Santoshkumar S. and Others v. Kerala State Co-operative Bank Ltd. and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V THURSDAY, THE 26[TH] DAY OF OCTOBER 2023 / 4TH KARTHIKA, 1945 WP(C) NO. 37932 OF 2022`** ## **`PETITIONER/S:`** ``` 1SANTHOSHKUMARS., AGED59YEARS S/O.SADASIVANM.,SENIORMANAGER(RETD.), KERALASTATECO-OPERATIVEBANK, RESIDINGATKOCHUTHARAYILHOUSE, PATTOMTHURUTHUP.O.,PERINADVIA, - KOLLAMDISTRICT691601. 2SANTHOSHKUMARC.R.,AGED59YEARS, S/O.RAGHAVANC.M., SENIORMANAGER,(RETD.) KERALASTATECO-OPERATIVEBANK, RESIDINGATCHOKKATHUPARAMBIL,POOVARANYP.O., - KOTTAYAMDISTRICT686577. 3G.GOPAKUMAR,AGED59YEARS, S/O.GOPALAKRISHNANNAIRG.,DEPUTYGENERALMANAGER (RETD.),KERALASTATECO-OPERATIVEBANK, RESIDINGATNALUKETTU,KILICHETTANLANE, SANKARROAD,SASTHAMANGALAM, THIRUVANANTHAPURAM-695016. 4RADHAKRISHNAPILLAIR.,AGED59YEARS, S/O.RAMAKRISHNAPILLAS., ASSISTANTGENERALMANAGER(RETD.) KERALASTATECO-OPERATIVEBANK, RESIDINGATSHREE,KRWA,242F, KUTHIRAKADLANE,VATTIYOORKAVU, - THIRUVANANTHAPURAM695013. 5RADHAKUMARIAMMA.S.K., AGED62YEARS D/O.KESAVANNAIR,DEPUTYGENERALMANAGER(RETD.) KERALASTATECO-OPERATIVEBANK,RESIDINGATKAIRALI, AMRITHANAGAR,KAIMANAM,PAPPANAMCODEP.O., THIRUVANANTHAPURAM-695018. ``` W.P.(C.) No.37932 of 2022 2 ``` 6P.VISWANATHAN,AGED62YEARS, S/O.SIVASANKARANNAIR,DEPUTYGENERALMANAGER(RETD.), KERALASTATECO-OPERATIVEBANK,RESIDINGAT32/196, ARUNODHAYAM,HOUSENO.52,STREETNO.4, – DARSANANAGAR,VENKKARA,NOORANI,PALAKKAD678004. 7MAYADEVIS.,AGED59YEARS, D/O.PRABHAKARANNAIRB.,TYPISTGRADE-I(RETD.) KERALASTATECO-OPERATIVEBANK,RESIDINGATKRISHNA, T.C.84/1388,DESRA-56,PERUNTHANNI,VALLAKKADAVUP.O., - THIRUVANANTHAPURAM695008. 8SREEKUMARK.,AGED62YEARS, S/O.KUNJUKRISHNAKURUP,DEPUTYGENERALMANAGER(RETD.), KERALASTATECO-OPERATIVEBANK,RESIDINGATUTHRADAM, A.34,MADANKOVILLANE,VELLAYAMBALAM, - THIRUVANANTHAPURAM695010. 9RAJANC.G.,AGED62YEARS S/O.GOPALAKRISHNANNAIR,,DEPUTYGENERALMANAGER (RETD.),KERALASTATECO-OPERATIVEBANK, RESIDINGATGREESHMAM,VNRAA-14,MANNAMKONAM, - VATTIYOORKAVUP.O.,THIRUVANANTHAPURAM695013. 10PILLAIGEETHAG.JANARDHAN,AGED62YEARS, D/O.JANARDHANAN,MANAGER(RETD.) KERALASTATECO-OPERATIVEBANK,RESIDINGATKSHB APARTMENT,FLATNO.301,EMSNAGAR,PATTOOR, - THIRUVANANTHAPURAM695035. 11K.B.ROY,AGED59YEARS, S/O.BALAN,SENIORMANAGER(RETD.) KERALASTATECO-OPERATIVEBANK, RESIDINGATPYARYLAND,MALAYALAPPUZHA, - THAZHAMP.O.,PATHANAMTHITTA689666. 12PAVITHRANK.P.,AGED59YEARS, S/ORAGHAVANNAMBIARC.V., SENIORMANAGER(RETD.)KERALASTATECO-OPERATIVEBANK, RESIDINGATCHALILHOUSE,THILLANKERYP.O. - MATTANNOOR,KANNURDISTRICT670702. ``` W.P.(C.) No.37932 of 2022 3 ``` 13VIMALADEVIAMMAS.,AGED59YEARS, D/O.CHELLAPPANPILLAI,SENIORMANAGER(RETD.) KERALASTATECO-OPERATIVEBANK,RESIDINGATSUDARSANAM, KIDANGAYAMNADUVILPATHARAMP.O., - KOLLAMDISTRICT690567. 14ANILKUMARM.G., S/O.GOVINDAPILLAI,AGED59YEARS, SENIORMANAGER(RETD.),KERALASTATECO-OPERATIVEBANK, RESIDINGATGOVINDAMANGALAM,INCHAKKADU, - KAKKAKKUNNUP.O.,KOLLAM690522. 15JOSEJOHN,AGED59YEARS, S/O.JOHN,SENIORMANAGER(RETD.), KERALASTATECO-OPERATIVEBANK, RESIDINGATMUNDAKKATHARAPPELHOUSE,VELLADP.O., - ALAKKODE,KANNUR670571. BYADVS. GEORGEPOONTHOTTAM(SR.) NISHAGEORGE A.L.NAVANEETHKRISHNAN ANNMARIAFRANCIS SIDHARTH.R.WARIYAR ``` ## **`RESPONDENT/S:`** ``` 1KERALASTATECO-OPERATIVEBANKLTD. P.B.NO.6515,COBANKTOWERS,PALAYAM, – THIRUVANANTHAPURAM695033, *REPRESENTEDBYITSCHIEFEXECUTIVEOFFICER. *THEADDRESSOFTHE1STRESPONDENTINTHECAUSE TITLEOFTHEWRITPETITIONISCORRECTEDAS ``` ``` “KERALASTATECOOPERATIVEBANKLTD., PBNO.6515,COBANKTOWERS,PALAYAM, THIRUVANANTHAPURAM-695033, REPRESENTEDBYITSCHIEFEXECUTIVEOFFICER, ASPERORDERDATED15.12.2022INIA1/22OFWPC37932/22 ``` W.P.(C.) No.37932 of 2022 4 - `2 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM` - `3 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT, –` - `THIRUVANANTHAPURAM 695001.