State Bank of Travancore v. Assistant Labour Commissioner (Central), Regional Labour Commissioner (Central) and K.G. Ramachandran Nair

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE S.SIRI JAGAN** ## **WEDNESDAY, THE 11TH DAY OF APRIL 2012/22ND CHAITHRA 1934** ## **WP(C).No. 33378 of 2007 (W)** **---------------------------------------** **PETITIONER(S):** **------------------------** **STATE BANK OF TRAVANCORE REPRESENTED BY ITS GENERAL MANAGER, (F & A), HEAD OFFICE POOJAPPURA, TRIVANDRUM.** **BY ADV. SRI.P.RAMAKRISHNAN** **RESPONDENT(S): -------------------------** **1. ASSISTANT LABOUR COMMISSIONER (CENTRAL), (CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT), TRIVANDRUM.** **2. REGIONAL LABOUR COMMISSIONER (CENTRAL) (APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT), ERNAKULAM.** **3. K.G.RAMACHANDRAN NAIR, KOIPATTU HOUSE, ANGADICKAL NORTH P.O., KAIPPATTOOR (VIA) PATHANAMTHITTA, PIN 689 648.** **BY ADV. SRI.SAJEEV KUMAR K.GOPAL BY ADV. SRI.H.B.SHENOY BY ADV. SRI.B.ASHOK SHENOY BY ADV. SMT.LAKSHMI B.SHENOY BY ADV. SRI.ABU MATHEW BY ADV. SRI.THOMAS P.MAKIL BY ADV. SRI.ANIL KURIAN THOMAS BY ADV. SRI.SOBHAN GEORGE BY ADV. SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-04-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **tss** ## **W.P.(C) NO.333782007** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **P1:- COPY OF ORDER DTD. 31.7.2006 OF THE CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT (CENTRAL) TRIVANDRUM.** **P2:- COPY OF ORDER DTD. 31.7.2007 PASSED BY THE 2ND RESPONDENT.** **RESPONDENT'S EXHIBITS:-** ## **NIL** **//TRUE COPY//** **P.A. TO JUDGE** **tss** ## **S. SIRI JAGAN, J.** ------------------------------------------- ## W.P.(C) No.33378 of 2007 ---------------------------------------------Dated this the 11[th] day of April, 2012 ## **JUDGMENT** The petitioner herein is the employer in a gratuity claim filed by the 3[rd] respondent before respondents 1 and 2. The 3[rd] respondent was dismissed from service on charges of misconduct involving riotous and disorderly behaviour. Although originally, punishment of dismissal from service was proposed, the punishment imposed on the 3[rd] respondent was discharge from service with superannuation benefits as eligible without disqualification for future employment. That punishment was upheld by the Industrial Tribunal, Alappuzha in an industrial dispute raised by the 3[rd] respondent. Subsequently, the 3[rd] respondent submitted an application for gratuity before the petitioner. That application was rejected on the ground that by an order passed on 15.11.2001, the petitioner had already ordered forfeiture of the gratuity payable to the 3[rd] respondent in accordance with the sub section 6(b) of Section 4 of the Payment of Gratuity Act. The 3[rd] respondent filed a claim for gratuity W.P.(C)No.33378/07 2 before the 1[st] respondent Controlling Authority, who upheld the contention of the 3[rd] respondent and ordered payment of gratuity as calculated in Ext.P1 order. The petitioner challenged the same before the 2[nd] respondent appellate authority, who, by Ext.P2 order upheld the order of the Controlling Authority. The petitioner is challenging Exts.P1 and P2 orders in this writ petition. 2. The petitioner's contention is that since the petitioner had already invoked its powers under Section 4(6) (b) of the Act to pass the order dated 15.11.2001 the 3[rd] respondent is not entitled to any gratuity at all. Of course, it is admitted that although the order forfeiting gratuity was stated to have been passed on 15.11.2001, it was served on the 3[rd] respondent only on 16.1.2006, after the 3[rd] respondent submitted an application for gratuity on 19.12.2005. The petitioner raises two contentions. The first is is that whether the order forfeiting gratuity was after hearing the petitioner or not or whether the order was communicated to him immediately after passing the same, the existence of the order cannot be denied. Therefore, unless and until the same is validly challenged before an appropriate authority, which, W.P.(C)No.33378/07 3 according to the petitioner, is not the Controlling Authority, the 3[rd] respondent cannot claim gratuity. The second is that the gratuity calculated is in accordance with the higher rate applicable in accordance with the agreement between the Management and the Union and not in accordance with the rate fixed in the Payment of Gratuity Act, for doing which the Controlling Authority is not competent. 3. The 3[rd] respondent would oppose the contentions of the petitioner. He would submit that first of all the question of forfeiture of gratuity does not arise, since the punishment imposed on the 3[rd] respondent is discharge from service with superannuation benefits as eligible which includes gratuity as well. He further points out that the other retirement benefits have already been paid to the 3[rd] respondent and therefore, there is no question of forfeiture of gratuity. He would contend that even otherwise the order forfeiting gratuity is no order at all, insofar as that order had never been served on the 3[rd] respondent prior to his application for gratuity. However, the discretion under Section 4(6) (b) can be exercised only after issuing a show cause notice to the 3[rd] respondent proposing forfeiture of gratuity, which has not been done. Therefore, 4 W.P.