N.R.City Ksreerolpadaka ... vs Kerala State Human Rights ...
2021 Latest Caselaw 17451 Ker

WP(C) NO. 1116 OF 2021                   1



               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                  PRESENT
          THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
                                     &
               THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
      THURSDAY, THE 26TH DAY OF AUGUST 2021 / 4TH BHADRA, 1943
                          WP(C) NO. 1116 OF 2021
PETITIONER:

             N.R.CITY KSREEROLPADAKA SAHAKARANA SANGHAM LTD,
             NO.I-112(D) APCOS, N.R.CITY P. O., IDUKKI DISTRICT,
             REPRESENTED BY ITS SECRETARY.
             BY ADV LATHEESH SEBASTIAN


RESPONDENTS:

     1     KERALA STATE HUMAN RIGHTS COMMISSION
           TURBO PLUS TOWER, PMG JUNCTION, VIKAS BHAVAN P. O.,
           THIRUVANANTHAPURAM - 695033, REPRESENTED BY ITS
           REGISTRAR.
     2     DIRECTOR
           DIARY DEVELOPMENT DEPARTMENT, PATTOM,
           THIRUVANANTHAPURAM - 695004.
     3     DEPUTY DIRECTOR
           DIARY DEVELOPMENT DEPARTMENT, THODUPUZHA, IDUKKI
           DISTRICT, PIN - 685584.
     4     REKHA SUDHAKARAN
           MUNDAPLACKAL HOUSE, RAJAKKAD P. O., IDUKKI DISTRICT -
           685566.
           BY ADVS.
           SRI.K.P.HARISH, SENIOR GOVERNMENT PLEADER FOR R2 & R3
           BY ADV SMT.M.P.MARY FOR R4



     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON   26.08.2021,    THE   COURT   ON     THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 WP(C) NO. 1116 OF 2021                      2

                                                                                CR

                                    JUDGMENT

SHAJI P. CHALY, J

This writ petition is filed by the petitioner, a Society, challenging Exhibit P7

order passed by the Kerala State Human Rights Commission dated 4 th November,

2020 directing the Secretary of the petitioner Society to disburse the eligible

benefits of one late Sudhakaran who died on 16.05.2013 while in service of the

petitioner, within two months from the date of receipt a copy of the order. The

Director of the Diary Development Department was further directed to ensure

that the benefits are received by the 4th respondent in time.

2. According to the petitioner, petitioner was never made a party in the

proceedings before the Human Rights Commission and in fact, the Human Rights

Commission has relied upon the report of the Director of Diary Development

Department that husband of the 4th respondent committed suicide on 16.5.2013

while working as Lab Assistant with the petitioner Society. It was also noted that

a financial irregularity of Rs.7,23,191/- surfaced in the Society during the year

2012-2013 and late Sudhakaran, Lab Assistant, and K.P.Johny, the Procurement

Assistant, were responsible for the irregularity as stated by the Secretary.

3. But on a perusal of the bank transaction records, it was found that

Smt.Sheela.P.K. - Secretary, was on duty at that time and the irregularity was

committed using the jointly signed cheques of the President and Secretary of the

Society and it was because of the lapse of the Secretary in discharging the duty,

the financial irregularity has taken place in the Society and hence, the entire loss

is to be recovered from the Secretary of the Society as the Chief Executive Officer

of the Society, on the basis of a letter issued by the Deputy Director of the Diary

Development Department, Idukki to the President of the Society on 19.3.2014. It

was also found from the report that, against the direction of the Deputy Director,

Smt.Sheela.P.K. approached the High Court with W.P.(C) No.11600/2014 and a

stay was obtained on 6.5.2014 from enforcing the order of the Deputy Director.

However, the Commission found that there was no prima facie records to show

that late Sudhakaran committed financial irregularity and there is no restriction

imposed by the High Court in paying the benefits due to late Sudhakaran. That

apart, it was also noted, a crime was registered at Rajakkad Police Station against

the financial irregularities. It was also noted by the Commission that

Smt.Sheela.P.K., Secretary of the Society, was held responsible.

