High Court of KeralaSingle JudgeWrit petitions allowed; banks directed to pay t...

WP(C) Nos. 3461/2022, 3472/2022, 3490/2022 and 7193/2022

Case / Petition Number:3461/2022; 3472/2022; 3490/2022; 7193/2022

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Basant Balaji, J.
Judgment Date
2024-02-08
Court Decision / Holding
The writ petitions are allowed. The respective banks are directed to disburse the balance amount of gratuity due to the petitioners within three months from the date of receipt of a copy of this judgment. If not paid, the amount shall carry interest at 6% per annum from the due date.
Final Disposition
Writ petitions allowed; banks directed to pay the balance gratuity within 3 months with 6% interest if delayed.

Parties to the Case

Appellants / Petitioners

  • Ummar K
  • V. Hamza
  • Zainudheen K
  • Sainudheen M
  • Abdussalam P
  • U.C Aboobacker
  • Abdul Razak M.V

Respondents

  • The Thachinganadam Service Co-Operative Bank Ltd
  • The Kondotty Service Co-Operative Bank Ltd
  • The Pattikkad Service Co-Operative Bank Ltd
  • The Tirurangadi Co-Operative Agricultural and Rural Development Bank Ltd
  • The Life Insurance Corporation of India (LIC)

Legal Representation & Advocates

Counsels for Petitioners

  • • K. Aboobacker Sidheeque

Counsels for Respondents

  • • Ajmal P. Sahasranaman
  • • T.S. Harikumar
  • • O. D. Sivadas
  • • P.B. Sahasranaman
  • • P. C. Muhammed Noushiq
  • • P. Sanjay
  • • S. Easwaran
  • • Lal George
  • • A. Parvathi Menon
  • • Biju Meenattoor
  • • Paul Varghese (Pallath)
  • • P. A. Mohammed Aslam
  • • Kiran Narayanan Prasoon Sunny
  • • Rahul Raj P.
  • • K. Mohanakannan

Case Synopsis & Summary

The batch writ petitions challenge the computation of gratuity payable to former employees of several co‑operative banks in Malappuram district under the Payment of Gratuity Act, 1972. The banks had adopted a special gratuity scheme and paid Rs. 10 lakh to the petitioners on retirement, alleging that this figure complies with the cap under Section 4(3) of the Act. The petitioners contend they are legally entitled to the full gratuity provided by the Act, with any excess over the scheme amount to be paid by the employer, in accordance with Sections 4(2) and 4(5) of the Act. The respondents deny liability beyond the scheme; LIC has paid Rs. 10 lakh to some petitioners and contends it bears no further liability. The court cites Chandrasekharan Nair v. Kerala State Co‑operative Agricultural and Rural Development Bank Ltd. (2017 (4) KLT 276) to reiterate that the liability to pay gratuity rests with the employer under Sec. 4(2), and higher amounts are payable under Sec. 4(5). Consequently, the court holds that the balance gratuity beyond the LIC payment is the employer’s obligation. The petitions are allowed, and the banks are directed to disburse the balance gratuity within three months from the copy of the judgment, with interest at 6% p.a. if delayed.

Provisions of Law Cited

Payment of Gratuity Act, 1972Section 4(2) of the Payment of Gratuity Act, 1972Section 4(3) of the Payment of Gratuity Act, 1972Section 4(5) of the Payment of Gratuity Act, 1972

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that the statutory entitlement under the Payment of Gratuity Act, 1972 cannot be overridden by a private gratuity scheme. They argue that Section 4(2) imposes the employer’s liability to pay gratuity, and Section 4(5) permits higher amounts where due. The LIC’s payment of Rs. 10 lakh does not exhaust the employee’s gratuity entitlement; the balance must be paid by the respective bank. They rely on the court’s own Full Bench ruling in Chandrasekharan Nair (2017) to justify liability shifting from LIC to the employer and seek a direction to pay the remaining gratuity within a set period with interest.

