Writ Petition No. 14031 of 2015 · The High Court
Case Details
- 1 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 14031 OF 2015 (L-KSRTC) C/W WRIT PETITION NO. 46787 OF 2014 (L-PG) IN WP No. 14031/2015 BETWEEN: V.KRISHNAPPA SINCE DECEASED BY LRS, K.SHESHADRI, S/O LATE V.KRISHNAPPA (DECEASED L.R.) AGED ABOUT 42 YEARS, R/AT HILLALIGE GRAMA, CHANDAPURA POST, ANEKAL TALUK, BANGALORE-560 081. (BY SRI. SOMASUNDAR RAO, ADVOCATE FOR SRI. LAKSHMAN RAO.,ADVOCATE) …PETITIONER AND: 1. THE DIVISIONAL CONTROLLER B.M.T.C. SOUTH DIVISION, DOMLUR BANGALORE - 560 071. 2. THE ASST. LABOUR COMMISSIONER & GRATUITY CONTROLLING AUTHORITY, DIVISION-4, KARMIKA BHAVAN, Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 BANNERGHATTA ROAD, BANGALORE-560 029. 3. THE DEPUTY LABOUR COMMISSIONER & APPELLATE AUTHORITY UNDER THE P.G.ACT 1972 REGION-2, KARMIKA BHAVAN, BANNERGHATTA ROAD, BANGALORE-560 029. …RESPONDENTS (BY SMT. H R RENUKA, ADVOCATE FOR R1; MS. RASHMI RAO, HCGP FOR R2 & R3) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO- QUASH THE IMPUGNED ORDER PASSED BY THE R-3 DATED 17.6.2014 VIDE ANNX-A AND RESTORE ORDER PASSED BY THE R-2 UNDER THE P.G. ACT PASSED VIDE DATED 30.4.2013 VIDE ANNX-C; DIRECT THE R-1 TO RELEASE THE DIFFERENCE OF GRATUITY A SUM OF RS.1,62,636/- TO THE PETITIONER FORTHWITH. IN WP NO. 46787/2014 BETWEEN: BANGALORE METROPOLITAN TRANSPORT CORPORATION, CENTRAL OFFICE,K H ROAD, SHANTHINAGAR,BANGALORE-560027 BY ITS DIVISIONAL CONTROLLER, BMTC SOUTH DIVISION, BANASHANKARI ,BANGALORE REPRESENTED BY ITS - 3 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 CHIEF LAW OFFICER.
Legal Reasoning
(BY SMT. H R RENUKA .,ADVOCATE) ...PETITIONER AND: 1. THE DEPUTY LABOUR COMMISSIONER AND THE APPELLATE AUTHORITY, UNDER THE PAYMENT OF GRATUITY ACT REGION-II,KARMEEKA BHAVAN BANERGHATTA ROAD, BANGALORE-560 029. 2. THE ASSISTANT LABOUR COMMISSIONER AND CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT DIVISION-4,KARMEEKA BHAVAN BANNERGHATTA ROAD,BANGALORE-560 029. 3. V KRISHNAPPA S/O VENKATANARAYANAPPA, SINCE DECEASED BY LRS 1. SESHADRI S/O V KRISHNAPPA ADULT 2. MURALI S/O V. KRISHNAPPA, ADULT R/O HELLALAGI VILLAGE CHANDRAPURA POST ANEKAL TALUK BENGALURU -560 081. …RESPONDENTS (BY MS. RASHMI RAO., HCGP FOR R1 & R2; SRI. SOMASUNDAR RAO, ADVOCATE FOR SRI. LAKSHMAN RAO, ADVOCATE FOR R3) - 4 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTIUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED DATED 30.4.2013 (ANNEX-B) PASSED BY THE R-2; QUASH THE ORDER DATED 17.6.2014 (ANNEX-C) PASSED BY THE R-1. THESE PETITIONS, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER These petitions are filed calling in question the orders of the Controlling and the Appellate Authorities under the provisions of the Payment of Gratuity Act, 1972 [for short, the Gratuity Act]. The Employer - the Bangalore Metropolitan Transport Corporation [the Transport Corporation] - has filed the writ petition in W.P. No.46787/2014, and the writ petition by the deceased Employee, who is now represented by his two sons as his legal heirs, is in W.P.No.14031/2015. - 5 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 2. The Controlling Authority, on an application by the deceased employee in No.114/2011-12, has directed the Transport Corporation to pay a total sum of Rs.1,62,636/- as gratuity payable to the petitioner within thirty days. The Controlling authority has also directed the Transport Corporation, if it fails to deposit the gratuity as aforesaid, to deposit such an amount along with interest at 10% for the delayed period. The Controlling Authority's order is dated 30.04.2013, and both the Transport Corporation and the deceased employee have filed their respective appeals as against the Controlling Authority's order dated 30.04.2013. 3. The Transport Corporation’s appeal is in No.107/2013-14, and the deceased employee’s appeal is in No.133/2013-14. The Transport Corporation has deposited a total sum of Rs.1,62,636/- simultaneously while presenting its - 6 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 appeal. The Appellate Authority, by its impugned order dated 17.06.2014, has modified the Controlling Authority's order directing the Transport Corporation to pay a sum of Rs.68,364/- for the period between the date of the deceased Employee's application under Section 7 of the Gratuity Act [14.12.2011] and the date of deposit [14.08.2013]. After the Appellate Authority's order, the Controlling Authority has retained with itself Rs.75,199/- and has refunded a sum of Rs.87,437/- to the Transport Corporation. 