4. It seems the Deputy Director had also reported that late Sudhakaran and

another person had taken cheque leaves of the Society and misappropriated the

funds. Anyhow, the Commission has found that nothing is mentioned in the

report about the initiation of proceedings for recovering the misappropriated

amount from the properties of late Sudhakaran, though the Secretary has raised

allegations against late Sudhakaran. It was thereupon that the directions as

pointed out above were issued by the Commission to the petitioner.

5. The paramount contention advanced by the petitioner in the writ petition

is that the dispute raised by the 4 th respondent in Exhibit P1 complaint is a

service matter/labour dispute with respect to non-payment of gratuity of her late

husband by the petitioner society and therefore, by virtue of section 17 of the

Kerala State Human Rights Commission (Procedure) Regulations - 2001, the

Commission had no jurisdiction to interfere in the dispute and direct the

petitioner to pay the service benefits of late Sudhakaran to the 4 th respondent.

6. Apart from the same, it is contended that in order to attract jurisdiction of

the Human Rights Commission, there should be a violation of human rights

enabling the Commission to interfere in the matter and issue appropriate orders

or recommendations. That apart it is submitted that as per regulation 17(f) of

the Kerala State Human Rights Commission (Procedure) Regulations - 2001,

there are restrictions to deal with any service matter or labour dispute and

therefore, the Commission did not have any jurisdiction to entertain the

complaint and issue the directions.

7. It is also contended that the petitioner had taken a decision on 17.11.2013

to forfeit the gratuity of deceased Sudhakaran invoking section 4(6) of the

Payment of Gratuity Act, 1972 on account of the loss sustained to the petitioner

due to the criminal acts of misappropriation of money, forgery and fabrication of

records of the petitioner. But all these aspects could not be pointed out by the

petitioner before the 1st respondent since it was not made a party, and for that

matter there was no opposite party in the complaint filed by the 4 th respondent

before the Human Rights Commission, which is also clear and evident from

Exhibit P7 order.

8. A detailed counter affidavit is filed by the 4 th respondent supporting the

order passed by the Human Rights Commission and also submitting that there is

no prima facie evidence to prove that late Sudhakaran had any manner of

involvement in the financial irregularity detected in the society , as stated by the

Secretary of the petitioner itself . It is also pointed out that it is clearly specified

in Exhibit P3 that the Society is liable to pay the terminal benefits of late

Sudhakaran to the 4th respondent - his widow. Learned counsel for the 4 th

respondent has further submitted that none of the adverse provisions of the

Payment of Gratuity Act enabling the petitioner to detain the gratuity would come

into play since Sudhakaran died while in service and the provisions of the

Payment of Gratuity Act creating adverse consequences would apply only on the

termination of service.

9. Therefore, according to the 4 th respondent, the legal contentions advanced

in the writ petition relying upon the provisions of Kerala State Human Rights

Commission (Procedure) Regulations - 2001 and the Payment of Gratuity Act,

1972 may not have any legal bearing at all. That apart it was submitted that the

non-payment of the gratuity amount due to late Sudhakaran is clearly a human

rights violation, which was liable to be addressed by the State Human Rights

Commission, and therefore the order passed by the Human Rights Commission is

not having any arbitrariness or illegality liable to be interfered with by this Court

exercising the power of discretionary jurisdiction conferred under Article 226 of

the Constitution of India. Learned counsel for 4th respondent also submitted that

it is not mandatory that the Commission shall hear the opposite party. To top up

the above submissions, it was argued that the Human Rights Commission is

vested with sufficient powers to adjudicate any complaint before it without any

notice to the rival party and it is also not mandatory that in a complaint before

the commission affected persons are made parties.

