Calcutta High Court (Appellete Side)And Rural Development Bank Ltd vs The State Of West Bengal & Anr on 25 September, 2023Form No.J(2)\n\n\n                 IN THE HIGH COURT AT CALCUTTA\n                CONSTITUTIONAL WRIT JURISDICTION\n                         APPELLATE SIDE\nPresent:\n\nThe Hon'ble Justice Raja Basu Chowdhury\n\n\n                             WPA 23522 of 2022\n\n                     Burdwan Co-operative Agriculture\n                     And Rural Development Bank Ltd.\n                                   Versus\n                      The State of West Bengal & Anr.\n\n\nFor the petitioner       :     Mr. Saikat Banerjee\n                               Mr. Arnab Ray\n\nFor the State            :     Mr. Jayanta Samanta\n                               Mr. Manas Kumar Sadhu\n\nFor the respondent       :     Mr. Indranath Mitra\nNo. 4                          Mr. Saukha Biswas\n\nHeard on                 :     25th August, 2023.\n\nJudgment on              :     25th September, 2023.\n\n\nRaja Basu Chowdhury, J:\n\n\n1. The present writ application has been filed, inter alia, challenging\n\n   the order passed by the Appellate Authority under thePayment of\n\n   Gratuity Act, 1972(hereinafter referred to as the "said Act").\n\n\n2. The petitioner claims that the petitioner is a Primary Co-operative\n\n   Agriculture and Rural Development Bank which is having co-\n\n   operative credit structure entity within the meaning ofSection\n                                    2134B(1)(a)of the West Bengal Co-operative Societies Act, 2006.\n\n  The respondent no.4 was employed by the petitioner on 4th May,\n\n  1979. After serving the petitioner for approximately 33 years 8\n\n  months and 27 days, the respondent no.4 retired from service as\n\n  Head Assistant and Loan Officer on 31st January, 2013.\n\n\n3. It is the petitioner's case that immediately upon the respondent\n\n  no.4 having retired, the petitioner had disbursed the retiral\n\n  benefits to the respondent no.4, which, inter alia, included\n\n  gratuity amounting to Rs.6,00,000/-.\n\n\n4. Despite the respondent no.4, having accepted the said amount,\n\n  on the following day, the respondent no.4 had applied before the\n\n  petitioner for disbursal of the balance amount, inter alia,\n\n  complaining short payment.\n\n\n5. By a communication, in writing, dated 11 th February, 2013, the\n\n  petitioner while rejecting the respondent no.4's claim had clarified\n\n  that the payment of gratuity was made as per the guidelines\n\n  provided in the agreement governing the parties.\n\n\n6. Feeling aggrieved, the respondent no.4 had filed a writ petition\n\n  before this Hon'ble Court which was registered as WP No.5916 (W)\n\n  of 2013.\n\n\n7. By an order dated 2nd April, 2013, a Co-ordinate Bench of this\n\n  Hon'ble Court while granting liberty to the respondent no.4 to\n                                    3\n\n\n\n\n  accept all payments made by the petitioner without prejudice to\n\n  his rights and contentions, directed both the respondent no.4 and\n\n  the petitioner to approach the Competent Authority under the\n\n  provisions of the said Act.\n\n\n8. The petitioner, however, did not accept the said order and had\n\n  filed an intra-court appeal, which was registered as MAT 1330 of\n\n  2013.\n\n\n9. In the interregnum, the respondent no.4 had, however, in\n\n  compliance of the directions passed by the Co-ordinate Bench of\n\n  this Court had applied before the Controlling Authority under the\n\n  said Act for determination of the amount payable to him towards\n\n  gratuity. The said proceeding was contested by the petitioner. By\n\n  an order dated 21st November, 2013, the Controlling Authority\n\n  after determining the quantum of gratuity payable to the\n\n  respondent no.4 by a notice in Form 'R' of the even date, had\n\n  called upon the petitioner to make payment of the differential\n\n  amount of gratuity to the respondent no.4, along with interest.\n\n\n10.   Challenging the aforesaid order, an appeal was filed by the\n\n  petitioner before the Appellate Authority within the meaning of\n\n  the said Act, by complying with the provisions as regards the\n\n  mandatory pre-deposit for filing of the appeal.