4. The material facts preceding these orders are that the deceased Employee has applied for voluntary retirement, which is accepted by the Transport Corporation on 04.12.2006 with effect from 01.12.2005. Thereafter, the Transport Corporation has paid a sum of Rs.24,768/- to the deceased Employee towards gratuity deducting a sum of Rs.32,406/-. This deduction is towards Festival Allowance [Rs.700/-], URD [Rs.3,706/-] and the - 7 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 outstanding towards the loan availed by the deceased Employee from the Syndicate Bank to buy a TVS vehicle [Rs.28,000/-]. 5. The Transport Corporation has not applied under Section 7 of the Gratuity Act for over five years seeking adjudication of its liability, and it is only after such lapse of time, the Transport Corporation has applied with the Controlling Authority. The Controlling Authority, by its order dated 30.04.2013 [the first impugned order], has allowed this application computing the gratuity taking the Basic Pay as also the Dearness Allowance and multiplying it by the number of years of service put in by the deceased Employee. 6. The controversy presented before the Appellate Authority is whether the Controlling Authority could have taken the Basic Pay and Dearness Allowance given the undisputed position - 8 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 that the Transport Corporation, after computing gratuity under its Gratuity Regulations and the Gratuity Act, must pay such amount which is beneficial to the employee. The Appellate Authority by the next impugned Order dated 17.6.2014 [the second impugned order], because payment of gratuity in terms of the Gratuity Act will be beneficial, has computed such amount taking both the Basic Pay and the Dearness Allowance for 15 days of every completed year of service as against the Basic Pay and Dearness Allowance for the entire month as is considered by the Controlling Authority. 7. The controversy as regards the Dearness payable either at fifteen days for every completed year of service or at thirty days for every completed year of service rests with the Appellate Authority's order. Ms.H.R.Renuka, the learned counsel for the Transport Corporation, does not dispute that it would be within this Court's discretion to pass just orders - 9 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 on the rate of interest in the facts of the case and the learned counsel also further clarifies that she will not contest the deceased Employee's case for payment of gratuity effective from 01.12.2005. As such, in the present proceedings the dispute is confined to the following two questions: [a] Whether the Appellate Authority should have computed the gratuity allowing for deduction of Rs.28,000/ [towards Festival Allowance [Rs.700/-], URD and the outstanding towards the loan availed from the Syndicate Bank, and [b] Whether the Appellate Authority should have granted interest at 10% for the period between 04.01.2006 and the date of deposit. 8. Ms. H R Renuka inviting this Court's attention to the question that is formulated by this Court while granting the interim order on 02.12.2014, submits that the Transport Corporation has placed on record a copy of the affidavit sworn to - 10 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 by the deceased employee while availing the vehicle loan from Syndicate Bank authorising the Transport Corporation to deduct EMI and also the proof of the final payment for closure of the loan [Ex.R-19] enclosing a cheque for Rs.8,94,915/-. The learned counsel emphasises this amount includes a sum of Rs.28,000/- deducted towards closure of the loan and other heads and that the Bank Statement which shows such an amount has been received by Syndicate Bank is produced. 9. Ms. H R Renuka also argues that Mr. Venka Reddy, the Establishment Superintendent who is examined as RW.1 in the proceedings before the Controlling Authority, has categorically spoken about such deduction, but the Appellate Authority has not considered this aspect though the Controlling Authority has perfunctorily observed that such deduction would not be permissible under Section 13 of the Gratuity Act. - 11 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 10. Mr. Somasundar Rao, the learned counsel who appears for the legal representatives of the deceased Employee, submits that the Transport Corporation's witness has only spoken about the deduction without mentioning the details of the payments made, and the learned Counsel also relies upon the Circular dated 25.04.2013 to contend that the instructions are not to deduct any amount from the gratuity amount. Insofar as the claim for interest, Mr. Somasundar Rao submits that every employer, who fails to pay gratuity amount within 30 days as contemplated under Section 7[3] of the Gratuity Act, must pay simple interest at the rate not exceeding the notified rate, but the Appellate Authority has granted interest only at 6% per annum. 