(C)No.33378/07 that order is non est and cannot be pressed into service for denying the 3[rd] respondent gratuity after the 3[rd] respondent applied for gratuity. As far as the contention regarding competence of the Controlling Authority to decide eligibility for higher rate of gratuity, the 3[rd] respondent contends that insofar as the Payment Gratuity Act itself saves the entitlement for higher terms of gratuity in accordance with the agreement between the employer and the employee, that question also can be considered by the Controlling Authority under the very same Act, especially when the entitlement of the 3[rd] respondent for the higher rate is not disputed by the petitioner 4. I have considered the rival contentions in detail. At the outset, I must note that the Payment of Gratuity Act is a beneficial legislation intended for the benefit of employees. The same has to be interpreted as far as possible in favour of the employee. In this case, admittedly, the punishment imposed on the 3[rd] respondent by the petitioner was discharge from service with superannuation benefits. After imposing such a punishment, which does not bar payment of superannuation benefits, I do not think that the petitioner can thereafter turn around and invoke Section 4(6) (b) of the W.P.(C)No.33378/07 5 Payment of Gratuity Act, forfeiting the gratuity. Even apart from that, admittedly, the order stated to have been passed is dated 15.11.2001 and admittedly, the same was communicated to the 3[rd] respondent only on 16.1.2006, after the 3[rd] respondent filed an application for gratuity on 19.12.2005. An order not communicated to the person against whom that order has been passed is no order at all and it should be construed as non est. Therefore, I am not inclined to accept the contention of the petitioner that the petitioner had validly forfeited the gratuity payable to the 3[rd] respondent by invoking Section 6 (b) of the Payment of Gratuity Act. 5. As far as the other question regarding competence of the Controlling Authority to consider the eligibility for payment of higher rate of gratuity as per agreement between the employer and the employee, the learned counsel for the petitioner relies on a decision of this Court in _**Ayyappan** v._ _**Joint Labour Commissioner**_ [1999(2) LLJ 1351], wherein a learned Judge of this Court has held that the Controlling Authority can order payment of gratuity only in terms of the Act and any other claim under terms of service conditions will have to be agitated before the appropriate authority. The 6 W.P.(C)No.33378/07 learned counsel for the petitioner also relies on the decision of _**-**_ the Bombay High Court in _**Pune District Central Co operative Bank Limited, Pune**_ v _**Shivajirao Dinkarrao Jadhavrao and Others**_ [2005(1) LLJ 838] in support of that contention. The learned counsel for the 3[rd] respondent would rely on the Orissa High Court’s decision in _**Steel Authority of India**_ v _**Regional Labour Commissioner(Central) & Ors.**_ [1995(1) LLJ 1007] to the contrary. I am not inclined to exercise my discretionary jurisdiction to deny the benefit of Exts.P1 and P2 order to the 3[rd] respondent in the peculiar facts and circumstances of the case especially in view of the fact that the petitioner does not dipsute the entitlement of the 3[rd] respondent for higher rate of gratuity calculted as per the impugned orders. Their only contention is that the Controlling Authority under the Payment of Gratuity is not the authority competent to order higher terms of gratuity. I do not think that when the eligibility is admitted, the 3[rd] respondent should be driven to the remedy by way of approaching the Labour Court under Section 33 (c) (2) of the Industrial Disputes Act for claiming balance gratuity as per the better terms of gratuity agreed upon between the employer and the employee. Even otherwise, I am of opinion 7 W.P.(C)No.33378/07 that when the Act itself recognizes the eligibility for better terms of gratuity as per the contract between the employer and the employee, the employee should not be driven to a different Forum for claiming that better terms of gratuity, which will have the effect of the employee being driven to separate Forums for claiming gratuity as per the Payment of Gratuity Act and also gratuity as per the conditions of service agreed between the employer and the employee. Therefore, I deny my discretionary jurisdiction to the petitioner in respect of that contention. In view of the above findings, I do not find any merit in this writ petition and accordingly, the same is dismissed. ## **S. SIRI JAGAN, JUDGE** acd W.P.(C)No.33378/07 8 W.P.(C)No.33378/07 9