High Court of KeralaSingle JudgeWrit petitions dismissed; common judgment dispo...

Prabhakaran C. et al. v. State of Kerala and Travancore-Cochin Chemicals Ltd. and others

Case / Petition Number:W.P.(C).No. 20174 of 2012; W.P.(C).No.12544 of 2013; W.P.(C).No.14209 of 2012; W.P.(C).No.28127 of 2014
Neutral Citation::null

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • P. V. ASHA
Judgment Date
2019-02-19
Court Decision / Holding
Writ petitions dismissed. The court held that the amendments to the Trust Deed were valid, and petitioners could not claim gratuity beyond Rs.10 lakhs, consistent with the Payment of Gratuity Act ceiling and the LIC Group Gratuity Scheme, and that the petitioners’ challenges to the amendment were unsustainable.
Final Disposition
Writ petitions dismissed; common judgment disposing of all connected petitions.

Parties to the Case

Appellants / Petitioners

  • Prabhakaran C.
  • G. Radhakrishnan Krishnendhu
  • Jacob Chacko V. Valiyakalayil
  • V. Ramachandran
  • George Michael
  • K.M. Varkey
  • K.N. Balagangadharan
  • P.K. Mohandas Puthussery
  • A. Mohammed Mustafa

Respondents

  • State of Kerala
  • Travancore-Cochin Chemicals Ltd.
  • The Chairman and Managing Director, Travancore-Cochin Chemicals Ltd.
  • The Company Secretary, Travancore-Cochin Chemicals Ltd.
  • Gratuity Fund Trust, Travancore-Cochin Chemicals Ltd.
  • Life Insurance Corporation of India Ltd.

Legal Representation & Advocates

Counsels for Petitioners

  • • Elvin Peter P.J.
  • • K.R. Ganesh
  • • T.G. Sunil (Pranavam)
  • • P. Benny Thomas
  • • K. John Mathai
  • • M. Gopikrishnan Nambiar
  • • P. Gopinath (Sr.)
  • • Joson Manaval?

Counsels for Respondents

  • • S. Easwaran
  • • K. John Mathai
  • • M. Gopikrishnan Nambiar
  • • P. Benny Thomas
  • • P. Gopinath (Sr.)
  • • Government Pleader S. Easwaran

Case Synopsis & Summary

These writ petitions, heard together, arise from the Travancore-Cochin Chemicals Limited (TCC) Gratuity Fund. Retired officers of TCC challenge the 31.12.2010 amendment to Ext.P1, the Trust Deed, which aligned gratuity with the statutory ceiling of Rs 10 lakhs under the Payment of Gratuity Act, 1972, and introduced the LIC Group Gratuity Scheme. Ext.P5 amended the Trust Deed to cap gratuity at Rs 10 lakhs; LIC had issued a master policy (Ext.P3) and the Trust had earlier funded gratuity through an 8-1/3% contribution regime (Ext.P1). Petitioners point out that pre-amendment payments, and their rights under the original scheme, amounted to higher gratuities, arguing that amendments alter terms of service and the accrued rights of existing employees. The respondents contend that the amendments were made in accordance with Ext.P1’s Clause 8, allowing modifications so long as they do not affect liabilities already in the hands of trustees and the rights of employees to moneys already in custody, and that the Board’s resolution to limit gratuity was consistent with the statutory ceiling and the LIC master policy. The court examines the legality of the amendment, the effect on pre- amendment vested rights, and relevant precedents, ultimately holding that the amendment is valid and that petitioners cannot claim gratuity beyond Rs 10 lakhs. The petitions are dismissed.

Provisions of Law Cited

Payment of Gratuity Act, 1972 – Section 4(5)Income Tax Act, 1961Cooperative Societies Act, Section 62Kerala Co-operative Societies Rules, 1969 – Rule 59Proviso to Rule 59(iii)

Legal Doctrines & Maxims

  • Amendments to a Trust Deed are permissible if they do not affect liabilities of Trustees or rights of employees with respect to funds already in the Trustees’ hands (Ext.P1, Clause 8).
  • Higher gratuity under Section 4(5) of the Payment of Gratuity Act may be applicable but can be modified by valid amendments to the Trust Deed and Scheme.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners argued that the 31.12.2010 amendment to Ext.P1, enabling a cap of Rs 10 lakh on gratuity, amounts to a unilateral reduction of earlier earned gratuity rights and alters terms of service. They contend that Sections 4(5) of the Payment of Gratuity Act (1972) guarantee higher gratuity for employees who were in service prior to amendments, and that the LIC Group Gratuity Scheme cannot retrospectively deprive these rights. They rely on prior judicial pronouncements to claim entitlement to higher gratuity and seek restoration of pre- amendment benefits.

