IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN FRIDAY, THE 8TH AUGUST 2008 / 17TH SRAVANA 1930 OP.No. 8782 of 2003(U) ---------------------- PETITIONER: ------------ C.A.VISWANATHAN, RETIRED ASST.SECRETARY VILAYANCHATHANOOR SERVICE, CO-OPERATIVE BANK LTD., RESIDING AT CHERUKODE HOUSE, VILAYANCHATHANOOR PO. VILAYANNOOR, PALAKKAD DISTRICT. BY ADV. SMT.V.P.SEEMANDINI (SR.) ADV. SRI.P.S.DIVAKARAN SMT.LEKSHMY RAMANATHAN RESPONDENTS: ------------- 1. STATE OF KERALA, REP.BY ITS SECRETARY TO GOVT, CO-OPERATION (C) DEPARTMENT TRIVANDRUM. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETY TRIVANDRUM. 3. THE JOINT REGISTRAR, OFFICE OF THE JOINT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, PALAKKAD. 4. THE VILAYANCHATHANNOOR SERVICE CO-OPERATIVE BANK LTD., NO.F.1599 H.O. VILAYANCHAHANUR, THENKURUSSI. 5. THE SECRETARY-IN-CHARGE, THE VILAYANCHATHANNOOR SERVICE CO-OPERATIVE BANK LTD., NO.F.1599 H.O.VILAYANCHATHANUR, THENKURUSSI. BY ADV. SRI.P.B.SURESH KUMAR FOR R4 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 08/08/2008 ALONGWITH WA NO.1250 OF 2004, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P.8782/03 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE LETTER NO.367/CC3/86/CO.OP, DATED 14.5.86 ISSUED BY THE 1ST RESPONDENT. EXT.P2: COPY OF THE APPLICATION DATED 8.11.2001 SUBMITTED BY THE PETITIONER BEFORE THE ADMINISTRATOR OF THE 4TH RESPONDENT. EXT.P3: COPY OF THE LETTER DATED 26.11.2001 ISSUED BY THE 5TH RESPONDENT. EXT.P4: COPY OF THE LETTER DATED 20.4.2002 ISSUED BY THE 5TH RESPONDENT. EXT.P5: COPY OF THE LETTER DATED 25.5.2002 SENT BY THE 3RD RESPONDENT TO THE SECRETARY OF THE 4TH RESPONDENT. EXT.P6: COPY OF THE LETTER DATED 5.7.2002 SENT BY THE 3RD RESPONDENT TO SECRETARY OF THE 4TH RESPONDENT. EXT.P7: COPY OF THE REQUEST DATED 28.8.2002 MADE BY THE PETITIONER, TO THE 3RD RESPONDENT. /TRUE COPY/ 8.8.2008 P.A. TO JUDGE J.B.KOSHY & K.P.BALACHANDRAN, JJ. ------------------------------- W.A.NO.1250 OF 2004 & O.P.NO.8782 OF 2003 ----------------------------------- Dated this the 8th day of August, 2008 J U D G M E N T KOSHY,J. Petitioners in these cases are retired employees from the Vilayanchathanur Service Co-operative Bank Ltd. registered under the Co-operative Societies Act. They are members of the new gratuity scheme named “Group Gratuity Life Assurance Scheme” introduced by the Life Insurance Corporation of India. Under Rule 59 of the Kerala Co- operative Societies Rules, the Bank is bound to pay gratuity to every retiring employee. In order to enable the Bank to discharge that obligation, it has joined the scheme introduced by the L.I.C. The petitioners received the above amount as it will be released by the L.I.C. as per the insurance scheme. The Assistance Registrar of the Co-operative Societies by virtue of Rule 59 of the Kerala Co-operative Societies Rules, issued Circular No.25/1999. According to them, the amount payable to the employee is in excess of the dues payable under O.P.NO.8782 OF 2003 & W.A.NO.1250 OF 2004 2 Rule 59. The excess amount has to be recovered and retained by the Bank, if L.I.C. paid the compensation as provided under the Payment of Gratuity Act. The learned Single Judge in the impugned judgment came to the conclusion that the Secretary of the Co-operative Bank is not included in the definition of the “employee” as defined under the Payment of Gratuity Act. “Employee” is defined under Section 2(e) of the Payment of Gratuity Act as follows: (e) “Employee” means any person (other than an apprentice) employed on wages, 4[* * *] in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, [and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.] Even persons employed in Managerial or Administrative capacity are covered by the Act. The definition is different O.P.NO.8782 OF 2003 & W.A.NO.1250 OF 2004 3 from the definition of a worker under the Industrial Disputes Act. Therefore, petitioners are entitled to gratuity as provided under the Payment of Gratuity Act. The rule is correctly interpreted by a learned Single Judge of this Court in Retnavalli v. Ambalapadu Service Co-operative Bank Ltd. (2005 (3) KLT 320). We agree with the above views. Petitioners are covered under the new gratuity scheme and gratuity released by the L.I.C. cannot be recovered and retained by the Bank. Circular No.25/1999 was against the statutory provisions, and therefore, the above circular and consequent recovery are invalid. If any portion of the gratuity paid is recovered, that should be refunded. The impugned judgment and circular are set aside. With the above observations, this original petition and appeal are disposed of. J.B.KOSHY, JUDGE K.P.BALACHANDRAN, JUDGE prp O.P.NO.8782 OF 2003 & W.A.NO.1250 OF 2004 4 J.B.KOSHY & K.P.BALACHANDRAN, JJ. -------------------------------------------------------- M.F.A.NO. OF 2006 () --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 4th August, 2008