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2022 Supreme(Mad) 3936
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.Vaidyanathan, Mohammed Shaffiq, JJ.
N.Ponmudi and ors. and ors. - Appellants
Versus
Villupuram District Central Co-operative Bank Ltd. and ors. – Respondents
Writ Appeal No.57 of 2022
Decided On : 16-12-2022
Advocate Appeared:
For the Appellant : Mr. K.Premkumar
For the Respondent: Mr. M.R. Gokulakrishnan, Addl. G.P., Mr. C. Selvaraj, Addl. G.P.
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 beneficial to them.
Headnote:
Payment of Gratuity Act - Co-operative Society - Sections 153 and 154 of the Tamil Nadu Co-operative Societies Act - Section 4(5) of the Payment of Gratuity Act - Sections 7(3-A) and 8 of the Payment of Gratuity Act
Fact of the Case:
The appellants, employees of a cooperative bank, claimed gratuity under the Payment of Gratuity Act after the bank's bifurcation. The management contended that a separate gratuity scheme under the Tamil Nadu Co-operative Societies Act applied to them.
Finding of the Court:
The court held that the Payment of Gratuity Act applies to cooperative societies and employees are entitled to choose the forum beneficial to them. The impugned order was set aside, and the appellants were granted gratuity with interest.
Issues: Applicability of the Payment of Gratuity Act to cooperative society employees and the choice of forum for gratuity claims.
Ratio Decidendi: Employees of cooperative societies can claim gratuity under the Payment of Gratuity Act if it provides better benefits than the cooperative society's scheme. They are entitled to choose the forum beneficial to them.
Final Decision: The Writ Appeal was allowed, and the appellants were granted gratuity with interest.
JUDGMENT :
S.Vaidyanathan, J.
The appellants were employed in South Arcot District Central Cooperative Bank, which was bifurcated into Villupuram District Central Co-operative Bank and Cuddalore District Central Co-operative Bank with effect from 01.04.1996. After bifurcation, the appellants were working in Villupuram District Central Co-operative Bank Limited. The appellants had rendered sufficient years of service to get gratuity in terms of the Payment of Gratuity Act. Since the gratuity has not been paid, they moved an application before the Controlling Authority under the Payment of Gratuity Act and the claim was granted on 14.06.2012. Aggrieved by the order of the Controlling Authority, the Management has preferred an appeal after depositing the amount as ordered by the Controlling Authority and the appellate authority, vide order dated 27.12.2002, confirmed the order of the Controlling Authority.
2. According to the appellants, they were allowed to continue and retire on attaining the age of superannuation at 58 years, and the Bank ought to have paid gratuity, which was not done, which made them to prefer a claim before the Controlling Authority wherein they were successful and the appellate authority has also confirmed the order of the Controlling Authority, as stated supra.
3. The Management has contended that it is a Bank and has got a separate scheme for payment of gratuity in terms of its bye-laws. It is further contended that Clause 28 of the said Scheme provides for gratuity and there is a group gratuity cash amalgamations scheme of Life Insurance Corporation being maintained for payment of gratuity for the employees of the District Central Co-operative Bank and fund has also been created, which will not be utilised for any other purpose including business purposes and that the Controlling Authority has no locus-standi to entertain any application under the Payment of Gratuity Act.
4. The Management went on to contend that in terms of Section 79 of the Tamil Nadu Co-operative Societies Act, a registered society not being an establishment to which the Payment of Gratuity Act applies, may provide in its bye-laws for payment of gratuity to the employees at such rates and on such conditions as may be specified in the bye-laws and such Society may establish a gratuity fund or make arrangement for the purpose. When the Management has created a separate Scheme for the purpose of payment of gratuity, the Controlling Authority has no locus-standi to entertain an application.
5. The learned Single Judge, on hearing both sides, proceeded to hold that the Tamil Nadu Co-operative Societies Act alone will govern the matter, as the Tamil Nadu Co-operative Societies Act is a special enactment and the Payment of Gratuity Act is a general law. Once the Management has decided to have a separate Scheme, approved by the Registrar of Cooperative Societies, the grievance will have to be addressed only under the provisions of the Tamil Nadu Co-operative Societies Act and the Payment of Gratuity Act would not be applicable to the employees of a Co-operative Society.
6. The learned Single Judge has further held that in terms of Sections 153 and 154 of the Tamil Nadu Co-operative Societies Act, the aggrieved persons will have to work out their remedy only before appropriate forum and not under the Payment of Gratuity Act.
7. Heard both sides and perused the materials available on record.
8. It is not in dispute that if an employee has attained the age of superannuation on completion of sufficient years of service, he was an employee under the Tamil Nadu Co-operative Societies Act.
9. For the sake of convenience, Section 4(5) of the Payment of Gratuity Act needs to be referred to, which is extracted as follows:
"Section 4: Payment of gratuity:
.. ..
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. ....."
10. Section 4(5) clearly stipulates tha
