Kerala High Court
Unnikrishna Pillai P.V vs Hdfc Bank Limited on 23 October, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
2024:KER:78626
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 23RD DAY OF OCTOBER 2024 / 1ST KARTHIKA, 1946
WP(C) NO. 22930 OF 2023
PETITIONER:
UNNIKRISHNA PILLAI P.V.,
AGED 58 YEARS
SWATHI, NILA -25, KOLLANPADY, IRUMPANAM P.O.,
THRIPUNITHURA, ERNAKULAM DISTRICT, PIN - 682309
BY ADV NANDA SURENDRAN
RESPONDENTS:
1 HDFC BANK LIMITED,
S.L. PLAZA, 2ND FLOOR, PALARIVATTOM,
ERNAKULAM - 682 025,
REPRESENTED BY ITS STATE HEAD (HR)
2 THE CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY
ACT, 1972
[ASSISTANT LABOURT COMMISSIONER (CENTRAL)],
KAKKANAD, ERNAKULAM, PIN - 682030
3 THE APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY
ACT, 1972
[DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL)],
KAKKANAD, PIN - 682030
2024:KER:78626
W.P.(C) No.22930/2023
:2:
BY ADVS.
K.K.CHANDRAN PILLAI (SR.)
K.SUDHINKUMAR
P.BENNY THOMAS
D.PREM KAMATH(K/1285/1998)
TOM THOMAS (KAKKUZHIYIL)(K/000821/2008)
ABEL TOM BENNY(K/1381/2018)
AARON ZACHARIAS BENNY(K/001533/2023)
PRAISY THOMAS(CG/249/2020)
AMRUTHA SELVAM(K/001249/2023)
BHARATH NAIR(K/002569/2022)
SRI.T.C. KRISHNA, DSGI IN CHARGE
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.08.2024, THE COURT ON 23.10.2024 DELIVERED THE
FOLLOWING:
2024:KER:78626
W.P.(C) No.22930/2023
:3:
N. NAGARESH, J.
`````````````````````````````````````````````````````````````
W.P.(C) No.22930 of 2023
`````````````````````````````````````````````````````````````
Dated this the 23rd day of October, 2024
JUDGMENT
~~~~~~~~~
The petitioner, who is a former employee of the 1 st
respondent-Bank, states that he joined services under the 1st
respondent on 28.09.2006 as Senior Manager. The petitioner
resigned from the services of the 1 st respondent with effect from
31.03.2023 while working as Vice President. The petitioner
was drawing ₹2,33,500/- per mensem at the time of his
resignation. The petitioner was paid ₹5,94,554/- towards
gratuity. Dissatisfied with the amount of gratuity, the petitioner
approached the Controlling Authority under the Payment of
Gratuity Act for payment of balance gratuity, which the
petitioner claimed as ₹7,22,308/-.
2024:KER:78626
2. The 1st respondent filed Ext.P3 objection to Ext.P2
Gratuity Application filed by the petitioner. After considering
Ext.P3 objection of the 1st respondent, the Controlling Authority
found that apart from the Basic Salary, the Personal Pay also
should have been taken as a component for computing gratuity.
The Controlling Authority therefore passed Ext.P4 order
directing the 1st respondent to pay balance gratuity amount of
₹7,22,308/-. The 1st respondent challenged Ext.P4 order of the
Controlling Authority filing Ext.P5 appeal. The petitioner filed
Ext.P6 comments. The petitioner also filed Ext.P7 appeal.
3. The petitioner states that on the first date of hearing
of the appeal on 26.04.2023, the petitioner appeared in person
before the Appellate Authority. The petitioner thereafter
engaged an Advocate to represent him in both the appeals. On
the next date of posting, 09.05.2023, the petitioner's counsel
entered appearance. The counsel for the 1 st respondent was
absent on that day. Thereafter, both the appeals were posted
to 19.05.2023. On 19.05.2023, the petitioner's counsel sought
2024:KER:78626
adjournment by two weeks, due to ill-health. But, the appeal
was posted on 23.05.2023. The appeal was again adjourned to
14.06.2023 due to the ailment of the counsel of the petitioner.
