01Facts
The fourth respondent resigned from the petitioner Bank on 23 December 2015 after 15 years and 3 months of service and sought gratuity under the Payment of Gratuity Act, 1972.
pp. 3–5The Controlling Authority determined the gratuity payable as Rs.2,01,444; on the employee’s appeal under Section 7(7), the Appellate Authority fixed it at Rs.3,49,170 and directed payment of a differential amount with interest at 10% per annum.
pp. 3–5The Bank challenged that order, principally disputing the salary used to calculate gratuity.
pp. 3–5It produced before the High Court a salary certificate showing basic salary of Rs.17,200 and dearness allowance of Rs.5,590 per month.
pp. 3–502Issues
i.1. Whether the Appellate Authority correctly determined the employee’s monthly salary for calculating gratuity.
pp. 4–5ii.2. Whether the gratuity and balance payable to the employee required modification in light of the salary certificate and the Bank’s bye-laws.
pp. 5–603Law Applied
The Court referred to the Payment of Gratuity Act, 1972, including the employee’s appeal under Section 7(7), but based its calculation on the Bank’s bye-laws.
pp. 3, 5–6Under those bye-laws, an employee with more than 10 years of service is entitled to gratuity, whether the employee resigns, retires, or dies in service, of up to one month’s pay for each completed year of service, calculated on the pay drawn at the relevant date.
pp. 3, 5–6No judicial precedents were cited.
Provisions in the judgment · 2
Mysore Co-operative Societies Act, 1959 Section 7
PAYMENT OF GRATUITY ACT, 1972 Section 7
04Reasoning
The Appellate Authority had used a monthly salary of Rs.23,278 because the Bank had not provided it with material establishing the employee’s actual salary.
pp. 4–5The Bank later produced a salary certificate showing monthly basic salary and dearness allowance totalling Rs.22,790, which the Court accepted as the relevant salary.
pp. 4–5Applying the bye-laws and counting 15 completed years of service, the Court calculated gratuity at Rs.3,41,850 (Rs.22,790 × 15).
pp. 5–6After deducting Rs.1,59,530 already paid and Rs.37,691 deposited with the Controlling Authority, the balance was Rs.1,44,629.
pp. 5–605Holding
The writ petition was allowed in part, and the Appellate Authority’s order was modified.
p. 7The Bank was directed to pay the employee Rs.1,44,629 with interest at 10% per annum from 30 March 2016 until deposit before the Controlling Authority.
p. 7The Controlling Authority was directed to release the Rs.37,691 already deposited to the employee.
p. 7Original Court PDF
SRI LAKSHMI NARAYANA CO OPERATIVE BANK LIMITEDvsTHE STATE OF KARNATAKA
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