\n\n\n11.   In the meantime, by an order dated 5th October, 2015, the\n\n  Hon'ble Division Bench of this Court was, inter alia, pleased to set\n                                    4\n\n\n\n\n  aside the order passed by the Co-ordinate Bench and remanded\n\n  the matter with a request to expeditiously dispose of the same, if\n\n  possible.\n\n\n12.   Pursuant to the aforesaid direction, a Co-ordinate Bench of\n\n  this Court was, inter alia, pleased to hear out the said matter and\n\n  by an order dated 11th March, 2019 was pleased to dismiss the\n\n  said writ petition.\n\n\n13.   Being aggrieved, the respondent no.4 had filed an intra-court\n\n  appeal, being MAT 534 of 2019. By an order dated 3rd July, 2019,\n\n  the Division Bench of this Hon'ble Court while granting liberty to\n\n  the respondent no.4 to approach the Controlling Authority within\n\n  the meaning of the said Act, disposed of the said appeal.\n\n\n14.   Pursuant to the aforesaid order, the respondent no.4 once\n\n  again applied in Form 'N' before the Controlling Authority under\n\n  the said Act. Such application was filed on 30 th July, 2019.\n\n\n15.   The aforesaid proceeding was once again contested by the\n\n  petitioner whereupon by an order dated 7th September, 2021, the\n\n  Controlling Authority was pleased to determine the gratuity\n\n  payable in favour of the respondent no.4 and by a notice in Form\n\n  'R' of even date had called upon the petitioner to make payment of\n\n  the balance amount towards unpaid gratuity with interest.\n                                     5\n\n\n\n\n16.   Being aggrieved, an appeal was filed before the Appellate\n\n  Authority by complying with the provisions as regards mandatory\n\n  pre-deposit. The Appellate Authority, by an order dated 31 st\n\n  August, 2022, which is impugned in the present writ application,\n\n  was, inter alia, pleased to dispose of the said appeal by observing\n\n  that the matter had been rightly decided by the Controlling\n\n  Authority and by such order also directed the Controlling\n\n  Authority to initiate the process of recovery from the appellant\n\n  taking into account the interest due on principal amount, which\n\n  has accrued, by making a fresh calculation.\n\n\n17.   By an order dated 21st November, 2022, this Hon'ble Court\n\n  while entertaining the said petition and while recording that a\n\n  sum of Rs.3,48,620/- and a sum of Rs.2,99,527/- had been\n\n  deposited by the petitioner with the Controlling Authority,\n\n  restrained the respondent no.4 from realizing the balance amount\n\n  till disposal of the present writ application.\n\n\n18.   Mr. Ray, led by Mr. Banerjee, learned advocate appearing in\n\n  support of the aforesaid application, by placing reliance on the\n\n  provisions ofSection 5of the said Act submits that the petitioner\n\n  is competent to enter into an agreement or contract with its\n\n  employees with regard to payment of gratuity. By drawing\n\n  attention of this Court to an agreement dated 30th November,\n\n  2011, it is submitted that the respondent no.4 had been paid\n                                   6\n\n\n\n\n  gratuity in terms of the agreement, executed between the\n\n  petitioner on one hand and the employees' association on the\n\n  other. The respondent no.4 is a signatory to the said agreement in\n\n  his capacity as the Secretary of the Co-operative Employees'\n\n  Association. The respondent no.4 cannot be permitted to retract\n\n  from the said agreement. The amount of gratuity had been\n\n  computed on the basis of the said agreement, which is not only\n\n  binding on the respondent no.4 but other employees of the\n\n  petitioner as well.\n\n\n19.   By placing reliance on the judgment delivered by the Hon'ble\n\n  Supreme Court in the case of Beed District Central Coop. Bank\n\n  Ltd. v. State of Maharashtra and Others, reported in (2006) 8\n\n  SCC 514, he submits that the employer has a right to make\n\n  payment of gratuity in terms of the scheme/agreement entered\n\n  into by and between the employees and the employer.\n\n\n20.   