Contentions of Respondents

The banks contend that gratuity disbursements were governed by terms of employment and internal schemes; LIC paid a part of the gratuity under the scheme and claims no further liability. They contend the 4(3) cap pertains to the statutory maximum and that the balance, if any, must be paid by the employer under the Act, not by LIC. They deny any liability beyond the scheme. They urge the court to acknowledge the machinery of private settlement through the scheme and limit judicial interference to ensure compliance with existing contractual arrangements.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
Chandrasekharan Nair v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd.2017 (4) KLT 276PositiveCited to reaffirm that the employer bears liability to pay gratuity under Sec. 4(2), with higher amounts under Sec. 4(5) when applicable.

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Extracted Judgment Text

Exact text extracted from official judgment records.

1 WPC 3461, 3472, 3490 and 7193/22 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE BASANT BALAJI`** ``` THURSDAY, THE 8[TH] DAY OF FEBRUARY 2024 / 19TH MAGHA, 1945 ``` ## **`WP(C) NO. 3461 OF 2022`** ## **`PETITIONER/S:`** - `1 UMMAR K AGED 64 YEARS S/O UNNEEN, KATTUNGAL HOUSE, THACHINGANADAM P.O.MALAPPURAM DISTRICT, PIN-679 325` - `2 V.HAMZA, AGED 63 YEARS S/O MOHAMMED, VELUVAMBALI HOUSE, THACHINGANADAM P.O.MALAPPURAM DISTRICT, PIN679 325` ``` BY ADV K.ABOOBACKER SIDHEEQUE ``` ## **`RESPONDENT/S:`** - `1 THE THACHINGANADAM SERVICE CO-OPERATIVE BANK LTD THACHINGANADAM P.O.MALAPPURAM DISTRICT, PIN-679 325, REPRESENTED BY ITS SECRETARY` - `2 THE LIFE INSURANCE CORPORATION OF INDIA, LIC DIVISIONAL OFFICE, KOZHIKODE, JEEVAN PRAKASH, LIC ROAD, KOZHIKODE DISTRICT, PIN-673 001, REPRESENTED BY ITS DIVISIONAL MANAGER BY ADVS. AJMAL P. SAHASRANAMAN PB T.S.HARIKUMAR(K/782/1989)` ## **`OTHER PRESENT:`** ## `SC SRI. S. EASWARAN` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.02.2024, ALONG WITH WP(C).3490/2022, AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 WPC 3461, 3472, 3490 and 7193/22 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE BASANT BALAJI`** ``` THURSDAY, THE 8[TH] DAY OF FEBRUARY 2024 / 19TH MAGHA, 1945 ``` ``` WP(C) NO.3490OF 2022 ``` ## **`PETITIONER/S:`** ``` ABDUSSALAM P AGED 62 YEARS S/O. HYDROSS, PERAYIL HOUSE,ORADAMPALAM.P.O, THIRURKKAD, MALAPPURAM DISTRICT, PIN-679 321. ``` ``` BY ADV K.ABOOBACKER SIDHEEQUE ``` ## **`RESPONDENT/S:`** ``` 1THE KONDOTTY SERVICE CO-OPERATIVE BANK LTD NO.D 1937 KONDOTTY P.O, MALAPPURAM DISTRICT,PIN-673 638 REPRESENTED BY ITS SECRETARY. ``` ``` 2THE LIFE INSURANCE CORPORATION OF INDIA, LIC DIVISIONAL OFFICE, KOZHIKODE, JEEVAN PRAKASH, LIC ROAD, KOZHIKODE DISTRICT, PIN- 673 001, REPRESENTED BY ITS DIVISIONAL MANAGER. BY ADVS. P.B.SAHASRANAMAN P.C.MUHAMMED NOUSHIQ ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.02.2024, ALONG WITH WP(C).3461/2022 AND CONNECTED CASES AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 3 WPC 3461, 3472, 3490 and 7193/22 ``` IN THE HIGH COURT OF KERALA AT ERNAKULAM ``` ``` PRESENT ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI ``` ``` THURSDAY, THE 8[TH] DAY OF FEBRUARY 2024 / 19TH MAGHA, 1945 WP(C) NO.3472 OF 2022 ``` ## **`PETITIONER/S:`** ``` 1ZAINUDHEEN K AGED 63 YEARS S/O MUHAMMED KUTTY, KOTTOTH HOUSE, PATTIKKAD P.O.MALAPPURAM DISTRICT, PIN-679 325. 