Contentions of Respondents

The respondents contend that Ext.P5 amendments were carried out per Ext.P1 Clause 8, allowing modification of rules and schemes so long as it does not affect liabilities in trustees’ hands or employees’ rights to already-paid funds. They argue that the act aligns with the statutory ceiling under the PG Act (Rs 10 lakhs) and the LIC master policy; no employee’s gratuity payable on retirement is unlawfully reduced, as the change governs future payments and liabilities consistent with the fund’s management.

Cited Precedents (3)

Case NameCitationTreatmentExplanation
Nedupuzha Service Co operative Bank Ltd. v. Rugmini2011 (3) KLT 134Mentioned OnlyCited as part of a comparative discussion; the court notes it but does not apply it to extend gratuity beyond the statutory ceiling.
Chandrasekharan Nair v. Kerala State Co operative Agricultural and Rural Development Bank Limited2017 (4) KLT 276DistinguishedFull Bench decision considered but held not applicable to the present facts; the court distinguishes it.
Travancore-Cements Employees Co operative Bank Limited v. Ramachandran Nair2014 (1) KLT 889PositiveUsed as a supportive precedent that guided the conclusion regarding gratuity limits under the scheme.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **TUESDAY ,THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940** ## **WP(C).No. 20174 of 2012** ## **PETITIONER/S:** **1 PRABHAKARAN.C AGED 58 YEARS CHERUPURATH HOUSE, KUNJATTUKARA, POST EDATHALA, ALUVA. 2 G.RADHAKRISHNAN KRISHNENDHU, ARA 169, ALFIA NAGAR, COCHIN UNIVERSITY P.O., KALAMASSERY. BY ADVS. SRI.ELVIN PETER P.J. SRI.K.R.GANESH SRI.T.G.SUNIL (PRANAVAM)** ## **RESPONDENT/S:** **1 STATE OF KERALA REPRESENTED BY ITS SECRETARY, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, PIN-695001.** **2 TRAVANCORE-COCHIN CHEMICALS LTD. REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501. 3 THE CHAIRMAN AND MANAGING DIRECTOR TRAVANCORE-COCHIN CHEMICALS LTD.,P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501.** **4 THE COMPANY SECRETARY TRAVANCORE-COCHIN CHEMICALS LTD.,P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501. 5 TRAVANCORE-COCHIN CHEMICALS LTD. GRATUITY FUND TRUST, TRAVANCORE-COCHIN CHEMICALS LTD., REGD.OFFICE: P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501, REPRESENTED BY ITS SECRETARY.** 2 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 **6 LIFE INSURANCE CORPORATION OF INDIA LTD. DIVISIONAL OFFICE, JEEVAN PRAKASH, M.G.ROAD, ERNAKULAM, COCHIN-11, REPRESENTED BY ITS MANAGER, PIN-682011.** **BY ADVS. SRI.P.BENNY THOMAS SRI.S.EASWARAN SRI.K.JOHN MATHAI SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.02.2019, ALONG WITH WP(C).12544/2013, WP(C).14209/2012, WP(C).28127/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 3 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **TUESDAY ,THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940** **WP(C).No. 12544 of 2013** ## **PETITIONER/S:** **JACOB CHACKO.V. VALIAKALAYIL, K.D PLOT P.O, KALAMASSERY 683109, ERNAKULAM DISTRICT** **BY ADVS. SRI.ELVIN PETER P.J. SRI.K.R.GANESH SRI.T.G.SUNIL (PRANAVAM)** ## **RESPONDENT/S:** - **1 STATE OF KERALA REPRESENTED BY ITS SECRETARY, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM** - **2 TRAVANCORE- COCHIN CHEMICALS LTD REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, P.B NO 4, UDYOGAMANDAL P.O, ERNAKULAM 683501** - **3 THE CHAIRMAN AND MANAGING DIRECTOR TRAVANCORE-COCHIN CHEMICALS LTD., P.B. NO.4, UDYOGAMANDAL P.O., ERNAKULAM-683501.** - **4 THE COMPANY SECRETARY TRAVANCORE- COCHIN CHEMICALS LTD, P.B NO 4, UDYAGAMANDAL P.O, ENRAKULAM 683501.** - **5 TRAVANCORE -COCHIN CHEMICAL LTD.** 4 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 **GRATUITY FUND TRUST, TRAVANCORE- COCHIN CHEMICALS LTD, REGD OFFICE P.B NO 4, UDYOGAMANDAL P.O, ERNAKULAM 683501, REPRESENTED BY ITS SECRETARY.