Karnataka State Road Transport Corporation Vs the Assistant Labour Commissioner and the Appellate Authority

THE ASSISTANT LABOUR COMMISSIONER AND THE APPELLATE AUTHORITY, UNDER THE PAYMENT OF GRATUITY ACT, SUB-DIVISION-2, KARMEEKA BHAWAN, BANNERGHATTA ROAD, BENGALURU-560 029.

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Digitally signed by PREMCHANDRA M R Location: High Court of Karnataka

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THE ASSISTANT LABOUR COMMISSIONER AND CONTROLLING AUTHORITY, UNDER THE PAYMENT OF GRATUITY ACT, DIVISION-2, KARMEEKA BHAWAN, BANNERGHATTA ROAD, BENGALURU-560 029.

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LINGAMADEGOWDA S/O BHUJANGEGOWDA, ADULT, NO.137, KOMMAGHATTA, KHB LAYOUT, BANDEMATA KENGERI, BANGALORE-560 060.

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…RESPONDENTS

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(BY SRI. SRINIVAS KUMAR.M., HCGP FOR R1 & 2; SRI. M.C. BASAVARAJU., ADVOCATE FOR R3)

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

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THIS WRIT PETITION IS BEING RESERVED FOR ORDERS, SITTING AT PRINCIPAL BENCH, BENGALURU, THIS DAY, AN ORDER IS PRONOUNCED AS UNDER:

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CAV ORDER

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Smt.H.R.Renuka., counsel for the petitioner, Sri.Srinivas Kumar., HCGP for respondents 1 and 2 and Sri.M.C.Basavaraju., counsel for respondent No.3 have appeared in person.

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2. The short facts are these:

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Sri.Lingamadegowda - the third respondent joined the service as a Welder in KIMCO in the year 1981. On 01.10.1996, the KIMCO was merged with KSRTC subject to terms and conditions. Consequently, the employees of KIMCO came to be absorbed in the Corporation subject to terms and conditions of Government Order. On 17.04.1999, a separate agreement was entered in respect of gratuity under a Tripartite Settlement entered between the employees of KIMCO, Union and Management. In terms of this settlement, the erstwhile

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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employees of KIMCO are to be paid gratuity in terms of the Payment of Gratuity Act.

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3. The third respondent attained the age of

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superannuation on 30.04.2018. Upon his superannuation, the gratuity payable to him was calculated in terms of the Payment of Gratuity Act for the period of service rendered by him for 38 years. The calculation is as under:

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Basic Pay	-	Rs.29,670/-
DA	-	Rs.13,245/-
Addl. DA	-	Rs.751/-
Total	-	Rs.43,666/-

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Rs.43,666/- X 15/26 X 38 years = Rs.9,57,293/-

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The amount was paid in two installments: - Rs.9,44,797/and Rs.12,496/-.

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As the matter stood thus, the third respondent filed an application claiming a difference in gratuity before the Controlling Authority in the year 2021. The Controlling Authority vide order dated 16.11.2022, condoned the delay and allowed the application. Aggrieved by the order of the

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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Controlling Authority, the Corporation filed an appeal before the Appellate Authority. The Appellate Authority vide order dated 14.09.2023 dismissed the appeal. The orders of the Gratuity Authorities are called into question in this Writ Petition on several grounds as set out in the Memorandum of Writ Petition.

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4. Counsel appearing for the respective parties urged several contentions. Heard the arguments and perused the writ papers with utmost care.

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5. The short point that requires consideration is whether the orders of the Gratuity Authorities requires interference.

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6. The facts are sufficiently stated and they do not require reiteration. The issue revolves around a narrow compass and relates to the claim of difference in gratuity made by the third respondent. Suffice it to note that the third respondent attained the age of superannuation in the year 2018 and received the gratuity amount. However, after lapse of almost three years, he moved an application before the Controlling Authority seeking difference in gratuity. Notwithstanding the delay, the Controlling Authority

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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entertained the application and allowed his claim. This is not sustainable. The reason is simple and apparent. It is not in dispute that the third respondent had joined the service in KIMCO and because of the merger, the employees were absorbed in the Corporation subject to terms and conditions. It is pivotal to note that a Memorandum of Settlement was entered between the employees of KIMCO, Union and Management. The Memorandum of Settlement is furnished along with the Writ Petition and the same is marked as Annexure-A. The terms of the settlement reads as under:

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1. The representatives of the Management of KSRTC., and the representatives of KSRTC Pradheshika Karyagara Karmikra Sangha, Hassan, agree for regulating the payment of Gratuity to the absorbed employees of the erstwhile KIMCO in accordance with the Payment of Gratuity Act, 1972.

