as gratuity to the employee after payment by the insurer has to be met by the employer only as the liability squarely rests on him under S.4(2) of the Central Act. The insurer cannot be made liable to pay any amount in excess of the maturity value of the master policy as the same would be dependent on the premium paid to him. The compulsory insurance under S.4A of the Central Act is only to facilitate employer to discharge his liability and the premium paid is part of the wages only. Of course the wording of the second proviso to R.59(iii) of the Rules gives rise to a doubt that the employee would be pinned down to the amount of gratuity specified in the Central Act. Such an interpretation would render S.4(5) of the Central Act otiose whereunder the employee has a right to receive better terms of gratuity under any award or agreement or contract with the employer. The provisions of the Central Act or any rule made thereunder shall have effect ``` CON.CASE(C) NO. 232 OF 2022 ``` **==> picture [22 x 9] intentionally omitted <==** notwithstanding anything inconsistent therewith contained in any other enactment or instrument or contract. The overriding effect of the Central Act over other enactments is explicit from S.14 of the Central Act which is to the following effect: “14. Act to override other enactments, etc.- The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.” ” 6. No doubt in case there is a short fall of the insured amount the liability is fastened upon the employer. The dispute involved in the present contempt petition is whether the petitioners would be entitled to the maximum amount of Rs.10,00,000/(Rupees ten lakhs only) as per the provisions of the Central Act i.e., Section 4 whereby the limit was enhanced from Rs.3,50,000/- to Rs.10,00,000/- with effect from 29.03.2018. There is no such retroactive application of the amendment. Respondents have ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -6- ``` already discharged the liability in the payment as both the petitioners have retired before the date of the amendment i.e., on 30.06.2009 and 31.03.2010. 7. At this stage learned counsel for the petitioners submits that the Life Insurance Corporation (LIC) had indemnified the employer more than the statutory limit provided under the Central Act before the amendment i.e., about Rs.3,62,000 and odd amount in respect of the petitioners. 8. Learned counsel for the respondents submits that the bank has already informed the petitioners to claim the interest on the amount received by the LIC. In case the respondents have received the amount in excess of Rs.3,50,000/- that liability has to be credited in the account of the employee along with the interest but the petitioners have not come forward, as per the submissions of the learned counsel for the respondents, to claim the same. ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -7- ``` The petitioners are at liberty to claim the aforesaid. As and when they approach the respondents or provide their bank details to the respondents, the amount will be credited. In this view of the matter rule is discharged and contempt petition is dismissed. Sd/- ``` AMIT RAWAL JUDGE ``` ``` vv ``` ``` CON.CASE(C) NO. 232 OF 2022 ``` ``` -8- ``` ## **`APPENDIX OF CON.CASE(C) 232/2022`** ## **`PETITIONER ANNEXURES`** |`Annexure A1`|`TRUE COPY OF THE JUDGMENT DATED 17-`| |---|---| ||`12-2020 IN WP(C0 NO. 35127/2011`| |`Annexure A2`|`TRUE COPY OF THE COMMUNICATION DATED`| ||`6-12-2021 SUBMITTED TO THE RESPONDENT`| ||`BY THE PETITIONERS`| |`Annexure A3`|`TRUE COPY OF THE COMMUNICATION DATED`| ||`24-12-2021 RECEIVED BY THE 1ST`| ||`PETITIONER FROM THE RESPONDENT`| |`Annexure A4`|`TRUE COPY OF THE COMMUNICATION DATED`| ||`24-12-2021 RECEIVED BY THE 2ND`| ||`PETITIONER FROM THE RESPONDENT`|