IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 4TH JUNE 2009 / 14TH JYAISHTA 1931 WP(C).No. 1120 of 2008(G) ------------------------------------ PETITIONER(S): ---------------------- CHENDAMANGALAM-KARIMPADAM HANDLOOM WEAVERS CO-OPERATIVE SOCIETY LTD.NO.H.191, REPRESENTED BY ITS SECRETARY, KARIMPADAM, P.O.CHENDAMANGALAM-683 512. BY ADV. MR.P.RAMAKRISHNAN MR.T.C.KRISHNA RESPONDENT(S): ------------------------ 1. APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT (REGIONAL JOINT LABOUR COMMISSIONER), CIVIL STATION, KAKKANAD, ERNAKULAM. 2. CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT (DISTRICT LABOUR OFFICER), ERNAKULAM. 3. M.K. RAGHAVAN, MATTACKAL HOUSE, KIZHAKKUMPURAM, CHENDAMANGALAM P.O., N.PARAVUR, PIN-683 512. R1 & R2 BY GOVERNMENT PLEADER SMT.SMITHA SUKUMAR. R3 BY ADV. MR.T.K.SHAJAHAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/06/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 1120/2008-G APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE APPLICATION DATED 27/03/99 SUBMITTED BY THE 3RD RESPONDENT. EXT.P2: COPY OF THE WRITTEN STATEMENT FILED BY THE PETITIONER IN GC 13/2000. EXT.P3: COPY OF THE ADDITIONAL WRITTEN STATEMENT FILED BY THE PETITIONER IN GC 13/2000. EXT.P4: COPY OF THE REJOINDER FILED BY THE 3RD RESPONDENT IN GC 13/2000. EXT.P5: COPY OF THE ORDER DATED 19/05/2001 OF THE 2ND RESPONDENT IN GC 13/2000. EXT.P6: COPY OF THE APPEAL MEMORANDUM FILED BY THE 3RD RESPONDENT BEFORE THE 1ST RESPONDENT. EXT.P7: COPY OF THE ORDER DATED 29/10/2007 PASSED BY THE 1ST RESPONDENT IN GA 14/01. EXT.P8: COPY OF THE DEPOSITION OF 3RD RESPONDENT BEFORE THE 2ND RESPONDENT IN GC 13/2000. RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.S. TO JUDGE rs. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W. P (C) No. 1120 of 2008 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 4th June, 2009. J U D G M E N T The 3rd respondent was an employee of the petitioner Society who retired from service on 31-3-1999. He filed an application before the 2nd respondent under the Payment of Gratuity Act, alleging that the gratuity due to the 3rd respondent from the petitioner-Society was not paid to him. The 2nd respondent adjudicated the said application as G.C.No. 13/2000. By Ext. P2 written statement, the petitioner- Society contended that the gratuity amounting to Rs. 75,101/- and the provident fund amount of Rs. 29,218.80 were paid to the 3rd respondent after his retirement. Their contention was that the gratuity due to the employees of the Society was being paid as and when the LIC with whom the Society had a gratuity policy for its employees, released the gratuity amount in accordance with the policy. According to the petitioner, since there was delay in getting the amount from the LIC and the 3rd respondent was in need of money urgently after retirement, he filed Ext. P1 application dated 27-3-1999 for advance towards his gratuity and provident fund amount. The request was placed before the managing committee of the Society, who sanctioned the same pursuant to which an amount of Rs. 60,000/- was paid as advance towards gratuity and an amount of Rs. 29,218.80 was paid as provident fund. According to the petitioner, the 3rd respondent signed vouchers for having received both payments. Subsequently, after receipt of the gratuity amount from the LIC as per the policy the balance gratuity of Rs. 15,101/- was also paid to the 3rd respondent and another voucher for Rs. 75,101/- was signed by the 3rd respondent in respect of which a receipt for Rs. 60,000/- was also issued to the petitioner adjusting the advance earlier paid, was the contention raised in the written statement. In the written statement, it was also mentioned that there was some W.P.C. No. 1120/08. -: 2 :- proceedings against the 3rd respondent for misappropriation of money in respect of which proceedings are pending. In Ext. P4 rejoinder filed by the 3rd respondent, he raised a contention that three blank vouchers were got signed from him by the Secretary and another employee of the Society by name Bose under threat and coercion and those blank vouchers were used for forging the receipts of money by the 3rd respondent. He denied that he had made Ext. P1 application for advance. After taking evidence and hearing the arguments, the 2nd respondent-controlling authority believed the case of the petitioner-Society holding that gratuity amounting to Rs.75,101/- had been paid to the 3rd respondent and therefore the 3rd respondent is not entitled to any further amounts as gratuity. Accordingly, the application was dismissed. The 3rd respondent filed Ext. P6 appeal before the appellate authority. Pursuant thereto, the 1st respondent-appellate authority passed Ext. P7 appellate order reversing Ext. P5 order and allowing the application for gratuity believing the case of the 3rd respondent that the vouchers were got signed under threat and coercion, apparently, relying on the fact that the petitioner-Society had not complied with the provisions of Section 7(2) of the Payment of Gratuity Act and Rule 9 of the Kerala Payment of Gratuity Rules, which requires an employer to issue notice to the controlling authority regarding determination of gratuity payable to an employee. The petitioner-Society is challenging Ext. P7 order. 