Karnataka High Court
Shri B Premananda Pai vs The Chairman And Managing Director on 31 July, 2024
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WA No. 951 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE RAJESH RAI K
WRIT APPEAL NO. 951 OF 2023 (L-PG)
BETWEEN:
SHRI. B. PREMANANDA PAI,
AGED ABOUT 70 YEARS,
S/O LATE B. VINAYAKA PAI,
EARLIER WORKING AS
SENIOR MANAGER,
MIDDLE MANAGMENT SCALE-III,
STAFF CODE NO.1923,
VIJAYA BANK,
REGIONAL OFFICE HUBLI,
PRESENTLY RESIDING AT:
Digitally signed by NO.45, GROUND FLOOR, 6TH MAIN,
MAYAGAIAH
VINUTHA BHAIRAVESHWARNAGAR,
Location: HIGH NAGARBHAVI MAIN ROAD,
COURT OF BANGALORE 560 072.
KARNATAKA
...APPELLANT
(BY SRI. S VITTAL SHETTY, ADVOCATE)
AND:
1. THE CHAIRMAN & MANAGING DIRECTOR,
VIJAYA BANK (NOW BANK OF BARODA)
HEAD OFFCIE, 41/2, M.G. ROAD,
BANGALORE-560 001.
2. THE APPELLATE AUTHORITY UNDER THE
PAYMENT OF GRATUITY ACT, 1972
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WA No. 951 of 2023
AND THE DEPUTY LABOR COMMISSIONER (C)
"SHRAM SADAN", 3 RD CROSS,
3RD MAIN, TUMKURU ROAD,
YESHWANTHPUR,
BANGALORE-560 022.
3. THE CONTROLLING AUTHORITY UNDER THE
PAYMENT OF GRATUITY ACT, 1972,
AND THE ASSISTANT LABOUR
COMMISSIONER (CENTRAL)
"SHRAM SADAN", 3 RD CROSS,
3RD MAIN, TUMKUR ROAD,
YESHWANTHPUR,
BANGALORE-560 022.
...RESPONDENTS
(BY SRI. UDAYA SHANKAR RAI.P, ADVOCATE FOR R1;
SRI. B.RAVINDRANATH, ADVOCATE FOR R2 & R3)
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER OF THE
LEARNED SINGLE JUDGE, DATED 14.06.2023, IN W.P.NO.9175
OF 2018 (L-PG), BY GRANTING ALL THE PRAYERS MADE IN THE
WRIT PETITION AND ETC.
THIS WRIT APPEAL, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS
UNDER:
CORAM: HON'BLE MR JUSTICE V KAMESWAR RAO
and
HON'BLE MR JUSTICE RAJESH RAI K
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WA No. 951 of 2023
ORAL JUDGMENT
(PER: HON'BLE MR JUSTICE V KAMESWAR RAO)
The challenge in this appeal is to an order dated
14.06.2023 passed by the learned Single Judge in
W.P.No.9175/2018, whereby the learned Single Judge has
dismissed the writ petition filed by the appellant herein by
stating as under:
"17. For the foregoing reasons, this Court
pass the following
ORDER
i. The Writ Petition is dismissed.
ii. Impugned orders at Annexure-H dated
24.01.2017 and Annexure-M dated
29.12.2017 stand confirmed."
2. The aforesaid writ petition was filed by the
appellant challenging the order dated 24.01.2017 passed
by the Controlling Authority under the Payment of Gratuity
Act, 1972 (for short 'the Act') and order dated 29.12.2017
passed by the Appellate Authority under the same Act.
3. The facts that are relevant for a decision in this
appeal are, the appellant joined the services of the
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respondent No.1-Bank in the year 1971. Due to certain
irregularities committed while working at the Bank, Bijapur
office, he was placed under suspension between the period
10.06.2005 to 20.03.2007. A charge-sheet was issued to
him. The proceedings were held, which resulted in his
dismissal from service in terms of the order passed by the
Disciplinary Authority. The departmental remedy before
the Appellate Authority also resulted in a rejection. The
appellant filed an Application under Section 7 of the Act
claiming Gratuity amount from the Bank. The Controlling
Authority dismissed the claim, as being premature, by
reserving the liberty to prefer the same after the
proceedings in W.P.No.16150/2011, wherein the appellant
had challenged his dismissal from service are decided. The
appellant after attaining the age of superannuation filed a
similar application for payment of Gratuity before the
Controlling Authority. The Controlling Authority, on the
same ground, again closed the application. A subsequent
Writ Petition being No.10904/2015 was allowed and the
order of the Controlling Authority, who had rejected the
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application of the appellant, was allowed directing the
Controlling Authority to dispose of the application within a
period of two months from the date of receipt of the order.
