Kerala High Court

Kannur District Co-Operative ... vs Kannur District Co-Operative ... on 5 March, 2021

              IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

             THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS

                                  &

                  THE HONOURABLE MR.JUSTICE K. BABU

     FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942

                        WA.No.437 OF 2021
AGAINST THE INTERIM ORDER DATED 26.02.2021 IN WP(C) 11877/2020(H)
                     OF HIGH COURT OF KERALA


APPELLANT/1ST RESPONDENT:

              KANNUR DISTRICT CO-OPERATIVE BANK
              (PRESENTLY THE KERALA STATE CO-OPERATIVE BANK), REP.
              BY THE GENERAL MANAGER, KANNUR REGION, (INCORRECTLY
              DESCRIBED AS REGIONAL MANAGER IN THE WRIT PETITION),
              KANNUR DISTRICT - 670 001.

              BY ADV. SRI.M.SASINDRAN

RESPONDENTS/PETITIONER & RESPONDENTS 2 AND 3

         1    SRI.A.K.PURUSHOTHAMAN
              AGED 60 YEARS
              S/O. LATE RAGHAVAN NAMBIAR, 'VANAMALA',
              MUNDAYAD P.O., KANNUR DISTRICT - 670 594.

         2    THE MANAGING DIRECTOR
              THE KERALA STATE CO OPERATIVE BANK, CO-BANK TOWERS,
              PALAYAM, THIRUVANANTHAPURAM - 695 001.

         3    THE DIVISIONAL MANAGER
              L.I.C. OF INDIA, KOZHIKODE DIVISION, DIVISIONAL
              OFFICE, (P & GS) DEPARTMENT, 7TH FLOOR,
              JEEVAN PRAKASH, KOZHIKODE - 673 001.



              SMT.MEENA JOHN, SRI.ABRAHAM P.MEACHINKARA

     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05.03.2021,
ALONG WITH WA.439/2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 W.A Nos.437 & 439 of 2021
                                    2



                IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                 PRESENT

               THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS

                                    &

                    THE HONOURABLE MR.JUSTICE K. BABU

     FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942

                            WA.No.439 OF 2021
AGAINST THE INTERIM ORDER DATED 26.2.2021 IN WP(C) 11845/2020(E)
                    OF HIGH COURT OF KERALA

APPELLANTS/RESPONDENTS 1 AND 2:

           1     KANNUR DISTRICT CO-OPERATIVE BANK
                 (PRESENTLY THE KERALA STATE CO-OPERATIVE BANK),
                 REPRESENTED BY THE GENERAL MANAGER (I/C), DISTRICT
                 OFFICE, P.B.NO.35, KANNUR DISTRICT-670 001

           2     THE DEPUTY GENERAL MANAGER,
                 THE KERALA STATE CO-OPERATIVE BANK LTD, HEAD
                 OFFICE, P.B.NO.6515, CO BANK TOWERS, PALAYAM,
                 THIRUVANANTHAPURAM,PIN-695 028

                 BY ADV. SRI.M.SASINDRAN

RESPONDENTS/PETITIONER & RESPONDENT NO.3:

           1     SRI.P.SIDHARTHAKUMAR, AGED 61 YEARS
                 S/O. LATE GOPALAN NAIR, 'SIGIL NIVAS',
                 CHETTIPEEDIKA, PALLIKUNNU P.O., KANNUR,PIN-670 004

           2 THE DIVISIONAL MANAGER,
             LIC OF INDIA, KOZHIKODE DIVISION, DIVISIONAL OFFICE
             (P & GS) DEPARTMENT, 7TH FLOOR, JEEVAN PRAKASH,
             KOZHIKODE-673 001
             SMT.MEENA JOHN, SRI.ABRAHAM P.MEACHINKARA
     THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
05.03.2021, ALONG WITH WA.437/2021, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
 W.A Nos.437 & 439 of 2021
                                         3




