WA Nos.437 of 2021 & 439 of 2021 (Intra Court Appeals) against interim order in W.P(C) Nos.11877/2020(H) & 11845/2020

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** ## **&** **THE HONOURABLE MR.JUSTICE K. BABU** **FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942** ## **WA.No.437 OF 2021** **AGAINST THE INTERIM ORDER DATED 26.02.2021 IN WP(C) 11877/2020(H) OF HIGH COURT OF KERALA** ## **APPELLANT/1ST RESPONDENT:** **KANNUR DISTRICT CO-OPERATIVE BANK** **(PRESENTLY THE KERALA STATE CO-OPERATIVE BANK), REP. BY THE GENERAL MANAGER, KANNUR REGION, (INCORRECTLY DESCRIBED AS REGIONAL MANAGER IN THE WRIT PETITION), KANNUR DISTRICT - 670 001.** ## **BY ADV. SRI.M.SASINDRAN** ## **RESPONDENTS/PETITIONER & RESPONDENTS 2 AND 3** - **1 SRI.A.K.PURUSHOTHAMAN AGED 60 YEARS** **S/O. LATE RAGHAVAN NAMBIAR, 'VANAMALA', MUNDAYAD P.O., KANNUR DISTRICT - 670 594.** - **2 THE MANAGING DIRECTOR** **THE KERALA STATE CO OPERATIVE BANK, CO-BANK TOWERS, PALAYAM, THIRUVANANTHAPURAM - 695 001.** - **3 THE DIVISIONAL MANAGER L.I.C. OF INDIA, KOZHIKODE DIVISION, DIVISIONAL OFFICE, (P & GS) DEPARTMENT, 7TH FLOOR, JEEVAN PRAKASH, KOZHIKODE - 673 001.** **SMT.MEENA JOHN, SRI.ABRAHAM P.MEACHINKARA** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.03.2021, ALONG WITH WA.439/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A Nos.437 & 439 of 2021 2 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** ## **&** **THE HONOURABLE MR.JUSTICE K. BABU** **FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942** ## **WA.No.439 OF 2021** **AGAINST THE INTERIM ORDER DATED 26.2.2021 IN WP(C) 11845/2020(E) OF HIGH COURT OF KERALA** ## **APPELLANTS/RESPONDENTS 1 AND 2:** - **1 KANNUR DISTRICT CO-OPERATIVE BANK (PRESENTLY THE KERALA STATE CO-OPERATIVE BANK), REPRESENTED BY THE GENERAL MANAGER (I/C), DISTRICT OFFICE, P.B.NO.35, KANNUR DISTRICT-670 001** - **2 THE DEPUTY GENERAL MANAGER, THE KERALA STATE CO-OPERATIVE BANK LTD, HEAD OFFICE, P.B.NO.6515, CO BANK TOWERS, PALAYAM, THIRUVANANTHAPURAM,PIN-695 028** ## **BY ADV. SRI.M.SASINDRAN** ## **RESPONDENTS/PETITIONER & RESPONDENT NO.3:** - **1 SRI.P.SIDHARTHAKUMAR, AGED 61 YEARS S/O. LATE GOPALAN NAIR, 'SIGIL NIVAS', CHETTIPEEDIKA, PALLIKUNNU P.O., KANNUR,PIN-670 004** - **2 THE DIVISIONAL MANAGER, LIC OF INDIA, KOZHIKODE DIVISION, DIVISIONAL OFFICE (P & GS) DEPARTMENT, 7TH FLOOR, JEEVAN PRAKASH, KOZHIKODE-673 001 SMT.MEENA JOHN, SRI.ABRAHAM P.MEACHINKARA** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.03.2021, ALONG WITH WA.437/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A Nos.437 & 439 of 2021 3 ## **ALEXANDER THOMAS & K.BABU, JJ.** ## **===========================** ## **W.A Nos.437 & 439 of 2021** [ _arising out of the common interim order dated 26.02.2021 in W.P(C) Nos.11877 & 11845 of 2020_ ] **===========================** Dated this the 05[th] day of March, 2021 ## **JUDGMENT** ## **ALEXANDER THOMAS, J.** The 1[st] respondent in the abovesaid Writ Petition (Civil) [W.P(C) Nos.11877 & 11845 of 2020] have approached this Court by filing this intra court appeal, in terms of Sec.5(i) of the Kerala High Court Act, so as to impugn the common interim order dated 26.02.2021 rendered by the learned Single Judge in those W.P(C)s, whereby the appellant has been directed to enter personal appearance and explain, as to why contempt proceedings have not been taken against him in terms of Article 215 of the Constitution of India, etc. 2. Heard Sri.M.Sasindran, learned counsel appearing for the appellant-District Co-operative Bank in these case, Smt.Meena John, learned Advocate appearing for the 1[st] respondent in both these appeals/writ petitioner concerned and Sri.Abraham P.Meachinkara, learned Standing Counsel for the Life Insurance Corporation (LIC) W.A Nos.437 & 439 of 2021 4 appearing for the 3[rd] & 2[nd] respondents respectively in these appeals/3[rd] respondent in these W.P(C)s. 