State Consumer Disputes Redressal Commission
The Special Officer, S.1143, Kothur ... vs Gunasankaran, S/O.Achiyanna Gounder, ... on 28 April, 2014
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI PRESENT : THIRU.A.K.ANNAMALAI PRESIDING JUDICIAL MEMBER
TMT.P.BAKIYAVATHI MEMBER F.A.NO.254/2012 (Against the order in CC.No.11/2011, dated 28.12.2011 on the file of the DCDRC, Namakkal) DATED THIS THE 28TH DAY OF APRIL 2014 The Special Officer, S.1143, Kothur Primary Agricultural Co-operative Credit Society Ltd, M/s.N.Thiagarajan Kothur Post, Paramathi Velur Taluk, Counsel for Appellant /Opp.party Namakkal District.
-vs-
1. Gunasankaran, S/o.Achiyanna Gounder, M/s.S.Devika & T.Mohan Kothur Post, Paramathi-Velur Taluk, Counsel for 1st Respondent / Namakkal District. 1st Complainant
2. Tamil Nadu Consumer Association By its secretary K.Subrayan, 2nd Respondent /2nd Complainant 40-B1, Senthamangalam Salai, Dismissed.
Namakkal.
The Respondents are the complainants filed a complaint before the District Forum against the opposite party praying certain reliefs. The District Forum Allowed the complainant. Against the said order the appellant / opposite party filed this appeal praying to setaside the order of the District Forum in CC.No.11/2011, dated 28.12.2011.
This appeal coming before us for hearing finally on 21.03.2014, upon hearing the arguments on either side, perusing the documents, lower court records, and the order passed by the District Forum, this commission made the following order.
THIRU.A.K.ANNAMALAI, PRESIDING JUDICIAL MEMBER The opposite party is the appellant.
2. The 1st complainant served in the opposite party Kothur Primary Agricultural Co-operative Credit society from 01.07.1971 to 31.10.2010 and retired from service on 31.10.2010 on superannuation. This complaint has been filed through Tamil nadu Consumer Association, Namakkal which has been arrayed as 2nd complainant. The Special Officer of the said society is the administrator of the society. Regarding the employees of the society a group gratuity (Cash Accumulation) scheme was entered into between the society and Life Insurance Corporation of India. After the retirement of the 1st complainant Rs.5,20,492/- was sent by the Life Insurance Corporation of India towards the settlement of his gratuity amount. But the opposite party society citing the bylaws allowed only one third of the said amount and settled the gratuity claim of the complainant at Rs.2,07,402/- being the one third amount. The reason being told is that the bylaws of the society were not amended to sanction the entire amount. By refusing to sanction the entire amount of Rs.5,20,492/- the society has committed deficiency in service. Hence to get the balance amount of Rs.3,13,090/- with interest and to get compensation for deficiency in service, the 1st complainant has filed this claim through the 2nd complainant association.
3. The opposite party / appellant denied the allegation in their written version by contending that as per the bylaws 16 of the Society the employees are entitled to get only 1/3 of his basic salary multiplied by years of service as the gratuity amount and on that basis alone in this case a sum of Rs.2,07,402/- sanction given by the LIC to the 1st complainant to settle the gratuity claim and there is no deficiency of service on their part.
4. The District Forum after an enquiry and on the basis of both sides materials by accepting the contentions of the complainant allowed the complaint by directing the opposite party to pay the balance gratuity amount of Rs.3,13,090/- with 9% interest from the date of this complaint and also to pay a sum of Rs.10,000/- as compensation for the deficiency of service and to pay Rs.2000/- as costs.
5. Aggrieved by the impugned order the appellant / opposite party filed this appeal contending that the District Forum erroneously allowed the complaint without taking into consideration of the relevant rules and regulations of the society relating to the payment of gratuity and also awarded both compensation and interest for the repayment of gratuity against the law and thereby the appeal is to be allowed.