By placing reliance on another judgment delivered by the\n\n  Hon'ble Supreme Court in the case of High Court of Punjab &\n\n  Haryana v. Jagdev Singh, reported in (2016) 14 SCC 267, he\n\n  submits that the petitioner having accepted the gratuity in terms\n\n  of the agreement to which he is the signatory, cannot be\n\n  permitted to disown the said agreement. The Hon'ble Supreme\n\n  Court in paragraph 11 of the judgement has recognized that once,\n\n  an officer furnished an undertaking while opting for revised pay\n                                      7\n\n\n\n\n  scale, he is bound by such undertaking. In this case, the\n\n  respondent no.4, having accepted the agreement and having\n\n  opted out the provisions of thePayment of Gratuity Act, is bound\n\n  by    the   said   agreement.   This   aspect   was   not   taken into\n\n  consideration either by the Controlling Authority or by the\n\n  Appellate Authority. The maximum permissible gratuity, payable\n\n  to the respondent no.4, under the said agreement had already\n\n  been disbursed. No further amount is payable to the respondent\n\n  no.4.\n\n\n21.    In the given facts, this Court may be pleased to quash the\n\n  orders passed both by the Controlling Authority as also by the\n\n  Appellate Authority and direct the refund of the amount lying in\n\n  deposit with the Controlling Authority.\n\n\n22.    Per contra, Mr. Mitra, learned advocate representing the\n\n  respondent no.4, has taken this Court through the provisions of\n\n  theWest Bengal Cooperative Societies Act, 2006, (hereinafter\n\n  referred to as the "2006 Act"), and the Rules framed thereunder\n\n  and submits thatSection 84of the 2006 Act, mandates payment\n\n  of gratuity to be made to the employees of the cooperative\n\n  societies in accordance with the provisions of thePayment of\n\n  Gratuity Act, 1972.\n\n\n23.    By referring to Section 157 of the said 2006 Act, he submits\n\n  that the statute empowers the State Government to make rules.\n                                    8\n\n\n\n\n  In terms of the powers conferred by Section 157 of the 2006 Act,\n\n  rules have been framed. By placing reliance on Rule 106(19)(2) of\n\n  the West Bengal Cooperative Societies Rules, 2011 (hereinafter\n\n  referred to as the "said Rules"), it is submitted that the said Rule\n\n  106(19)(2) categorically provides that the employees of the\n\n  Cooperative Society shall be eligible for payment of gratuity as per\n\n  the provisions of thePayment of Gratuity Act, 1972.\n\n\n24.   By referring to the said agreement dated 30th November, 2011,\n\n  it is submitted that the said agreement is not a settlement within\n\n  the meaning ofSection 2(p)of the Industrial Disputes Act, 1947\n\n  and is not binding on the workmen since, the said agreement has\n\n  not been arrived at as per the provisions set forth inSection 2(p)of the Industrial Disputes Act, 1947.\n\n\n25.   In the factual backdrop as aforesaid, it is submitted that there\n\n  is no irregularity on the part of the respondent no.4 in claiming\n\n  gratuity in terms of the provisions contained in thePayment of\n\n  Gratuity Act, or in the Controlling Authority and the Appellate\n\n  Authority directing the disbursal of the gratuity in terms of the\n\n  provisions contained in the said Act.\n\n\n26.   While distinguishing the judgment delivered by the Hon'ble\n\n  Supreme Court in the case of Beed District Central Coop. Bank\n\n  Ltd. (supra), it is submitted that the Hon'ble Supreme Court in\n\n  the said case was considering a scheme whereby the employees of\n                                    9\n\n\n\n\n  the concerned cooperative bank were required to be paid gratuity.\n\n  In this case, there is no such scheme, excepting the agreement\n\n  providing for an upper limit. The aforesaid agreement was entered\n\n  into on 30th November, 2011 when admittedly the upper limit of\n\n  the payment of gratuity as per the provisions of the said Act had\n\n  already been amended so as to raise it to Rs.10,00,000/-. He says\n\n  that the aforesaid agreement is contrary to the provisions of the\n\n  said Act as alsoSection 23of the Indian Contract Act, 1872 and\n\n  is not lawfully enforceable, in the light of the provisions contained\n\n  in the said Act. The orders impugned do not call for interference\n\n  and the writ petition deserve to be dismissed with cost.\n\n\n27.   