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2014 Supreme(Ker) 142

High Court of Kerala
THE HONOURABLE MR. JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN, JJ.
The Travancore Cements Employees Co-Operative Bank Ltd, rep. by its Secretary
Versus
E.V. Ramachandran Nair & Others
WA. No. 1757 of 2009 IN RP. 90 of 2008
Decided on: 28-02-2014

Advocates Appeared:
For the Appellant:Raju K. Mathews, Advocate.
For the Respondents:R1, K. Gopalakrishna Kurup, Sr. Advocate, S. Manu, Gopalakrishna Kurup, R2 & R3, Mohammed Shafi, Sr. Government Pleader, R4, Prabha R. Menon, Advocates.

Headnote:Payment of Gratuity Act, 1972, Section 4(3) - Kerala Co-operative Societies Act, 1969, Section 62 - Kerala Cooperative Societies Rules, 1969, Rule 59 - Group Gratuity Cash Accumulation Scheme of LIC - Gratuity liability limited to 3.5 L - Group liability policy taken by the bank with the LIC, employee cannot claim gratuity more than statutary limit.

       FACTS OF THE CASE

       The writ petitioner, the 1st respondent herein, was the Secretary of the appellant-Bank, who retired from service on 31.5.2007. He filed W.P.(C) No.23491/2007 seeking a declaration that, on retirement he is entitled to receive the entire amount paid by the Life Insurance Corporation of India (L.I.C.), the 4th respondent herein, to the appellant-Bank as gratuity due to him under the Group Gratuity Cash Accumulation Scheme and for other consequential reliefs. According to him, the L.I.C. issued a cheque for `5,36,567/- to the appellant-Bank for payment of gratuity due to him, however, the Bank disbursed only an amount of `3.5 lakhs. He submitted Exhibit P1 representation before the President of the Bank requesting to disburse the balance amount. But, vide Exhibit P2 letter, the Secretary of the Bank informed that, though the Managing Committee had decided to sanction the balance amount of `1,86,567/-, the said decision could not be implemented in view of the instructions issued by the Inspector of Co-operative Societies (Kumarakom Unit), the 2nd respondent herein, based on a complaint made by one of the members of the Bank, before the Co-operation Department, against disbursement of gratuity in excess of `3.5 lakhs.

       FINDINGS

       Writ appeal dismissed.

       

Judgment :

Anil K. Narendran, J.

1. This Writ Appeal is filed by the 1st respondent in W.P.(C) No.23491/2007, who is the review petitioner in R.P.No.90/2008 in W.P.(C)No.23491/2007.

2. The writ petitioner, the 1st respondent herein, was the Secretary of the appellant-Bank, who retired from service on 31.5.2007. He filed W.P.(C)No.23491/2007 seeking a declaration that, on retirement he is entitled to receive the entire amount paid by the Life Insurance Corporation of India (LIC), the 4th respondent herein, to the appellant-Bank as gratuity due to him under the Group Gratuity Cash Accumulation Scheme and for other consequential reliefs. According to him, the LIC issued a cheque for Rs.5,36,567/- to the appellant-Bank for payment of gratuity due to him, however, the Bank disbursed only an amount of Rs.3.5 Lakhs. He submitted Exhibit P1 representation before the President of the Bank requesting to disburse the balance amount. But, vide Exhibit P2 letter, the Secretary of the Bank informed that, though the Managing Committee had decided to sanction the balance amount of Rs.1,86,567/-, the said decision could not be implemented in view of the instructions issued by the Inspector of Co-operative Societies (Kumarakom Unit), the 2nd respondent herein, based on a complaint made by one of the members of the Bank, before the Co-operation Department, against disbursement of gratuity in excess of Rs.3.5 Lakhs. According to the 1st respondent, withholding of a portion of gratuity due to him is illegal and contrary to the law laid down by this Court in Retnavally V. Ambalapadu Service Co-operative Bank Ltd., (2005 (3) KLT 320).

3. The learned Single Judge by his judgment dated 11.12.2007 allowed the writ petition, placing reliance on the judgment in Retnavally's case (supra), directing that the entire amount as paid by the LIC to the appellant-Bank shall be released to the 1st respondent. The Bank was directed to release the balance amount due, i.e., Rs.1,86,567/- to the 1st respondent within a period of three weeks from the date of receipt of a copy of the judgment.

4. Seeking review of judgment, the appellant-Bank filed R.P.No.90/2008, contending, inter alia, that going by the statement of accounts as on 11.10.2006 issued by the LIC, dated 22.9.2006, produced as Annexure I along with the review petition, the LIC received contribution from the Bank limiting the maximum gratuity payable to Rs.3.5 Lakhs, which is the maximum limit prescribed under the Payment of Gratuity Act. But, as stated in Annexure II letter dated 25.9.2007, the LIC made available Rs.5,36,567/- to the Bank purportedly acting on a resolution dated 14.5.2007 of the Managing Committee by which it was decided to request the LIC to sanction gratuity amount to the employees without any ceiling limit, on the Bank continuing to pay proportionate contribution. Later, vide Annexure III resolution dated 23.10.2007, the Managing Committee decided to withdraw amount from the LIC limiting the maximum gratuity payable to Rs.3.5 Lakhs, since any additional liability on account of payment of higher rate of contribution, in order to pay gratuity above ceiling limit, would adversely affect the financial stability of the Bank, which is running at a loss. The Managing Committee further decided to fix the gratuity payable to the 1st respondent at Rs.3.5 Lakhs and to remit back the excess amount of Rs.1,86,567/- to the LIC. Pursuant to the said decision, the Bank remitted back the excess amount of Rs.1,86,567/- to the LIC vide Annexure IV receipt dated 12.11.2007.

5. The learned Single Judge by his order dated 30.3.2009 dismissed R.P.No.90/2008 in view of the fact that the decision in Retnavally's case (supra) stands affirmed by the Division Bench of this Court by judgment dated 8.8.2008 in W.A.No.1250/2004. It is challenging judgment dated 11.12.2007 in W.P.(C)No.23491/2007 and order dated 30.3.2009 in R.P.No.90/2008 of the learned Single Judge, the appellant filed the present Writ Appeal.

6. We heard




















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