                ALEXANDER THOMAS & K.BABU, JJ.
                    ===========================
                         W.A Nos.437 & 439 of 2021
                [arising out of the common interim order dated 26.02.2021
                           in W.P(C) Nos.11877 & 11845 of 2020]
                     ===========================
                         Dated this the 05th day of March, 2021

                                   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) W.A Nos.437 & 439 of 2021

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 3 rd 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 1 st 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 W.A Nos.437 & 439 of 2021

In the alternative, commanding the 1 st 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 1 st 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 in Chandrasekharan 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 W.A Nos.437 & 439 of 2021

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 the ceiling limit of

gratuity notified by the Union Government in terms of Sec.4(3) of the

Act is upto Rs.20 lakhs, the actual amounts that are received by the

appellant-District Co-operative Bank from the respondent-LIC is

much more than the ceiling limit of Rs.20 lakhs and that going by the

dictum laid down by the Full Bench in Chandrasekharan Nair's

case supra {2017 (4) KLT 276 (FB)}, the employer is legally and

statutorily obliged to pay such entire amounts to the employee as

gratuity, including the amount over and above the ceiling limit of

Rs.20 lakhs.

6. Per contra, the contention of the appellant-Bank is to the

effect that the matter in issue is covered fully in favour of the

appellant-Bank as per the ratio decidendi laid down by the Apex W.A Nos.437 & 439 of 2021

Court in an identically placed case in the decision in B.C.H Electric

Ltd. v. Pradeep Mehra {ILR 2020 (2) (Ker.) 345 (SC)} = {2020

KHC 6365 (SC)}. Further it is pointed out that the view taken by the

Full Bench in Chandrasekharan Nair's case supra {2017 (4) KLT

276 (FB)} that the second Proviso to Rule 59 of the Kerala

Co-operative Societies Rules framed under the Kerala Co-operative

Societies Act, is illegal and ultra vires by virtue of Article 254 (2) of

the Constitution of India read with Sec.62 of the Kerala Co-operative

Societies Act, is per se legally wrong, inasmuch as the doctrine of

repugnancy envisaged in Article 254 will not apply in this case, for the

simple reason that the Kerala Co-operative Societies Act, 1969 has got

the assent of the President of India, as envisaged in Article 254 of the

Constitution of India and that therefore, there is no question of

repugnancy as between the provisions in the Kerala Co-operative

Societies Rules framed under the Kerala Co-operative Societies Act,

inasmuch as the said Act has got the assent of the President of India.

7. A detailed counter affidavit has also been filed by the

appellant-Bank, as respondent in the W.P(C), copies of which have

also been annexed along with this appeal memorandum in these W.A Nos.437 & 439 of 2021

cases.

8. The learned Single Judge has now passed the impugned

common interim order dated 26.02.2021 in both these W.P(C)s,

ordering that the said conduct of the appellant-Bank in not paying the

full amount of gratuity, which is over and above the ceiling limit,

inspite of the clear dictum laid down by this Court in

Chandrasekharan Nair's case supra {2017 (4) KLT 276 (FB)},

etc., has to be viewed seriously and that it has been seen as an act on

the part of the employers to divert the higher amounts received from

the LIC, etc. Accordingly, the learned Single Judge as per the

common impugned interim order rendered on 26.02.2021 has

directed that the Regional Manager of the District Co-operative Bank,

which is now amalgamated with the Kerala State Co-operative Bank,

shall be personally present in the Court on 05.03.2021 (today) at

2p.m. and that he shall personally an affidavit in the matter and if the

affidavit so filed is not satisfactory, then the learned Single Judge will

be constrained to initiate contempt action, in terms of Article.215 of

the Constitution of India, etc. It is this order that is under challenge

in these appeals.

W.A Nos.437 & 439 of 2021

9. We have heard the parties in extenso. We have also

endeavoured to persuade the learned counsel appearing for the writ

appellants to ensure that the dictum laid down by the Full Bench of

this Court in Chandrasekharan Nair's case supra {2017 (4) KLT

276 (FB)}, may be duly considered and that if the same applies in the

facts and circumstances of the case, then the due amounts by way of

gratuity may be paid to the writ petitioners, without any further delay,

instead of prolonging the agony of the litigative exercise.

