Allowed

The M.D., Kaic Ltd. v. C.S.Krishnan

Kerala HC3 Oct 2016WP(C)/12012/2009

Case brief

AI extract

What is this about?

The Court examined the Petitioner's writ petition challenging an order directing payment of interest for delayed gratuity. The Court held that while the Petitioner should pay interest based on seniority, it must implement the order. Proceedings for recovery were stayed for six months to allow payment.

What did the court decide?

Proceedings for recovery of interest (Ext.P5 and P7) stayed for 6 months for the respondents 3-7.

The M.D., Kaic Ltd. Vs C.S.Krishnan — Pension and Retirement Benefits | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE SMT. JUSTICE P.V.ASHA

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MONDAY, THE 3RD DAY OF OCTOBER 2016/11TH ASWINA, 1938 WP(C).No. 12012 of 2009 (V) ---------------------------PETITIONER(S): -------------

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THE MANAGING DIRECTOR, KERALA AGRO INDUSTRIES CORPORATION LIMITED, KISSAN JYOTHI, FORT, THIRUVANANTHAPURAM.

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BY ADVS.SRI.E.K.NANDAKUMAR SRI.ANIL D. NAIR SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI

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RESPONDENT(S):

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1. C.S.KRISHNAN, `KRISHNA KRIPA', 1/626, OLD KALPATHY, PALAKKAD-3.(DIED)

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2. THE CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT, (DISTRICT LABOUR, OFFICER), PALAKKAD.

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*ADDL.R3 TO R7 IMPLEADED :

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3. V.R.VASANTHA, AGED 58 YEARS, W/O.LATE C.S.KRISHNAN,SREEKRISHNA KRIPA, 1/626, OLD KALPATY, PALAKKAD II VILLAGE, PALAKKAD.

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4. LAKSHMI K., AGED 33 YEARS, D/O. LATE C.S.KRISHNAN,SREEKRISHNA KRIPA, 1/626, OLD KALPATHY, PALAKKAD II VILLAGE, PALAKKAD.

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5. VEENA K., AGED 30 YEARS,D/O. LATE C.S.KRISHNAN, SREEKRISHNA KRIPA, 1/626, OLD KALPATHY, PALAKKAD II VILLAGE, PALAKKAD

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6. GANAKRISHNAN, AGED 28 YEARS, D/O. LATE C.S.KRISHNAN,SREEKRISHNA KRIPA, 1/626, OLD KALPATHY, PALAKKAD II VILLAGE, PALAKKAD

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WP(C).No. 12012 of 2009 (V)

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7. LAKSHMINARAYAN, AGED 24 YEARS, S/O. LATE C.S.KRISHNAN, SREEKRISHNA KRIPA, 1/626. OLD KALPATHY, PALAKKAD II VILLAGE, PALAKKAD.

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*ADDL R3 TO R7 ARE IMPLEADED AS PER ORDER DT 29/5/2009 IN IA 6030/2009.

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R2 BY GOVERNMENT PLEADER SMT.PRINCY XEVIER ADDL.R3 TO 7 BY ADV. SRI.K.P.BALAGOPAL

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 12012 of 2009 (V)

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APPENDIX

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PETITIONER'S EXHIBITS :

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P1: COPY OF THE ORDER DT 27/7/2001 ISSUED BY THE PETITIONER.

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P2: COPY OF THE APPLICATION FILED BY THE R1 DT 5/4/2005.

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P3: COPY OF THE COUNTER STATEMENT DT 11/11/2005 FILED BY THE PETITIONER WITHOUT ITS ANNEXURES.

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P4: COPY OF THE ORDER DT 29/11/2006 PASSED BY THE R2.

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P5: COPY OF THE SHOW CAUSE NOTICE DT 18/11/2008 ISSUED BY THE R2 TO THE PETITIONER.

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P6: COPY OF THE REPLY T THE SHOW CAUSE NOTICE DT 31/12/2008 SUBMITTED BY THE PETITIONER.

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P7: COPY OF THE SHOW CAUSE NOTICE DT 24/2/2009 ISSUED BY THE R2 TO THE PETITIONER.

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RESPONDENT'S EXHIBITS :

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EXT R3(A): COPY OF THE LEGAL HEIRSHIP CERTIFICATE DT 6/5/2008 ISSUED BY THE TAHSILDAR, PALAKKAD TO THE PETITIONERS.

