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2021 Supreme(Online)(KER) 16153
HIGH COURT OF KERALA
ALEXANDER THOMAS, K. Babu, JJ
KANNUR DISTRICT CO-OPERATIVE BANK – Appellant
Versus
A.K.PURUSHOTHAMAN – Respondent
WA/437/2021
SRI.M.SASINDRAN, SMT.MEENA JOHN, SRI.ABRAHAM P.MEACHINKARA
Employers are bound to pay gratuity beyond statutory limits if contractually agreed, as affirmed by previous court judgments.
Headnote:
Gratuity - Writ Petition - Payment of Gratuity Act, 1972 - Sections 4, 4(3) - The court interpreted the provisions of the Payment of Gratuity Act, emphasizing that gratuity exceeding the ceiling limit is payable to employees, as established by previous case law.
Fact of the Case:
The District Co-operative Bank filed an intra-court appeal against an interim order directing it to explain why contempt proceedings were not initiated for failing to pay gratuity beyond the statutory ceiling.
Finding of the Court:
The court suggested that the main writ petitions be decided without delay and vacated the interim order, questioning the necessity of contempt proceedings, while acknowledging the ongoing disputes over gratuity payment amounts.
Issues: Whether the District Co-operative Bank is obligated to pay gratuity amounts exceeding the ceiling limit designated in the Payment of Gratuity Act, 1972, and the appropriateness of contempt proceedings.
Ratio Decidendi: The Full Bench ruling in a previous case mandated that the gratuity amounts exceeding the stipulated ceiling limit must be paid by the employer to the employees, establishing the employer's obligation despite governmental limits.
Final Decision: The appeals were disposed of, vacating the interim order and allowing the main writ petitions to be heard promptly.
JUDGMENT
ALEXANDER THOMAS, J.
The 1st respondent in the abovesaid Writ Petition (Civil) [W.P(C)
Nos.11877 & 11845 of 2020] have approached this Court by filing this intra court appeal, in terms of Sec.5(i) of the Kerala High Court Act, so as to impugn the common interim order dated 26.02.2021 rendered by the learned Single Judge in those W.P(C)s, whereby the appellant has been directed to enter personal appearance and explain, as to why contempt proceedings have not been taken against him in terms of Article 215 of the Constitution of India, etc.
2. Heard Sri.M.Sasindran, learned counsel appearing for the appellant-District Co-operative Bank in these case, Smt.Meena John, learned Advocate appearing for the 1st respondent in both these appeals/writ petitioner concerned and Sri.Abraham P.Meachinkara, learned Standing Counsel for the Life Insurance Corporation (LIC)
appearing for the 3rd & 2nd respondents respectively in these appeals/3rd respondent in these W.P(C)s.
3. The prayers in W.P(C) No.11877/2020 are as follows (see page No.22 of the paper book of W.A No.437/2021) :
“a) To call for the records relating to above writ petition b) Issue a writ of mandamus or any other appropriate writ, order or direction commanding the respondents to disburse the balance amount of gratuity amounting to Rs.18,29,372/- received by the 1st respondent Bank from the 3rd respondent LIC, as per Master Policy No.3839 together with interest at the rate of 9% per annum.
c) Pass any other orders, which are deemed fit and proper in the facts and circumstances of the case.”
4. The prayers in W.P(C) No.11845/2020 are as follows (see page Nos.22 & 23 of the paper book of W.A No.439/2021) :
“a) To call for the records relating to above writ petition b) Issue a writ of Certiorari to quash Exhibit-P4 order issued by the 2nd respondent since it is legally not sustainable.
c) Issue a writ of mandamus or any other appropriate writ, order or direction commanding the 3rd respondent LIC to re-credit the balance amount of gratuity amounting to Rs.2,40,806/-, as per Master Policy No.3839 to the account of the 1st respondent bank, in case the said amount is remitted back to the 3rd respondent LIC by the 1st respondent and then to release the same to the petitioner together with interest at the rate of 9%
per annum.
Or In the alternative, commanding the 1st respondent to disburse the balance amount of gratuity amounting to Rs.2,40,806/-, as pre Master Policy No.3839 together with interest at the rate of 9% per annum, in case the said amount is with the 1st respondent bank d) Pass any other orders, which are deemed fit and proper in the facts and circumstances of the case.”
5. From the submissions of both sides, it appears that the above writ petitions were filed on 16.06.2020. Thereafter, the case was formally posted on 09.07.2020 and later came up for consideration on 24.02.2021. The learned Standing Counsel for the appellant-Bank/R1 in these W.P(C)s had sought for time to file counter affidavit and time was granted and counter affidavits have also been filed by the appellant-Bank in these W.P(C)s. The stand taken up by the writ petitioners in this case is that the matter in issue raised in these proceedings is fully covered in favour of the petitioners, in terms of the ratio decidendi laid down by the Full Bench of this Court in the case inChandrasekharan Nair.G& Ors. v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. & Ors. {2017 (4) KLT 276 (FB)}. Therefore, the provisions in Sec.4 of the Payment of Gratuity Act would apply and that in view of the mandate contained in Sec.4(5) of the Payment of Gratuity Act, 1972 , the provision for ceiling limit of gratuity made in sub-section (3) of Sec.4 will not apply and detrimentally affect the right of an employee to receive better terms of gratuity, in terms of the arrangement made on behalf of the employees by the employer-Bank with the respondent-LIC, Further, it is pointed out that as a matter of fact, though
