Kerala High Court
K.B.Unnikrishnan Nair vs Kerala State Road Transprot ... on 11 October, 2013
Author: C.K. Abdul Rehim
Bench: C.K.Abdul Rehim
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM
THURSDAY, THE 3RD DAY OF JULY 2014/12TH ASHADHA, 1936
WP(C).No.10266 of 2013 (G)
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PETITIONER:
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K.B.UNNIKRISHNAN NAIR,S/O.KRISHNA PILLAI,
AGED 61 YEARS,T C NO.14/776,KRISHNA MANGALAM,
OBSERVATORY LANE, PALAYAM,
VIKAS BHAVAN P.O,THIRUVANANTHAPURAM
BY ADV. SRI.D.SAJEEV
RESPONDENTS:
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1. KERALA STATE ROAD TRANSPROT CORPORATION
REPRESENTED BY ITS MANAGING DIRECTOR,
TRANSPORT BHAVAN,EAST FORT,
THIRUVANANTHAPURAM-695024.
2. THE MANAGER,KSFE,HOUSING BOARD BRANCH,
THIRUVANANTHAPURAM-695005
3. THE SPL.DEPUTY TAHSILDAR(RR)
KSFE,SILVER JUBILEE BUILDINGS,STATUE,
THIRUVANANTHAPURAM-695002
R1 BY SRI.BABU JOSEPH KURUVATHAZHA,SC,KSRTC
R2 BY SRI.BABU VARGHESE (SENIOR ADVOCATE.)
ADV.SRI.JOHNSON T.JOHN, SC, KSFE LTD.
R3 BY GOVT. PLEADER SRI.M.A.ABDUL SHUKOOR.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 03-07-2014, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
pk
WP(C).No.10266 of 2013 (G)
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APPENDIX
PETITIONERS EXHIBITS
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EXT.P1:TRUE COPY OF THE CERTIFICATE ISSUED BY THE ASSISTANT
TRANSPORT OFFICER, KSRTC.
EXT.P2:TRUE COPY OF THE REVENUE RECOVERY NOTICE ISSUED BY THE 3RD
RESPONDENT.
EXT.P3:TRUE COPY OF THE ORDER DTD 22/1/2010 IN IA NO.59/2010 IN
COMPLAINT NO.168/2010 OF THE HON'BLE LOK AYUKTA.
EXT.P4:TRUE COPY OF THE JUDGMENT REPORTED IN 2009(4)KHC 185
EXT.P5:NIL
EXT.P6:TRUE COPY OF THE APPLICATION DATED 11.10.2013FILED BEFORE THE
PUBLIC INFORMATION OFFICER,KSRTC.
EXT.P7:TRUE COPY OF THE REPLY DATED 8.11.2013 ISSUED BY THE STATE
PUBLIC INFORMATION OFFICER.
EXT.P8:TRUE COPY OF THE INTERIM ORDER DATED 22.1.2010 IN
I.A.NO.59/2010IN COMPLAINT NO.168/2010.
RESPONDENTS EXHIBITS
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EXT.R2(a):EMPLOYMENT CERTIFICATE AND AGREEMENT FOR RECOVERY
FROM SALARY AND TERMINAL BENEFITS.
//TRUE COPY//
P.S.TO JUDGE
pk
"C.R"
C.K. ABDUL REHIM, J.
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W.P.(c) No. 10266 OF 2013-G
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DATED THIS THE 9th DAY OF APRIL, 2014.
J U D G M E N T
The petitioner, a retired employee of the 1st Corporation, is seeking declaration with respect to his entitlement for getting payment of the gratuity amounts due to him along with interest, without any deduction/recovery in view of the decision of this court in Kunjumohammed V. A V. KSFE Ltd. and others (2009 (4) KHC 185). A consequential relief by way of direction for effecting the payment is also sought for.
