[Cites 6, Cited by 0]
Kerala High Court
The Kerala State Co-Operative Bank Ltd vs Sri. A.K.Purushothaman on 30 January, 2026
WA No.39 and 46 of 2022
1
2026:KER:6226
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR.JUSTICE P. V. BALAKRISHNAN
FRIDAY, THE 30TH DAY OF JANUARY 2026 / 10TH MAGHA, 1947
WA NO. 39 OF 2022
AGAINST THE ORDER/JUDGMENT DATED 19.11.2021 IN WP(C)
NO.11877 OF 2020 OF HIGH COURT OF KERALA
APPELLANT/PETITIONER:
1 THE KERALA STATE CO-OPERATIVE BANK LTD.
REPRESENTED BY ITS GENERAL MANAGER, REGIONAL
OFFICE, KANNUR 670 001. (THE KANNUR DISTRICT CO-
OPERATIVE BANK (PRESENTLY THE KERALA STATE CO
OPERATIVE BANK LTD.,) REPRESENTED BY ITS REGIONAL
MANAGER, KANNUR DISTRICT 670 001.
2 THE CHIEF EXECUTIVE OFFICER,
(MANAGING DIRECTOR), THE KERALA STATE CO
-OPERATIVE BANK, CO BANK TOWERS, PALAYAM,
THIRUVANANTHAPURAM.
BY ADV SRI.GILBERT GEORGE CORREYA
RESPONDENT/RESPONDENTS:
1 SRI. A.K.PURUSHOTHAMAN
AGED 60 YEARS
S/O. LATE RAGHAVAN NAMBIAR, VANAMALA MUNDAYAD P.O.
KANNUR DISTRICT 670 594.
2 THE DIVISIONAL MANAGER,
L.I.C. OF INDIA, KOZHIKODE DIVISION, DIVISIONAL
OFFICE, ( P AND GS), DEPARTMENT, 7TH FLOOR, JEEVAN
WA No.39 and 46 of 2022
2
2026:KER:6226
PRAKASH, KOZHIKODE 673 001.
BY ADV DR.ABRAHAM P.MEACHINKARA
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
22.01.2026, THE COURT ON 30.01.2026 DELIVERED THE FOLLOWING:
WA No.39 and 46 of 2022
3
2026:KER:6226
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR.JUSTICE P. V. BALAKRISHNAN
FRIDAY, THE 30TH DAY OF JANUARY 2026 / 10TH MAGHA, 1947
WA NO. 46 OF 2022
AGAINST THE ORDER/JUDGMENT DATED 19.11.2021 IN WP(C)
NO.11877 OF 2020 OF HIGH COURT OF KERALA
APPELLANT/PETITIONER:
SRI. A.K.PURUSHOTHAMAN,
AGED 61 YEARS
S/O. LATE RAGHAVAN NAMBIAR, VANAMALA MUNDAYAD
P.O., KANNUR DISTRICT 670 594.
BY ADVS.
SRI.VIJU THOMAS
SMT.M.MEENA JOHN
RESPONDENT/RESPONDENTS:
1 THE KANNUR DISTRICT CO-OPERATIVE BANK,
(PRESENTLY THE KERALA STATE CO-OPERATIVE BANK)
REP. BY THE REGIONAL MANAGER, KANNUR DISTRICT 670
001.
2 THE MANAGING DIRECTOR,
THE KERALA STATE CO-OPERATIVE BANK, COBANK TOWERS,
PALAYAM, THIRUVANANTHAPURAM.
3 THE DIVISIONAL MANAGER,
L.I.C. OF INDIA, KOZHIKODE DIVISION, DIVISIONAL
WA No.39 and 46 of 2022
4
2026:KER:6226
OFFICE, (P & GS), DEPARTMENT , 7TH FLOOR, JEEVAN
PRAKASH, KOZHIKODE 673 001.
BY ADV DR.ABRAHAM P.MEACHINKARA
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
30.01.2026, THE COURT ON 30.01.2026 DELIVERED THE
FOLLOWING:
WA No.39 and 46 of 2022
5
2026:KER:6226
SUSHRUT ARVIND DHARMADHIKARI
&
P.V. BALAKRISHNAN, JJ.
..........................................
WA Nos.39 and 46 of 2022
...............................................................
Dated this the 30th day of January, 2026
COMMON JUDGMENT
P.V. Balakrishnan, J.
These intra-court appeals are filed challenging the
judgment dated 19.11.2021 passed by the learned single judge
in W.P.(C) No. 11877 of 2020. Writ appeal 39 of 2022 is filed by
respondents 1 and 2 and writ appeal 46 of 2022 is filed by the
petitioner in W.P.(C) No. 11877 of 2020.