2SAINUDHEEN M, AGED 65 YEARS S/O MUHAMMED HAJI, MANNIKKUNNAN HOUSE, VAZHANGODE, PATTIKKAD P.O.MALAPPURAM DISTRICT, PIN-679 325. ``` ``` BY ADV K.ABOOBACKER SIDHEEQUE ``` ## **`RESPONDENT/S:`** ``` 1THE PATTIKKAD SERVICE CO-OPERATIVE BANK LTD PATTIKKAD P.O.MALAPPURAM DISTRICT, PIN-679 325, REPRESENTED BY ITS SECRETARY ``` ``` 2THE LIFE INSURANCE CORPORATION OF INDIA, LIC DIVISIONAL OFFICE, KOZHIKODE, JEEVN PRAKASH, LIC ROAD, KOZHIKODE DISTRICT, PIN-673 001, REPRESENTED BY ITS DIVISIONAL MANAGER BY ADVS. AJMAL P. SAHASRANAMAN PB T.S.HARIKUMAR(K/782/1989) O.D.SIVADAS ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.02.2024, ALONG WITH WP(C).3461/2022 AND CONNECTED CASES AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 4 WPC 3461, 3472, 3490 and 7193/22 ``` IN THE HIGH COURT OF KERALA AT ERNAKULAM ``` ``` PRESENT ``` ``` THE HONOURABLE MR.JUSTICE BASANT BALAJI ``` ``` THURSDAY, THE 8[TH] DAY OF FEBRUARY 2024 / 19TH MAGHA, 1945 ``` ``` WP(C) NO.7193OF 2022 ``` ## **`PETITIONER/S:`** - `1 U.C ABOOBACKER AGED 63 YEARS PANDINCHARA KOTTAYIL HOUSE, ULLANAM NORTH P.O, PARAPPANANGADI, MALAPPURAM DISTRICT., PIN - 676303` - `2 2. ABDUL RAZAK M.V AGED 62 YEARS PUTHAN MALIYAKKAL HOUSE, KADALUNDI NAGARAM P.O, MALAPPURAM DISTRICT., PIN - 673314` ``` BY ADV K.ABOOBACKER SIDHEEQUE ``` ## **`RESPONDENT/S:`** ``` 11. THE TIRURANGADI CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD CHEMMAD P.O, TIRURANGADI, MALAPPURAM DISTRICT, PIN-676306, REPRESENTED BY ITS SECRETARY., PIN - 676306 ``` ``` 22. THE LIFE INSURANCE CORPORATION OF INDIA LIC DIVISIONAL OFFICE, KOZHIKODE, JEEVAN PRAKASH, LIC ROAD, KOZHIKODE DISTRICT, PIN-673001, REPRESENTED BY ITS DIVISIONAL MANAGER., PIN - 673001 BY ADVS. P.SANJAY SHRI.S.EASWARAN, SC, LIFE INSURANCE CORPORATION OF INDIA LAL GEORGE A.PARVATHI MENON BIJU MEENATTOOR PAUL VARGHESE (PALLATH) P.A.MOHAMMED ASLAM KIRAN NARAYANAN PRASOON SUNNY RAHUL RAJ P. K.MOHANAKANNAN ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.02.2024, ALONG WITH WP(C).3461/2022 AND CONNECTED CASES AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 5 WPC 3461, 3472, 3490 and 7193/22 ## **JUDGMENT** (Dated this the 8[th] day of February 2024) **[WP(C) Nos.3461/2022, 3490/2022, 3472/2022 and 7193/2022]** The petitioners are the former employees of different cooperative Banks and superannuated on different dates. The Bank had taken a special Scheme for payment of gratuity to the employees from the 2[nd] respondent. On superannuation, the 2[nd] respondent has paid Rs.10,00,000/- as gratuity to the petitioners as per the limit imposed under Section 4(3) of the Payment of Gratuity Act, 1972 (for short ‘the Act, 1972’). Thus, the eligibility of petitioners to receive the full amount of gratuity in terms of special scheme, is curtailed. 