** **6 LIFE INSURANCE CORPORATION OF INDIA LTD. DIVISIONAL OFFICE, JEEVAN PRAKASH, M.G. ROAD, ERNAKULAM, COCHIN-11, REPRESENTED BY ITS MANAGER682011.** **BY ADVS. SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.) SRI.S.EASWARAN** ## **OTHER PRESENT:** **SR.GP.SMT.MARY BEENA JOSEPH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.02.2019, ALONG WITH WP(C).20174/2012, WP(C).14209/2012, WP(C).28127/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 5 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **TUESDAY ,THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940** **WP(C).No. 14209 of 2012** ## **PETITIONER/S:** **1 V.RAMACHANDRAN AGED 59 YEARS 34/2492, MANGALA, T.P.ROAD, EDAPPALLY, ERNAKULAM-682 024. 2 GEORGE MICHAEL 1706/B, JANATHA NAGAR, SOUTH JANATHA ROAD, PALARIVATTOM, ERNAKULAM-682 025. 3 K.M.VARKEY KOCHUKUDIYIL HOUSE, KUNJATTUKARA, EDATHALA P.O., ALUVA-683561. 4 K.N.BALAGANGADHARAN ANURAMYA, 50/531, GANGA NAGAR, MANIMALA ROAD, EDAPPALLY, ERNAKULAM-682 024. 5 P.K.MOHANDAS PUTHUSSERY HOUSE, 37/1727, KUMARANASAN NAGAR ROAD, KADAVANTHRA, KOCHI-682 020.** **BY ADVS. SRI.ELVIN PETER P.J. SRI.K.R.GANESH SRI.T.G.SUNIL (PRANAVAM)** ## **RESPONDENT/S:** - **1 STATE OF KERALA** 6 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 **REPRESENTED BY ITS SECRETARY, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001.** - **2 TRAVANCORE-COCHIN CHEMICALS LTD REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, P.B.NO.4, UDYOGAMANDAL P.O., ERNAKULAM-683 501.** - **3 THE CHAIRMAN AND MANAGING DIRECTOR TRAVANCORE-COCHIN CHEMICALS LTD., P.B.NO.4, UDYOGAMANDAL P.O., ERNAKULAM-683501.** - **4 THE COMPANY SECRETARY TRAVANCORE-COCHIN CHEMICALS LTD., P.B.NO.4, UDYOGAMANDAL P.O., ERNAKULAM-683501.** - **5 TRAVANCODRE-COCHIN CHEMICALS LTD GRATUITY FUND TRUST, TRAVANCORE-COCHIN CHEMICALS LTD., REGD. OFFICE P.B.NO.4, UDYOGAMANDAL P.O., ERNAKULAM-683 501, REPRESENTED BY ITS SECRETARY.** - **6 LIFE INSURANCE CORPORATION OF INDIA LTD. DIVISIONAL OFFICE, JEEVAN PRAKASH, M.G.ROAD, ERNAKULAM, COCHIN-11, REPRESENTED BY ITS MANAGER.** **BY ADVS. GOVERNMENT PLEADER SRI.S.EASWARAN SRI.K.JOHN MATHAI SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.BENNY THOMAS SRI.P.GOPINATH (SR.)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.02.2019, ALONG WITH WP(C).20174/2012, WP(C).28127/2014, WP(C).12544/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** 7 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **TUESDAY ,THE 19TH DAY OF FEBRUARY 2019 / 30TH MAGHA, 1940** **WP(C).No. 28127 of 2014** ## **PETITIONER/S:** **A.MOHAMMD MUSTAFA PLOT NO. 3, SHAHNAZ, UDAYA NAGAR, KATHRIKADAVU, KALOOR P.O., ERNAKULAM, KOCHI-682017.** **BY ADVS. SRI.ELVIN PETER P.J. SRI.K.R.GANESH SRI.T.G.SUNIL (PRANAVAM)** ## **RESPONDENT/S:** |**1**|**STATE OF KERALA**| |---|---| ||**REPRESENTED BY ITS SECRETARY, INDUSTRIES**| ||**DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.**| |**2**|**TRAVANCORE-COCHIN CHEMICALS LTD.**| ||**REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR,**| ||**P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501.**| |**3**|**THE CHARIMAN AND MANAGING DIRECTOR**| ||**TRAVANCORE-COCHIN CHEMICALS LTD., P.B.NO. 4,**| ||**UDYOGAMANDAL P.O., ERNAKULAM-683501.**| |**4**|**THE COMPANY SECRETARY**| ||**TRAVANCORE-COCHIN CHEMICALS LTD., P.B.NO. 4,**| ||**UDYOGAMANDAL P.O., ERNAKULAM-683501.**| |**5**|**TRAVANCORE-COCHIN CHEMICALS LTD.**| 8 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 **GRATUITY FUND TRUST, TRAVACNORE-COCHIN CHEMICALS LTD., REGD. OFFICE, P.B.NO. 4, UDYOGAMANDAL P.O., ERNAKULAM-683501, REPRESENTED BY ITS SECRETARY.** **6 LIFE INSURANCE CORPORATION OF INDIA LTD. DIVISIONAL OFFICE, JEEVAN PRAKASH, M.G.ROAD, ERNAKULAM, COCHIN-11, REPRESENTED BY ITS MANAGER.** **BY ADVS. SRI.P.BENNY THOMAS SRI.S.EASWARAN SRI.JOSON MANAVALAN SRI.K.JOHN MATHAI SRI.KURYAN THOMAS SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH (SR.)