6. We have heard both sides arguments and perused the materials and contentions of the parties. It is the admitted case of both sides that the 1st complainant being the employee of the opposite party was admitted in the Group Insurance Scheme through the Life Insurance Corporation of India for the purpose of granting gratuity one lump sum premium was paid by their employer and thereby in this case at the time of retirement of the 1st complainant a sum of Rs.5,20,492/- was sanctioned as gratuity payment by the Life Insurance Corporation of India as per the Document under Ex.A3. But the appellant / opposite party has paid only a sum of Rs.2,07,402/- towards the gratuity claim by retaining the balance amount of Rs.3,13,090/- alleging that as per bylaws 16 of the Societies Act and terms and conditions under Ex.B1 and B4 is entitled only for 1/3 of the basic pay multiplied with number of years service rendered and it is disputed by the complainant. On perusal of the materials when the LIC of India has sanctioned and paid the amount of Rs.5,20,492/- on the basis premium paid by the employer as gratuity amount under the scheme, it is clear that the employer has no business to retain the balance under guise of bylaws and rules of the society and when those rules and terms and conditions are verified and perused as per Ex.B1 and reply given under Ex.B2 the benefit under the Group Insurance is created only for the purpose of the employee to get more benefit under the Gratuity being a member in this scheme is opted when there is no specific scheme of gratuity or other alternative arrangements are not available with the society, those circumstances the opposite party cannot deny such benefits by stating in their reply that since the rules are not framed for the payment of entire beneficial amount by the authority. Further it is brought out notice that the Co-operative Department had issued a circular in this regard dated 30.6.2004 in its Rc.No.49344/2004 CBS2 in which in para -2 & 3 it is reiterated as follows :
In so far as District Central Cooperative Banks are concerned, they are permitted to pay gratuity in accordance with the Group Graduity cash Accumulation scheme of LIC of India. In the Special bylaws of the District Central Cooperative Banks approved by the Government the following clause has been approved with regard to the payment of Gratuity.
The Bank may provide for payment of gratuity to the employees in accordance with the provisions contained in the payment of Gratuity Act 1972 or in accordance with the Group Gratuity. Cash accumulation scheme of LIC of India, whichever is beneficial to the employee.
In view of the same also it is clear that there is no violation in payment of gratuity in excess of Rs.3,50,000/- to the employees of the Cooperative Banks on the Superannuation eventhough it is applicable to the District Cooperative banks this would applicable to the opposite partys Societies also in view of the other rules relied upon by the District Forum in its order and also it is specifically pointed out in Para-12 regarding the procedure for adopting for payment of gratuity through the LICs scheme and in that letter it was pointed out as follows :
The Co-operative Societies which accepts the Life Insurance Corporation Scheme will be able to pay the dependents of the deceased employees 15 months salary that length of service put in by the employee. In other words the employees, lives will be get insured to the extent of 15 times the salaries they will be drawing throughout their service without paying a single paise as premium from out of their pockets.
and thereby it is clear that when no such gratuity funds is established some other scheme or arrangements is made for grant of gratuity then gratuity will be given only as per terms and conditions of the arrangements made and in this case such an alternative arrangements in the form of Group gratuity of LIC of India scheme has been entered into by the opposite partys bank with LIC of India to regulate payment of gratuity to the employees of the bank and the policy given under the scheme is nothing but a contract between the employees of the Society and the LIC of India and the amount assured would be strictly governed by the terms and conditions of the policy. As pointed out by the opposite party in the rulings reported in 2010 III CPJ at page 357 Sahara India & Another vs-
National Insurance Corporation of India it is observed that when the society is beneficiary under the policy it is not entitled to retain any funds of the amount given by the Life Insurance Corporation of India by sticking as bylaws No.16 of the Societies and thereby refusal of the same to the complainant is not justifiable as per the terms and conditions of the policy. Hence in view of the foregoing reasons and discussion made we are of the view that there is no error or infirmity in the findings of the District Forum in this regard. But as far as the award of compensation of Rs.10,000/- is concerned since the District Forum already award directed the opposite party to refund the balance amount of Rs.3,13,090/- with 9% interest per annum from the date of this complaint along with a sum of Rs.10,000/- as compensation. In our view which would amount to double benefit as already observed in various judgments and thereby we are of the view that the award of compensation of Rs.10,000/- alone to be modified in the order of the District Forum by deleting the compensation alone and accordingly In the result, the appeal is allowed in part by modifying the order of the District Forum as follows :
The District Forum direction for a sum of Rs.10,000/- as compensation for the deficiency of service payable to the complainant alone is hereby set aside.
In other respects the order of the District Forum is hereby confirmed.
No order as to costs in this appeal.
These directions shall be complied within a period of 6 weeks from the date of this order.
P.BAKIYAVATHI A.K.ANNAMALAI MEMBER PRESIDING JUDICIAL MEMBER