IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 10TH AUGUST 2010 / 19TH SRAVANA 1932 WP(C).No. 25793 of 2009(T) ---------------------------------------- PETITIONER(S): ---------------------- K.RAJAGOPALAN, CHIEF ACCOUNTANT (RETIRED), THE CHERPLACHERRY SERVICE CO-OPERATIVE BANK LIMITED,RESIDING AT 'SREEKRISHNALAYAM', PANNIYANKURISSI P.O.,PALAKKAD-679 503. BY SRI.V.CHITAMBARESH, SENIOR ADVOCATE BY ADVS.SRI.T.C.SURESH MENON SRI.JIBU P THOMAS SRI.P.S.APPU SRI.A.R.NIMOD SRI.P.S.APPU RESPONDENT(S): ------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES,PALAKKAD. 2. THE CHERPLACHERRY SERVICE CO-OPERATIVE BANK LIMITED,NO.P-589,REP.BY ITS SECRETARY, CHERPLACHERRY P.O.,PALAKKAD DISTRICT. * ADDL. R3 IMPLEADED 3. THE LIFE INSURANCE CORPORATION OF INDIA, REP.BY ITS MANAGER, P 495, DEPARTMENT, 4TH FLOOR, LIC DIVISIONAL OFFICE M.G.ROAD, ERNAKULAM. *ADDL. R3 IS IMPLEADED AS PER ORDER DT.3.3.2010 IN IA. NO.1218/2010. R2 BY ADVS. SRI.SANTHEEP ANKARATH, SMT.P.JAYALAKSHMI. ADDL.R3 BY SRI.S.EASWARAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10/08/2010, ALONG WITH WPC. NO.36755 OF 2009 & WPC. 397 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.25793/2009 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE COMMUNICATION DTD. 22.42.009. P2:- COPY OF THE JUDGMENT IN WPC. NO.8598/2007 ON THE FILE OF THIS HONOURABLE COURT DTD. 24.1.2008. P3:- COPY OF THE JUDGMENT IN WPC. 16169/2008 ON THE FILE OF THIS HONOURABLE COURT DTD. 30.5.2008. P4:- COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER DTD. 29.5.2009. P5:- COPY OF THE RECEIPT DTD. 24.6.2009 . P6:- COPY OF THE CIRCULAT DTD. 22.6.1999. TRUE COPY P.A. TO JUDGE tss K.SURENDRA MOHAN, J. -------------------------------------------------------- W.P.(C) Nos.25793 of 2009, 36755 of 2009 and 397 of 2010 -------------------------------------------------------- Dated this the 10th August, 2010 JUDGMENT The question raised in all these writ petitions is whether the petitioners are entitled to the entire amount of gratuity that the LIC is liable to pay to them as per the Group Insurance Policy that has been taken by the Society. 2. The petitioners in all these writ petitions are persons who have retired from the service of Co-operative Societies. They have on their retirement become eligible to payment of gratuity under Rule 59 of the Kerala Co- operative Societies Rules. For the purpose of meeting the liability of the Society under Rule 59 of the Rules, the respective Societies have taken Group Insurance Policies with the Life Insurance Corporation of India. According to the petitioners, they have not been paid the entire amount of gratuity due to them in terms of the insurance policies in the respective cases. 3. Adv.N.Sugathan who appears for the bank in WPC No.397 of 2010 has filed a counter affidavit. A counter affidavit has been filed on behalf of the bank in W.P.(C) No.25793 of 2009 also. The counter affidavits contend wpc Nos.25793/2009, 397/2010 and 36755 of 2009 2 that as per the insurance policy, the petitioners were paid only an amount of Rs.3,50,000/- for the reason that there was a ceiling limit in the Payment of Gratuity Act. It is pointed out by the counsel for the petitioner that the issue has been considered and settled in Retnavalli v Ambalapadu Service Co-op. Bank Ltd. (2005(3) KLT 320 wherein it has been held that the entire amount received from the LIC should be paid to the employees. 4. In the decision referred to above, after considering the issue, this Court has noted its findings in paragraph-16 thereof. “The long and short of the above discussion is that payment of amounts by the L.I.C. out of the Trust fund as per Ext.P1 policy to the employees of the Society or their legal heirs does not in any way violate either R.59 of the Kerala Co-operative Societies Rules, 1969 or the bye-laws of the Society, if any. The amount payable as per Ext.P1 policy is the amount belonging to the employee and the Society has no legal or moral right to withhold any part of it, citing R.59, bye-laws of the Society or the limit prescribed by the Payment of Gratuity Act, 1972. The result of these findings is that the Ist respondent-Society is bound to pass on the entire amount paid by the L.I.C. pursuant to Ext.P1, in respect of the gratuity liability of the Society towards each employee, taken over by wpc Nos.25793/2009, 397/2010 and 36755 of 2009 3 the LIC in full, without withholding any amount therefrom, even if it is in excess of the amount prescribed as per R.59 or the bye-laws of the Society.” 5. It is clear from the above that since the gratuity liability of the society has been taken over by the LIC, the entire amount received as per the said policy would have to be paid to the respective employees without any restriction. The Society is not entitled to benefit from the policy by appropriating any excess amount that is found payable to the respective employees. In view of the dictum in the above case, the petitioners are entitled to succeed. 5. Accordingly, these writ petitions are allowed. The petitioners in each of the writ petitions shall be paid the amount of full gratuity due to each of them as per the Group Insurance Policy, as expeditiously as possible and at any rate within a period of two months from the date of receipt of a copy of this judgment. K.SURENDRA MOHAN, JUDGE css/