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.02.2019, ALONG WITH WP(C).20174/2012, WP(C).14209/2012, WP(C).12544/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 9 ## **J U D G M E N T** The petitioners in all these cases are officers retired from Travancore Cochin Chemicals Limited ('TCC' for short). They are aggrieved by the action of the TCC in fixing a ceiling of Rs.10 lakhs as the gratuity payable to them. They seek directions to the respondents to disburse their gratuity at a rate which existed on 30.12.2010, the date on which amendment to the trust deed was effected. As the issue arising in all these cases is one and the same, these writ petitions are disposed of by this common judgment. Parties and documents referred to in this judgment are as described in W.P.(C).No.20174 of 2012. 2. The petitioners in W.P.(C).No.20174 of 2012, retired from service on 20.06.2012 and 20.05.2012 while working in TCC, which is a public sector Company. They have challenged the provision, 10 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 pointing out that persons who retired prior to their date of retirement got gratuity far in excess of Rs.10 lakhs. It is also pointed out that when they retired from service the Company themselves had mentioned the gratuity amount due to them as Rs.11,18,631/-, in the case of the first petitioner, whereas the actual gratuity amount paid was Rs.10 lakhs. 3. The TCC along with 5 trustees executed Ext.P1 Trust Deed on 07.10.1985, for constitution of a Trust viz., TCC Gratuity Fund ('Fund' for short), as a welfare measure for payment of gratuity to its employees. As per the terms of that deed, the TCC was to remit a sum equal to 8-1/3% of the salary of each employee for each year of his service as on 01.04.1985 and every year thereafter, to the Fund. As per Rule 3 of TCC Gratuity Fund Rules, the employees were eligible for gratuity at the time of their retirement at the rate of half month's salary last W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 11 drawn for each completed year of their service or portion thereof exceeding six months subject to a maximum of 20 months' salary. The amount transferred to the Fund was to be remitted in the Post Office Savings Bank or in the current Deposit of any scheduled Bank or in any manner specified in Rule 67(2) of Income Tax Rules. 4. Ext.P1 Trust Deed was amended on 22.04.1993 by which the amount in the Fund and future contributions could be deposited in the Life Insurance Corporation of India Group Gratuity Scheme. Based on that, the entire amount in the Fund was deposited with the Life Insurance Corporation of India Group Gratuity Cash Accumulation Scheme and LIC issued Ext.P3 master policy on 27.05.1994, after acknowledging the receipt of a sum of Rs. 20675681/towards the insuring 1146 members towards a total assured sum of Rs.4,8054482/- and LIC agreed to pay the grantees the benefit in respect of the members on 12 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 the grantee supplying proof and on condition that the TCC shall pay the premium as prescribed in schedule IV of the policy . 5. Whileso, the Board of Directors of the TCC in its meeting held on 21.12.2010 decided to limit the future gratuity payments in accordance with Payment of Gratuity Act, according to which the maximum amount payable was only Rs.10 lakhs. At the time when the Fund was constituted in 1985, the ceiling of gratuity under the payment of Gratuity Act was Rs.50,000/-; it was enhanced from time to time and later to Rs.10 lakhs by way of amendment to the Payment of Gratuity Act, 2010. The TCC decided to amend the Scheme with effect from 31.12.2010 and accordingly a ceiling limit was fixed with effect from 31.12.2010 at Rs.10 lakhs. 