2. The parties are hereinafter referred to as in their
status in the writ petition for convenience.
3. The writ petition was filed by the petitioner, aggrieved
by the non-payment of the entire amount of gratuity payable to
him under Section 4(5) of the Payment of Gratuity Act
(hereinafter referred to as 'the Act,' for short). The writ
petitioner joined the service of the 1st respondent bank on
01.07.1981 and retired from service on 31.10.2018, after serving
nearly 38 years. After retirement, even though retiremental
benefits were sanctioned to the petitioner, the gratuity was not
paid in full. The petitioner is entitled to Rs.38,29,372/- towards
WA No.39 and 46 of 2022
2026:KER:6226
gratuity under the 'Cannanore District Co-operative Central
Bank Employees Group Gratuity and Life Assurance Scheme'.
The 1st respondent raised a claim for the afore amount under
Master Policy No.3839 on behalf of the petitioner from the 3 rd
respondent LIC. The 3rd respondent credited the afore amount
into the account of the 1st respondent, as evidenced by Ext. P1.
But the 1st respondent bank only paid a sum of Rs. 20 Lakhs to
the petitioner from the said amount. Even though the petitioner
made a request before the 1st and 2nd respondents, nothing
transpired. In the meanwhile, the 1st respondent bank also
claimed a sum of Rs.1,62,572 /- as additional gratuity from the
3rd respondent LIC, and received it. According to the petitioner,
he is entitled to the entire benefits flowing out of the LIC scheme
and hence is entitled to receive the balance amount of
Rs.19,91,944/-. It is in such circumstances that the petitioner
approached this Court by filing the afore writ petition seeking
the following relief:
''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.19,91,944/- 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.''
WA No.39 and 46 of 2022
2026:KER:6226
4. The learned Single Judge by a common judgment
dated 19.11.2021 passed in this case and in W.P.(C)No.11845 of
2020 allowed the writ petition in the following manner;
''Respondent bank is directed to remit the amount of
Rs.2,40,806/- and Rs.19,91,944/- to the respective
petitioners after making request to the LIC to whom they
refunded back. Let the request is made to the LIC within a
period of two weeks from today. Thereafter the learned
counsel representing the LIC submits that they would
remit the amount as expeditiously as possible within a
period of another one month and thereafter, the bank
would disburse the same to the petitioners within another
period of 15 days ie., total period of 45 days. In case, the
aforementioned amount after completion of the formality is
not remitted by the bank to the petitioners, it will entail
interest as provided under the Payment Gratuity Act.''
5. Heard Adv. Meena John, the learned counsel
appearing for the writ petitioner, Adv. Gilbert George Correya,
the learned counsel appearing for the Bank and Adv. Dr.
Abraham P. Meachinkara, the learned Standing Counsel
appearing for LIC.
6. The learned counsel for the writ petitioner submitted
that even though the learned Single Judge has ordered the bank
to disburse the amount of Rs.19,91,944/- after getting the
amount from the LIC, no amount towards interest has been
granted. She also submitted that the writ petitioner retired from
WA No.39 and 46 of 2022
2026:KER:6226
service as early as in 2018 and the money legally due to him has
not been granted by the bank, and therefore, the bank is liable
to pay the interest. She further contended that the writ
petitioner is also eligible for an additional gratuity of
Rs.6,35,176/- by way of pay revision with effect from 01.04.2017
and the learned Single Judge neither accepted the additional
documents produced to support this contention nor allowed this
claim.
7. Per contra, the learned counsel for the Co-operative
Bank submitted that even though Ext. R1(a) as varied by R1(b) is
applicable to the employees, including the writ petitioner, in this
case, the writ petitioner is entitled only to the gratuity fixed as
per Section 4(3) of the Act. According to the learned counsel,
since the master policy specifically states that it is subject to the
Gratuity Act, the employees are entitled to benefits under the
Act only, and thus entitled only for an amount of Rs.20 lakhs,
which is the ceiling fixed under the Act. He argued that it is in
such circumstances the bank though, received an amount in
excess of Rs.20 lakhs from the LIC, has remitted it back to the
LIC. He also argued that at the time when the writ petitioner
retired from service, it was an administrative committee that
was at the helm of affairs in the bank, and at that time the
WA No.39 and 46 of 2022
2026:KER:6226
employees themselves had filed the claim form before the LIC,
claiming exaggerated amounts, resulting in the LIC remitting
the amount to the bank. He argued that even if it is otherwise so,
the claim submitted to the LIC is not on the basis of the method
of computation specified in Ext.R1(b) policy.
