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IN THE HIGH COURT OF KERALA
MURALI PURUSHOTHAMAN, J
Ravunnikutty Alias Baby v. Ponani Co-Operative Urban Bank Ltd
Headnote: Read headnote
1. The petitioner was an employee of the 1st respondent Bank. He retired from service on 31.05.2023. The employees of the 1st respondent Bank are covered by the Employees' Group Gratuity Insurance Scheme with Life Insurance Corporation of India (LIC), the 2nd respondent. According to the petitioner, an amount of Rs.22,51,548/- is due to him towards gratuity. It is submitted that the LIC has already released the amount of Rs.22,51,548/- to the Bank at the time of retirement of the petitioner. However, the petitioner has been paid only an amount of Rs.20 lakhs and the rest of the amount released by the LIC has been retained by the Bank. The learned counsel for the petitioner submits that the action of the Bank is not justified in the light of the decision reported in Chandrasekharan Nair. G. and Other v. Kerala State Co - operative Agriculture and Rural Development Ltd., (2017 (4) KLT 276) .
The Bank cannot retain gratuity amounts released by LIC to the employee.
Employers are required to pay the complete Gratuity amount accrued under the Life Insurance Corporation scheme as per applicable bye-laws.
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 full gratuity as per relevant statutes, including any excess from insurance schemes.
Employees are entitled to gratuity benefits as per the terms of their employment scheme, which can exceed statutory limits under the Payment of Gratuity Act.
Gratuity entitlements exceed statutory limits if stipulated in insurance contracts, and banks are required to comply with contractual obligations under the Payment of Gratuity Act.
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.
Employer cannot withhold gratuity for unauthorized retention of quarters post-retirement; statutory interest of 10% applies for delayed payment.
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.
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