Dismissed

Sri Y N Siddalingaiah v. the Commissionerfor Endowment

Karnataka HC13 Oct 2020WA/3938/2019

Case brief

AI extract

What is this about?

Appeal by retired temple employees challenging dismissal of writ petitions seeking Gratuity and insurance proceeds. Court held that under the special law, employees are entitled only to benefits prescribed in the 1997 Act and Rules. Appeal dismissed.

What did the court decide?

Writ petitions set aside; appellants not entitled to Gratuity or Scheme proceeds.

Sri Y N Siddalingaiah Vs the… — Pension and Retirement Benefits | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF OCTOBER, 2020

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PRESENT

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THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA

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AND

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THE HON’BLE MR.JUSTICE N.S.SANJAY GOWDA

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W.A.No.3938/2019 (S – RES)

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BETWEEN:

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Sri. Y.N.Siddalingaiah, Aged about 63 years, Son of Late Nanjunadaiah, Residing of Yedeyuru at and post, Kunigal Taluk, Tumakuru District – 572 101.

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Smt. Y.N.Kamalamma, Aged about 65 years, Wife of M.M.Narayan, Residing of Yedeyuru at and post, Kunigal Taluk, Tumakuru District – 572 101.

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Smt. Y.N.Basavaradhya, Aged about 66 years, Son of Late A.M.Siddalingashasthri, Residing of Yedeyuru at and post, Kunigal Taluk, Tumakuru District – 572 101.

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Smt. Parvathamma, Major, Wife of Late A.Mariyappa, Residing of Yedeyuru at and post, Kunigal Taluk, Tumakuru District – 572 101. (All the appellants have not claimed any Senior citizen benefits) … Appellants

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(By Sri. S.B.Mukkannappa, Advocate) AND: 1. The Commissioner for Endowment And Charitable Institution, Near Minto Hospital, Charmarajapete, Bengaluru – 560 018.

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The Deputy Commissioner/Chairman, Sri Siddalingeswara Swami Kshethra, Yedeyuru, kunigal Taluk, Tumakuru District – 572 101.

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The Secretary, Sri Siddalingeswara Swami Kshethra, Yedeyuru, Kunigal Taluk, Tumakuru District – 572 101.

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Life Insurance Corporation of India, P & G S Unit, Jeevan Prakash, 4^th Floor, J.C.Road, Bengaluru – 560 002. Represented by its Manager. … Respondents

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(By Sri.T.L.Kiran Kumar, AGA for R-1 & R-2, Sri A.G. Gururaja, Advocate for R-3, Sri. Shivayogi .B Hallur, Advocate for R-4)

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This appeal is filed under Section 4 of the Karnataka High Court Act praying to set aside the order dated 16/07/2019 passed by this Hon’ble Court in WP. Nos.56257-56260/2013 [S-RES] and consequently allow the Writ Petition Nos.56257-56260/2013 [S-RES] filed by the appellants under the facts and circumstances of the case.

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This appeal coming on for Preliminary Hearing this day, SANJAY GOWDA, J., delivered the following:

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JUDGMENT

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Though there is a delay of 67 days in filing the appeal, we have nevertheless heard learned counsel for

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the respective parties on the merits of the appeal.

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The legality and correctness of order dated 16.07.2019 passed in W.P.Nos.56257-56260/2013 by the learned Single Judge is called in question in this appeal.

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We have heard learned counsel for the appellants and learned Additional Government Advocate for respondent Nos.1 and 2 and perused the material on record.

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The appellants – writ petitioners are all retired employees of Sri Siddalingeshwara Swamy Temple, Yedeyuru, a Muzrai Institution under the erstwhile Karnataka Religious and Charitable Institutions Act, 1927 (for short, hereinafter referred to as ‘1927 Act’) and presently a Notified Institution under the succeeding enactment i.e., The Karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997 (for short, hereinafter referred to as ‘1997 Act’).

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The appellants made a claim for payment of Gratuity in terms of the Payment of Gratuity Act for which their Employer i.e., the Notified Institution, while they were in service, had subscribed to a scheme with the Life Insurance Company and which was termed as the Sri Siddalingeshwaraswamy Shrine Employees Group

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Gratuity Assurance Scheme (for short, hereinafter referred to as ‘the Scheme’) and the Life Insurance Corporation had also issued a Master Policy in this regard. It is averred that they were however not paid

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Gratuity in terms of the said scheme at the time of their retirement. They, however, admitted that they had been paid all other retiral benefits.

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On an earlier occasion, this Court in W.P.Nos.60666069/2010 directed the Institution to consider the said claims of the Appellants.