2. While in service, the petitioner along with a co- worker stood as surety for a loan availed by one Sri. Rajendran Nair from 2nd respondent. Consequent to default committed by the loanee in repayment, certain amounts were recovered from the salary of the petitioner. The 3rd respondent initiated revenue recovery steps and Ext.P2 notice was served on the petitioner. The petitioner approached the 'Lok Ayukta' challenging the recovery steps, mainly raising a contention that the steps were initiated W.P.(c) No.10266/2013 -2- only against him, despite the fact the co-surety is still in service. The 'Lok Ayukta' passed Ext.P3 interim direction restraining the 1st respondent from making any deduction from the amount of pensionary benefits due to the petitioner and from attaching any of the properties belonging to him. It is stated that, despite such an order, the 1st respondent insisted for execution of a consent letter for disbursal of the terminal benefits due to the petitioner, agreeing to recover from such benefits the arrears due to the 2nd respondent. Accordingly the petitioner became compelled to execute a consent letter. But the DCRG due to the petitioner was not sanctioned for payment at that time. Thereafter, the petitioner submitted a request to cancel the consent letter, which according to him was obtained only by way of coercion. It is complained that the amount of DCRG due to the petitioner was not disbursed, even after the lapse of more than 6 years. Hence this writ petition is filed.
3. The petitioner relies on the decision in Kunju Mohammed's case (supra) for contending that, even if a surety agrees to recover the amounts out of the gratuity, W.P.(c) No.10266/2013 -3- such an agreement is not enforcible since the amount of gratuity is made free from any attachments.
4. The 1st respondent in their counter affidavit had contended that, at the time of sanctioning the loan, the petitioner had given authorisation permitting the 2nd respondent to effect recovery from the DCRG. Since such a consent was willingly given to the KSFE knowing about its consequence, the amount is liable to be recovered from the DCRG due. Further, the petitioner had already withdrawn the complaint filed before the 'Lok Ayukta' and the directions contained in Ext.P3 order is no more in force. The 1st respondent extended that, the judgment in Kunju Mohammed's case (supra) deals with the provisions contained in the Payment of Gratuity Act, whereas by virtue of a notification issued by the Government the 1st respondent corporation stands exempted from the purview of the Payment of Gratuity Act. Hence it is contended that the law declared in Kunju Mohammed's case (supra) is not applicable.
W.P.(c) No.10266/2013 -4-
5. In the counter affidavit of the 2nd respondent it is contended that, various amounts were already recovered from the sureties and the total balance outstanding is only a sum of Rs.2,45,270/-, as on 30-06-2013. The petitioner is liable to make payment of the said amount along with interest, in terms of the agreement executed at the time of availing the loan. It is specifically stated that all the sureties including the petitioner had given consent to recover the amounts from their terminal benefits and such consents were countersigned by the authorities of the 1st respondent. As per the agreement and the consent letter issued, the amount in arrears is liable to be recovered from the DCRG. Hence it is contended that the attachment effected on the amount of DCRG, under provisions of the Kerala Recovery Recovery Act, is valid and sustainable.
6. The 3rd respondent had also raised identical contentions in their counter affidavit. It is contended that, if a consent is given to the creditor organisation unconditionally agreeing for recovery from the retirement benefits, it will amount to sufficient compliance of the W.P.(c) No.10266/2013 -5- requirement stipulated in Ruling No.1 attached to Rule 3 of Part III of KSR, authorising recovery. Therefore the attachment made on the amount of DRCG is in order, is the contention. It is further contended that the gratuity is attached under Section 19 of the Kerala Recovery Recovery Act since the petitioner had agreed to recover the liability from the terminal benefits.