11. Indeed, the Gratuity Act contemplates forfeiture under certain circumstances while stipulating that no amount payable under this Act shall be liable to be attached in execution of any - 12 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 decree or order. However, there is no express prohibition under the Gratuity Act for deduction. The legal representatives of the deceased Employee cannot rely upon the Circular dated 25.04.2013 as it is issued in the year 2013 and the deductions in the present case is based on an affidavit which is filed by the deceased Employee much earlier as part of his submissions for Voluntary Retirement Scheme. 12. Therefore, the next question is: whether the Transport Corporation is justified in deducting Rs.28,000/- in terms of this affidavit. In answering this question, this Court must observe that Exhibits R-18 and R-19 clearly bear out that a sum of Rs.28,000/- which is deducted from the gratuity amount payable has been deposited with M/s Syndicate Bank as part of a total sum of Rs.8,94,915/- for which the cheque dated 29.01.2007 is issued. The Corporation's witness has - 13 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 specifically spoken about this deduction and there is no cross-examination in this regard. 13. If the Act does not expressly prohibit deduction, and if the policy decision against deduction is taken after the transaction, and if the deceased Employee in filing the affidavit has facilitated such deduction towards settlement of the loan availed by him from out of the gratuity, this Court is of the considered view that the Appellate Authority should have considered these circumstances and allowed such deduction while computing the amount. This Court may also refer to a decision of the Division Bench in Writ Appeal No. 1681 of 2009 wherein it is held as follows. "The only grievance of the appellant before this Court is that in respect of the gratuity, no amount could be adjusted towards dues payable to the Management admittedly when the festival advance was received by the appellant and that he had also borrowed loans from the society based on the undertaking - 14 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 given by him and if such payments are to be made to KSRTC Society and Bharath Co- operative Society, if the learned Single Judge has ordered to adjust the same, this Court cannot find fault with the same." 14. As such, this Court opines that there must be interference both at the instance of the Transport Corporation and the legal representatives of the deceased Employee. The gratuity must be computed as is done by the Appellate Authority, subject to deduction of Rs.28,000/-, and the legal representatives of the deceased Employee must be allowed interest at 10% p.a. for the period between the date of application and the date of deposit. The Controlling Authority must re-compute and disburse the amount of Rs.75,199/- held in deposit in the light of this Court's finding on the deduction of Rs.28,000/- and interest at 10% for the aforesaid period. In the light of the afore, the following: - 15 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014
Decision
ORDER [a] The petitions are allowed declaring that the Transport Corporation is justified in deducting Rs.28,000/- from the gratuity amount payable and that the legal representatives of the deceased employee are entitled to interest at the rate of 10% p.a. for the period between the date of the application and the date of deposit. [b] The Controlling Authority is called upon to compute the legal representatives’ entitlement accordingly and disburse the amount held subject to this calculation. If there is any shortfall even after taking into the account the interest that would be earned with the amount being deposited, the Transport Corporation shall be called upon to make good such shortfall. - 16 - NC: 2025:KHC:15308 WP No. 14031 of 2015 C/W WP No. 46787 of 2014 [c] On the other hand if there is surplus, the same shall be paid to the Transport Corporation. [d] The legal representatives of the deceased employee are reserved with liberty to file a certified copy of this order with the Controlling Authority within four [4] weeks from the date of receipt thereof for due compliance. Sd/- (B M SHYAM PRASAD) JUDGE NV List No.: 1 Sl No.: 72