SRI LAKSHMI NARAYANA CO OPERATIVE BANK LIMITED vs THE STATE OF KARNATAKA

Court
Karnataka High Court

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022







IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 28 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE H.T. NARENDRA PRASAD

WRIT PETITION NO. 12018 OF 2022 (L-PG)

BETWEEN:

SRI LAKSHMI NARAYANA
CO OPERATIVE BANK LIMITED
NO.1627/1, PARK ROAD
RAMA MOHANAPURA
BENGALURU 560 021
REP. BY ITS GENERAL MANAGER
SRI. MAHESH KUMAR B M
AGED ABOUT 39 YEARS
REGISTERED UNDER SECTION 7 OF THE MYSORE
CO-OPERATIE SOCIETIES ACT 1959.
…PETITIONER
(BY SRI. MANU D GOWDA, ADVOCATE FOR
SRI. NAGARAJ D., ADVOCATE)










AND:

1. THE STATE OF KARNATAKA
DEPARTMENT OF LABOUR
REP. BY ITS PRINCIPAL SECRETARY
M.S. BUILDING, DR. B.R. AMBEDKAR VEEDHI
BENGALURU-560 001.

2. THE ASSISTANT LABOUR
COMMISSIONER AND APPELLATE
AUTHORITY
UNDER THE PROVISIONS OF PAYMENT OF
GRATUITY ACT, BENGALUR DIVISION-1
ROOM NO. 14-15, FIRST FLOOR

Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022


KARNATAKA STATE LABOUR RESEARCH
INSTITUTE BUILDING, BAGALAKUNTE
MANJUNATHANGAR, BENGALURU-560 073.

3. THE LABOUR OFFICER AND
CONTROLLING OFFICER
UNDER THE PROVISIONS OF PAYMENT
OF GRATUITY ACT 1972
BENGALURU SUB DIVISION I
KARMIKA BHAVAN, BANNERGHATTA ROAD
BENGALURU-560 029.

4. SRI.S.N UMESH
S/O S.D NARAYANA
AGED ABOUT 54 YEARS
R/AT NO. 1722/23
TH
6 MAIN D BLOCK
ND
RAJAJINAGAR 2 STAGE
BENGALURU-560 010.
…RESPONDENTS
(BY SRI.M RAJAKUMAR, AGA FOR R1 TO R3:
SRI. K. SRINIVASA, ADVOCATE FOR R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE ORDER DATED: 07.05.2022 BEARING
NO.SAKAAABEM-1/PGA(A)/CR-12/2019-20, PASSED BY THE
R2-APPELLATE AUTHORITY, VIDE ANNEXURE-E AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE H.T. NARENDRA PRASAD



Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022


ORAL ORDER
This writ petition is filed under Articles 226 and 227
of the Constitution of India, challenging the order dated
07.05.2022 passed by the second respondent vide
Annexure-E, determining the gratuity payable at
Rs.3,49,170/- and directing the petitioner to pay the
differential amount of Rs.1,51,949/- along with interest at
10% p.a. to the fourth respondent.
2. The brief facts of the case are that the petitioner is
a Co-operative Society, carrying on banking business since
1972. The fourth respondent was an employee of the
petitioner-Bank. He resigned from service on 23.12.2015,
after having rendered 15 years and 3 months of service.
After his resignation, he filed an application under the
Payment of Gratuity Act, 1972 (for short, ‘the Act’),
seeking payment of gratuity. The Controlling Authority,
vide Annexure-D, determined the gratuity payable at
Rs.2,01,444/- and directed the petitioner to pay the
differential amount of Rs.4,223/- along with interest @
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022


10% p.a. Being aggrieved by the same, the fourth
respondent preferred an appeal before the Appellate
Authority under Section 7(7) of the Act. By the impugned
order, the Appellate Authority directed the petitioner to
pay a differential amount of Rs.1,51,949/- to the fourth
respondent along with interest @ 10% p.a.. Being
aggrieved by the said order, the petitioner is before this
Court.
3. The only grievance of the petitioner is that, as per
the bye-laws of the Society, the average monthly salary
drawn by the employee during the last year of his active
service is required to be taken into consideration for
calculating the gratuity. However, while calculating the
gratuity, the Appellate Authority has taken the gross
monthly salary of the fourth respondent as Rs.23,278/-.
4. The learned counsel for the petitioner has
produced the salary certificate pertaining to the fourth
respondent. As on the date of his resignation, he was
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
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CNR: KAHC010268032022


drawing a basic salary of Rs.17,200/- and dearness
allowance of Rs.5,590/-, totalling Rs.22,790/- per month.
Therefore, the average monthly salary drawn by the fourth
respondent has to be taken as Rs.22,790/-. However, the
Appellate Authority, while calculating the gratuity, has
taken the salary as Rs.23,278/-, which is contrary to the
material available on record. Since no material was placed
before the Appellate Authority by the petitioner to
substantiate the actual salary drawn by the fourth
respondent, the Appellate Authority proceeded to take the
gross monthly salary as Rs.23,278/-. Since the salary
certificate has now been produced along with a memo
before this Court, the average monthly salary of the fourth
respondent is required to be taken as Rs.22,790/-.
5. As per the bye-laws of the Society, every
employee who has rendered more than 10 years of
service, whether he resigns or retires from service or dies
while in service, is entitled to gratuity not exceeding one
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022


month's pay for every completed year of service,
calculated on the basis of the pay drawn by him as on the
date of resignation, retirement or death, as the case may
be.
6. In the present case, the fourth respondent has
rendered 15 years of service and his average monthly
salary was Rs.22,790/-. Accordingly, the gratuity payable
to him works out to Rs.3,41,850/- (Rs.22,790/- × 15).
Out of the said amount, the petitioner has already paid a
sum of Rs.1,59,530/-, and a further sum of Rs.37,691/-
has been deposited before the Controlling Authority.
Therefore, after deducting the aforesaid amounts from the
total gratuity payable, the balance amount of
Rs.1,44,629/- is required to be paid by the petitioner to
the fourth respondent. The impugned order is liable to be
modified to that extent.
7. Accordingly, the following order is passed:

Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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HC-KAR
NC: 2026:KHC:59921
WP No. 12018 of 2022


CNR: KAHC010268032022


ORDER
(i) The writ petition is allowed in part.
(ii) The impugned order is modified. The
petitioner is directed to pay a sum of Rs.1,44,629/-
to the fourth respondent towards the balance
gratuity payable along with interest @ 10% p.a. from
30.03.2016 till the date of deposit before the third
respondent.
(iii) The Controlling Authority is directed to
release the sum of Rs.37,691/- deposited by the
petitioner before it in favour of the fourth
respondent.
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA
(H.T. NARENDRA PRASAD)
JUDGE


CM
LIST NO.: 1 SL NO.: 23