2. It is brought to the notice of this court that in **Chandrasekharan Nair v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. [2017 (4) KLT 276],** a full bench of this court had held that the liability to pay gratuity to an employee is always on the employer under 6 WPC 3461, 3472, 3490 and 7193/22 Section 4(2) of the Act, 1972. It was further held that if the employee is entitled to higher amounts, the higher amount shall be paid in view of section 4(5) of the Act, 1972. 3. A counter affidavit has been filed by the 1[st] respondent Bank in W.P.(C) No.3490 of 2022 and by the 2[nd] respondent Life Insurance Corporation of India in the other 3 petitions. The averments contained in the petitions are denied in the counter-affidavits. It is submitted that petitioners retired from service on different dates. The gratuity claim of the petitioners was settled based on the terms and conditions of employment entered into between the Co-operative Bank and its employees. The LIC Corporation of India has no liability to pay the gratuity amount. 4. In view of the dictum laid down by this court in **Chandrasekharan Nair** (supra), the liability to pay the 7 WPC 3461, 3472, 3490 and 7193/22 balance amount of gratuity over the amount received from the LIC is on the employer. Therefore, these Writ Petitions are allowed and the respondent Bank is directed to disburse the balance amount of gratuity to the petitioners within a period of 3 months from the date of receipt of a copy of this judgment. If the amount is not paid as ordered above, the same shall carry interest @ 6% per annum from the date on which it became due. Sd/- **BASANT BALAJI JUDGE** dl/ 8 WPC 3461, 3472, 3490 and 7193/22 ## **`APPENDIX OF WP(C) 3490/2022`** ## `EXHIBITS` ``` Exhibit-P1: A true copy of the order dated 18.09.2017 in W.P.(C).No.19892/2009 and connected cases of the Full Bench of this Hon'ble Court reported in 2017 (4) KLT 276 (FB). ``` ``` Exhibit-P2: A true copy of the Judgment dated 02.11.2017 in W.P. (C) No.19892/2009 and connected cases of this Hon'ble Court. ``` ``` Exhibit-P3: A true copy of order dated 11.05.2018 by Supreme Court of India in the Special Leave to Appeal (C) No (s). 9439- 9444/2018. ``` `Exhibit-P4: A true copy of the representation dated 30.12.2021 submitted by petitioner to first respondent bank` . ``` ExhibitExhibit.R.2 (a) ExhibitExhibit.R.2 (b) ExhibitExhibit.R.2 (c) ``` 9 WPC 3461, 3472, 3490 and 7193/22 ## **`APPENDIX OF WP(C) 3472/2022`** ## `PETITIONER EXHIBITS` ``` Exhibit P1A TRUE COPY OF THE ORDER DATED 18.9.2017 IN WPC NO 19892/2009 AND CONNECTED CASES OF THE FULL BENCH OF THIS HON'BLE COURT REPORTED IN 2017 (4) KLT 276 (FB) ``` ``` Exhibit P2A TRUE COPY OF THE JUDGMENT DATED 2.11.2017 IN WPC NO 19892/2009 AND CONNECTED CASES OF THIS HON'BLE COURT ``` ``` Exhibit P3A TRUE COPY OF ORDER DATED 11.5.2018 BY SUPREME COURT OF INDIA IN THE SPECIAL LEAVE TO APPEAL (C) NO (S) 9439-9444/2018 ``` ``` Exhibit P4A TRUE COPY OF THE REPRESENTATION DATED 30.12.2021 SUBMITTED BY FIRST PETITIONER TO FIRST RESPONDENT BANK ``` ``` Exhibit P5A TRUE COPY OF THE REPRESENTATION DATED 30.12.2021 SUBMITTED BY SECOND PETITIONER TO FIRST RESPONDENT BANK ``` ``` EXHIBITS ``` ``` ExhibitExhibit.R.2 (b) ExhibitExhibit.R.2 (a) ExhibitExhibit.R.2 (e) ExhibitExhibit.R.2 (d) ExhibitExhibit.R.2 (f) ExhibitExhibit.R.2 (C) ``` 10 WPC 3461, 3472, 3490 and 7193/22 ## **`APPENDIX OF WP(C) 7193/2022`** ``` PETITIONER EXHIBITS ``` ``` Exhibit-P1A TRUE COPY OF THE ORDER DATED 18.09.2017 IN W.P.