The appeal was adjourned to 22.06.2023. An adjournment was
sought on that day also as the counsel for the petitioner was
seriously ill. But, the Appellate Authority passed Ext.P8 order
allowing the appeal filed by the 1st respondent and setting aside
the order of the Controlling Authority. The petitioner is before
this Court aggrieved by Ext.P8 order.
4. The counsel for the petitioner argued that Ext.P8 is
an ex-parte order. Adjournments were sought as the
petitioner's counsel was indisposed. The Appellate Authority,
without rejecting the application for adjournment, passed
Ext.P8 order on 27.06.2023. The Appellate Authority in his
Ext.P8 order has copied the contentions raised by the 1 st
respondent in the appeal. The appellate order did not make
any reference to the arguments of the petitioner. Ext.P8 order
has been passed without application of mind.
2024:KER:78626
5. The counsel for the petitioner further argued that the
3rd respondent's conclusion that personal pay will not form part
of the wages for calculating gratuity, is based on an incorrect
reading and construction of the provisions of the Payment of
Gratuity Act and Section 2(s). The Controlling Authority had
correctly understood the term 'personal pay' and treated it as
wages. The order of the Appellate Authority is therefore illegal
and unsustainable.
6. The 1st respondent resisted the writ petition. The 1st
respondent submitted that in terms of the letter of appointment,
the petitioner was paid ₹22.99 lakhs towards superannuation
fund, apart from his gratuity. The said superannuation fund is
not a statutory requirement but it is only a gratuitous payment.
Though under the Employees Provident Fund Act the 1st
respondent was liable to pay contribution only on ₹15,000/-, the
1st respondent paid EPF contribution on the entire Basic Pay.
The petitioner accepted all benefits available to him under the
letter of appointment. The petitioner, however, challenged the
2024:KER:78626
computation of gratuity.
7. The Appellate Authority had posted the appeal on
several days and had granted adjournments to the counsel for
the petitioner at his request. As the petitioner's counsel was
repeatedly seeking adjournments, the 3rd respondent had no
other option but to hear and pass orders on the appeal.
8. I have heard the learned counsel for the petitioner,
the learned Standing Counsel appearing for the 1st respondent
and the DSGI-in-Charge representing respondents 2 and 3.
9. The petitioner served the 1st respondent from
28.09.2006 to 31.03.2023. His last drawn salary was
₹2,33,500/-. The 1st respondent paid ₹5,94,554/- towards
gratuity. To calculate gratuity, the only component taken into
account by the 1st respondent-employer was the Basic Pay.
Apart from Basic Pay, the petitioner has been in receipt of
house allowance, food allowance, telephone allowance,
medical allowance, hard furnishing allowance, personal pay
and other allowances.
2024:KER:78626
10. The Controlling Authority under the Payment of
Gratuity Act found that though the Payment of Gratuity Act,
1972 excludes personal allowance for the purpose of
calculation of wages, in the case of the petitioner the term used
by the employer is "personal pay". Therefore, though all other
components described as allowances should be excluded for
the purpose of calculation of gratuity, the component of
"personal pay" should be taken into account for computation of
gratuity. On the said finding, the Controlling Authority passed
Ext.P4 order directing the employer to pay to the petitioner an
amount of ₹7,22,308/- towards gratuity with simple interest at
the rate of 10% on that amount, from the date on which gratuity
became payable to the date on which it is paid.
11. The 1st respondent filed Ext.P5 appeal against
Ext.P4 order of the Controlling Authority. The Appellate
Authority held that as per Section 2(s), "wages" mean all
emoluments which are earned by an employee while on duty or
on leave in accordance with the terms and conditions of his
2024:KER:78626
employment and which are paid or are payable to him in cash
and includes dearness allowance but does not include any
bonus, commission, house rent allowance, overtime wages and
any other allowance. The Appellate Authority held that the
Personal Pay paid by the employer-Bank to the petitioner is not
wage under definition under Section 2(s) and hence it is not
permissible to consider any other components other than the
basic pay for calculation of gratuity.
12. The contention of the petitioner is that what are
excluded from the definition of wages are bonus, commission,
HRA, overtime wages and any other "allowance". The term
"personal pay" does not fall within any of the excluded
components as it is not any "allowance" as contemplated by
Section 2(s) and it should be treated as wage. There is no
discussion on this point in Ext.P8 appellate order.