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7. Pursuant to the said order, the Notified Institution,

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by an order dated 15.05.2013 (Annexure M), rejected the claim of the appellants on two grounds: firstly, that from 01.01.1983, the Committee of Management had accorded them payscales on par with Government employees and in view of the said extension of payscales, the question of giving them the benefit of Gratuity would not arise. The Institution was of the view that they had subscribed to a Master policy in the year 1976 when its employees had not been accorded the Government payscales and the moment the Government payscales were made applicable to them, there was no

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question of them having an additional benefit of Gratuity. Secondly, the subscription to the Scheme by the Institution had been objected to by the Audit Department on the ground that the Karnataka Civil Service Rules did not permit the Government employees to get the benefit of Gratuity under the Scheme and a specific direction was issued by them to ensure that the sums paid towards the Scheme were recovered from the Life Insurance Corporation.

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8. Being aggrieved by the said rejection vide

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Annexure-M, the petitioners filed writ petitions.

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The learned Single Judge, by the impugned order, has dismissed the writ petitions on the ground that there was no privity of contract between the appellants and the Life Insurance Corporation and also on the ground that the appellants were being paid the salary and emoluments on par with the Government employees and

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they were, therefore, not entitled to the additional benefit under the Scheme.

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Assailing the said order of the learned Single Judge, this appeal has been preferred by the Writ Petitioners.

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Sri S.B.Mukkannappa, learned counsel for the appellants contended that the decision of the learned Single Judge was not correct. He submitted that once a Scheme had been subscribed to by the Institution, the appellants, as beneficiaries of the said Scheme, were entitled to the same and that benefit could not be denied to them on the ground that they were being given pay on par with the Government employees.

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Learned Additional Government Advocate, on the other hand, contended that on coming into force of the 1997 Act, the employees of a notified Institution would not be entitled to any benefit other than the one that are prescribed under the Karnataka Hindu Religious

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Institutions and Charitable Endowments Rules, 2002 (for short, hereinafter referred to as ‘the Rules’). Placing reliance on Rule 16 of the Rules, he contended that Archakas and other temple servants of a notified Institution would be entitled to the retirement benefits specified therein i.e., fifteen days salary for every completed year of service, subject to maximum of Rupees Twenty Thousand, where there is no provident fund or insurance fund benefit had been extended by the notified Institutions or subject to a maximum of Rupees Fifteen Thousand where provident fund and insurance fund benefits had been extended by the Institutions (as in force when the appellants had retired). He submitted that in consonance with the said statutory Rule, the appellants had been paid terminal benefits as prescribed and therefore, they were not entitled to the proceeds of the Scheme which had been subscribed to before 01.01.1983 and which had been surrendered to the LIC.

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Learned Additional Government Advocate also contended that the issue regarding the entitlement of employees of a notified Institution was no longer res integra , in as much as, the Full Bench of this Court in the case of Shri Mookambika Temple, Kollur Vs. Mr.Raviraja Shetty & Others in W.A.No.1756/2015 disposed of on 01.08.2019, (of which one of us, Nagarathna, J. was a member), had laid down the law to the effect that a ‘temple’ as defined under the 1997 Act would not fall within the description of a ‘commercial establishment’ and hence, the Payment of Gratuity Act, 1972 would be inapplicable to them. The Full Bench had also declared therein that the provision of the 1997 Act and the 2002 Rules alone would apply to the employees of a notified Institution and by virtue of the said declaration of law by the Full Bench, the appellants would not be entitled for Group Insurance benefits, which was not prescribed under the Rules.

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We have considered the submissions of the learned counsel for the respective parties and also perused the material on record.

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It is not in dispute that the appellants were all employees of a Hindu Religious Institution which has been notified under Section 23 of the 1997 Act and is thus a ‘Notified Institution’. It is also not in dispute that they had all retired prior to 2012.

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It is also not in dispute that all of the Appellants, by virtue of being the employees of a notified Institution, would all be governed by the provisions of the 1997 Act and the Rules framed there under.

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Rule 16 of the Rules as it stood prior to 2012,

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which deals with the terminal benefits, reads as under:

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and other temple servants of notified institutions are entitled for the following retirement benefits, namely:-

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(1)

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Rupees twenty thousand where no provident fund or insurance fund benefit or both are extended by notified institution;

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(2) Rupees fifteen thousand where provident fund and insurance fund benefits are extended:

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Provided that minimum length of service for entitlement to the retirement benefit under this rules shall be ten years.

