Kerala High Court
K. Mohandas vs The Kakkattil Co-Operative Rural Bank ... on 11 July, 2025
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WA 2290/18
2025:KER:51565
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR. NITIN JAMDAR
&
THE HONOURABLE MR.JUSTICE BASANT BALAJI
FRIDAY, THE 11TH DAY OF JULY 2025 / 20TH ASHADHA, 1947
WA NO. 2290 OF 2018
AGAINST THE JUDGMENT DATED 26.09.2018 IN WP(C) NO.7402 OF 2018 OF
HIGH COURT OF KERALA
APPELLANT/PETITIONER:
K. MOHANDAS,AGED 59 YEARS
GOPEEKRISHNA, PAYATHONG P.O, KALLACHI, VADAKARA, KOZHIKODE.
BY ADV SHRI.P.N.MOHANAN
RESPONDENTS/RESPONDENTS:
1 THE KAKKATTIL CO-OPERATIVE RURAL BANK LTD.
NO.F.1270, REPRESENTD BY SECRETARY, KAKKATTTIL, KOZHIKODE -
673 507.
2 THE MANAGING COMMITTEE OF THE KAKKATTIL CO-OPERATIVE RURAL
BANK LTD.NO.F.1270,
REPRESENTED BY PRESIDENT, KAKKATTIL, KOZHIKODE- 673507.
BY ADV SHRI.P.C.SASIDHARAN
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 11.07.2025, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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WA 2290/18
2025:KER:51565
JUDGMENT
(Dated this the 11th day of July 2025)
1. The Appellant filed W.P.(C) No. 7402 of 2018 in this court, seeking
a writ of mandamus or appropriate direction to compel the Respondents to
pay the outstanding balance of ₹10,94,548/-, along with 15% interest, and
other related reliefs.
2. The Appellant retired from the Respondents' bank on 30 April 2017.
The bank had secured a gratuity policy from LIC via its Cash Accumulation
Scheme. At the time of the Appellant's retirement, LIC paid ₹20,94,548/- as
gratuity, which the Appellant accepted. However, on 13 July 2017, the
Respondents issued a notice demanding the Appellant refund ₹10,94,548/-.
This amount was deemed an overpayment, exceeding what was due under
Rule 59 of the Kerala Co-operative Societies Rules, 1969, and relevant
circulars from the Registrar of Co-operative Societies. The Appellant
subsequently refunded the amount on 18 July 2017.
3. The Appellant asserts that his entitlement to the full gratuity from LIC
is a settled matter, referencing the Full Bench decision in Chandrasekharan
Nair. G. v. The Kerala State Co-operative Agricultural and Rural
Development Bank Ltd.1 Consequently, he argues that the amount previously
refunded under Ext.P1 should be returned to him.
2017 4 KLT 276
2025:KER:51565
4. The Respondents, in their counter-affidavit, claim that the Appellant,
while serving as Secretary, misled the managing committee just before his
retirement. They allege the Appellant arranged an enhanced premium
payment to the LIC Gratuity Cash Accumulation Plan to secure an unlimited
gratuity amount. It is argued that this was a misuse of his position, as the
society had a prior agreement with LIC to cap gratuity payments at ₹10 lakhs,
in line with the Payment of Gratuity Act (the Act) and relevant circulars.
5. The Respondents assert that the Registrar of Co-operative Societies
issued Ext.R1(a) on 26 February 2016, a circular explicitly warning all State
Societies about the substantial financial burden of unlimited gratuity policies
and mandating that such policies be capped at the amount payable under the
Act. It is alleged that the Managing Committee was kept in dark about this
circular when deciding to take out an unlimited policy just before the
Appellant's superannuation. The Respondents further argue that the
Appellant only approached the court, citing the judgment in
Chandrasekharan Nair (supra), after voluntarily remitting the amount.
Therefore, they seek the dismissal of the Appeal.
6. Heard Shri.P N Mohanan, the learned counsel for the Appellant and
the learned counsel Shri.Akshay Venu representing Shri.P. C. Sasidharan,
learned counsel appearing for the respondents.
7. Initially, the Respondents' society had an LIC gratuity policy capped
at the statutory limit. This policy was, however, switched to an unlimited one
right before the Appellant retired. LIC then paid ₹20,94,548/- for the
Appellant's gratuity, which the society disbursed entirely. Upon becoming
2025:KER:51565
aware of Circular Ext.R1(a), the Managing Committee issued Ext.P1,
instructing the Appellant to return the amount exceeding the ₹10 lakh
gratuity limit set by the Act. He has since remitted this amount.
8. The learned Single Judge carefully considered the impact of the
decision in Chandrasekharan Nair. G. (supra) judgment. Given that the
Appellant had received ₹20,94,548/- --an amount exceeding the gratuity
ceiling--and had also refunded the excess as per Ext.P1, the learned Judge
found that a dispute existed regarding the Appellant's entitlement to the
larger sum. Therefore, the Writ Petition was dismissed, and the Appellant was
directed to pursue the statutory remedy under Section 7 of the Act.
9. The dispute over the gratuity amount owed to the Appellant properly
falls under Section 7 of the Act, which specifically governs the determination
of gratuity. We, therefore, hold that the learned Single Judge was correct in
dismissing the Writ Petition, ensuring the Appellant's right to pursue this
statutory remedy remains intact. Therefore, this Writ Appeal fails and
accordingly, it is dismissed.
Sd/-
NITIN JAMDAR
CHIEF JUSTICE
Sd/-
BASANT BALAJI
JUDGE
dl/
2025:KER:51565
PETITIONER ANNEXURES
ANNEXURE A1 A TRUE COPY OF THE RESOLUTION NO.18 DATED
20.02.2015 OF THE BANK.
ANNEXURE A2 A TRUE COPY OF THE COVERING LETTER DATED 12.05.2017
OF THE LIC.
