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2025 Supreme(Ker) 1307
IN THE HIGH COURT OF KERALA AT ERNAKULAM
N.NAGARESH, J.
The Manager Life Insurance Corporation Of India Limited - Appellant
Vs.
James Mathew - Respondent
RP No. 1138 Of 2024, RP NO. 60 OF 2025
Decided On : 13-05-2025
Advocate Appeared:
For the Appellant : SRI.ABRAHAM P.MEACHINKARA
For the Respondent: SMT.K.L.LAKSHMI RANI,STANDING COUNSEL, SMT.VINAYAKUMARI
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.
Headnote:
(A) Payment of Gratuity (Central) Act, 1972 - Section 4(2) and 4(5) - Review petitions filed by respondents alleging errors in the judgment regarding disbursement of Gratuity amounts to retired employees - Court found no error in the previous judgment directing payment of Gratuity with interest - Employees entitled to higher Gratuity amount if opted under Section 4(5) - Insurer's role limited to securing Gratuity liability as per employer's terms. (Paras 4, 5, 7)
(B) Review Jurisdiction - The court held that review petitions must demonstrate clear errors on the face of the record to warrant reconsideration - No such errors were found in the present case. (Paras 5, 6)
Facts of the case:
The review petitions were filed by the insurer and employer against a judgment directing payment of Gratuity to retired employees of Meat Products of India Limited, who claimed unpaid amounts from the Group Gratuity Scheme.
Findings of Court:
The court upheld the previous judgment, affirming that employees are entitled to the full accrued Gratuity amount, dismissing the review petitions.
Issues: The main issues included whether the previous judgment contained errors and the applicability of Gratuity provisions to the employees in question.
Ratio Decidendi: The court ruled that the employer is responsible for the full Gratuity amount, and the insurer's role is limited to securing the Gratuity liability as per the employer's terms.
Result: Review Petitions dismissed.
ORDER :
N.NAGARESH, J.
Respondents 3 and 4 in W.P.(C) No.41613 of 2018 have filed these Review Petitions alleging errors apparent on the face of the records in the judgment dated 29.08.2024 in W.P.(C) No.41613 of 2018.
2. W.P.(C) No.41613 of 2018 was filed by retired employees of Meat Products of India Limited stating that they were enrolled by the employer in a Group Gratuity Scheme framed by the Life Insurance Corporation and that the entire amounts in the Group Gratuity Scheme has not been disbursed to the petitioners. The petitioners sought to direct respondents 2 to 4 to pay the balance amount of Gratuity due from the Life Insurance Corporation with interest to the petitioners.
3. This Court found that the legal issue involved in the writ petition had come up for consideration before this Court and before the Hon’ble Apex Court and the Hon’ble Apex Court has laid down the law in this regard. This Court therefore disposed of the writ petition following Exts.P18 to P21 judgments directing the 4th respondent to pay the petitioners the balance amount of Gratuity along with 6% interest.
4. In the judgment in Chandrasekharan Nair G. and others v. Kerala State Co-operative Agricultural and Rural Development Bank Limited [2017 (4) KLT 276], a Full Bench of this Court held that an employee is entitled to the higher amount of Gratuity if he has opted in terms of Section 4 (5) of the Payment of Gratuity (Central) Act, 1972 even if a lesser amount is due under Section 4(2) thereof. Any amount in excess of the Gratuity due would also go to the employee since the contract of insurance would fall within the ambit of Section 4(5) of the Payment of Gratuity (Central) Act. Any deficit in the amount due as Gratuity to the employee, after payment by the insurer has to be met by the employer only, as the liability squarely rests on him. The Full Bench judgment which dealt with the employees of Co-operative Societies was followed in respect of the employees of Public Sector Undertakings also in Ext.P21 judgment in W.P.(C) No. 20057 of 2018. It was following those judgments, that the writ petition was disposed of.
5. The review petitioner-insurer in RP No.1138/2024 would urge that contributions are made to the fund to secure Gratuity liability to the extent and required by the employer. The quantum of Gratuity payable to the employee by the employer at the time of retirement is decided by the employer as per the terms and conditions of employment. It is the duty of the employer to pay the balance amount, if any, due towards Gratuity to its employees and the Life Insurance Corporation has no further role in this matter.
6. In RP No.60/2025, the 3rd respondent-employer would urge that respondents 1 to 4 retired during the period between 19.05.2016 and 19.02.2018 and they have received wages as on the respective dates of their retirement. Therefore, the judgment relied on by this Court will not apply to them. The ceiling on Gratuity was revised with effect from 29.03.2018. Therefore, respondents 1 to 4 are not entitled to get any amount over and above Rs. 10 lakhs as Gratuity as claimed by them. On these premises, the revision petitioners seek to review the judgment.
7. From the judgment sought to be reviewed, I find that this Court as per Ext.P16 judgment has held that an employee is entitled to higher amount of Gratuity, if he has opted in terms of Section 4(5) of the Payment of Gratuity (Central) Act. For payment of Gratuity, the employer had availed a policy from the insurer and the premium were paid on behalf of the employees. Therefore, at the time of retirement, the employees are entitled to get full accrued amount as Gratuity. The maturity value from master policy would go to the credit of the dues of the employees.
Therefore, I do not find any error on the face of the records of the case, warranting review of the judgment in W.P.(C) No.41613/2018. The Review Petitions are therefore dismissed.