3. The prayers in W.P(C) No.11877/2020 are as follows (see page No.22 of the paper book of W.A No.437/2021) : - _“a) To call for the records relating to above writ petition_ - _b) Issue a writ of mandamus or any other appropriate writ, order or direction commanding the respondents to disburse the balance amount of gratuity amounting to Rs.18,29,372/received by the 1[st] respondent Bank from the 3[rd] respondent LIC, as per Master Policy No.3839 together with interest at the rate of 9% per annum._ - _c) Pass any other orders, which are deemed fit and proper in the facts and circumstances of the case.”_ 4. The prayers in W.P(C) No.11845/2020 are as follows (see page Nos.22 & 23 of the paper book of W.A No.439/2021) : - _“a) To call for the records relating to above writ petition_ - _b) Issue a writ of Certiorari to quash Exhibit-P4 order issued by the 2[nd] respondent since it is legally not sustainable._ - _c) Issue a writ of mandamus or any other appropriate writ, order or direction commanding the 3[rd] respondent LIC to re-credit the balance amount of gratuity amounting to Rs.2,40,806/-, as per Master Policy No.3839 to the account of the 1[st] respondent bank, in case the said amount is remitted back to the 3[rd] respondent LIC by the 1[st] respondent and then to release the same to the petitioner together with interest at the rate of 9% per annum._ _Or_ W.A Nos.437 & 439 of 2021 5 _In the alternative, commanding the 1[st] respondent to disburse the balance amount of gratuity amounting to Rs.2,40,806/-, as pre Master Policy No.3839 together with interest at the rate of 9% per annum, in case the said amount is with the 1[st] respondent bank_ _d) Pass any other orders, which are deemed fit and proper in the facts and circumstances of the case.”_ 5. From the submissions of both sides, it appears that the above writ petitions were filed on 16.06.2020. Thereafter, the case was formally posted on 09.07.2020 and later came up for consideration on 24.02.2021. The learned Standing Counsel for the appellant-Bank/R1 in these W.P(C)s had sought for time to file counter affidavit and time was granted and counter affidavits have also been filed by the appellant-Bank in these W.P(C)s. The stand taken up by the writ petitioners in this case is that the matter in issue raised in these proceedings is fully covered in favour of the petitioners, in terms of the _ratio decidendi_ laid down by the Full Bench of this Court in the case in _**Chandrasekharan Nair.G &**_ _**Ors. v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. & Ors.**_ {2017 (4) KLT 276 (FB)}. Therefore, the provisions in Sec.4 of the Payment of Gratuity Act W.A Nos.437 & 439 of 2021 6 would apply and that in view of the mandate contained in Sec.4(5) of the Payment of Gratuity Act, 1972, the provision for ceiling limit of gratuity made in sub-section (3) of Sec.4 will not apply and detrimentally affect the right of an employee to receive better terms of gratuity, in terms of the arrangement made on behalf of the employees by the employer-Bank with the respondent-LIC, Further, it is pointed out that as a matter of fact, though the ceiling limit of gratuity notified by the Union Government in terms of Sec.4(3) of the Act is upto Rs.20 lakhs, the actual amounts that are received by the appellant-District Co-operative Bank from the respondent-LIC is much more than the ceiling limit of Rs.20 lakhs and that going by the dictum laid down by the Full Bench in **Chandrasekharan Nair’s case** supra {2017 (4) KLT 276 (FB)}, the employer is legally and statutorily obliged to pay such entire amounts to the employee as gratuity, including the amount over and above the ceiling limit of Rs.20 lakhs. 