IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.T.RAVIKUMAR WEDNESDAY, THE 27TH OCTOBER 2010 / 5TH KARTHIKA 1932 WP(C).No. 5351 of 2010(T) --------------------------------------- PETITIONER(S): ------------------------ 1. K.V.OONNOONNY, S/O.VARGHESE THOMAS, KUMBAZHASSERIL, PERUMPETTY.P.O, MALLAPPALLY (MANAGER (RETIRED), PERUMPETTY BRANCH OF THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, PERUMPETTY). 2. R.RAJAGOPALAN NAIR, S/O.RAMAN PILLAI, KOLAMMAKKAL HOUSE, PADIMON.P.O, MALLAPPALLY (MANAGER (RETIRED) PERUMPETTY BRANCH OF THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, PERUMPETTY). BY ADVS. SRI.S.SUBHASH CHAND, SMT.M.P.MARY. RESPONDENT(S): --------------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM. 3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, PATHANAMTHITTA. 4. THE THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, H.O.ERAVIPEROOR, REPRESENTED BY ITS GENERAL MANAGER. Kss ..2/- ..2... WPC.NO.5351/2010 T *ADDL.R5 IMPLEADED: R5. THE BRANCH MANAGER, LIFE INSURANCE CORPORATION OF INDIA, KOTTAYAM BRANCH, STAR JUNCTION, KOTTAYAM. (*ADDL.R5 IS IMPLEADED AS PER ORDER DTD. 20/09/2010 IN I.A.NO.12758/10) R1 TO R3 BY GOVERNMENT PLEADER SRI. P.M.MANOJ R4 BY ADV. SRI.P.HARIDAS ADDL.R5 BY ADV. SRI.P.B.SAHASRANAMAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27/10/2010 ALONG WITH WPC NO. 5873 OF 2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.5351/2010 T APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE SCHEDULE TO THE LIC MASTER POLICY. P2: COPY OF THE JUDGMENT DTD. 24/01/2008 IN WPC.NO.8598/2007 PASSED BY THIS HON'BLE COURT. P3: COPY OF THE JUDGMENT DTD. 30/05/2008 IN WPC.NO.16169/2008 PASSED BY THIS HON'BLE COURT. P4: COPY OF THE REPRESENTATION DTD. 15/01/2010 SUBMITTED BEFORE RESPONDENTS 1 TO 4. RESPONDENT'S EXHIBITS: N I L RESPONDENT'S ANNEXURE: COPY OF THE RESOLUTION DTD... OF THE BOARD. /TRUE COPY/ P.A.TO JUDGE Kss C.T.RAVIKUMAR, J -------------------------------------- W.P.(C).NOS.5351,5873,17032,17084, 25394 AND 31125 OF 2010 ----------------------------------------------------------- Dated this the 27th day of October, 2010 JUDGMENT The common issues based on common facts involved in these writ petitions and therefore, they were jointly heard and are being disposed of this common judgment. Narration of the facts of each case is uncalled for as the issues involved in these writ petitions are of common nature. 2. The petitioners are retirees from the service of different Service Co-operative Banks registered under the Kerala Co-operative Societies Act. Section 4(5) comes into operation only if the award is becomes better than terms of gratuity. No amendment has been brought to Section 11 of the Act and in short, even now the employer is answerable to duty bound to pay and answerable to its failure. As per Section 62 of the Kerala Co-operative Societies Act, 1969 the employees of a society shall be entitled to gratuity at the rates and on such conditions as prescribed. Rule 59 of the Kerala Co-Operative Societies Rules, 1969 provides that every society shall make in its bye- laws provision for payment of gratuity to its employees and frame regulations for its administration. The rates and conditions relating disbursement of gratuity are also specifically provided thereunder and the regulations to be framed by each society shall provide for the same among other matters. Section 4(5) of the payment of Gratuity W.P.(C).NOS.5351,5873,17032,17084, 25394 AND 31125 OF 2010 2 Act reads thus:- “Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with employer”. The petitioners in all these writ petitions have retired from the service of their respective Banks prior to 24.05.2010. Prior to 24.5.2010 Section4(5) stood as follows:- “The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees” 3. The petitioners in all these writ petitions claim that they are entitled to be paid more than the statutory ceiling limit of Rs.3.5 lakhs in terms of Section 4(3) of the payment of Gratuity Act. They seek direction to their respective employer or to the Life Insurance Corporation of India to pay the differential amount. The employer Co-Operative Banks in these writ petitions have entered into arrangement with the Life Insurance Corporation of India to have their liability for payment of gratuity to its employees insured as per a group gratuity scheme namely “ Employees Group Gratuity Life Assurance Scheme”. Section 4A of the payment of Gratuity act deals with compulsory insurance. 