6. Based on the decision of 21.12.2010, Ext.P5 deed was executed on 31.12.2010 between the TCC and the trustees incorporating the amendments to the 13 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 original trust deed executed by them making the maximum amount of Gratuity payable to the employees, the maximum prescribed under the provisions in the Payment of Gratuity Act, 1972, as amended from time to time. The maximum amount payable under the Act is Rs.10 lakhs with effect from 24.05.2010. Petitioners are challenging the amendment on the ground that it has altered the service conditions. According to the learned counsel for the petitioners, this cannot affect the employees who were in service as on the date of amendment. 7 **.** The TCC has filed a statement pointing out that the trust deed was amended in tune with the provisions contained in the original trust deed. It is also pointed out that a settlement was arrived at with the workmen category on 26.02.2011 in tune with the amendment effected. It is also pointed out that petitioners did not challenge the amendments when it was effected in the year 2010. According to them, no 14 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 other employee belonging to workmen category or managerial category has challenged this Scheme or the amendment. According to them, the ceiling under the Payment of Gratuity Act at the time of creation of the fund was only Rs.50,000/- thereafter it was raised to Rs.1,00,000 and thereafter Rs.3,50,000/from 24.09.1997 and it was raised to Rs.10 lakhs with effect from 24.05.2010. It is also stated that at the time of creation of fund the average salary of the employees was only Rs.3,225/- in the year 1993 thereafter, the wages were revised. The managerial cadre employees got their pay revised with effect from 01.04.2007 as per order dated 07.02.2009; the workmen's wages were also revised. It is further pointed out that until the previous revision the gratuity payable to the employees had not crossed Rs.7 lakhs. But after the revision, there is considerable hike. As the Company was facing huge financial crisis the Board was compelled to take a W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 15 decision to limit the gratuity in terms of the provisions under the Payment of Gratuity Act and amendment was in tune with the Act. 8. The LIC has filed a counter affidavit stating that it has issued a master policy on 27.05.1994 on conditions specified. It is stated that consequent to amendment effected to Ext.P1 trust deed on 31.12.2010, endorsement was made on the master policy also limiting the maximum payable gratuity as Rs.10 lakhs. Consequent to the amendment of Ext.P1 Trust Deed as well as the rules and master policy, the claim of the petitioners for payment at the rates admissible before amendment is not permissible. It is stated that as per general condition No.9 of the master policy, the benefits payable under it are subject to the amendments made from time to time and therefore petitioners cannot have any right for payment in accordance with the rules prior to amendment. It is stated that LIC is only a Fund W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 16 manager and payments are made depending on the Fund made available by the TCC. 9. Learned counsel for the petitioners points that the issue is covered by the judgments in **- Nedupuzha Service Co operative Bank Ltd. v. Rugmini** [2011 (3) KLT 134] and in the judgment of the Full Bench of this Court in **Chandrasekharan Nair v. Kerala - State Co operative Agricultural and Rural Development Bank Limited** [2017 (4) KLT 276]. According to the petitioners, they were entitled to gratuity at a higher rate which is permissible under Section 4(5) of the Payment of Gratuity Act and that cannot be taken away by way of an amendment and if at all such an amendment was brought in, that would be applicable only to those employees joined subsequent to the amendment. 