10. Sri.M.Sasindran, learned counsel appearing for the writ

appellant submits that he would endeavour to persuade the party, but

that, the instructions he has received so far is that they are of the firm

view that the dictum laid down by the Apex Court in B.C.H Electric

Ltd. v. Pradeep Mehra {ILR 2020 (2) (Ker.)345 (SC)} = {2020

KHC 6365 (SC)} will apply in this case and that hence, the writ

petitioners are entitled to get only the gratuity only in tune with the

ceiling limit stipulated in terms of Sec.4(3) of the Payment of Gratuity

Act. Further, it is pointed out that the said ceiling limit amount of

Rs.20 lakhs have already been disbursed to both the writ petitioners

in these cases, etc. Sri.M.Sasindran, learned counsel appearing for W.A Nos.437 & 439 of 2021

the writ appellant would also point out that passing an order in the

nature of the present impugned order would amount to short-

circuiting and stultifying the statutory rights of a litigant like the

appellant to contest the matter on merits and that the party aggrieved

by the judgment in the W.P(C) will also have the statutory right to file

the intra court appeal, etc.

11. Smt.Meena John, learned counsel appearing for the writ

petitioners/contesting respondent No.1 in these appeals would point

out that the said stand of the appellant-Bank is clearly illegal and

unreasonable and has been made only to unnecessarily prolong the

payment of the due gratuity amounts to the writ petitioner, who are

retired employees and who are facing financial difficulties to prolong

with their life, etc.

12. After hearing both sides, we would hold that the abovesaid

observations made by us are only prima facie in nature, shall not be

construed as an expression or apart regarding the merits of the main

controversy, as the same lies exclusively within the domain and

province of the learned Single Judge and which has to be adjudicated

in the abovesaid writ proceedings. However, as far as the present W.A Nos.437 & 439 of 2021

issues concerned, we are of the view that since the matter is still

pending final consideration, initiation of contempt proceedings and

that too under Article 215 of the Constitution of India, may not really

be necessary and called for. Accordingly, we suggested to both sides

that the main matter in the writ petitions may be heard and decided,

without any further delay.

13. Both the appellant and the respondent-LIC had agreed the

to our suggestion, so that the direction to initiate contempt

proceedings may be vacated and so that the main matter in the

W.P(C) is heard and decided, without any further delay, at any rate

within 2 to 3 weeks. Accordingly, the following directions and orders

are passed:

(i) the impugned interim order dated 26.02.2021 rendered in W.P(C) Nos.11877/2020 & 11845/2020 will stand vacated and set aside.

(ii) The respondent-LIC will immediately file an affidavit or statement, stating as to the exact amounts disbursed by them to the appellant-

District Co-operative Bank by way of gratuity dues payable in terms of the scheme arrived at between the employer and the LIC and whether the said W.A Nos.437 & 439 of 2021

amount in these cases is only Rs.20 lakhs under Sec.4(3) of the Act or whether it is higher than the said ceiling limit of Rs.20 lakhs and if so, how much?

            (iii) the   details   in   both    these    cases     should   be
                 meticulously      and      precisely    stated     by     the
                 respondent-LIC in their affidavit.

14. Sri.Abraham P.Meachinkara, learned Standing Counsel

for the LIC appearing for the respondent-LIC submits that his party

will file the said affidavit within a week or so. In that regard, it is

ordered that the respondent-LIC need not even wait for the formal

issuance of the certified copy of this judgment and should proceed to

forthwith file the said affidavit, as aforedirected. Since, both parties

have to make elaborate submissions and as the Court dealing with

admission cases and petition matters may not have sufficient time to

devote to such final hearing, it is ordered that the Registry will post

the Writ Petition for hearing, preferably before a court, exclusively or

mainly dealing with hearing matters on 15.03.2021. We would

request that all parties should fully co-operate with the Court to