IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 3RD NOVEMBER 2011 / 12TH KARTHIKA 1933 WP(C).No. 30604 of 2006(R) ---------------------------------------- PETITIONER(S): ------------------------- K.A.JOSE, S/O. AUGUSTINE, SECRETARY (RETIRED), THE CHUNGATHARA SERVICE CO-OPERATIVE BANK LTD., NOW RESIDING AT KAITHAMALA HOUSE, EDAMALA, CHUNGATHARA, MALAPPURAM DISTRICT. BY ADV. SRI.BABU S. NAIR RESPONDENT(S): -------------------------- 1. THE CHUNGATHARA SERVICE CO-OPERATIVE BANK LTD. NO.F.1807, CHUNGATHARA, REPRESENTED BY ITS SECRETARY. 2. THE CHUNGATHARA SERVICE CO-OPERATIVE BANK LTD., NO.F.1807, CHUNGATHARA, DIRECTOR BOARD, REPRESENTED BY ITS PRESIDENT. 3. THE LIFE INSURANCE CORPORATION OF INDIA, KOZHIKODE DIVISION, REPRESENTED BY ITS DIVISIONAL MANAGER. R3 BY ADV. SRI.N.RAJAGOPALAN NAIR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.30604/2006 P APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DTD. 24/076/2006. P2: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 18/09/2006. P3: COPY OF THE REPLY OF THE FIRST RESPONDENT DTD. 20/07/2006 TO THE REPRESENTATION OF THE PETITIONER. RESPONDENT'S EXHIBITS: R3A: COPY OF POLICY NO.GGI 44528. R3B: COPY OF RULE OF GROUP GRATUITY SCHEME. R3C: COST BENEFIT SCHEME SCHEDULE. R3D: COPY OF LETTER DTD. 13/07/2006 FROM LIC TO BANK. R3E: COPY OF RECEIPT DTD. 18/07/2006. /TRUE COPY/ P.A.TO JUDGE Kss S.SIRI JAGAN, J. ================== W.P.(C).No. 30604 of 2006 ================== Dated this the 3rd day of November, 2011 J U D G M E N T The petitioner retired as the Secretary of the 1st respondent Society on 30.6.2006 after 37 years of service. The petitioner was paid only an amount of ` 3,50,000/- as gratuity, which is the maximum gratuity payable under the Payment of Gratuity Act. The earlier Secretary at the time of retirement was paid an amount of ` 3,80,175/- as gratuity. On the ground that he should have been paid only ` 3,50,000/-, the excess amount paid as gratuity was sought to be recovered from the petitioner also. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs: “i) Issue a writ of mandamus or any other appropriate writs, orders of directions commanding the respondents to disburse the entire amounts as gratuity to the petitioner, for which he is legally eligible. ii) Issue a writ of mandamus or any other appropriate writs, orders of (sic) directions commanding the respondents 1 and 2, not to recover an amount of Rs. 30,175/- drawn by C.Sreedharan, former Secretary of the society, from the retirement benefits of the petitioner. iii) Issue a writ of mandamus or any other appropriate writs, orders of directions commanding the respondents to disburse the entire amounts due to the petitioner as gratuity forthwith, without any further delay.” 2. The petitioner contends that the 1st respondent society has taken out a group gratuity policy with the Life Insurance Corporation of India and the petitioner is entitled to the policy amount due in respect w.p.c.30604/06 - : 2 :- of that policy towards payment of gratuity, for payment of which amount, the maximum limit prescribed in the Payment of Gratuity Act is not a bar. The petitioner, as a beneficiary of the Group Gratuity Policy, is entitled to the amount fixed in the policy issued by the LIC as maturity amount in respect of the Group Gratuity Policy. According to the petitioner, the petitioner is entitled to ` 4,78,068/- as the amount due under the said policy, which has not been paid to the petitioner. The petitioner would further contend that, by the same coin, the former Secretary of the society is also entitled to payment of the policy amount, which only has been paid. Therefore, the alleged excess amount paid to the former Secretary is not liable to be recovered from the petitioner. 