WP/17926/2006 of D. Rangaiah, Vs Andhra Bank, rep. by its Chairman and Managing Director, on 28 December 2007

COMMON ORDER:

W.P.Nos.17922 and 17926 of 2006

In these two Writ Petitions common questions of law and factarise for consideration; therefore, they are being disposed of by thiscommon Order.

It appears, writ petitioners have retired from service on attainingage of superannuation i.e. 58 years. It is their grievance that they werenot paid gratuity, provident fund, leave encashment and salary duesand, therefore, the action of respondents 1 and 2 in not payingretirement benefits to them is arbitrary, illegal and violative of Articles14 and 21 of the Constitution of India.

While admitting the Writ Petition on 4-6-2007 an interim orderwas passed directing respondents 1 and 2 to consider for payment ofterminal benefits, such as, provident fund, gratuity and leaveencashment due to the petitioners as on the date of their retirement onattaining the age of superannuation. When the said orders were notcomplied with, contempt cases have been filed.

Though no counter is filed in the Writ Petitions, respondent No.3has filed counters in the contempt cases. It is asserted that theManaging Committee has discussed the issue as to payment ofarrears of salary to the petitioners and constituted a sub-committeeconsisting of 3 employees and 3 Managing Committee members of the society, as per the Governmental Orders. Thus, the ManagingCommittee has taken a decision in their meeting held on 26-6-2007regarding the pay scales and payment of salaries to the employeesfrom the funds of the society i.e. fixed deposits. As per the directions ofthe District Cooperative Officer, Warangal, the Divisional CooperativeOfficer, Mahaboobabad attended the meeting and issued a letter to theManaging Director of the Society and Branch Manager, Andhra Bank,Mahaboobabad vide letter Rc.No.609/2004-C, dated 22-9-2007 toimplement the decision of the Managing Committee held on 24-8-2007and permitted to utilize the fixed deposit to incur the expendituretowards pending salaries.

Learned counsel for the petitioners strenuously contended thatthe petitioners were not paid leave encashment (8 months salary) asper the leave to the credit of their accounts and even the provident fundwas not paid as per the Regulations. Apart from that, the salary due for20 months was also not paid.

Learned counsel appearing for the respondents submitted thatthe Writ Petition itself is not maintainable, since the Andhra Bank doesnot own the Society. Further, Miscellaneous Petitions under Section33-C(2) of the Industrial Disputes Act,1947 (for short ‘the Act’) werefiled by the petitioners seeking payment of salary due etc. Petitionerswere already paid 180 days of earned leave salary, since that wasonly the leave available to the credit of the account of the petitionersand the same has been adjusted towards the advance salaries paid tothem. Even if there is more than 180 days earned leave, that wouldlapse and as per the Rules, the petitioners are not entitled forencashment of earned leave beyond 180 days. Insofar as theprovident fund is concerned, it is nothing to do with the respondentsand it is between the petitioners and the Provident Fund Commissioner. Regarding the gratuity, as per the assurance scheme,petitioners were paid the amount and as such, it cannot be said thatthey are entitled for further gratuity, leave salary etc.

I have given my earnest consideration to the respectivesubmissions made by the learned counsel on either side and perusedthe material made available on record.

Insofar as the salary due to the petitioners is concerned, it isalready subject matter of M.Ps under Section 33-C(2) of the Act beforethe Industrial Tribunal. Therefore, this aspect need not be gone into inthese Writ Petitions. Further, the respondents have nothing to do withthe payment of provident fund to the petitioners. As such, this aspectalso need not be gone into in these Writ Petitions.

Thus, the only question to be resolved is as to whether thegratuity paid to the petitioners is just and proper, whether thepetitioners are entitled only for encashment of 180 days earned leaveand whether the respondents are justified in adjusting the said leaveencashment amount towards advance salary etc.