` - `4 THE CHIEF EXECUTIVE OFFICER, KERALA STATE CO-OPERATIVE BANK LTD., P.B. NO. 6515, –` - `COBANK TOWERS, PALAYAM, THIRUVANANTHAPURAM 695033.` ``` SRI.GILBERTGEORGECORREYA,SCFORKERALASTATE CO-OPERATIVEBANK ``` ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSION ON26.10.2023,THECOURTONTHESAMEDAYDELIVEREDTHE FOLLOWING: ``` W.P.(C.) No.37932 of 2022 5 ## **JUDGMENT** The petitioners contend that after rendering about two decades of service with the respondent Bank, they have attained superannuation. They have approached this court seeking the following reliefs: - i) Issue a writ of mandamus or any other appropriate writ order or direction directing the 1st respondent Bank to disburse the balance eligible higher gratuity amount to the Petitioners. - ii) For a declaration that the proviso (iii) to Rule 59 of the KCS Rule is not applicable to the employees who have signed Exhibit P1 declaration. 2. The petitioners assert that at the time of their superannuation, after serving in the respondent Bank for decades, they were only paid a sum of Rs.20 lakhs by way of gratuity. They contend that, in terms of the agreement entered into between the management and the employees, the petitioners are entitled to one month’s pay for every year of service, and if that be the case, they are entitled to a higher amount of gratuity that has been paid to them. They would contend that a Full Bench of this Court in **Chandrasekharan Nair G. and Others v. Kerala State Co-operative Agricultural and** W.P.(C.) No.37932 of 2022 6 **Rural Development Bank Ltd. and Others[1]** 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. It is on these assertions that they seek issuance of directions to the 1st respondent to disburse the balance eligible higher gratuity amount to the Petitioners. 3. A counter affidavit has been filed by the respondents controverting the contentions. It is stated that the petitioners have an equally efficacious remedy in approaching the competent authority claiming gratuity. It is further stated that the petitioners herein have all retired from service on attaining the age of superannuation after 29.03.2018. According to them, the Payment of Gratuity Act has been amended by limiting the gratuity payable to the employee to 20 lakhs. The management, in the said circumstances, has taken a decision vide resolution No.86 dated 2.6.2018 to limit the gratuity in terms of the resolution. 4. I have heard learned counsel appearing for the petitioners and the > 1 [2017 (4) KLT 276] W.P.(C.) No.37932 of 2022 7 learned Standing Counsel appearing for the respondent bank. I have considered the submissions. 5. I find that identical issues had come up for consideration before a Division Bench of this Court and by judgment dated 14.7.2023 in Writ Appeal No.758 of 2022 and connected cases, the matter was decided in favor of the employees. The petitioners therein are similarly placed as the petitioners therein. The very same objections raised by the respondents herein in that matter were noticed by the Division Bench and the same was rejected by holding as under: 6. The learned counsel for the appellant Sri. Gilbert George Correya argues that the judgment in Chandrasekharan Nair (supra) is clearly distinguishable. He also argued that going by Section 7 of the Payment of Gratuity Act an appeal is provided against the order of the controlling authority and if at all the petitioners are aggrieved about the quantum of gratuity they should have taken recourse to alternate remedy. It is also argued by the learned counsel that Ext.P1 Regulations came into force on 16.02.1968 prior to the enactment of the Central or the State Regulations of Gratuity and after the coming into force of the Kerala Co-operative Societies Act, 1969, the petitioners would be bound by that. He also relied on the judgments in Thalassery Co-operative Rural Bank Ltd. v. Mukundan [2021 (1) KLT 663] and Y.K.Singla v. Punjab National Bank and others [(2013) 3 SCC 472] to support his W.P.