In reply, Mr. Ray submits that since, the petitioner is a\n\n  primary cooperative credit structure entity, Rule 106 of the said\n\n  Rules is not applicable to the petitioner. By referring to the\n\n  provisions of theIndustrial Disputes Act, 1947, it is submitted\n\n  that the agreement may not partake the character of a settlement\n\n  within the meaning ofSection 2(p)of the saidIndustrial Disputes\n\n  Act, 1947, however the same can certainly be enforced by and\n\n  between the parties.\n\n\n28.   Heard the learned advocates appearing for the respective\n\n  parties and considered the materials on record. In this case, it is\n\n  noticed that the admitted facts are that the respondent no.4 was\n\n  employed by the petitioner on 4th May, 1979. The said respondent\n                                     10\n\n\n\n\n  after serving the petitioner for approximately 33 years 8 months\n\n  and 27 days, retired from service as Head Assistant and Loan\n\n  Officer on 31st January, 2013. Immediately on his retirement, the\n\n  petitioner   disbursed   the   retiral   benefits   in   favour   of   the\n\n  respondent no.4, which, inter alia, included gratuity amounting to\n\n  Rs.6,00,000/-. Despite the respondent no.4 accepting the said\n\n  amount, on the following day the respondent no.4 applied before\n\n  the petitioner for disbursal of the balance amount, inter alia,\n\n  complaining short payment. By communication in writing dated\n\n  11th February, 2013 the petitioner while rejecting the respondent\n\n  no.4's claim had clarified that the payment of gratuity was made\n\n  as per the guidelines provided in the said agreement. Feeling\n\n  aggrieved, a writ application was filed and ultimately by an order\n\n  passed by the Division Bench of this Hon'ble Court on 3rd July,\n\n  2019, the respondent no.4 was granted liberty to approach the\n\n  Controlling Authority within the meaning of the said Act.\n\n\n29.   Pursuant to the aforesaid order, the respondent no.4 had\n\n  applied in Form 'N' before the Controlling Authority under the\n\n  said Act on 30th July, 2019. On contest the Controlling Authority\n\n  by an order dated 7th September, 2021 was pleased to determine\n\n  the gratuity in favour of the respondent no.4 and by a notice of\n\n  even date in Form 'R' had called upon the petitioner to make\n\n  payment of the balance amount towards unpaid gratuity with\n\n  interest.\n                                      11\n\n\n\n\n30.   Being aggrieved although an appeal was filed under the said\n\n  Act, by an order dated 31st August, 2022, which is impugned in\n\n  the writ application, the Appellate Authority had dismissed the\n\n  said appeal. By placing reliance on the provisions ofSection 4(5)of the said Act, it is submitted that the employer has a legal right\n\n  to enter into an agreement with the employees for payment of\n\n  gratuity. However, a perusal of theSection 4(5)of the said Act\n\n  would make the position clear. To morefully appreciate the same,\n\n  the aforesaid Section is extracted herein below:\n\n\n                "4. Payment of Gratuity.- (1) Gratuity shall be\n                payable to an employee on the termination of his\n                employment after he has rendered continuous service\n                for not less than five years,-\n\n                (a) on his superannuation, or\n\n                (b) on his retirement or resignation, or\n\n                (c) on his death or disablement due to accident or\n                disease:\n\n                Provided that the completion of continuous service of\n                five   years shall    not   be   necessary   where   the\n                termination of the employment of any employee is\n                due to death or disablement:\n\n                1[Provided   further that in case of death of the\n                employee, gratuity payable to him shall be paid to his\n                nominee or, if no nomination has been made, to his\n                heirs, and where any such nominees or heirs is\n                minor, the share of such minor, shall be deposited\n                                             12\n\n\n\n\n               with the Controlling Authority who shall invest the\n               same for the benefit of such minor in such bank or\n               other financial institution, as may be prescribed, until\n               such minor attains majority].