10. Petitioner has filed a reply affidavit refuting the contentions raised in the

counter affidavit and reiterating the stand adopted in the writ petition.

11. We have heard, learned counsel for the0 petitioner Sri.Latheesh

Sebastian, learned counsel Smt.M.P.Mary for the 4th respondent, learned Senior

Government Pleader Sri.K.P.Harish for the Government Officials and perused the

pleadings and materials on record.

12. The basic contention advanced by the writ petitioner is relying upon

regulation 17(1)(f) of the Kerala State Human Rights Commission (Procedure)

Regulations - 2001. Regulation 17 deals with the complaints not ordinarily

maintainable before the Commission, which specifies that the Commission may

dismiss in limine complaints of the nature delineated thereunder . Clause (f)

makes it clear that any issue relating to civil disputes, service matters, labour or

industrial dispute are included in the provision, by which a complaint in regard to

the service benefits of a deceased employee is not maintainable. The submission

made by learned counsel for the 4 th respondent in that regard was that the

expression 'may' employed in regulation 17 of regulations 2001 makes it clear that

the Commission has got discretion to decide as to whether the complaint of the

nature specified thereunder was to be entertained or not, and having exercised

the discretion taking into account a report submitted by a competent officer, no

manner of interference is required to the impugned order.

13. On the other hand, according to the learned counsel for petitioner, the

discretion of the Commission, is not in respect of the matters enumerated

thereunder but to identify as to whether there are any laws, rules and guidelines

issued by the State or Central Government to deal with the situation specified in

regulation 17. Therefore, it was submitted that the issue of payment of gratuity is

guided by section 4 of the Payment of Gratuity Act, 1972. Sub-section (1) thereto

clearly states that gratuity shall be payable to an employee on termination of his

employment after he has rendered continuous service for not less than five

years,--

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease.

14. Therefore, it is discernible from the said provision that the issue of

payment of gratuity comes into play only on cessation of employment under the

circumstances discussed above. The second proviso thereto makes it clear that in

the case of death of employee, gratuity payable to him shall be paid to his

nominee or if no nomination has been made, to his heirs, and where any such

nominees or heirs is a minor, the share of such minor shall be deposited with the

controlling authority, who shall invest the same for the benefit of such minor in

such bank or other financial institution, as may be prescribed, until such minor

attains majority. More significant is subsection 6 of section 4 of Act 1972, which

reads thus:

(6) Notwithstanding anything contained in sub-section (1),--

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused;

(b) the gratuity payable to an employee may be wholly or partially forfeited --

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

15. On a consideration of the said provision conjointly with section 4 (1) of

Act 1972, termination for the purpose of entitlement for gratuity includes a death

also. Thinking so, we do not find much force in the said contention of the learned

counsel for the 4th respondent.

16. Learned counsel has also invited our attention to section 7 of the

Payment of Gratuity Act, 1972 dealing with determination of the amount of

gratuity. Certain of the provisions of section 7 is relevant for the purpose of

adjudicating the issue raised by the rival parties and it reads thus:

"Determination of the amount of gratuity.--(1) A person who is eligible

for payment of gratuity under this Act or any person authorised, in writing to

act on his behalf shall send a written application to the employer, within such

time and in such form, as may be prescribed, for payment of such gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an

application referred to in sub-section (1) has been made or not, determine the

amount of gratuity and give notice in writing to the person to whom the

gratuity is payable and also to the controlling authority specifying the amount

of gratuity so determined.

[(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify: Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.] (4) (a) If there is any dispute to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. [(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the

dispute may make an application to the controlling authority for deciding the

dispute.]