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2. This will be implemented from the date of absorption of KIMCO employees into the services of KSRTC., i.e., 01.10.1996, also taking into account, this service rendered in the erstwhile KIMCO.

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3. Therefore, for the purpose of Payment of Gratuity to the employees of erstwhile KIMCO who were absorbed into the services of KSRTC as on

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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01.10.1996, they will no longer be governed by the Memorandum of Settlement dated:03.04.1996, Clause 16, but by this settlement dated:17.04.1999.

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The third respondent attempted to contend that he has been transferred to the Corporation as such he is an employee of the Corporation, hence, he is entitled to claim gratuity as per the regulations of the Corporation. In this Court also he has adhere to the said contention. I decline to accept the said contention. The reason is apparent. The third respondent became the employee of the KSRTC in terms of the notification issued during the merger of KIMCO with the KSRTC. However, the Gratuity Authorities have overlooked this aspect of the matter.

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7. Sri. M.C.Basavaraju., in presenting his arguments, strenuously urged that the contention about the Memorandum of Settlement and the order passed by this Court W.P.No.19477/2003 was not taken before the gratuity authorities. However, the same been taken for the first time in the Writ Petition. He contends that the Controlling Authority and the Appellate Authority extenso referred to the material on record and justified in directing the KSRTC to pay the gratuity.

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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Counsel therefore, submits that an appropriate order may be passed.

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8. The orders passed by the Gratuity Authorities are furnished and the same are marked as Annexure ‘C’ and ‘E.’ A perusal of the same reflects that the Corporation had indeed taken the contention about the non-applicability of the Memorandum of Settlement dated 03.04.1996 and the applicability of the Memorandum of Settlement dated:17.04.1999. Despite the objection, the Gratuity Authorities erroneously went ahead with the matter and calculated the gratuity in terms of the regulations of the Corporation. Moreover, the third respondent was an erstwhile employee of the KIMCO and a separate agreement was entered into especially in the matter of payment of gratuity and it was agreed that they would be paid the gratuity in terms of Payment of Gratuity Act. It is pivotal to note that the same is also supported by the decision of this Court in W.P.No.19477/2003. As already noted above, the services of the third respondent was absorbed into the Corporation because of the merger, he is bound by the settlement dated 17.04.1999. The determination of the gratuity by the

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NC: 2025:KHC:6021 WP No. 12297 of 2024

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Controlling Authority is contrary to the Memorandum of Settlement dated:17.04.1999 and also ruling of this Court. I may venture to say that the orders of the gratuity authorities failed to have regard to the relevant considerations and disregarded relevant matters. Therefore, I deem it proper to set aside the orders of the gratuity authorities by issuing a Writ of Certiorari.

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9. A Writ of certiorari is issued. The order passed by the second respondent in No.LOB-2/PGA/CR/57/2020-21 dated: 16.11.2022 vide Annexure-C and the order passed first respondent in case No.ALCB-2/PGA/CR(A)/CR/27/2022-23 dated: 14.09.2023 vide Annexure-E are quashed.

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10. Resultantly, the Writ Petition is allowed .

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Because of disposal of the Writ Petition, the Gratuity

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Authorities are directed to release the amount in deposit, if any in favor of the Corporation after due identification.

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SD/(JYOTI MULIMANI) JUDGE

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MRP List No.: 2 Sl No.: 1

Karnataka State Road Transport Corporation v. the Assistant Labour Commissioner and the Appellate Authority

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Karnataka State Road Transport Corporation v. the Assistant Labour Commissioner and the Appellate Authority

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