\n\n               ....................................................(5) Nothing in this section shall affect the right\n               of an employee to receive better terms of\n               gratuity under any award or agreement or\n               contract with the employer....................................................."31.   As would appear from the above, the right is not with the\n\n  employer but with the employee to receive better terms of gratuity\n\n  under any award or agreement or contract with the employer.\n\n  However, a perusal of the memorandum of settlement dated 28th\n\n  November, 2007 and the subsequent settlement dated 30th\n\n  November, 2011 in no uncertain terms provides the upper limit\n\n  for payment of gratuity to be Rs.6,00,000/-. Incidentally, when\n\n  the aforesaid agreement was entered into, in terms of the said\n\n  Act, the upper limit for payment of gratuity was Rs.10,00,000/-.\n\n  Although, by placing reliance on the judgment delivered by the\n\n  Hon'ble Supreme Court in the case of Beed district Central\n\n  Coop. Bank Ltd. (supra), it has been submitted that the\n\n  employer has a right to make payment of gratuity in terms of the\n\n  scheme/agreement, I am, however, unable to subscribe to the\n\n  reasoning given by the petitioner that notwithstanding the13Payment of Gratuity Actproviding for upper limit of gratuity to be\n\n  Rs.10,00,000/-, the petitioner could have entered into any\n\n  settlement, dehors the provisions of the said Act, so as to reduce\n\n  the upper limit for payment gratuity to its employees. The\n\n  aforesaid agreement, in my view, is contrary toSection 4(5)of the\n\n  said Act and cannot override the provisions of the said Act. The\n\n  judgment delivered in the case of Beed district Central Coop.\n\n  Bank Ltd, (supra) cannot assist the petitioner as in the said case\n\n  the Hon'ble Supreme Court was concerned, as has been rightly\n\n  pointed out by Mr. Mitra, with regard to implementation of a\n\n  particular scheme for payment of gratuity. In the settlement/\n\n  agreement at hand, there is no such scheme, only the upper limit\n\n  for payment of gratuity has been provided. The said agreement,\n\n  thus, cannot override the said Act. The only other point\n\n  canvassed by the petitioner is that although, the aforesaid\n\n  agreement might not partake the character of a settlement within\n\n  the meaning ofSection 2(p)of the Industrial Disputes Act, 1947,\n\n  yet the said agreement is binding insofar as the respondent no.4\n\n  is concerned, since, the respondent no.4 is signatory to the same.32.   I am, however, unable to accept the aforesaid contention, in as\n\n  much as the aforesaid settlement/agreement only provides for a\n\n  upper limit for payment of gratuity. The said agreement is directly\n\n  contrary to and is in conflict withSection 4(5)of the said Act. The\n\n  said agreement does not provide for any better terms, on the14contrary the same provides for inferior terms than provided for in\n\n      the said Act. The case of Jagdev Singh (supra), thus, does not\n\n      assist the petitioner. The same is clearly distinguishable on facts\n\n      and cannot assist the petitioner.33.      Having regard to the aforesaid, I am of the view that the\n\n      petitioner cannot be permitted to deny payment of gratuity in\n\n      terms of the provisions contained in the said Act, by citing in the\n\n      aforesaid agreement/settlement, which also is not in consonance\n\n      with the provisions ofSection 4(5)of the said Act. Independent of\n\n      the provisions of the 2006 Act, gratuity is payable as per the said\n\n      Act.34.      In the facts as noted hereinabove, no case for interference has\n\n      been made out. The writ petition fails and the same is accordingly\n\n      dismissed.35.      There shall, however, be no order as to costs.36.      Urgent photostat certified copy of this order, if applied for, be\n\n      given to the parties upon compliance of necessary formalities.(Raja Basu Chowdhury, J.)\n\n\nsb.