Shircy V., J.

Over a span of time, the services rendered by the Life Insurance Corporation of India (hereinafter referred to as `the LIC') have improved and it attracts the public, with new policies and schemes. One such scheme introduced is `Employees Group Gratuity Life Assurance Scheme'. By this scheme the LIC offered to take over the statutory liability of the employer to pay gratuity to its employees. The 1st respondent Amballoor Janatha Service Co-Operative Bank Ltd. (hereinafter referred to as 'the Society') has accepted the offer floated by the LIC. But when an employee of the Society expired before completing his entire period of service, the liability of the employer Society for payment of gratuity to the heirs of the deceased have not been disbursed by the LIC as per the scheme and hence the Society filed W.P.(C)No. 25930 of 2010 before this Court. The learned single Judge by the judgment dated 05.11.2014 allowed the writ petition. Challenging the Judgment, this appeal has been preferred.

2. The brief facts are as follows: The LIC had offered the Employee's Group Gratuity Life Assurance Scheme for taking over the liability of various institutions under the Payment of Gratuity Act. Ext P1 is the brochure of the scheme. The Society subscribed the scheme on 28.02.1986 and it was accepted by LIC by Ext.P3. One C.B. Gopalakrishnan, an employee expired on 03.05.2009 before completing his entire period of service. The respondents 2 and 3 are the legal heirs of the deceased employee. Though, the Society paid the actual gratuity amount due to the deceased to his legal heirs and approached the LIC for reimbursement, the claim was rejected. The Society has claimed the balance amount with interest out of the total amount of Rs.3,50,000/- as per the ceiling limit of the scheme. But it was denied. Hence, the writ petition.

3. The LIC admitted that the Society had subscribed the Employee Group life Assurance Scheme on 28.02.1986, but contended that under this scheme the gratuity amount is settled according to the salary of the employees as on previous renewal date and not the salary on the date of exit subject to a maximum ceiling limit. Out of the two schemes one is with a ceiling of Rs.3,50,000/- and the other without a ceiling limit. The Society joined the scheme with ceiling limit on 28.02.1986. As per the Scheme, the gratuity will be paid on retirement of an employee at the rate of 15 days salary for each year of service subject to a maximum of 20 months. An endorsement was issued to the policy in November 2009 placing the ceiling limit of Rs.3,50,000/-. The death of Sri. C.B. Gopalakrishnan, the employee of the Society was communicated on 25.06.2009 and as per the Scheme availed by the Society, his legal heirs are entitled to get only an amount of Rs.92,281 the premium paid and interest and the insurance coverage of Rs.1,75,000/- as per the existing norms at the time of his death.

4. We heard the learned counsel for the appellant, learned Senior Counsel for the first respondent and the learned counsel for respondents 2 and 3.

5. Ext.P1 is the brochure of LIC. By 'Group Gratuity Scheme' LIC made an attractive offer to take over the heavy burden of the employer in funding the required gratuity liability to its employees. Acting upon Ext.P2 Circular issued by the Registrar of the Society, advising societies to subscribe to the scheme, the society subscribed to the scheme for the welfare of its employees. Ext.P3 is the letter of acceptance issued by the LIC dated 01.02.1986. The relevant portion of Ext.P3 communication of the LIC reads as follows:

"In the event of death of an employee while in service, a sum equal to the gratuity the deceased employee would have earned, had he completed his entire period of service, would be settled by us as gratuity. This you would agree, is a great employee welfare measure which will induce a sense of security in the minds of the employees thus boosting their morale. In the event of retire