//TRUE COPY//

P.A. TO JUDGE

P.V.ASHA J.

-------------------------------------------W.P.(C) No.12012 of 2009

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---------------------------------------------

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Dated this the 3^rd day of October, 2016

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J U D G M E N T

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Petitioner filed this writ petition challenging Ext.P4 order of the second respondent directing payment of the interest to the 1^st respondent at the rate of 10% per annum from the date on which gratuity was due for payment till 25.8.2006. Petitioner also challenges Ext.P5 show cause notice issued by the District Labour Officer, intimating the proposed revenue recovery proceedings on failure to pay the interest. By Ext.P7 letter the second respondent also threatened the petitioner with revenue recovery proceedings for non payment of the interest.

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The deceased first respondent retired from service of the petitioner, on 4.3.2002 and his gratuity was paid only on 25.04.2006. By Ext.P4 order dated 29.11.2006 in G.C.No. 77/2006, the application filed by the 1^st respondent was allowed by the second respondent directing payment of interest at the rate of 10% per annum for the delayed payment, which is admissible under Section 7(3) of Payment of Gratuity Act.

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Petitioner challenges these orders on the ground

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that the financial conditions of the petitioner do not permit the

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W.P.(C) No.12012 of 2009

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payment of even the terminal benefits to its employees in time. It is also stated that on account of the financial stringency payment was being made in terms of the directions contained in the judgment in O.P.No.21584 of 2004 and O.P.No.23533 of 2002 after drawing a seniority list of the retired employees on the basis of date of retirement, in the order of seniority and nobody was paid interest for delayed payment. It is their further case that there are several persons who are yet to be paid even the gratuity apart from interest as in the case of the deceased 1^st respondent and there are several persons senior to the 1^st respondent who are also liable to be paid interest.

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I heard the learned Counsel for the petitioner and the learned Counsel appearing for the party respondents.

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The learned Counsel for the party respondents pointed out that the petitioner establishment continues to run even now and there is no justification in further delaying the statutory interest for the delayed payment of gratuity. It is pointed out that the 1^st respondent expired and the legal heirs got impleaded.

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It is seen that the 2^nd respondent has directed payment of statutory interest only. Further proceedings were initiated only because of the non-payment as directed in Ext.P4 order. The deceased 1^st respondent was entitled to payment of

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W.P.(C) No.12012 of 2009

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gratuity within 30 days of his retirement. If the payment is delayed, interest is payable under subsection 3 of Section 7 of the Payment of Gratuity Act, 1972. Therefore there is nothing illegal in the direction of the 2^nd respondent in Ext.P4 or in the proceedings initiated further in Exts.P5 or P7.

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Even though petitioner has stated that there are several persons who are to be paid interest in preference to the deceased 1^st respondent, the writ petition does not refer to any instance where any of such retired hands have approached the authorities under Payment of Gratuity Act in which orders are passed as in Ext.P4. Therefore even though it is fair to pay interest in the order of seniority, the petitioner has to implement the direction in Ext.P4 without further delay, when petitioner company admittedly continues to function. Petitioner cannot be absolved from the statutory liabilities especially on the face of the impugned proceedings. In case there are no funds for payment, the petitioner has to generate funds for the same to meet the statutory liabilities and to see that the matter is settled.

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Since it is pointed out that payment of the terminal benefits itself was being made after drawing the seniority list of retired hands based on date of retirement, the petitioner should have made payment after drawing a seniority list for the

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W.P.(C) No.12012 of 2009

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payment of interest also. It shall be done as expeditiously as possible as the employee is no more and the legal heirs have got impleaded. In case proceedings are thus commenced within a period of 'two months' the proceedings Exts.P5 and P7 shall be kept in abeyance for a period of 6 months. At any rate since 12 years lapsed since the retirement of the deceased and about 10 years lapsed since the order Ext.P4, 2^nd respondent, the interest as directed shall be paid to the additional respondents 3 to 7 within a period of 6 months from the date of receipt of a copy of the judgment.

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Writ petition is disposed of.

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Sd/-

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P.V.ASHA, JUDGE.

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The M.D., Kaic Ltd. v. C.S.Krishnan

Case brief

What is this about?

What did the court decide?

The M.D., Kaic Ltd. v. C.S.Krishnan

Case brief

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