(C.) No.37932 of 2022 8 contentions. He also argued that there was no choice for the writ petitioners since they are subject to the provisions of the Payment of Gratuity Act, 1972, and that there was no agreement, award or contract that has been entered into for the “better terms” and in the absence of the same the bank cannot be directed to make excess payments. The learned counsel further submitted that the learned single Judge has not appreciated the application of Section 4(5) of the Payment of Gratuity Act,1972 as well as the second proviso to Rule 59(iii) of the Kerala Cooperative Societies Act, 1969 , in the correct perspective. 7. On going through the judgments referred and relied on by the learned single Judge, we are in complete agreement with the finding that the matter in issue is squarely covered by the judgment in Chandrasekharan Nair (supra) as well as WP(C)No.1023 of 2019, WA No.524 of 2018 and WP(C)No.27507 of 2013. These judgments against the very same bank cover the issue on all fours and we are in complete agreement with the proposition laid down in them. We also note that the judgment in WP(C)No. 27507 of 2013 and WP(C)No.1023 of 2019 have become final in the absence of a challenge to the same by the bank and after accepting the same, it was not open to the appellant to contend against the findings in those cases over again. 8. The learned counsel for the appellant however argues that going by the judgment in BCH Electric Limited v. Pradeep Mehra (2020 KHC 6365), it must be taken that the view taken by the Full Bench in Chandrasekharan Nair (supra) has been changed. We do not think that the said submission is correct. The Supreme W.P.(C.) No.37932 of 2022 9 Court in the said judgment clearly found that for Section 4(5) of the Payment of Gratuity Act to get attracted, there must be better terms of gratuity available and extended to an employee 'under any award or agreement or contract with the employer' as against what has been provided for under and in terms of the Act. In other words, as against what is made applicable by the Act, if better terms are available under any such arrangement with the employer, Section 4(5) stipulates that nothing in Section 4 shall affect the right of any employee to receive such better terms. Thus when two choices are available, one under the provisions of the Payment of Gratuity Act and the other under such arrangement with the employer and if the latter offers better terms, the employee cannot be denied the right to receive those higher benefits. This we feel is in consonance with the judgment in Chandrasekharan Nair (supra) and not against it. That apart, the Supreme Court in BCH Electric Limited (supra) clearly found on facts that in that case there was no such choice available to the employees or no scheme existed which provided for better terms and in the absence of two alternatives one in terms of the Act and one as per the award or agreement or contract with the employer, the employees cannot get the benefit of Section 4(5) of the Act. The judgment of the Supreme Court is thus clearly distinguishable as the Supreme Court itself holds that in that case the employees are covered by the provisions of the Act even according to the trust deed therein, the amount of gratuity had to be calculated in accordance with the provisions of the Act. We therefore, reject the contentions of the learned counsel for the appellant that the judgment in BCH Electric W.P.