10. On the other hand, the learned Senior Counsel appearing for the TCC and the learned Standing Counsel for LIC pointed out that the issue 17 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 is covered against the petitioners by the judgment of the Division Bench of this Court in **Travancore - Cements Employees Co operative Bank Limited v. Ramachandran Nair** [2014 (1) KLT 889], where gratuity was being paid under a Group Gratuity Scheme. Therefore, it is pointed out that the petitioners cannot claim any amount in excess of that and they are governed by the provisions contained in the trust deed. The learned Senior Counsel also argued that Ext.P1 which is the original trust deed provides for amendment to the provisions therein and therefore, Ext.P3 as well as Ext.P4 amendments are brought in strictly in tune with the provisions contained in Ext.P1. 11. The learned counsel for the petitioners argued that there cannot be any reduction in gratuity to the retirement of the employees. 12. In this context, it is necessary to have a look at the original Trust Deed Ext.P1. Ext.P1 Trust W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 18 Deed was executed, for the constitution of the Fund in order to see that the employees of TCC are getting gratuity at the time of their retirement or on becoming incapacitated before the date of their superannuation and also to see that the dependents of those who die in harness after completion of qualifying period of service are getting the payment. Ext.P1 also provides for the rules under which the Fund is to be administered, subject to amendments made from time to time, as per Clause 4. As per Clause 6(a), the Company agreed to make initial contribution of an amount not exceeding 8-1/3 % of the salary of the employees, who were in the service of the Company as on 01.04.1985 for each year of their past service to the trustees as initial contribution to the Fund, calculating the same as half month's salary for each year of service upto 31.03.1985 on actuarial basis and paid into the Fund in one or more instalments. As per Clause (b), the W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 19 annual contribution shall be an amount not exceeding 8-1/3% of the salary of each employee for the year. Clause 8 reads as follows: The Trust hereby created shall be irrevocable save with consent of all beneficiaries of the TCC Gratuity Fund. From time to time and at any time, the Company may or the Trustees may with the consent of the Company, alter, vary, modify, remake, rescind, cancel or add to any of Rules in Schedule, provided that no alteration, variation, modification, re-making, rescission, cancellation or addition to the said Rules shall affect the liabilities or responsibilities of the Trustees or the right of any employee with respect to any moneys belonging to the TCC Gratuity Fund already in the hands of the Trustees. Provided, however, that so long as the TCC Gratuity Fund shall be an approved fund under the provisions of the Income tax Act, 1961 or any modification thereof, the powers contained in this Clause shall not be exercised without the consent of the Commissioner of Income-tax having jurisdiction over the area in which the Fund is established. 13. It would show that the only restriction to effect amendment, as far as employees are concerned is that it shall not affect the right of any employee with respect to any money belonging to the TCC Gratuity Fund already in the hands of the trustees. When the Company switched over to the Group Gratuity cash Accumulation Scheme of LIC, the gratuity Fund W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 20 comes to the hands of the trustees only at the time of retirement of the employee. Though till the date of amendment as per Ext.P5, persons like petitioners were entitled to a higher amount consequent to the revision of salary, it cannot be said that the gratuity fund was in the hands of the trustees as on the date of amendment or as on the date of their retirement. Therefore, in view of the