8. The learned counsel for the LIC submitted that LIC
has no role in computing the amount of gratuity to which the
employees are entitled and that they will only pay the amount,
on the basis of the demand made by the bank. He also submitted
that it is the bank that calculates the amount due to each of the
employees and intimates the same to the LIC, and the role of the
LIC is simply to make payment and nothing more. He further
submitted that in the instant case, even though the LIC has paid
a sum of Rs.39,91,944/- and has settled the claim of the Bank,
with respect to the writ petitioner, the bank has remitted back
an amount of Rs.53,08,176/- on 18.08.2020 to be credited to
policy No 3839, stating that the amount paid by the LIC is
excess.
9. In the instant case, the writ petitioner retired from
service on 31.10.2018 and at that time, the amount of gratuity
that was liable to be paid by the employer, as per the provisions
of the Act was Rs.20 lakhs. It is an admitted fact that the bank
WA No.39 and 46 of 2022
2026:KER:6226
has raised a claim before the LIC for making payment of a sum
of Rs.38,29,372/- as gratuity to the writ petitioner as per
Ext.R3(A)1 and that the LIC has paid the amount to the bank as
evidenced by Ext.R3(A)2. It is also an admitted fact that
thereafter, another sum of Rs.1,62,572/- was paid by the LIC to
the bank for payment of gratuity to the writ petitioner,
consequent to the revision of DA of the employees, as evidenced
by R3(D)1. It is further an admitted fact that the bank has
disbursed only a sum of Rs.20 lakhs to the writ petitioner and
has remitted back the entire balance amount to the LIC. As
stated earlier, it is the contention of the writ petitioner that since
the Group Gratuity Scheme provides for better gratuity than as
prescribed under Section 4(3) of the Act, the scheme falls under
the purview of Section 4(5) of the Act, and therefore, he is
entitled to the benefit of the entire amount paid by the LIC to the
bank. On the other hand, the case of the bank is that, since
Ext.R1(a) and (b) policy is subject to the Act, they are only liable
to pay an amount of Rs.20 lakhs, prescribed under Section 4(3)
of the Act.
10. A perusal of Ext.R1(b) shows that it does not in any
manner restrict the liability to pay gratuity to the amount
prescribed under Section 4(3) of the Act. On the other hand,
WA No.39 and 46 of 2022
2026:KER:6226
Clause 8 of the Scheme would show that the LIC, upon
retirement of an employee, is liable to pay a gratuity equal to 15
days salary for each completed year of service, subject to a
maximum of 20 months salary. It has been categorically held by
the Full Bench of this Court in Chandrasekharan Nair G. and
others v. Kerala State Co-operative Agricultural and Rural
Development Bank Ltd. and others [2017 (5) KHC 15] [which was
confirmed by the Hon'ble Apex Court in SLP(C)No.009439-
009444/2018 dated 11.05.2018] that any benefit in excess of the
gratuity amount prescribed, covered by a contract of insurance
availed by the employer, will also go to the employee, since the
contract of insurance will fall within the ambit of Section 4(5) of
the Act. The relevant portion of the dictum laid down in
Chandrasekharan Nair's case (supra) is extracted below.
''3. The liability to pay gratuity to an employee is always
on the employer under S.4(2) of the Central Act and is at
the rate of fifteen days' wages for every completed year
of service or part thereof in excess of six months. This
does not however affect the right of the employee to
receive better terms of gratuity under any award or
agreement or contract with the employer under S.4(5) of
the Central Act. The employee need not necessarily be
an eo- nominee party to the award or agreement or
contract which could be entered into by any one duly
authorised by him. S.4(5) of the Central Act has been
WA No.39 and 46 of 2022
2026:KER:6226
widely couched to take in service conditions regulating
the terms of gratuity to which the employee is entitled
to receive.''..........
...........................................................................................
"5. The liability to pay gratuity does not get shifted to
the insurer by the compulsory insurance and the effect is
only that the maturity value of the master policy would
go to the credit of the dues of the employee. Any amount
in excess of the gratuity due would also go to the
employee since the contract of insurance would fall
within the ambit of S.4(5) of the Central Act. Any deficit
in the amount due as gratuity to the employee after
payment by the insurer has to be met by the employer
only as the liability squarely rests on him under S.4(2) of
the Central Act. The insurer cannot be made liable to
pay any amount in excess of the maturity value of the
master policy as the same would be dependent on the
premium paid to him. The compulsory insurance under
S.4A of the Central Act is only to facilitate the employer
to discharge his liability and the premium paid is part of
the wages only. Of course the wording of the second
proviso to R.59(iii) of the Rules give rise to a doubt that
the employee would be pinned down to the amount of
gratuity specified in the Central Act. Such an
interpretation would render S.4(5) of the Central Act
otiose whereunder the employee has a right to receive
better terms of gratuity under any award or agreement
or contract with the employer. The provisions of the
Central Act or any rule made thereunder shall have
effect notwithstanding anything inconsistent therewith
contained in any other enactment or instrument or
WA No.39 and 46 of 2022
2026:KER:6226
contract."