3. Respondents 1 and 2 have not chosen to enter appearance and contest the matter. The 3rd respondent-Life Insurance Corporation of India has filed a counter affidavit. Their stand is that there is no privity of contract between the LIC and the petitioner. According to them, they are only bound to pay to the 1st respondent the policy amount in accordance with the Group Gratuity Policy. They have produced master policy as Ext.R3(a). They have also produced Ext.R3 (b) Rules of Group Gratuity Life Assurance Scheme. Ext.R3(c) is the schedule to the master policy and Ext.R3(d) is the statement regarding payment made to the society. The 3rd respondent would contend that w.p.c.30604/06 - : 3 :- going by Ext.R3(a) the amount payable by them to the 1st respondent towards the group gratuity policy in respect of the petitioner is only ` 3,50,805/-, which has been paid. According to them, no further amounts are due in respect thereof from the 3rd respondent to the 1st respondent. If there is any dispute between the petitioner and the 1st respondent in respect of payment of gratuity, they have to resolve the same before the authorities under the Payment of Gratuity of Act, is the contention of the LIC. 4. I have considered the rival contentions in detail. 5. The law on the question has been settled by a decision of this Court in Retnavalli v. Ambalapadu Service Co-operative Bank Ltd., 2005 (3) KLT 320, wherein this Court has already held that notwithstanding the maximum limit of gratuity fixed under the Payment of Gratuity Act, when the employer takes out an Employees Group Gratuity Life Insurance Policy, the employee is entitled to payment of the policy amount, whatever that amount is, without any upper limit. That decision was affirmed by the Division Bench in W.A.No.1250/2004. That decision was again affirmed by another Division Bench of this Court in Nedupuzha S.C.B. Ltd. v. Rugmini, 2011 (3) KLT 134. As such, the law on the question has been settled. That being so, what I have to consider in this writ petition is as to whether the 3rd respondent has the policy amount due to the petitioner w.p.c.30604/06 - : 4 :- as per Ext.R3(a) master policy. In Ext.R3(a) the “sum assured” is described as follows: “Sum Assured: The sum Assured under the Pure Endowment Assurance shall be an amount equal to 15 days salary of the member as on the Entry Date or the Annual Renewal Date, as the case may be for each year of service upto the Normal Retirement Date subject to the maximum of 20 months' salary.” The learned counsel for the petitioner would contend that at the time of retirement, the petitioner was drawing a salary of ` 18,060/- and dearness allowance of ` 4334/- which together would come to ` 22394/-. According to the petitioner, the gratuity calculated on that salary would come to ` 4,78,068/-, which should be the amount payable to the petitioner under Ext.R3(a) master policy. But I find that as per the master policy, the maximum insurance amount payable is 20 months' salary. 20 month's salary on the basis of the figures given by the petitioner would come to ` 4,57,880/-. But I cannot definitely accept those figures in the absence of any authentic documents to prove the salary and D.A. of the petitioner. But without any doubt, the petitioner is entitled to the policy amount calculated in accordance with the stipulation in Ext.R3(a) regarding the “sum assured”, which is quoted above. In the above circumstances, in respect of the amount payable to the petitioner under Ext.R3(a) policy, I issue the following directions: The 3rd respondent shall, in consultation with the 1st respondent, w.p.c.30604/06 - : 5 :- ascertain the pay and dearness allowance last drawn by the petitioner and calculate the amount payable to the petitioner under Ext.R3(a) policy in accordance with the provision regarding the “sum assured” quoted above. The difference between the said sum and the amount already paid as per Ext.R3(d) shall be forwarded to the 1st respondent, which the 1st respondent shall pay to the petitioner. The 3rd respondent shall complete the above exercise within one month from the date of receipt of a certified copy of this judgment and the 1st respondent shall pay the balance amount due to the petitioner within two weeks from the date when the amount is received from the 3rd respondent. 6. As far as the recovery from the petitioner in respect of the amount paid to the former Secretary of the society, the 1st respondent shall reconsider the same in accordance with the amount payable to the former Secretary on the basis of Ext.R3(a) policy. If the amount payable to the former Secretary is ` 3,80,175/- or more, no amount shall be recovered from the petitioner. But, if the LIC has not paid that amount, it would be open to the 1st respondent to take up the matter with the LIC for payment of that amount. The writ petition is disposed of as above. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge w.p.c.30604/06 - : 6 :-