provisions contained in Clause 8 of Ext.P1, there is nothing illegal in the amendment carried out. 14. Therefore, after the amendment the petitioners cannot have any rightful claim to insist payment of gratuity in excess of Rs.10 lakhs. When the trust deed itself provides for amendment and amendment is carried out in accordance with the provisions in Ext.P1 deed, without any violation to the conditions specified in Clause 8 of Ext.P1, the claims raised by petitioners are unsustainable. In view of Clause 8 of the deed of Trust, respondents W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 21 are free to amend the provisions contained in the trust deed. 15. The next question to be considered is whether the issue arising in this case is covered by **-** the judgments in **Nedupuzha Service Co operative Banks case (supra) or that in Chandrasekharan Nairs case. Ltd. v. Rugmini** [2011 (3) KLT 134]. In that case, this Court found that the Societies had received from LIC, amounts far in excess of what the employees were paid. The LIC had stated that the amount payable to the employees therein was more than the statutory limit and the admissible amount was already passed on to the society. The societies paid only the maximum payable under the Act retaining the excess amount received from LIC. There is no such contention in this case. 16. In the judgment in **Chandrasekharan Nair** 's case the Full Bench of this Court was considering the effect of Section 62 of the Co-operative Societies W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 22 Act, read with Rule 59 of the Rules. Rule 59 of the Co-operative Societies rules provided that gratuity payable to an employee would be half month's salary for every completed year of his service on condition that it shall not exceed 15 month's pay. Proviso to that Rule further provided that the amount payable towards gratuity shall not exceed the amount payable under the Payment of Gratuity Act or under the Cooperative Societies Act and Rules, whichever is applicable. In that background the Full Bench found that the employees were entitled to higher amount of gratuity as provided in Section 4(5) of the Payment of Gratuity Act, 1972. 17. In this case petitioner would have been eligible for the benefit of Rule 4(5) of the Central Act, in case Ext.P5 amendment was not effected. There is no rule as contained in the Provision to Rule 59(iii) of the Kerala Co-operative Societies Rules, 1969. Therefore the Full bench judgment will not 23 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 apply in the present case. There is no reason to interfere with the amendments carried out in Ext.P5 or on the decision of the Board of Directors in Ext.P6. Therefore, all these writ petitions are dismissed. Sd/- **P.V.ASHA, JUDGE.** AS 24 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 ## **APPENDIX OF WP(C) 20174/2012** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** - **TRUE COPY OF TRUST DEED DATED 7/10/85 CONSTITUTED BY THE 3RD RESPONDENT.** - **EXHIBIT P2** - **TRUE COPY OF THE EXT.P1 DEED AMENDED AS PER ORDER DATED 22/4/1993.** - **EXHIBIT P3 TRUE COPY OF MASTER POLICY OF THE GROUP GRATUITY SCHEME ISSUED BY THE 6TH RESPONDENT.** - **EXHIBIT P4 TRUE COPY OF COMMUNICATION ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE 2ND RESPONDENT COMPANY.** - **EXHIBIT P5 TRUE COPY OF EXT.P1 TRUST DEED AS PER AMENDMENT DATED 31/12/2010 ISSUED BY THE 2ND RESPONDENT.** - **EXHIBIT P6 TRUE COPY OF THE MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF THE 2ND RESPONDENT HELD ON 21/12/2010** - **EXHIBIT P7 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 1ST PETITIONER ISSUED BY THE 2ND RESPONDENT.** - **EXHIBIT P8 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 2ND PETITIONER ISSUED BY THE 2ND RESPONDENT.