4. The Controlling Authority, vide its order dated
24.01.2017, directed the Bank to pay gratuity amount of
Rs.3,50,000/- along with simple interest at the rate of
10% per annum with effect from 05.05.2019 till the date
of payment. It may be stated here, there is no dispute
that the said amount of Rs.3,50,000/- along with interest
had been paid to the appellant.
5. The appellant, being aggrieved by the order of
the Controlling Authority not granting better terms of the
Gratuity, had filed an appeal before the Appellate
Authority. The Appellate Authority confirmed the order of
the Controlling Authority.
6. The case of the appellant before the learned
Single Judge was that the order passed by the Controlling
Authority is against the interest of the appellant as he is
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entitled to better terms of Gratuity amount in terms of
Rules 12(e) of the Vijaya Bank Employees Gratuity fund
Rules and Regulations (for short 'Regulations'). In this
regard, it is also stated that the Gratuity rules under the
Payment of Gratuity Act do not specify exclusion of the
employees who have been terminated from service to
receive gratuity.
7. On the other hand, the case of the Bank before
the learned Single Judge was that the issue which has
been raised by the appellant is covered by the judgments
of the Hon'ble Supreme Court in the case of Union Bank
of India and Others v. C.G. Ajay Babu and Another
reported in (2018) 9 SCC 529 and Beed District
Central Coop. Bank Ltd. v. State of Maharashtra and
Others reported in (2006) 8 SCC 514. In other words,
the case of the respondent-Bank was that the appellant
having got the amount of Rs.3,50,000/- with interest
pursuant to the order of the Controlling Authority, the
appellant is not entitled to any benefits under the service
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rules governing Gratuity more so when the service rules
stipulate on termination, the employee forfeits the
Gratuity. The learned Single Judge while rejecting the case
set up by the appellant has in paragraph Nos.11 to 16
stated as under:
"11. It is not in dispute that the petitioner has
joined the service of the Bank in the year 1971
and was on suspension for the irregularities and
suffered an order of dismissal and the petition
filed before this Court assailing the order of
dismissal has also been dismissed. The
petitioner filed application seeking gratuity claim
before the Controlling Authority and the
Controlling Authority taking into consideration
that the workman was terminated from service
is not entitled for better terms of gratuity
amount under the Regulations and further has
held that the petitioner is entitled for payment
of gratuity under Section 4(5) of the Payment of
Gratuity Act, 1972. The said section reads as
under:-
"Section 4(5) of the 1972 Act does not
contemplate that the workman would
be at liberty to opt for better terms of
the contract, while keeping the option
open in respect of a part of the
statute. While reserving his right to
opt for the beneficent provisions of
the statute or the agreement, he has
to opt for either of them and not the
best of the terms of the statute as
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well as those of the contract. He
cannot have both."
12. Under Regulation 12 (e) of the Regulations
envisages that the employee is not entitled for
gratuity under the Rules, if there is a termination
of service by way of punishment. In the instant
case, the petitioner was dismissed for
misappropriation of funds, as such, in light of the
Regulations, the petitioner is not entitled for
better terms of gratuity under the provisions of
the Regulations. The better terms of gratuity
contemplated under Regulations is admittedly
applicable to the persons, who retired from the
service and not to the person, who resigned or is
dismissed. Since the petitioner who was
dismissed from service is entitled as per the
Gratuity Act, 1972 and there is no question of
entitlement of better terms under the
Regulations as contended by the
petitioner/workman.
13. In the case of Beed District Central Coop.
Bank Ltd. stated supra, which is relied by the
learned counsel on both sides, the Apex Court
has held at para 14 which reads as under:-
"14. Applying the "golden rule of
interpretation of statute", to us it
appears that the question should be
considered from the point of view of
the nature of the scheme as also the
fact that the parties agreed to the
terms thereof. When better terms are
offered, a workman takes it as a part
of the package. He may volunteer
therefore, he may not. Sub-section
(5) of Section 4 of the 1972 Act
provides for a right in favour of the
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workman. Such a right may be
exercised by the workman concerned.