11. There is no case for the bank that the amount now
disbursed to the writ petitioner, i.e., Rs.20 lakhs, has been paid
on the basis of calculation made as per Clause 8 of Ext.R1(b). If
the amount arrived at by calculating the gratuity as per Clause 8
is more than Rs.20 lakhs, as stipulated in Section 4(3) of the Act,
definitely the writ petitioner will be entitled to that amount, in
the light of the dictum laid down in Chandrasekharan Nair's case
(supra). It is further to be seen that in the instant case both
sides admit the fact that Ext.R3(A)1 claim made by the bank to
the LIC is not on the basis of the calculation made under Clause
8 of Ext.R1(b). On going through Ext.R3(A)1, it appears that the
calculation has thus been made as per Section 4(2) of the Act. If
the writ petitioner is claiming that he is entitled to the benefit of
Ext.R1(b) policy, which provides better terms of gratuity than
under the Act, definitely the calculation cannot be made as per
the guidelines prescribed under the Act, but only as per
Ext.R1(b) scheme.
12. Therefore, considering all the afore facts and
circumstances, we are of the view that these writ appeals can be
allowed by giving a direction to the 1st respondent (Kannur
District Co-operative Bank) to calculate the gratuity of the writ
WA No.39 and 46 of 2022
2026:KER:6226
petitioner in terms of Clause 8 of Ext.R1(b) gratuity scheme, and
if the amount thus calculated is more than Rs. 20 lakhs, which
has been paid to the writ petitioner, make a claim before the LIC
to disburse the excess amount. We are also of the view that
thereafter, the bank can be directed to disburse the excess
amount thus received from LIC to the writ petitioner along with
interest at the rate of 9% per annum from the date of his
retirement, till payment. It is made clear that at the time of
computation of the gratuity as directed afore, the bank shall also
take into consideration the pay revision benefits which are
applicable to the writ petitioner.
13. In the result, these writ appeals are allowed in part as
follows;
1. The judgment dated 19.11.2021 passed by the
learned Single Judge in W.P.(C)No.11877 of 2020 is
set aside.
2. W.P.(C)No.11877 of 2020 is allowed in part as
follows;
a) The 1st respondent Kannur District Co-
operative Bank is directed to compute the
gratuity of the writ petitioner as per Clause 8 of
Ext.R1(b) gratuity scheme, within a period of
one month from the date of receipt of a certified
copy of this judgment, by also taking into
WA No.39 and 46 of 2022
2026:KER:6226
account the pay revision benefits available to
him;
b) If the amount thus arrived at is in excess of
Rs.20 lakhs, which has been paid to the writ
petitioner, the 1st respondent Kannur District Co-
operative Bank shall submit a claim to the 3 rd
respondent LIC for the excess amount, within a
further period of ten days;
c) On receipt of the claim from the 1 st
respondent bank for excess amount, the 3 rd
respondent LIC shall pay the said amount to the
1st respondent bank within a period of two weeks
therefrom;
d) Thereafter, the 1st respondent bank shall
disburse the excess amount thus received from
LIC, to the writ petitioner with 9% interest p.a.
from the date of his retirement till payment,
within a period of two weeks;
e) In case it is found that the amount as
calculated as per Clause 8 of Ext.R1(b) is less
than the amount already disbursed to the writ
petitioner (Rs.20 lakhs), the 1st respondent bank
will not be entitled to recover the excess amount
from the writ petitioner;
f) The 1st respondent bank shall also furnish a
copy of the calculation statement prepared by it
as ordered in Clause 2(a) above to the writ
petitioner within a period of one month from the
date of receipt of a certified copy of this
WA No.39 and 46 of 2022
2026:KER:6226
judgment;
g) In case the writ petitioner has any dispute
regarding the computation of gratuity amount by
the 1st respondent bank, he will be at liberty to
approach the competent authority under Section
7 of the Gratuity Act to get his grievance
redressed, and the said authority shall take a
decision on it as per law.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI,
JUDGE
Sd/-
P.V. BALAKRISHNAN,
JUDGE
Dxy
WA No.39 and 46 of 2022
2026:KER:6226
APPENDIX OF WA NO. 39 OF 2022
PETITIONER ANNEXURES
Annexure I True copy of the Letter dated 17.08.2018
Annexure II True copy of the Proceedings dated
31.07.2017