(C.) No.37932 of 2022 10 Limited (supra) is a shift from the view taken in Chandrasekharan Nair (supra). 9. The learned counsel also argues based on the judgment in Thalassery Co-operative Rural Bank Ltd. (supra) that the writ petitioners had an alternate remedy both under the Payment of Gratuity Act as well as under the Kerala Co-operative Societies Act and that any dispute in connection with the employment had to be settled by resorting to the alternate remedy. We do not accept the said contention as in this case there is no factual dispute that needs resolution and the matter in issue is squarely covered in favour of the writ petitioners and in such circumstances relegating the petitioners to avail alternate remedy is onerous and harsh. It is pertinent to note that the bank is enjoined to act as a model employer whose actions on all fronts, including in the matter of payment of gratuity to its employees, must be informed by fairness in action. Having accepted the judgments mentioned above, the bank cannot adopt double standards while dealing with the similarly situated employees. The learned counsel also attempted to argue that Ext.P1 Regulations cannot be held to be an award or agreement or contract. We hold that Ext.P1 Regulations should definitely be an instrument or contract having the force of law which regulate the payment of gratuity to the writ petitioners. The non-obstante clause contained in sub section (5) of Section 4 of the Payment of Gratuity Act had overriding effect over all the other sub sections under Section 4 and Ext.P1 must be taken as a contract within the meaning of Section 4(5) of the Payment of Gratuity Act. No other contentions are urged.(emphasis supplied) W.P.(C.) No.37932 of 2022 11 It was held by this Court that if better terms are available under any arrangement with the employer, Section 4(5) stipulates that nothing in Section 4 shall affect the right of any employee to receive such better terms. Thus, when two choices are available, one under the provisions of the Payment of Gratuity Act and the other under such arrangement with the employer, and if the latter offers better terms, the employee cannot be denied the right to receive those higher benefits. Insofar as availing of alternate remedy is concerned, the Division Bench held that there is no factual dispute that needs resolution and the matter in issue is squarely covered in favor of the writ petitioners, and in such circumstances, relegating the petitioners to avail alternate remedy is onerous and harsh. The bank is enjoined to act as a model employer whose actions on all fronts, including in the matter of payment of gratuity to its employees, must be informed by fairness in action. It was held that the bank cannot adopt double standards while dealing with similarly situated employees. I am of the view that the principles laid down by the Division Bench in Writ Appeal No.758 of 2022 would apply on all fours in the instant case as well. 6. In that view of the matter, this petition will stand allowed. There will W.P.(C.) No.37932 of 2022 12 be a direction to the respondents to disburse the balance eligible gratuity to the petitioners. Needful shall be done within a period of three months from the date of receipt of a certified copy of this judgment. Sd/- **RAJA VIJAYARAGHAVAN V, JUDGE** NS/27/10/2023 W.P.(C.) No.37932 of 2022 13 ## **`APPENDIX OF WP(C) 37932/2022`** |`PETITIONER EXHIBITS`|| |---|---| |`Exhibit P1`|`TRUE COPY OF THE RELEVANT PAGES OF THE STAFF`| ||`REGULATIONS OF THE 1ST RESPONDENT BANK, WHICH`| ||`CONTAIN THE GRATUITY RULES ALONG WITH A MODEL`| ||`DECLARATION SUBMITTED AT THE TIME OF JOINING`| ||`SERVICE.