13. Be that as it may, it should be noted that the
employer had filed Ext.P5 appeal against the order of the
Gratuity Authority and the petitioner had filed Ext.P7 appeal
2024:KER:78626
against the same order. Ext.P8 relates to Ext.P5 appeal filed
by the 1st respondent-employer. As two appeals were filed
against the very same order of the Controlling Authority, it
would have been advisable for the Appellate Authority to
consider both the appeals together and pass order/orders.
14. The petitioner states that on the first date of hearing
of appeal on 26.04.2023, the petitioner appeared in person
before the Appellate Authority. The petitioner engaged a
counsel. The case was posted to 09.05.2023. The petitioner's
counsel appeared before the Appellate Authority on 09.05.2023
and filed Vakalat. The petitioner would submit that counsel for
the 1st respondent did not turn up on 09.05.2023 at the time
fixed.
15. Both the cases were posted to 19.05.2023. On that
day, the petitioner's counsel sought adjournment due to ill-
health. Though the counsel sought two weeks' time, the
Appellate Authority posted the appeal within three days, on
23.05.2023. On 23.05.2023, the petitioner's counsel did not
2024:KER:78626
recover from illness and hence sought adjournment. The case
was posted to 14.06.2023. As the illness was serious, an
application was made on 14.06.2023 for adjourning the matter
producing a Doctor's Certificate. But, the Appellate Authority
posted the case too soon to 22.06.2023. Though the counsel
sought further adjournment due to medical condition, no order
was passed on adjournment request. The appeal filed by the
1st respondent was allowed as per Ext.P8 order dated
27.06.2023.
16. The pleadings would show that as the legal issue
involved in the matter could not be effectively argued by the
petitioner, he had engaged a Lawyer who appeared before the
Appellate Authority and filed Vakalat. Due to ill-health of the
counsel, adjournments were sought which was initially granted
by the Appellate Authority. On 14.06.2023, as the counsel
could not recover from his pulmonary ailment, the counsel
sought adjournment producing a Doctor's Certificate. Only a
short adjournment was given disregarding the nature of ailment
2024:KER:78626
and the case was posted to 22.06.2023. Request for
adjournment made on that day was not granted. Considering
the facts of the case and issue involved, the Appellate Authority
ought to have granted further adjournment and heard the
petitioner on merits, on the legal issue involved. Failure to do
so has resulted in injustice to the petitioner.
The writ petition is therefore allowed. Ext.P8 order
of the Appellate Authority in GA No.39/234/2023/B6 is set
aside. The 3rd respondent-Appellate Authority is directed to
rehear the appeal and pass orders afresh.
Sd/-
N. NAGARESH, JUDGE
aks/21.10.2024
2024:KER:78626
APPENDIX OF WP(C) 22930/2023
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF PAY SLIP OF PETITIONER FOR
THE MONTH OF MARCH 2022
Exhibit P2 TRUE COPY OF APPLICATION FOR GRATUITY
DATED 08.06.2022 FILED BY PETITIONER
BEFORE 2ND RESPONDENT
Exhibit P3 TRUE COPY OF OBJECTION FILED BY 1ST
RESPONDENT DATED 15.07.2022 IN G.A. NO.
48/(18)2022/D1
Exhibit P4 TRUE COPY OF ORDER DATED 29.07.2022 IN
G.A. NO. 48/(18) 2022/D1 PASSED BY THE
2ND RESPONDENT
Exhibit P5 TRUE COPY OF APPEAL MEMORANDUM GA NO.
39/234/2023/B6 FILED BY 1ST RESPONDENT
BEFORE 3RD RESPONDENT DATED 20.03.2023
Exhibit P6 TRUE COPY OF COMMENTS DATED 02.05.2023
FILED BY PETITIONER BEFORE THE 3RD
RESPONDENT
Exhibit P7 TRUE COPY OF APPEAL MEMORANDUM GA NO.
39/246/2023/B6 DATED 02.05.2023 FILED
BY PETITIONER BEFORE 3RD RESPONDENT
Exhibit P8 TRUE COPY OF ORDER DATED 27.06.2023
ALLOWING EXT P5 APPEAL FILED BY THE 1ST
RESPONDENT
RESPONDENT'S EXHIBITS
Exhibit R1(a) True copy of the appointment order of
the petitioner dated 07.09.2006