** ## **RESPONDENT'S/S EXHIBITS:** - **ANNEXURE-R2(a()** TRUE COPY OF THE RECEIPT GIVEN BY 1ST PETITIONER DATED 19/7/2012 AT THE TIME OF ACCEPTING GRATUITY. - **ANNEXURE-R2(b)** TRUE COPY OF THE RECEIPT GIVEN BY 2ND PETITIONER DATED 13/7/2012 AT THE TIME OF ACCEPTING GRATUITY. 25 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 ## **APPENDIX OF WP(C) 12544/2013** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE TRUST DEED DATED 07-10-85 CONSTITUTED BY THE 3RD RESPONDENT** **EXHIBIT P2 TRUE COPY OF THE EXT. P1 DEED AMENDED AS PER ORDER DATED 22-04-1993** **EXHIBIT P3 TRUE COPY OF THE MASTER POLICY OF THE GROUP GRATUITY SCHEME ISSUED BY THE 6TH RESPONDENT** - **EXHIBIT P4 TRUE COPY OF COMMUNICATION ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE 2ND RESPONDENT COMPANY** **EXHIBIT P5 TRUE COPY OF THE EXT. P1 TRUST DEED AS PER AMENDMENT DATED 31-12-2010 ISSUED BY THE 2ND RESPONDENT** **EXHIBIT P6 TRUE COPY OF THE MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF THE 2ND RESPONDENT HELD ON 21-12-2010 EXHIBIT P7 TRUE COPY OF THE AMOUNT SETTLEMENT STATEMENT OF THE PETITIONER ISSUED BY THE 2ND RESPONDENT** 26 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 ## **APPENDIX OF WP(C) 14209/2012** ## **PETITIONER'S/S EXHIBITS:** - **EXHIBIT P1 TRUE COPY OF TRUST DEED DATED 7.10.85 CONSTITUTED BY THE 3RD RESPONDENT** - **EXHIBIT P2 TRUE COPY OF EXT.P1 DEED AMENDED AS PER ORDER DATED 22.4.1993** - **EXHIBIT P3 TRUE COPY OF MASTER POLICY OF THE GROUP GRATUITY SCHEME ISSUED BY THE 6TH RESPONDENT** - **EXHIBIT P4 TRUE COPY OF COMMUNICATION ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE 2ND RESPONDENT COMPANY** - **EXHIBIT P5 TRUE COPY OF EXT.P1 TRUST DEED AS PER AMENDMENT DATED 31.12.2010 ISSUED BY THE 2ND RESPONDENT** - **EXHIBIT P6 TRUE COPY OF THE MINUTES OF THE MEETING OF THE BOARD OF DIRECTOR OF THE 2ND RESPONDENT HELD ON 21.12.2010** - **EXHIBIT P7 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 1ST PETITIONER ISSUED BY THE 2ND RESPONDENT** - **EXHIBIT P8 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 2ND PETITIONER ISSUED BY THE 2ND RESPONDENT** - **EXHIBIT P9 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 3RD PETITIONER ISSUED BY THE 2ND RESPONDENT** - **EXHIBIT P10 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 4TH PETITIONER ISSUED BY THE 2ND RESPONDENT** - **EXHIBIT P11 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 5TH PETITIONER ISSUED BY THE 2ND RESPONDENT** W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 27 ## **RESPONDENT'S/S EXHIBITS:** ## **ANNEXURE R1** ## NIL **ANNEXURE R2 A** TRUE COPY OF THE RECEIPT GIVEN BY 1ST PETITIONER DATED 17.6.2011 AT THE TIME OF ACCEPTING GRATUITY **ANNEXURE R2 B** TRUE COPY OF THE RECEIPT GIVEN BY 2ND PETITIONER DATED 12.7.2011 AT THE TIME OF ACCEPTING GRATUITY **ANNEXURE R2 C** TRUE COPY OF THE RECEIPT GIVEN BY 3RD PETITIONER DATED 8.2.2011 AT THE TIME OF ACCEPTING GRATUITY **ANNEXURE R2 D** TRUE COPY OF THE RECEIPT GIVEN BY 4TH PETITIONER DATED 8.2.2011 AT THE TIME OF ACCEPTING GRATUITY **ANNEXURE R2 E** TRUE COPY OF THE RECEIPT GIVEN BY 5TH PETITIONER DATED 9.8.2011 AT THE TIME OF ACCEPTING GRATUITY 28 W.P.(C).No.14209 & 20174 of 2012, 12544 of 2013 and 28127 of 2014 ## **APPENDIX OF WP(C) 28127/2014** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF TRUST DEED DATED 7/10/85 CONSTITUTED BY THE 3RD RESPONDENT.** **EXHIBIT P2 TRUE COPY OF THE EXT.P1 DEED AMENDED AS PER ORDER DATED 22/4/1993.** **EXHIBIT P3 TRUE COPY OF MASTER POLICY OF THE GROUP GRATUITY SCHEME ISSUED BY THE 6TH RESPONDENT.** **EXHIBIT P4 TRUE COPY OF COMMUNICATION ISSUED BY THE PUBLIC INFORMATION OFFICER OF THE 2ND RESPONDENT COMPANY. EXHIBIT P5 TRUE COPY OF EXT.P1 TRUST DEED AS PER AMENDMENT DATED 31/12/2010 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P6 TRUE COPY OF THE MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF THE 2ND RESPONDENT HELD ON 21/12/2010 EXHIBIT P7 TRUE COPY OF AMOUNT SETTLEMENT STATEMENT OF THE 1ST PETITIONER ISSUED BY THE 2ND RESPONDENT.**