`| |`Exhibit P2`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| ||`THE 1ST PETITIONER TO THE CHIEF EXECUTIVE`| ||`OFFICER OF THE 1ST RESPONDENT BANK DATED`| ||`26.04.2022 ALONG WITH A COPY OF THE PAYSLIP`| ||`FOR THE MONTH OF JULY 2021.`| |`Exhibit P3`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| ||`THE 2ND PETITIONER TO THE CHIEF EXECUTIVE`| ||`OFFICER OF THE 1ST RESPONDENT BANK DATED`| ||`26.04.2022 ALONG WITH A COPY OF THE PAYSLIP`| ||`FOR THE MONTH OF DECEMBER 2021.`| |`Exhibit P4`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| ||`THE 3RD PETITIONER TO THE CHIEF EXECUTIVE`| ||`OFFICER OF THE 1ST RESPONDENT BANK DATED`| ||`29.04.2022 ALONG WITH A COPY OF THE PAYSLIP`| ||`FOR THE MONTH OF APRIL 2021.`| |`Exhibit P5`|`TRUE COPY OF THE REPRESENTATION DATED`| ||`24.06.2022 SUBMITTED BY THE 4TH PETITIONER`| ||`BEFORE CHIEF EXECUTIVE OFFICER OF THE 1ST`| ||`RESPONDENT BANK ALONG WITH A COPY OF THE`| ||`PAYSLIP FOR THE MONTH OF MAY 2022.`| |`Exhibit P6`|`TRUE COPY OF THE REPRESENTATION DATED`| ||`29.04.2022 SUBMITTED BY THE 5TH PETITIONER TO`| ||`THE CHIEF EXECUTIVE OFFICER OF THE 1ST`| ||`RESPONDENT BANK ALONG WITH A COPY OF THE`| ||`PAYSLIP FOR THE MONTH OF MAY 2018.`| |`Exhibit P7`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| ||`THE 6TH PETITIONER DATED 30.04.2022 TO THE`| ||`CHIEF EXECUTIVE OFFICER OF THE 1ST RESPONDENT`| ||`BANK ALONG WITH A COPY OF THE PAYSLIP FOR THE`| ||`MONTH OF MARCH 2018.`| W.P.(C.) No.37932 of 2022 14 |`Exhibit `|`P8`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| |---|---|---| |||`THE 7TH PETITIONER DATED 30.04.2022 TO THE`| |||`CHIEF EXECUTIVE OFFICER OF THE 1ST RESPONDENT`| |||`BANK ALONG WITH A COPY OF THE PAYSLIP FOR THE`| |||`MONTH OF APRIL 2021.`| |`Exhibit `|`P9`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| |||`THE 8TH PETITIONER DATED 29.04.2022 BEFORE THE`| |||`CHIEF EXECUTIVE OFFICER OF THE BANK.`| |`Exhibit `|`P10`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| |||`THE 9TH PETITIONER DATED 18.04.2022 TO THE`| |||`CHIEF EXECUTIVE OFFICER OF THE 1ST RESPONDENT`| |||`BANK ALONG WITH A COPY OF THE PAYSLIP FOR THE`| |||`MONTH OF JANUARY 2018.`| |`Exhibit `|`P11`|`TRUE COPY OF THE REPRESENTATION SUBMITTED BY`| |||`THE 10TH PETITIONER DATED 28.04.2022 TO THE`| |||`CHIEF EXECUTIVE OFFICER OF THE 1ST RESPONDENT`| |||`BANK ALONG WITH A COPY OF THE PAYSLIP FOR THE`| |||`MONTH OF JUNE 2018.`| |`Exhibit `|`P12`|`TRUE COPY OF THE REPRESENTATION DATED`| |||`30.04.2022 SUBMITTED BY THE 11TH PETITIONER TO`| |||`THE CHIEF EXECUTIVE OFFICER OF THE 1ST`| |||`RESPONDENT BANK ALONG WITH A COPY OF THE`| |||`PAYSLIP FOR THE MONTH OF JULY 2021.`| |`Exhibit `|`P13`|`TRUE COPY OF THE REPRESENTATION DATED`| |||`30.06.2022 SUBMITTED BY THE 12TH PETITIONER TO`| |||`THE CHIEF EXECUTIVE OFFICER OF THE 1ST`| |||`RESPONDENT BANK ALONG WITH A COPY OF THE`| |||`PAYSLIP FOR THE MONTH OF MAY 2022.`| |`Exhibit `|`P14`|`TRUE COPY OF THE REPRESENTATION DATED`| |||`03.05.2022 SUBMITTED BY THE 13TH PETITIONER TO`| |||`THE CHIEF EXECUTIVE OFFICER OF THE 1ST`| |||`RESPONDENT BANK ALONG WITH A COPY OF THE`| |||`PAYSLIP FOR THE MONTH OF MARCH 2021.`| |`Exhibit `|`P15`|`TRUE COPY OF THE REPRESENTATION DATED`| |||`26.04.2022 SUBMITTED BY THE 14TH PETITIONER TO`| |||`THE CHIEF EXECUTIVE OFFICER OF THE 1ST`| |||`RESPONDENT BANK ALONG WITH A COPY OF THE`| |||`PAYSLIP FOR THE MONTH OF MAY 2021.`| 15 ## W.P.(C.) No.37932 of 2022 ``` ExhibitP16TRUECOPYOFTHEREPRESENTATIONDATED 27.04.2022SUBMITTEDBYTHE15THPETITIONERTO THECHIEFEXECUTIVEOFFICEROFTHE1ST RESPONDENTBANKALONGWITHACOPYOFTHE PAYSLIPFORTHEMONTHOFJULY2021. ``` ``` RESPONDENTEXHIBITS ``` ``` ExhibitR1ISNOTMAINTAINABLEASTHEYARENOTENTITLED TORAISEANYEXCESSAMOUNTASGRATUITY.ACOPY OFTHERESOLUTIONNO.86 ```