6. Per contra, the contention of the appellant-Bank is to the effect that the matter in issue is covered fully in favour of the appellant-Bank as per the _ratio decidendi_ laid down by the Apex W.A Nos.437 & 439 of 2021 7 Court in an identically placed case in the decision in _**B.C.H Electric Ltd. v. Pradeep Mehra**_ {ILR 2020 (2) (Ker.) 345 (SC)} = {2020 KHC 6365 (SC)}. Further it is pointed out that the view taken by the Full Bench in **Chandrasekharan Nair’s case** supra {2017 (4) KLT 276 (FB)} that the second Proviso to Rule 59 of the Kerala Co-operative Societies Rules framed under the Kerala Co-operative Societies Act, is illegal and _ultra vires_ by virtue of Article 254 (2) of the Constitution of India read with Sec.62 of the Kerala Co-operative Societies Act, is _per se_ legally wrong, inasmuch as the doctrine of repugnancy envisaged in Article 254 will not apply in this case, for the simple reason that the Kerala Co-operative Societies Act, 1969 has got the assent of the President of India, as envisaged in Article 254 of the Constitution of India and that therefore, there is no question of repugnancy as between the provisions in the Kerala Co-operative Societies Rules framed under the Kerala Co-operative Societies Act, inasmuch as the said Act has got the assent of the President of India. 7. A detailed counter affidavit has also been filed by the appellant-Bank, as respondent in the W.P(C), copies of which have also been annexed along with this appeal memorandum in these W.A Nos.437 & 439 of 2021 8 cases. 8. The learned Single Judge has now passed the impugned common interim order dated 26.02.2021 in both these W.P(C)s, ordering that the said conduct of the appellant-Bank in not paying the full amount of gratuity, which is over and above the ceiling limit, inspite of the clear dictum laid down by this Court in **Chandrasekharan Nair’s case** supra {2017 (4) KLT 276 (FB)}, etc., has to be viewed seriously and that it has been seen as an act on the part of the employers to divert the higher amounts received from the LIC, etc. Accordingly, the learned Single Judge as per the common impugned interim order rendered on 26.02.2021 has directed that the Regional Manager of the District Co-operative Bank, which is now amalgamated with the Kerala State Co-operative Bank, shall be personally present in the Court on 05.03.2021 (today) at 2p.m. and that he shall personally an affidavit in the matter and if the affidavit so filed is not satisfactory, then the learned Single Judge will be constrained to initiate contempt action, in terms of Article.215 of the Constitution of India, etc. It is this order that is under challenge in these appeals. W.A Nos.437 & 439 of 2021 9 9. We have heard the parties _in extenso_ . We have also endeavoured to persuade the learned counsel appearing for the writ appellants to ensure that the dictum laid down by the Full Bench of this Court in **Chandrasekharan Nair’s case** supra {2017 (4) KLT 276 (FB)}, may be duly considered and that if the same applies in the facts and circumstances of the case, then the due amounts by way of gratuity may be paid to the writ petitioners, without any further delay, instead of prolonging the agony of the litigative exercise. 10. Sri.M.Sasindran, learned counsel appearing for the writ appellant submits that he would endeavour to persuade the party, but that, the instructions he has received so far is that they are of the firm view that the dictum laid down by the Apex Court in _**B.C.H Electric Ltd. v. Pradeep Mehra**_ {ILR 2020 (2) (Ker.)345 (SC)} = {2020 KHC 6365 (SC)} will apply in this case and that hence, the writ petitioners are entitled to get only the gratuity only in tune with the ceiling limit stipulated in terms of Sec.4(3) of the Payment of Gratuity Act. Further, it is pointed out that the said ceiling limit amount of Rs.20 lakhs have already been disbursed to both the writ petitioners in these cases, etc. Sri.M.Sasindran, learned counsel appearing for W.A Nos.437 & 439 of 2021 10 the writ appellant would also point out that passing an order in