4. In these cases, the petitioners were disbursed with gratuity only up to the ceiling limit under Section 4(3) of the Payment of Gratuity Act viz. Rs.3.5 lakhs and the stand of the W.P.(C).NOS.5351,5873,17032,17084, 25394 AND 31125 OF 2010 3 employer Banks in that they are not liable to pay anything in excess of the statutory ceiling limit of Rs.3.5 lakhs even if going by the admitted method of calculation an employee is entitled to more than the said amount. The counsel for the petitioners in all these writ petitions resisted the said contentions and contended that in the light of the decision of this Court Rathnavalli v. Ambalapadu Service Co-Operpative Society reported in 2005(3) KLT 320 which was approved try a Decision such as per judgment dated 8.8.2008 in W.A.No.1250 of 2004 the employer Banks cannot be heard to contend like that. In the light of Ratnavally's case supra the right to receive the gratuity by employees of Co- Operative Societies cannot be limited to any particular amount. The next question is whether the employer Banks could say that they are only liable to pay the amount that has been actually received by them from the L.I.C. In W.P.(c) No.17242 of 2009 this Court considered held that an employee is entitled to get gratuity at the rate of 15 days wages for every completed year of service in terms of the provisions under the Payment of Gratuity Act. That apart, it was held that on such calculation, if the amount due exceeded what is provided under the scheme and paid to the concerned employee it is certainly the liability of the employer to pay the differential amount. It was also observed that if under the scheme the full amount payable to the concerned employee and W.P.(C).NOS.5351,5873,17032,17084, 25394 AND 31125 OF 2010 4 accordingly, paid is to be reimbursed to the employer Bank it would always be open to the employer Bank to take up the matter with the L.I.C and to get the amount reimbursed. Following the said judgment this Court had disposed of W.P.(c) No.8697 of 2010 directing the employer Bank to honour the liability. W.P.(c) Nos.5351 and 5873 of 2010 were also allowed on the above lines. 5. It is thus obvious that the issues posed for consideration in these writ petitions are covered in favour of the petitioners by the decision in Ratnavally's case (supra) and the decision of this Court in W.P.(c) No.17842 of 2009. I am of the view that the petitioners in these writ petitions are entitled to receive gratuity based on the calculation in accordance with the provisions under the payment of Gratuity Act i.e., gratuity at the rate of 15 days wages for every completed year of service in terms of the Act. The employer Banks in these writ petitions cannot wriggle out of their liability to pay the differential amount i.e., the figure obtained by reducing the amount paid by the employer bank after receiving the same from the L.I.C. and the amount payable based on the aforesaid calculation. Accordingly, these writ petitions are disposed of as hereunder:- The respective employer Banks of the petitioners shall quantify the amount payable to each of the petitioners towards gratuity in terms of the above mentioned method of calculation in W.P.(C).NOS.5351,5873,17032,17084, 25394 AND 31125 OF 2010 5 the light of the decision in W.P.(c).No.17842 of 2009. For that purpose, it would open to the petitioners to submit application in writing in terms of Section 7(1) of the Payment of Gratuity Act to the concerned employer Bank claiming gratuity along with interest as provided under Section 7(3A) of the Act. On receipt of such applications the concerned employer Banks shall quantify the amount of gratuity payable to the petitioners based on the above direction and disburse the same expeditiously, at any rate, within two months from the date of receipt of such applications. In case the employer Banks are entitled to get imbursed the amount after effecting payment to the petitioners, under the scheme it will be open to them to take up the matter with the L.I.C and to get the amount reimbursed and, in case of failure on the part of L.I.C to effect reimbursement they will be free to resort to appropriate proceedings. These writ petitions are, accordingly disposed of. C.T.RAVIKUMAR,JUDGE pm