7. The 'Employment Certificate' and the 'agreement' executed by the petitioner in favour of the 2nd respondent is produced as Ext.R2 (a). The agreement is in a printed form captioned as, "Agreement for recovery from salary". It contains a clause to the effect that the petitioner had agreed that, in case of default of payment of the amounts by the loanee, recovery of such amount as fixed by the KSFE from time to time may be made from the salary at source and also from the terminal and other benefits. (emphasis supplied) Question posed is as to whether the amount of arrears due in the loan account can be recovered from the DCRG due to the petitioner, based on the agreement executed at the time of availing the loan. In Kunju W.P.(c) No.10266/2013 -6- Mohammed's case (supra) a learned Judge of this court found that Section 13 of the Payment of Gratuity Act, 1972 (hereafter referred as the 'Act' for short) provides that, gratuity payable under the Act is not liable to be attached in execution of any decree or order of any civil court, revenue or criminal court. It is provided under Section 14 of the Act that, provisions of the Act or any Rules made thereunder shall have overriding effect, notwithstanding anything contained inconsistent thereto in any other enactment or instrument of contract. Considering the said provision, despite any agreement executed conceding recovery from salary or terminal benefits, protection given with respect to attachment against gratuity will stand intact. It is further clarified that, eventhough such an agreement may be valid and enforceable in respect of recovery of salary and other terminal benefits, gratuity stands on a different footing and is free from any attachment. Learned counsel for the petitioner had also placed reliance on two other Division Bench decisions of this court. In FACT Ltd. V. Sebastian K. John and others (2014 (1) KLJ 209) this W.P.(c) No.10266/2013 -7- court held that, gratuity can be forfeited only if the conditions enumerated under Section 4 (6) of the Act is satisfied. There also the protection from attachment will cloth the amount of gratuity payable to certain immunity, which is only subject to Section 4 (6). In another decision of this court in KSEB V. Mohankumar (2008 (3) KLT
73) it is held by a Division Bench that, the employees of KSEB are entitled to claim gratuity in accordance with the Payment of Gratuity Act, because provisions of the Gratuity Act will prevail over Part III KSR. Repelling contentions of KSEB that their employees are employees of the State Government and therefore Payment of Gratuity Act cannot be made applicable, it is held that Section 2 (e) of the Act specifically excludes only those employees who are employed under the Central Government or the State Government. The employees of the Corporation, by no stretch of imagination, can be can be termed as an employee of the State Government. There also the scope of Section 14 was considered to hold that the claim for gratuity by an employee under the provisions of the Act is W.P.(c) No.10266/2013 -8- not based on any contract, but it is a right which arises from the statute itself. Learned counsel for the petitioner contended that employees of the 1st respondent Corporation are in par with employees of the KSEB and provisions of the Act will be applicable. Hence it is contended that the prohibition contained under Section 13 would equally apply, especially in view of the overriding effect provided under Section 14.
8. Sri. Babu Vargheese, Senior Counsel appearing on behalf of 2nd respondent had confronted the arguments pointing out that the 1st respondent is following provisions of KSR in the matter of payment of gratuity and the provisions of the Act is not applicable. Referring to Ruling No.1 of Rule 3 of Part III of KSR it is contended that amount if any due to the KSFE can be attached from the terminal benefits including the DCRG. He placed reliance on a decision of this court in Manni V. Divisional Forest Officer (2008 (4) KLT 955) wherein it is found that a security bond or even a consent given to the creditor organisation like KSFE, unconditionally agreeing for W.P.(c) No.10266/2013 -9- recovery from the retirement benefits will be sufficient compliance of Ruling No.1 of Rule 3 of Part III of KSR. But that was the case of an employee of the State Government, who is totally exempted from the purview of the Act by virtue of Section 2 (e).
9. Further, reliance was placed on the decisions of this court in Kuttan Pillai V. State of Kerala (2001 (2) KLT 375) and in Philomina Francis V. Accountant General (2007 (2) KLT 310). In the former case it is held that, gratuity payable can be deducted on the basis of the ruling contained in Rule 3 KSR, if the employee had consented for the same. An employee cannot turn around after having agreed or consented for such recovery to content that the recovery is bad, is the finding. In the latter case it is found that the State Bank of Travancore, not being a Government company expressly coming within the ambit of Ruling No.1 of Part III, being creature of a statute, can fall within the ambit of the said ruling. But as observed above, in both the cases the petitioners are State Government employees who were outside the purview of W.P.(c) No.10266/2013 -10- provisions contained in the Act by virtue of exemption contained in Section 2 (e).
10. It is contended that the prohibition contained in Section 13 of the Act will not apply in a case where the employee is paid gratuity based on provisions contained in the KSR. It is not disputed that the KSRTC was adopting the provisions of the KSR for the purpose of computation of gratuity. It is also not in dispute that from 2013 onwards the KSRTC stands exempted by virtue of the Government notification, issued in exercise of power vested under Section 5 of the Act with retrospective effect with from 1st April, 1984 onwards. Question posed is whether attachment or recovery from gratuity is possible, even if the gratuity is paid not under the provisions of the Act or even when the employee had given consent for recovery of the amount. In this regard provisions contained in Section 13 assumes importance, which is extracted below:
"13. Protection of gratuity.- No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted W.P.(c) No.10266/2013 -11- under Section 5 shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.
