Santhakumar vs The Managing Director
2021 Latest Caselaw 21587 Mad

                                                                1

                                     IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                      DATED: 28.10.2021

                                                              Coram

                                    The Hon'ble Mr. Justice PARESH UPADHYAY
                                                         and
                             The Hon'ble Mr. Justice SATHI KUMAR SUKUMARA KURUP

                                                      W.A.No.518 of 2020

                     Santhakumar                                                         ..Appellant

                                                               Vs

                     1.The Managing Director,
                      Erode District Central Co-operative Bank Ltd.,
                      Bhavani Main Road,
                      Erode.

                     2.The Joint Commissioner/Coimbatore,
                       Appellate Authority under the
                        Payment of Gratuity Act,
                      Coimbatore.                                                     ..Respondents

                           Appeal preferred under Clause XV of Letters Patent against the
                     order dated 30.09.2019 made in W.P.No.8524 of 2019.

                                      For Appellant      ..     Mr.E.P.Senniyangiri

                                      For Respondents ..        Mr.R.Kumaravel for R1

                                                       JUDGMENT

(Delivered by PARESH UPADHYAY, J.)

Challenge in this appeal is made to the order dated 30

September 2019 in W.P.No.8524 of 2019, whereby the writ petition by

the employer is allowed.

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2. Learned advocate for the appellant has submitted that the

impugned order is erroneous inasmuch as the provisions of Payment of

Gratuity Act, 1972, is given a go-by vis-a-vis the regulations of the

respondent-Co-operative Bank, which is impermissible under law.

Learned advocate for the appellant has further submitted that after

putting in more than 30 years of service, the appellant had retired on

superannuation and since he was not paid his gratuity, he had

approached the Controlling Authority under the Payment of Gratuity

Act, 1972, which ordered payment of gratuity, which was challenged

by the employer before the Appellate Authority under the Act and

the said authority confirmed the order of the Controlling Authority. It is

submitted that thereafter the employer moved this Court by filing

W.P.No.8524 of 2019 wherein, by the impugned judgment and order

dated 30 September, 2019, learned single Judge arrived at the

conclusion that it is the regulation of the Bank which will prevail over

the provisions of the Payment of Gratuity Act, 1972 and as the

consequence thereof the orders of the Controlling Authority and the

Appellate Authority under the Act are set aside. It is submitted that

the said course is inconsistent with the provisions of Section 4 of the

Payment of Gratuity Act, 1972 read with Section 14 of the Act. It is

submitted that impugned order be quashed and set aside.

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3. On the other hand, learned counsel for the

respondent/employer (writ petitioner) has opposed this appeal and has

submitted that the learned single Judge has not committed any error

by setting aside the order of the authorities. It is submitted that no

interference be made by this Court. Learned advocate for the

respondent has also referred to the pleadings in the writ petition to

contend that, the present appellant was not entitled to relief under the

Payment of Gratuity Act, 1972('the Act', for short). It is submitted that

this appeal be dismissed.

4. Having heard the learned counsel for the respective parties

and having considered the material on record, this Court finds as

under.

4.1. The appellant was in the service of the respondent No.1 for

the period from 2 January, 1985 to 30 September, 2015. He retired

on attaining the age of superannuation, on 30 September,2015. At the

time of his retirement, there was no disqualification against him as

stipulated under Section 4 of the Act. The payment of gratuity

therefore could not have been withheld by the employer - respondent

No.1.

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4.2. The action of the respondent No.1 not to make payment of

gratuity to the appellant was on the ground that, criminal proceedings

instituted by the employer against the appellant was pending, wherein

the allegation of misappropriation of fund was also there. Attention of

the Court is invited to earlier round of litigation, wherein some

punishment of fine was interfered with by the authorities under the Co-

operative Societies Act, which was not the subject matter of the writ

petition, from which this appeal has arisen.

4.3. It is not in dispute that, neither any order to forfeit gratuity

of the appellant was passed by the employer nor any condition

precedent of passing any such order - as enumerated under Section 4

of the Act has been complied with in the present case. Thus, as a

matter of fact, neither any order of forfeiture of gratuity was passed by

the employer nor such an order could have been passed for want of

compliance of any of the contingencies stipulated under Section 4 of

the Act. Under either of the circumstances, the action of the

respondent No.1 not to pay gratuity to the present appellant was

illegal and therefore, the direction by the Controlling Authority and the

Appellate Authority under the Payment of Gratuity Act, 1972, to pay

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gratuity to the present appellant could not have been termed to be

erroneous in any manner.

5. In the above circumstances, interference by the learned single

Judge in the orders of the authorities under the Payment of Gratuity

Act, 1972, in our view is unsustainable and same needs to be quashed

and set aside. At this stage, reference needs to be made to Section 14

of the Act, wherein over riding effect of the Act is provided. Conjoint

reading of Sections 4 and 14 of the Payment of Gratuity Act, 1972,

leaves no room for us to hold that, it is the provisions of the Act which

would prevail over the Regulations of the employer. We also note that,

it was not even the case of the employer before any of the authorities

under the Payment of Gratuity Act nor even before the writ court that

the Payment of Gratuity Act, 1972 is not applicable. Not only this, the

reading of the pleadings further indicate that, the employer has all

throughout agitated on merits before the authorities, so also before

this Court, that the gratuity should not be paid to the present appellant

because of the pendency of the proceedings against him. Examining

the case from any parameter, the appellant could not be denied

gratuity. The impugned order is unsustainable and the same needs to

be set aside.

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6. For the above reasons, the following order is passed.

6.1. This appeal is allowed.

6.2. The impugned order dated 30 September 2019 in

W.P.No.8524 of 2019, is quashed and set aside. Resultantly, the

orders impugned in the writ petition are ordered to be given effect to.

No costs.

(P.U.J.,) (S.S.K.J.,) 28.10.2021 Index:Yes/No raa/21

To

1.The Managing Director, Erode District Central Co-operative Bank Ltd., Bhavani Main Road, Erode.

2.The Joint Commissioner/Coimbatore, Appellate Authority under the Payment of Gratuity Act, Coimbatore.

https://www.mhc.tn.gov.in/judis

PARESH UPADHYAY, J.

and SATHI KUMAR SUKUMARA KURUP, J.

raa

W.A.No.518 of 2020

28.10.2021

https://www.mhc.tn.gov.in/judis