(C) NO.19892/2009 OF THE FULL BENCH OF THIS HON'BLE COURT REPORTED IN 2017 (5) KHC 15 (FB). Exhibit-P2A TRUE COPY OF THE JUDGMENT DATED 02.11.2017 IN W.P.(C) NO.19892/2009 . Exhibit-P3A TRUE COPY OF ORDER DATED 11.05.2018 BY SUPREME COURT OF INDIA IN THE SPECIAL LEAVE TO APPEAL (C) NO. (S). 9439-9444/2018 . ``` ``` Exhibit-P4A TRUE COPY OF THE REPRESENTATION DATED 28.12.2021 SUBMITTED BY FIRST PETITIONER TO FIRST RESPONDENT BANK. ``` ``` Exhibit-P5A TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P4. ``` ``` Exhibit-P6A TRUE COPY OF THE REPRESENTATION DATED 27.12.2021 SUBMITTED BY SECOND PETITIONER TO FIRST RESPONDENT BANK. ``` ``` Exhibit-P7A TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P6 . Exhibit-P8A TRUE COPY OF THE ORDER REJECTING THE CLAIM OF FIRST PETITIONER DATED 01.02.2022 ISSUED BY THE FIRST RESPONDENT. ``` ``` Exhibit-P9A TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P8. Exhibit-P10A TRUE COPY OF THE ORDER REJECTING THE CLAIM OF SECOND PETITIONER DATED 01.02.2022 ISSUED BY THE FIRST RESPONDENT . ``` ``` Exhibit-P11A TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P10. ``` 11 WPC 3461, 3472, 3490 and 7193/22 ``` Exhibit R2(a): True photostat copy of the relevant portion of the Rules prepared under the scheme, signed by the Master Policyholder showing the eligibility and gratuity benefits payable to the employees. ``` ``` Exhibit R2(b): True photostat copy of the Claim Form dated 04.05.2016 submitted by the 1st respondent Bank. ``` ``` Exhibit R2(c): True photostat copy of the Claim Form dated 04.04.2017 received from the 1st respondent Bank. ``` ``` Exhibit R2(d): True photostat copy of the discharge voucher dated 04.05.2016 received from the 1st respondent Bank. ``` ``` Exhibit R2(e): True photostat copy of the covering letter dated 12/04/2017 settling claim of Rs. 10 lakhs in respect of the 2[nd] petitioner. ``` 12 WPC 3461, 3472, 3490 and 7193/22 ## **`APPENDIX OF WP(C) 3461/2022`** ## `PETITIONER EXHIBITS` ``` Exhibit P1A TRUE COPY OF THE ORDER DATED 18.9.2017 IN WPC NO 19892/2009 AND CONNECTED CASES OF THE FULL BENCH OF THIS HON'BLE COURT REPORTED IN 2017 (40 KLT 276 (FB) ``` ``` Exhibit P2A TRUE COPY OF THE JUDGMENT DATED 2.11.2017 IN WPC NO 19892/2009 AND CONNECTED CASES OF THIS HON'BLE COURT ``` ``` Exhibit P3A TRUE COPY OF ORDER DATED 11.5.2018 BY SUPREME COURT OF INDIA IN THE SPECIAL LEAVE TO APPEAL (C) NO (S) 9439-9444/2018 ``` ``` Exhibit P4A TRUE COPY OF THE REPRESENTATION DATED 30.12.2021 SUBMITTED BY FIRST PETITIONER TO FIRST RESPONDENT BANK ``` ``` Exhibit P5A TRUE COPY OF THE REPRESENTATION DATED 30.12.2021 SUBMITTED BY SECOND PETITIONER TO FIRST RESPONDENT BANK ``` ## `EXHIBITS` ``` ExhibitExhibit.R.2 (c) ExhibitExhibit.R.2 (a) ExhibitExhibit.R.2 (b) ExhibitExhibit.R.2 (d) ExhibitExhibit.R.2 (a) ExhibitExhibit.R.2 (b) ExhibitExhibit.R.2 (d) ExhibitExhibit.R.2 (c) ExhibitExhibit.R.2 (b) ExhibitExhibit.R.2 (d) ExhibitExhibit.R.2 (c) ExhibitExhibit.R.2 (a) ```