[(c)] The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.] "

17. On an analysis of sub-section 4 (a) it is true that, if there is any dispute with

respect to the amount of gratuity payable to an employee under the Act, 1972 or

as to the admissibility of any claim of or in relation to an employee for payment of

gratuity or as to the person entitled to receive the gratuity, the employer shall be

liable to deposit with the controlling authority such amount which he admits to be

payable by him as gratuity alone. Which thus means the liability of the employer

to deposit the amount is limited to the admitted amount and if there is no

admitted amount to be deposited, the compulsion contained under the said

provision would not come into play . Though it is significant to note that gratuity

is not a bounty of the employer but a right of the employee and a benevolent

legislation , if and when there are damages allegedly caused to the employer, the

provisions of the act 1972 has to be construed strictly , and a serious adjudication

of the issue is required to be undertaken by the statutory authority to protect the

public interest and to sustain the rule of law. In that context it is relevant to note

that,if found otherwise, the authority is vested with powers to compensate with

interest as provided under subsection 3A of section 7 of Act 1972.

18. Even going by the contentions put forth by the parties and the order of

the State Human Rights Commission, it is clear that there was a disputed issue

pending in the petitioner society at the time of the death of Sudhakaran, which

was a subject matter of enquiry, allegedly into the involvement of late

Sudhakaran also. However, consequent to the death of Sudhakaran, he could not

be proceeded with and it was thereupon that the society has taken a decision to

recover the amount misappropriated from the persons, who are responsible for

the same. Anyhow, it is clear that where there is a dispute with regard to any

matter or matters specified in sub-section 4(b) of section 7 of Act 1972, the

employer or employee or any other person raising a dispute may make an

application to the controlling authority for deciding the dispute.

19. On an in-depth analysis of subsections 4 (a) to (c) of section 7 of Act

1972, amble power is vested with the controlling authority to conduct due enquiry

and after giving the parties a reasonable opportunity of being heard to determine

the matter or matters in dispute and if as a result of such enquiry any amount is

found to be payable to the employee, the controlling authority shall direct the

employer to pay such amount. To put it materially and succinctly, even the claim

raised by the legal heir or heirs of a deceased employee, is guided by the

aforementioned peremptory provisions of the Payment of Gratuity Act, 1972.

20. In our considered opinion the relevance of regulation 17 of Regulations,

2001 is to be appreciated by reading the provisions of the Gratuity Act, 1972

discussed above, and the said regulation conjointly, which would only make the

said provision expressive, sensible and meaningful. Thinking so, the word "may"

employed in regulation 17 of Regulations, 2001 shall have to be provided with a

strict meaning expressing a command since the power conferred to the State

Human Rights Commission as per regulation 17 can only be seen as a restrictive

methodology depriving adjudication of the matters governed by regulation 17 of

regulations 2001 and accordingly "may" employed in regulation 17 has to be

construed as "shall" to secure a purposive interpretation thought of by the law

maker, and that too the State Humans Rights Commission itself, by exercising

the powers conferred under Section 10 (2) read with Section 29 of the Kerala

State Human Rights Act 1993.

21. It is also clear from section 4 of the Payment of Gratuity Act 1972 that

the contention advanced by the learned counsel for the 4 th respondent that the

provisions of section 7 of Act 1972 would not come into play since there is no

termination of employment so as to detain the gratuity, may not be correct in

view of the fact that in order to enable an employee or his heirs to have right for

claiming gratuity, there should be cessation of employment consequent to

superannuation or retirement or resignation or death or disablement due to

accident or disease.

22. Here is a case where the employee died and therefore, the claim for

gratuity has arisen in favour of the legal heirs of the deceased and in that context

the provisions contained under section 7 of the Payment of Gratuity Act, 1972

would be significant because the controlling authority under the Act, 1972 is also

the authority vested with powers to entertain the claim of the legal heirs of the

deceased person. It is also clear from the second proviso to section 4 of the

Payment of Gratuity Act, 1972 that if and when an employee dies, the gratuity

payable shall be paid to his nominee, or if no nomination has been made, to his

heirs, and where any such nominees or heirs is a minor, the share of such minor,

shall be deposited with the controlling authority who shall invest the same for the