the nature of the present impugned order would amount to shortcircuiting and stultifying the statutory rights of a litigant like the appellant to contest the matter on merits and that the party aggrieved by the judgment in the W.P(C) will also have the statutory right to file the intra court appeal, etc. 11. Smt.Meena John, learned counsel appearing for the writ petitioners/contesting respondent No.1 in these appeals would point out that the said stand of the appellant-Bank is clearly illegal and unreasonable and has been made only to unnecessarily prolong the payment of the due gratuity amounts to the writ petitioner, who are retired employees and who are facing financial difficulties to prolong with their life, etc. 12. After hearing both sides, we would hold that the abovesaid observations made by us are only prima facie in nature, shall not be construed as an expression or apart regarding the merits of the main controversy, as the same lies exclusively within the domain and province of the learned Single Judge and which has to be adjudicated in the abovesaid writ proceedings. However, as far as the present W.A Nos.437 & 439 of 2021 11 issues concerned, we are of the view that since the matter is still pending final consideration, initiation of contempt proceedings and that too under Article 215 of the Constitution of India, may not really be necessary and called for. Accordingly, we suggested to both sides that the main matter in the writ petitions may be heard and decided, without any further delay. 13. Both the appellant and the respondent-LIC had agreed the to our suggestion, so that the direction to initiate contempt proceedings may be vacated and so that the main matter in the W.P(C) is heard and decided, without any further delay, at any rate within 2 to 3 weeks. Accordingly, the following directions and orders are passed: - _(i) the impugned interim order dated 26.02.2021 rendered in W.P(C) Nos.11877/2020 & 11845/2020 will stand vacated and set aside._ - _(ii) The respondent-LIC will immediately file an affidavit or statement, stating as to the exact amounts disbursed by them to the appellantDistrict Co-operative Bank by way of gratuity dues payable in terms of the scheme arrived at between the employer and the LIC and whether the said_ W.A Nos.437 & 439 of 2021 12 _amount in these cases is only Rs.20 lakhs under Sec.4(3) of the Act or whether it is higher than the said ceiling limit of Rs.20 lakhs and if so, how much?_ - _(iii) the details in both these cases should be meticulously and precisely stated by the respondent-LIC in their affidavit._ 14. Sri.Abraham P.Meachinkara, learned Standing Counsel for the LIC appearing for the respondent-LIC submits that his party will file the said affidavit within a week or so. In that regard, it is ordered that the respondent-LIC need not even wait for the formal issuance of the certified copy of this judgment and should proceed to forthwith file the said affidavit, as aforedirected. Since, both parties have to make elaborate submissions and as the Court dealing with admission cases and petition matters may not have sufficient time to devote to such final hearing, it is ordered that the Registry will post the Writ Petition for hearing, preferably before a court, exclusively or mainly dealing with hearing matters on 15.03.2021. We would request that all parties should fully co-operate with the Court to ensure the early final disposal of the writ petition, without any further W.A Nos.437 & 439 of 2021 13 delay, preferably well before the Court closes for summer vacation. It is made clear that none of the observations made by us hereinabove, shall be construed as an expression of opinion on our part regarding the merits of the main controversy. With these observations and directions, the above W.As will stand disposed of. **Sd/ALEXANDER THOMAS, JUDGE** **Sd/-** **K.BABU, JUDGE** vgd