It is explicitly clear that the prohibition will apply with respect to gratuity payable to an employee who is employed in any establishment which is exempted under Section 5. Therefore the bar against attachment/recovery will apply with respect to gratuity payable to the employees of the 1st respondent Corporation, which is exempted under Section 5.
11. Ruling No.1 of Rule 3 of Part II of KSR enables the recovery when there is a specific consent/agreement to that effect. Evidently, provisions contained in Ruling No.1 of Rule 3 is inconsistent or repugnant to Section 13, to the extent it nullifies the prohibition, when there is a consent. In Kunju Mohammed's case (supra) the learned Judge took the view that, existence of such consent/agreement will be valid only with respect to recovery of other terminal benefits, because gratuity stands on a different footing and it is free from any attachment. For arriving at such a W.P.(c) No.10266/2013 -12- conclusion this court relied on Section 14 which provides that provisions of the Act will prevail notwithstanding anything inconsistent contained in any other law, instrument or contract.
12. The specific aspect as to whether the prohibition contained in Section 13 will override Ruling No.1 of Rule 3 of Part III KSR was not decided in Kunju Mohammed's case. Section 14 of the Act provides that it has got overriding effect notwithstanding anything inconsistent contained in any instrument or contract. Here the recovery is attempted only based on the consent/agreement executed by the petitioner. When Section 14 provides an overriding effect on anything inconsistent in any instrument or contract, evidently the consent/agreement if any given for enabling recovery from DCRG will be overrided by the provisions of Section 13, which provides absolute protection against attachment/recovery. Moreover, the provisions of Ruling No.1 of Rule 3 itself will get overrided by virtue of provisions contained in Section 14 of the Act, since it is repugnant to Section 13.
W.P.(c) No.10266/2013 -13-
13. Learned Senior counsel appearing for KSFE had placed reliance on a decision of High Court of Madras in V. Vaithyanathan and others V. Deputy Commissioner of Labour and another (2002 (3) L.L.N 539). It is held that, if an employee willingly agrees to give up a portion of the amount of gratuity, in the background of sickness of the undertaking and the need for its revival, such agreement is binding on the parties, unless agreement is vitiated by any factor recognised by law. The authority can rightly act upon such agreement, is the finding. But such an agreement voluntarily executed permitting scaling down of the amount of gratuity cannot in any manner be equated as a contract which is inconsistent with the provisions of the payment of gratuity Act.
14. Incidentally, learned Senior Counsel appearing for the 2nd respondent had pointed out that, the petitioner is not approaching this court with clean hands since he had suppressed various factual aspects like execution of the agreement and the consent, wherein the recovery is conceded. It is also contended that the petitioner had W.P.(c) No.10266/2013 -14- executed such an agreement with full willingness and with an open understanding that the terminal benefits including DCRG is liable to be recovered, in case the repayment is defaulted. It is contended that this court should restrain from extending any relief under Article 226, which is discretionary in nature, with respect to such a person.
15. It is true that the petitioner had refuted execution of the agreement contending that he had consented only for recovery from salary. It is true that the petitioner had conceded about the undertaking given agreeing for recovery from pension and other benefits. But it is pertinent to note that the entire claim is based on the dictum contained in Kunju Mohammed's case, in which it is held that notwithstanding any consent/agreement the amount of gratuity is not attachable. Being a legal question agitated based on a settled precedent, this court do not find any reason to reject the writ petition based on a contention that there was suppression of any factual aspects.
16. Under the above mentioned circumstances, this writ petition is allowed to the extent of declaring that the W.P.(c) No.10266/2013 -15- amount of DCRG due to the petitioner from the 1st respondent Corporation cannot be attached or withheld to satisfy arrears if any due to the 2nd respondent under the loan account. Consequently, there will be a direction to the 1st respondent to disburse the amount of DCRG due to the petitioner at the earliest, at any rate within a period of 2 months from the date of receipt of a copy of this judgment.
17. However, it is clarified that the above judgment will not stand in the way of the respondents 2 & 3 proceeding against the petitioner to recover the arrears from any of his personal assets or from any other amount due to him towards terminal benefits from the 1st respondent Corporation.
Sd/-
C.K. ABDUL REHIM JUDGE AMG True copy P.A. to Judge