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C.N.RAMACHANDRAN NAIR, B.P.RAY
Nedupuzha Service Co-Operative Bank – Appellant
Versus
K. Rugmani – Respondent
Headnote: Read headnote
C.N. RAMACHANDRAN NAIR, J.
1. In these Writ Appeals the appellant Co-operative Banks are challenging judgments of the learned Single Judges directing the appellants to pay gratuity to the respondent employees over and above the gratuity amount receivable by them under the LIC's Group Gratuity cum Life Assurance Policy taken by the appellant Banks covering all the employees.
2. We have heard learned counsel appearing for the appellant Banks and learned counsel appearing for the respondents including the learned Standing Counsel appearing for the Life Insurance Corporation of India.
3. At our request, concerned executives from the LIC appeared in Court and personally explained the nature of the Group Gratuity cum Life Assurance Policy, which the appellant connected cases Banks have with them for payment of gratuity to their employees. Before proceeding with the matter, we have to refer to the statutory provisions under which the appellants as employers are liable
Employers are required to pay the complete Gratuity amount accrued under the Life Insurance Corporation scheme as per applicable bye-laws.
The court affirmed that gratuity payments are capped by law unless better terms are specified in agreements, and the statutory interest applies to unpaid gratuity.
Employees are entitled to the higher amount of Gratuity under Section 4(5) of the Payment of Gratuity Act, and the employer bears the liability for any deficit.
The liability to pay statutory interest on delayed gratuity lies with the employer, not the insurer, as per the provisions of the Payment of Gratuity Act, 1972.
The Bank cannot retain gratuity amounts released by LIC to the employee.
Employees are entitled to gratuity benefits under insurance policies that exceed statutory limits as per the Payment of Gratuity Act.
Retired employees are entitled to higher gratuity benefits under bank regulations which prevail over conflicting statutory provisions.
Employees of cooperative societies can claim gratuity under the Payment of Gratuity Act if it provides better benefits than the cooperative society's scheme, and they are entitled to choose the forum....
Employees of a Co-operative Society can approach the authority under the Payment of Gratuity Act if the Scheme provides lesser benefits than the Act, and they have the right to choose the forum benef....
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