Important points:
The employee to whom the gratuity is payable to file an application before the employer within such time and in such form as may be prescribed. Rule 7 is made in pursuance of and as contemplated by S.7(1). Rule 7(1) provides that such an application by an employee before an employer shall be made “ordinarily within thirty days from the date the gratuity became payable.” if we read sub-rule (1) and sub-rule (5) of rule 7 together, it is clear that not so much importance is attached to the time-limit of thirty days prescribed by rule 7(1)

JUDGMENT :

BECHU KURIAN THOMAS, J.

1. Petitioner challenges an order issued by the Controlling Authority under the Payment of Gratuity Act, 1972 (for short ‘the Act’) directing the writ petitioner to pay to the 2nd respondent the gratuity quantified.

2. The 2nd respondent retired as the Deputy General Manager of the writ petitioner Bank on 30.06.2010. He served in the Bank from 1975 onwards and no disciplinary proceedings were ever initiated against the petitioner till the date of his retirement. However, on the day of his retirement, a notice styled as ‘Memorandum’ was issued to him, which is produced as Ext.P1 directing him to show cause as to why disciplinary proceedings should not be initiated for an alleged gross negligence and dereliction of duty, alleged to have been committed by him. Though disciplinary proceedings were never initiated, 2nd respondent's gratuity was not paid alleging negligence and dereliction of duty in respect of a loan sanctioned in 2003.

3. Since even after the lapse of four years the gratuity was not paid to the petitioner, he filed an application as Ext.P2 before the controlling authority, on the basis of which after considering Ext.P3 objection filed by the writ petitioner, the impugned order Ext.P4 was issued.

4. A perusal of Ext.P4 order evinces that though the gratuity calculated as per the Act amounted to Rs. 14,94,231/- in view of the limits prescribed under the Act, the entire amount of gratuity totalling to Rs. 10,00,000/- was directed to be paid within 30 days.

5. I have heard Adv. Gilbert George Correya for the petitioner as well as Adv. Jawahar Jose for the 2nd respondent and Adv. Pooja Surendran, the learned Government Pleader.

6. Adv. Gilbert George Correya submitted that the controlling authority ought to have been guided by Rule 10 of the Payment of Gratuity Rules which enjoins the applicant to file the application claiming gratuity within 90 days and since such an application was not preferred, Ext.P4 was bad in law. It is further submitted by the counsel for the petitioner that even though Ext.P1 notice was issued, proposing to initiate proceedings against the 2nd respondent, he never participated, due to which the proposed disciplinary proceedings did not continue.

7. The learned counsel for the 2nd respondent, on the other hand contends that by virtue of the statutory prescription under Section 7 of the Act, the employer was bound to determine the quantum of gratuity payable on termination of the employment, irrespective of whether an application for payment of gratuity was filed by the employee or not. Relying upon the decision of this Court in Neelakandan Namboothiri vs. State of Kerala, 2001 (1) KLT 896, as well as the decision in P. Galemma and Others vs. Appellate Authority under Payment of Gratuity Act [II L.L.N. 645] it was contended that Rule 10 cannot control the statutory prescription under Section 7 read with Section 4 of the Act.

8. Though petitioner retired on 30.06.2010, the notice Ext.P1 asking him to show cause as to why disciplinary proceedings shall not be initiated was dated 29.06.2010, which is claimed by the petitioner to have been served only on 30.06.2010-the date of retirement. Thus petitioner had not been terminated from service by virtue of any act, wilful omission or negligence causing damage or loss or such other conditions as specified in Section 4(6) of the Act. The only method in which gratuity due to an employee can be detained or refused is by virtue of Section 4(6) of the Act. Section 4 read with Section 7 of the Act creates an obligation upon the employer to pay the gratuity due to an employee on the date of termination of his employment after carrying out the quantification. This is a statutory duty vested upon the employer. This statutory duty cannot be abdicated by an employer on the ground that the employee has not preferred an application as contemplated under Rule 10 of the Payment of Gratuity (Central) Rules, 1972.

9. Section 4 of the Act exposit