2. According to the petitioner, the findings of the appellate authority in Ext. P7 order is totally perverse. Counsel for the petitioner points out that Ext. P5 is an elaborate order discussing the entire evidence threadbare and giving cogent reasons for arriving at the conclusions. Without referring to the reliability of the evidence of the 3rd respondent simply because the petitioner-Society had not W.P.C. No. 1120/08. -: 3 :- issued intimation under Section 7(2) of the Act regarding determination of the gratuity amount, the appellate authority chose to believe the case of the 3rd respondent that the Secretary and another employee of the Society got signatures of the 3rd respondent in blank vouchers under threat and coercion, which finding is totally perverse. According to counsel, simply because the petitioner has omitted to issue notice to the controlling authority regarding determination of gratuity, that would not lead to a conclusion that the petitioner- society had oblique motive and take it as a conclusive circumstance to accept the version of the 3rd respondent that the vouchers were signed by him under threat and coercion without reference to any other evidence adduced in the case. According to him, the fact that the alleged signing of blank vouchers was in April 1999 and for six long months, the 3rd respondent never had a case that blank vouchers were got signed under threat and coercion and the fact that the 3rd respondent did not have such a case in his application before the controlling authority, are all circumstances which would conclusively disprove the case of the 3rd respondent. Therefore, according to the counsel for the petitioner, Ext. P7 is totally perverse and unsustainable. 3. Counsel for the 3rd respondent would totally deny the contentions of the counsel for the petitioner. According to him, the vouchers were not in his handwriting and it was in the handwriting of Mr. Bose. He also refers to the evidence of the Secretary to bring out discrepancies in the accounts maintained by the Society. On that basis, he would argue that Ext. P7 is sustainable. 4. I have considered the rival contentions in detail. 5. At the outset, I find that Ext. P5 is an elaborate, well considered order, considering the entire evidence adduced by both sides in the case giving cogent reasons for the conclusion arrived at W.P.C. No. 1120/08. -: 4 :- quoting relevant portions of the oral evidence and the documentary evidence. On the other hand, Ext. P7 order of the appellate authority sadly lacks in clarity of reasoning. Simply on the ground that the petitioner-Society has not issued intimation under Section 7(2) of the Payment of Gratuity Act the appellate authority has chosen to disbelieve the whole evidence of the petitioner and accepted the case of the 3rd respondent that the vouchers were got signed under threat and coercion without any independent evidence to prove the same. Admittedly, the allegation of the 3rd respondent is that three blank vouchers were got signed by him under threat and coercion in April, 1999. But, he admits that for six long months, he did not tell anybody even to his union, about the same. Even according to him, the two vouchers were used for gratuity amount and the third voucher was used for provident fund amount. Admittedly, the 3rd respondent has not complained to anybody about the non-receipt of the provident fund amount although the amount came to more than Rs. 29,000/-. The 3rd respondent issued a notice dated 1-10-1999 to the employer demanding gratuity. The Society issued a reply letter dated 28-10-1999 specifically stating that the gratuity due to the 3rd respondent was paid for which the 3rd respondent had signed vouchers, the particulars of which were also mentioned therein. Immediately on receipt of the same on 29-10-1999, the 3rd respondent issued a notice through his advocate demanding return of the vouchers allegedly got signed under threat and coercion. It is thereafter the 3rd respondent filed the gratuity application. In that application, he did not state anything about the vouchers or the same having been got signed under threat and coercion. For the first time he raises that contention in the rejoinder statement produced as Ext. P4. Curiously, in Ext. P4, he flatly denied having filed any application for payment of gratuity and provident fund in advance. But, in cross W.P.C. No. 1120/08. -: 5 :- examination the 3rd respondent admitted that Ext. P1 application dated 27-3-1999 contained his signature and that the same was in his own handwriting. Again, he flatly denied having received any communication regarding misappropriation. But, in cross examination, he had to admit that he had received one and that he had in fact filed a reply. But, again, his defence was it was under threat and coercion. I am of opinion that such a person who had first denied everything and when confronted with the documents proving the same would take the stand that although he had signed the same that was under threat and coercion, cannot be believed. None of these evidence and probabilities had been discussed by the appellate authority in Ext. P7 order. He merely relied on the fact that the petitioner-Society had not issued a notice as contemplated under Section 7(2) and therefore the 1st respondent's contention that the vouchers were got signed under threat and coercion can be believed, without discussing the other evidence of the petitioner-Society. That notice itself is in respect of calculation of gratuity and not payment of gratuity. In this case, I find that the gratuity payable to the 3rd respondent as per the Payment of Gratuity Act is only Rs. 73,270/- insofar as the 3rd respondent admittedly had 40 years and 3 months' of service, it has to be rounded off as 40 as per the provisions of the Act. In fact, in Ext. P4, the controlling authority had held so. But, the petitioner-employer counted the three months also as one year and calculated the gratuity as Rs. 75,101/-, which is more than what the 3rd respondent was entitled to under law. Therefore, I am of opinion the employer who would pay more than what is due to his employee is more believable than the 3rd respondent, whose conduct is not at all one inspiring confidence. In the above circumstances, I am fully satisfied that Ext. P7 is on a perverse appreciation or lack of appreciation of the evidence W.P.C. No. 1120/08. -: 6 :- adduced whereas in Ext. P5, the evidence had been correctly appreciated giving cogent reasons. Therefore, Ext. P7 is clearly perverse and unsustainable. Accordingly, Ext. P7 is quashed. The writ petition is allowed as above. Sd/- S. Siri Jagan, Judge. Tds/