He need not necessarily do it. It is the
right of individual workman and not all
the workmen. When the expression
"terms" has been used, ordinarily it
must mean "all the terms of the
contract". While interpreting even a
beneficent statute, like, the Payment
of Gratuity Act, we are of the opinion
that either contract has to be given
effect to or the statute. The provisions
of the Act envisage for one scheme. It
could not be segregated. Sub-section
(5) of Section 4 of the 1972 Act does
not contemplate that the workman
would be at liberty to opt for better
terms of the contract, while keeping
the option open in respect of a part of
the statute. While reserving his right
to opt for the beneficent provisions of
the statute or the agreement, he has
to opt for either of them and not the
best of the terms of the statute as
well as those of the contract. He
cannot have both. If such an
interpretation is given, the spirit of the
Act shall be lost. Even in Shin
Satellite, this Court stated: (SCC
pp.637-38, para 27)
"27. The proper test for deciding
validity or otherwise of an agreement
or order is 'substantial severability'
and not 'textual divisibility'. It is the
duty of the Court to sever and
separate trivial or technical parts by
retaining the main or substantial part
and by giving effect to the latter if it is
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legal, lawful and otherwise
enforceable. In such cases, the Court
must consider the question whether
the parties could have agreed on the
valid terms of the agreement had they
known that the other terms were
invalid or unlawful. If the answer to
the said question is in the affirmative,
the doctrine of severability would
apply and the valid terms of the
agreement could be enforced, ignoring
invalid terms. To hold otherwise would
be 'to expose the covenanter to the
almost inevitable risk of litigation
which in nine cases out of ten he is
very ill-able to afford, should he
venture to act upon his own opinion as
to how far the restraint upon him
would be held by the court to be
reasonable, while it may give the
covenantee the full benefit of
unreasonable provisions if the
covenanter is unable to face
litigation."
14. In view of the law declared by the Apex
Court in the cases of Beed District Central
Coop. Bank Ltd and C.G. Ajay Babu stated
supra and the material on record would reveal
that as per clause 12(e) of the Regulations, the
workman is not entitled to claim under the said
provisions since the workman has seized to be
an officer of the bank on the account of
punishment imposed on him and since the
workman was terminated, the workman is not
entitled for better terms of gratuity under the
said Regulations.
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15. For the reasons stated, the point framed for
consideration is answered against the petitioner
holding that the petitioner is not entitled to
better terms of gratuity under Regulations but
entitled to gratuity under the provisions as
contained under Section 4 (5)of the Payment of
Gratuity Act, 1972.
16. The judgments relied by the petitioner was
not in the context of dismissal on the ground of
offence involving moral turpitude and the said
judgments relied is not applicable to the facts
and circumstances of the present case."
8. Even before us, the submissions of the learned
counsel for the appellant is on similar lines as was before
the learned Single Judge. He has also relied upon the
following judgments in support of his submissions.
(1) Y.K.Singla v/s Punjab National Bank and
Others reported in (2013) 3 SCC 472
(2) Ramappa H. v/s General Manager, Sri.
Yellamma Cotton Woollen and Silk Mills,
Davanagere District LLJ-2008-2-737,
(3) State Bank of Mysore Vs. A. Balakrishna
Singh and others in WP No.34639/2009
(4) Beed District Central CoOP. Bank Ltd.
Vs. State of Maharashtra and others
reported in (2006) 8 SCC 514 [Beed District
Central CoOP. Bank Ltd]
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9. We are afraid that the submission made by the
learned counsel for the appellant cannot be accepted,
more so, in view of the position of law as laid down by the
Hon'ble Supreme Court in Beed District Central CooP.
Bank Ltd. supra, of which a reference has been made by
the learned Single Judge more specifically to paragraph 14
of the judgment. The conclusion drawn by the learned
Single Judge based on the Beed District Central CooP.
Bank Ltd. supra is that, the material on record would
reveal that as per Clause 12(e) of the Regulations, the
workman is not entitled to claim Gratuity under the said
provision since the workman ceases to be an employee of
the Bank on account of punishment imposed on him.
10. We agree with the aforesaid conclusion drawn
by the learned Single Judge. If the plea of the learned
counsel for the appellant has to be accepted, then the
same shall have the effect to mean that even though the
appellant stood terminated, still the service rules need to
be operated in his favour by giving the difference of the
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Gratuity (over and above Rs.3,50,000/- he received)
which he is otherwise would have been entitled to under
the Service Rules. That is not the understanding of the
Service Rules more so when there is a stipulation that on
termination, the employee forfeits the Gratuity.
11. During the course of his submissions, the
learned counsel for the appellant has relied upon the
judgment in the case of Y.K.Singla (supra). Suffice to
state the judgment in Y.K.Singla's would not be
applicable to the facts of this case as the Hon'ble Supreme
Court in the said case had only considered the payment of
interest under the Payment of Gratuity Act which was
more beneficial as against the interest stipulated under the
Service Regulations. It was in that background, the
Hon'ble Supreme Court has given the benefit of interest in
favour of the petitioner-Sri.Y.K.Singla. Since the issue is
quite different from the one which arose for consideration
in Y.K.Singla's case, the said judgment is clearly
distinguishable.
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12. In view of our discussion above, we hold that
the learned Single Judge is right in dismissing the petition
filed by the appellant. We do not see any reason to
interfere with the same.
The appeal is dismissed.
Sd/-
(V KAMESWAR RAO)
JUDGE
Sd/-
(RAJESH RAI K)
JUDGE
HKV