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(3) In case of death of Archaka or temple servant after completion of three years of service but before completion of ten years of service rupees five thousand shall be paid as terminal benefits:

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Provided that retirement benefit to be sanctioned under this rule is subject to reserve funds available at the disposal of the respective institution and the benefit cannot be claimed as a matter of right where there is no sufficient

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reserve fund at the credit of the institution.

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(4) Subject to the availability of funds at the disposal of the institution contributory provident fund may be extended to Archakas and temple servants under the provision of the Employees Provident Fund and Miscellaneous Provisions Act, 1952.”

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Admittedly, the appellants were paid a sum of Rs.15,000/- as terminal benefits at the time of attaining superannuation as evidenced by Annexures-D, E and F. It is thus clear that the appellants were paid the retirement benefits as prescribed under Rule 16 of the Rules.

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The appellants, after receiving the said prescribed terminal benefits, have basically contended that they were also entitled for an additional benefit i.e., the

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proceeds of the Scheme to which the notified institution had subscribed to with the Life Insurance Corporation in the year 1976.

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In our view, the moment the Institution accorded the employees the Government payscales, the employees became disentitled to any sum other than the one prescribed under the relevant Acts and Rules which govern the notified institutions. In other words, the rights of an employee of a notified Institution can only be those that are conferred on them by the statutory provisions and they cannot and would not be entitled to any other benefit.

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The Full Bench of this Court, in the case stated above, has laid down in clear and categorical terms as follows:

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“76. It is held that the Act of 1997,

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which deals with Hindu religious institutions and charitable endowments, including temple, is a special law made under List III,

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whereas the Payment of Gratuity Act, 1972 is a general law also made under List III of the Seventh Schedule of the Constitution. Also, the State enactment has received the assent of the President and hence is applicable in the State of Karnataka visa-vis Hindu religious institutions and charitable endowments including temples and it only incidentally touches upon payment of gratuity, which is a central subject.

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In the result, the questions for

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reference are answered as under:

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(i) That the appellant being a ‘Temple’ as defined in Clause (27) of Section 2 of the karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997, does not answer the description of “commercial establishment” within the meaning of Clause (e) of Section 2 of the Karnataka Shops and Commercial Establishments Act, 1961 and hence, the Payment of Gratuity Act, 1972 is inapplicable to it by virtue of Clause (b) of sub-section (3) of Section 1 thereof;

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(ii) That the law declared by the Division Bench of this Court in the case of Sri Venkataramana Temple (supra) , that a clerk in a temple is entitled to claim the benefit of gratuity on attaining the age of superannuation under the Payment of Gratuity Act, 1972, is not in conformity with the provisions of law applicable in the State of Karnataka. Consequently, the judgment of Division Bench in Sri Venkataramana Temple (supra) is held to be no longer good law and hence, is over-ruled;

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(iii) That the provisions of the Karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997 and the rules of 2002 made thereunder would apply to the respondent – employee as per the position of law as it exists at present.

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(iv) The appellant – Temple to pay gratuity to the first respondent employee in accordance with the Act of 1997 and the Rules made thereunder within a period of four weeks from the date of receipt of certified copy of this judgment, if not already paid.”

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In view of this clear declaration of law, the appellants would only be entitled to the benefits conferred under the special law i.e., the 1997 Act and they would not be entitled for Gratuity or any sum other than the one prescribed under the statute. As stated above, it is admitted by the Appellants that they have received the terminal benefits as prescribed under Rule 16 of the Rules and there is thus no wrongdoing committed by the Notified Institution in this regard.

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The learned Single Judge by the impugned order has noticed that the appellants were in fact granted Government payscales and therefore, they would not be entitled for any other benefits. The learned Single Judge has also noticed that the appellants would not be entitled, as a matter of right, to claim the benefits of the Scheme, which the learned Single Judge, has noticed had already been surrendered.

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It may be pertinent to state here that the Government itself had objected to the continuance of the

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Scheme and the Institution had surrendered the policy in view of the objection taken by the Government and after being reimbursed with the proceeds from the Life Insurance Corporation had proceeded to remit the same to the funds of the Institution. In our view, there is absolutely no infirmity in the order passed by the learned Single Judge.

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In the result, we do not find any merit in this appeal and the same is accordingly dismissed.

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In view of the dismissal of the appeal, I.A.No.1/2019 also stands dismissed.

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Parties to bear their respective costs.

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Sd/JUDGE

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Sd/JUDGE

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PKS

Sri Y N Siddalingaiah v. the Commissionerfor Endowment

Case brief

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What did the court decide?

Sri Y N Siddalingaiah v. the Commissionerfor Endowment

Case brief

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