benefit of such minor in such bank or other financial institution, as may be

prescribed, until such minor attains majority. Therefore it can be seen that the

issue of Disbursal of the gratuity takes on various aspects of relevance and

importance which has to be adjudicated by the controlling authority by virtue of

the powers conferred under the Act, 1972 after providing opportunity to all

concerned. However, we are of the view that the issue is guided by section 16 of

the Protection of Human Rights Act, 1993 which deals with the manner in which

persons likely to be prejudicially affected to be heard and it specifies that if at

any stage of the enquiry the Commission considers it necessary to inquire into

the conduct of any person or is of the opinion that the reputation of any person is

likely to be prejudicially affected by the inquiry, it shall give to that person a

reasonable opportunity of being heard in the inquiry and to produce evidence in

his defence.

23.Therefore, when the report was submitted by the Director of Dairy

Development the Commission was aware of the misappropriation of the amount of

the society, and in that circumstances it would have been only appropriate to

decide to hear the petitioner society. If such a course was adopted, definitely the

intrinsic aspects considered above would have been made a subject matter of

adjudication in order to find out as to whether the complaint was maintainable

before the State Human Rights Commission.

24. In that view of the matter, we are inclined to think that these significant

aspects were not brought to the notice of the Commission enabling the

Commission to arrive at a just and proper decision as to whether the Commission

is still vested with powers to proceed with the complaint consequent to the

limitations and inhibitions prescribed under regulation 17 of Regulations, 2001.

Considering the factual and legal aspects, discussed above, we are of the clear

opinion that the Human Rights Commission did not have the power to proceed

with the complaint and it ought to have rejected the same at the threshold,

leaving open the liberty of the 4th respondent to approach the statutory authority.

25. Accordingly, we hold that the order of the State Human Rights

Commission dated 4th November, 2020 in HRMP No.3563/11/4/2019/IDK at

Exhibit P7 cannot be sustained under law and we quash the same. However we

leave open the liberty of the 4th respondent or the legal heirs of late Sudhakaran

to approach the authority under the the Payment of Gratuity Act, 1972, and if

any such application is filed, we have no reason to think that the said authority

would not take into account the entire pros and cons so as to arrive at a just and

proper conclusion in accordance with law at the earliest .

Writ petition is allowed accordingly.

Sd/-

S. MANIKUMAR CHIEF JUSTICE

Sd/-

                                                   SHAJI P. CHALY
smv                                                   JUDGE


             APPENDIXAPPENDIX OF WP(C) 1116/2021

PETITIONER EXHIBITS
EXHIBIT P1            TRUE COPY OF THE COMPLAINT OF THE 4TH
                      RESPONDENT BEFORE THE 1ST RESPONDENT TAKEN
                      COGNIZANCE AS 3563/2011/4/19
EXHIBIT P2            TRUE COPY OF THE OBJECTION OF THE PETITIONER
                      TO EXT.P1 COMPLAINT.
EXHIBIT P3            TRUE COPY OF THE REPORT OF THE 2ND RESPONDENT
                      DATED 26.07.2019.
EXHIBIT P4            TRUE COPY OF THE ORDER OF THIS HON'BLE COURT
                      DATED 04.06.2014 IN W.P.(C) NO.11600/2014.
EXHIBIT P5            TRUE COPY OF THE DIRECTION OF THE 3RD
                      RESPONDENT DATED 29.06.2013.
EXHIBIT P6            TRUE COPY OF THE ORDER OF THE 3RD RESPONDENT
                      DATED 19.03.2014.
EXHIBIT P7            TRUE COPY OF THE ORDER OF THE 1ST RESPONDENT
                      DATED 04.11.2020.
EXHIBIT P8            TRUE COPY OF THE ORDER OF THE 2ND RESPONDENT
                      DATED 07.10.2020 WHICH WAS DESPATCHED FROM
                      THE OFFICE OF THE 2ND RESPONDENT ONLY ON
                      07.10.2020..