Learned counsel appearing for the 1[st] respondent relied uponRegulation 26 of the Staff Service Regulations,1988 of the AndhraBank Farmers’ Service Cooperative Society Limited, Korvi, whichreads as under:

“26. Terminal Benefits:

a)

Provident Fund: Every employee willbecome a member of Provident Fund asper the provident fund Rules. The societyshall contribute to the provident fund inaccordance with the rules governing in theprovident fund from time to time, providedthat the amount contributed by it shall notbe more than 12½% of the wages of theemployee.

b)Gratuity: Every employee, who hascompleted one year of service shall beeligible for Gratuity on:

(I)RETIREMENT

(II)DEATH

(III)DISABLMENET rendered him unfit forfurther service as certified by aGovernment Doctor not less than therank of Surgeon. The amount ofGratuity payable to an employee shallbe (1) months wages for everycompleted year of service, subject to amaximum of 20 months wages. Thesociety shall join with the Life InsuranceCorporation of India under GROUPGRATUITY LIFE ASSURANCESCHEME for the payment of gratuityamount as per the eligibility. Thesociety shall bound to the rules andregulations of L.I.C. of India under thesaid scheme.further service as certified by aGovernment Doctor not less than therank of Surgeon. The amount ofGratuity payable to an employee shallbe (1) months wages for everycompleted year of service, subject to amaximum of 20 months wages. Thesociety shall join with the Life InsuranceCorporation of India under GROUPGRATUITY LIFE ASSURANCESCHEME for the payment of gratuityamount as per the eligibility. Thesociety shall bound to the rules andregulations of L.I.C. of India under thesaid scheme.

and submitted that in view of the above provision, petitioners areentitled for the amount under Group Gratuity Life Assurance Schemeand whatever is being paid by the Life Insurance Corporation,petitioners should accept the same. In these cases, a sum ofRs.50,000/- was paid under group gratuity life assurance scheme toeach of the petitioners and they are entitled only for such amount and not anything more than that.

The contention of the respondents that the writ petition is notmaintainable cannot be countenanced. The Society is sponsored bythe Andhra Bank itself and its staff are Ex-Officio Director/s of theSociety. Further, Andhra Bank has exercised control over the society.Under those circumstances, I am of the opinion that the Writ Petitionsare maintainable against the 2[nd] respondent-Society.

A plain reading of the above Regulation would make it clear thatthe amount of gratuity payable to an employee shall be one month’swages for every completed year of service, subject to a maximum of 20months wages. Further, it contemplates that the Society shall join with

the Life Insurance Corporation of India under group gratuity lifeassurance scheme for payment of gratuity amount as per theeligibility. This itself does not mean that the petitioners are not entitledfor gratuity as per law and that they are entitled for gratuity as per thegroup gratuity life assurance scheme, i.e. Rs.50,000/- only. A readingof the said Regulations would indicate that the petitioners are entitledto one month’s wages for every completed year of service, subject to amaximum of 20 months’ wages. Therefore, it cannot be construed thatonce group gratuity life insurance scheme is introduced, petitioners arenot entitled for 20 months wages as contemplated under the law. Infact, it must be construed otherwise, i.e., petitioners are not onlyentitled for 20 months wages, but also the amount of Life InsuranceCorporation of India under Group Gratuity Life Assurance Scheme. Bethat as it may, petitioners were paid only Rs.50,000/- each, whereas,they are entitled for 20 months wages, since they have put in morethan 20 years of service.

Insofar as encashment of earned leave accrued to the account ofthe petitioners is concerned, it is the case of the respondents that thepetitioners are entitled only for 180 days salary, since that was the onlyleave available to their credit and further the amount towards leaveencashment of 180 days has been adjusted towards advance salariespaid to them. There is no dispute as to the drawing of advancesalaries by the petitioners. Therefore, it cannot be said that therespondents have committed an error in adjusting the salary advancealready paid to the petitioners towards leave encashment etc. However, if there is any dispute as to the leave encashment beyond180 days, it is always open to the petitioners to make a representationbefore the respondents and the respondents shall consider the same,as per law and shall furnish the details of the leave available to each of the petitioners and also shall calculate the amounts already paidtowards advance salary etc. and furnish a detailed account of theamount due to them on this account i.e., encashment of earned leave.

In the result, the Writ Petitions are disposed of directing therespondents to pay gratuity amount, equivalent to 20 months wages asper Regulation 26(b) of the Regulations and also consider therepresentations filed by the petitioners insofar as encashment ofearned leave is concerned, within a period of six weeks from the dateof receipt of a copy of this Order. No order as to costs.CONTEMPT CASE Nos.1003 and 1004 of 2007

In view of the Orders passed in the said Writ Petitions, thecontempt cases are liable to be closed. Accordingly, the contemptcases are closed.

prk

28-12-2007