Employers are required to pay the complete Gratuity amount accrued under the Life Insurance Corporation scheme as per applicable bye-laws.

JUDGMENT Dated this the 5^th day of February, 2026 The petitioner retired from the services of the Chittur Primary Co-operative Agricultural and Rural Development Bank Limited as a Secretary on 31.03.2024.

2. The petitioner states that while she was in service, she was enrolled under Employees Group Gratuity Life Assurance Scheme along with other employees. On her retirement, the amount accumulated to the credit of the petitioner in the Group Gratuity Scheme was ₹26,97,369/-.

3. As the upper limit for payment of Gratuity under the Payment of Gratuity Act , 1972 was ₹20 lakhs, the petitioner was initially paid only ₹20 lakhs towards Gratuity. Thereafter, the upper limit was enhanced by the Government of India to ₹25 lakhs after the retirement of the petitioner, but with retrospective effect from 01.01.2024. The petitioner made a request to the respondents to pay the additional amount of ₹5 lakhs payable to the petitioner in view of the decision taken by the Government of India. Accordingly, the Managing Committee of the Society allowed the petitioner to draw the balance amount of ₹5 lakhs towards Gratuity.

4. The petitioner states that subsequently, the Secretary to the 4^th respondent Society has issued Ext.P3 stating that there is audit objection and the amount of ₹5 lakhs to be paid to the petitioner is irregular. The petitioner has been required to repay the amount. It is aggrieved by Ext.P3 communication that the petitioner has approached this Court seeking to quash Ext.P3 and to declare that the petitioner is entitled to receive the entire amount from the LIC as shown in Ext.P1 statement as Gratuity amount on retirement from service.

5. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the additional 6^th respondent.

6. It is evident from Ext.P1 that an amount of ₹26,97,369/- has been accumulated in the LIC Group Insurance Account of the petitioner. The petitioner has already been paid ₹25 lakhs as Gratuity. The respondents state that ₹5 lakhs paid to the petitioner is excessive for the reason that the Circular by which the Central Government has enhanced the Gratuity ceiling to ₹25 lakhs is not applicable to the employees of the Co-operative Society. Therefore, the

4^th respondent required the petitioner to remit back ₹5 lakhs.

7. I find that the 4^th respondent-Society is governed by Ext.P4 Bye-law. Clause 12 of the Bye-law makes it clear that all employees of the Society should be enrolled in the Group Gratuity Scheme of the Life Insurance Corporation and premiums will have to be paid as required by the Life Insurance Corporation, in respect of all employees. The Bye- laws specifically states that to the claimants for Gratuity, the entire amount allowed by the Life Insurance Corporation has to be paid. If that be so, the respondents are liable to pay ₹26,97,369/- to the petitioner.

8. I find that this Court in W.P.(C) No.33417 of 2025 has held that employers have to pay the entire amount of Gratuity received from the Life Insurance Corporation in view of the Full Bench judgment of this Court inChandrashekharan Nair v. Kerala State Co-operative Agricultural Bank Limited and others[2017 (4) KLT 276].

In view of the afore facts, the petitioner is entitled to succeed. The writ petition is therefore disposed of directing the 4^th respondent to pay the entire amount approved in the LIC Group Insurance Scheme to the credit of the petitioner as reflected in Ext.P1 to the petitioner after deducting the amounts already paid, within a period of two months.

Sd/-