JUDGMENT : K.M. Thaker, J. Heard Mr. Y.V.Shah, learned advocate for the petitioner, Mr. Mehul Shah, learned advocate for the respondent No. 3, and Mr. Barot, learned AGP for the respondent Nos. 1 and 2. 1.1 Rule. Mr. Barot, learned AGP, has waived service of Rule for the respondent Nos. 1 and 2, and Mr. Mehul Shah, learned advocate, has waived service of Rule for the respondent No. 3. 1.2 At the request of learned advocate for the petitioner and considering the nature and subject of the dispute and with consent of learned advocate/AGP for the respondents, the petition is taken up for final decision today. 2. In present petition, the petitioner has prayed, inter alia, that:- (“7A) Be pleased to issue an appropriate writ, direction or order by directing the respondent Bank to Pay the statutory interest @ 10% running interest Under Section 7(3A) and 15% Under section 8 of the Act till the actual payment for delayed payment after one year, when petitioner retired from service on 7.7.2007 and gratuity was paid on 7.7.2008 without interest when respondent Bank has received the amount of Gratuity of Rs. 3,73,620 from the Master Policy of the LIC of India, on 2.12.2006 and that too after long delay and after dragging the petitioner from pillar to post under various round of litigation as per usual habit, by quashing and setting aside the impugned orders passed by the Controlling Authority and Appellate Authority without principles of natural justice and committed jurisdictional error on the face of the record;” 3. On reading the relief prayed for by the petitioner at first blush it emerges that the petitioner claims interest on account of delay caused in payment of gratuity. 3.1 However, on conjoint reading of the relief prayed for in the memo of the petition and in the application filed before the Controlling Authority, it comes out that actually the petitioner claims difference in the amount paid by LIC to the respondent No. 3 under the Group Insurance Master Policy (of LIC of India) and the amount paid to him by the respondent No. 3. 3.2 It appears that while discharging its liability under the Group Insurance Master Policy (of LIC of India), LIC paid certain amount to the respondent No. 3 bank which had to be paid to the claimant towards gratuity and for meeting with the said obligation the employer had availed the Group Insurance Master Policy (of LIC of India). 3.3 It appears that the respondent No. 3 bank calculated and quantified the amount which would be payable towards the gratuity as per the formula prescribed under the Act and the amount so derived by the respondent No. 3 bank was paid to the concerned workman, however, the amount paid by the LIC under the scheme was more than the amount paid by the employer - respondent No. 3 bank to the concerned employee. 3.4 In this background, the workman has taken out application and claimed, in substance and in effect, that the amount paid by LIC to the respondent No. 3 bank should be paid to him because he would be entitled for higher amount and his right for better benefit should not be restricted only to the amount which would otherwise be payable as per the provisions and formula under the Act. The said claim by the petitioner herein came to be rejected by the Controlling Authority only on the ground that the workman's claim was earlier adjudicated and therefore, such fresh claim cannot be considered and the claim for such higher amount made by the claimant - workman is barred by principles of res judicata. The said decision of the Controlling Authority, confirmed by the Appellate Authority, is brought under challenge in this petition. 4. Mr. Y.V. Shah, learned advocate for the petitioner, submitted that the LIC paid a sum of Rs. 3,73,620/- to the respondent No. 3 bank and the said amount is the amount payable towards gratuity under the scheme for which the respondent No.3 bank had taken out policy with the LIC and that therefore, the said amount should have been paid to the petitioner. Mr. Shah, learned advocate for the petitioner, submitted that the respondent No. 3 bank, instead, paid only Rs. 3,44,880/- towards gratuity. Mr. Shah, learned advocate for the petitioner, submitted that the respondent No. 3 bank, instead, paid only Rs. 3,44,880/- towards gratuity. He further submitted that though the amount paid by the LIC is higher than the amount paid (to him) by the Bank allegedly under the provisions/formula of the Act, the respondent No. 3 bank did not pay the said higher amount. He submitted that when the said claim was presented before the Controlling Authority, the said statutory authority should have decided the said claim and should not have dismissed the application on the ground that it had already decided one application filed by the claimant and that therefore, another application was not maintainable. 5. Mr. Mehul Shah, learned advocate for the respondent No. 3 bank, submitted that so far as respondent No. 3 bank is concerned, it is clear that if any higher amount is paid by LIC, then, the bank may not be legally entitled to hold or retain such higher amount, but according to the respondent No. 3 bank, the petitioner also would not be entitled to receive the said amount as a matter of right, inasmuch as the petitioner workman had been paid the amount pursuant to a settlement under which the claimant had agreed to accept the amount (paid to him) as per the settlement and that therefore, the petitioner is not entitled to the amount paid by LIC. He submitted that earlier application was decided by the Controlling Authority on the basis of the settlement and the amount which was determined to be paid to the workman as per the settlement is already paid to the workman and thereby, the Controlling Authority's order passed in terms of the settlement is complied and therefore, the subsequent application by the petitioner claimant is not justified and not maintainable. 6. I have considered the submissions by learned advocate for the petitioner and learned advocate for the respondent No. 3 bank and also examined the impugned orders. 7. So as to consider and appreciate the issue raised by the petitioner in this petition, it is necessary to take into account factual background. 7.1 It is not in dispute that the petitioner claimant was employed by the respondent bank and he retired from service with the respondent bank. Upon superannuation, his service with the bank came to an end. So as to consider and appreciate the issue raised by the petitioner in this petition, it is necessary to take into account factual background. 7.1 It is not in dispute that the petitioner claimant was employed by the respondent bank and he retired from service with the respondent bank. Upon superannuation, his service with the bank came to an end. 7.2 The petitioner - claimant claimed that when his service came to an end, he was entitled to receive gratuity. It appears that the claimant was not paid amount towards gratuity, which according to him, was payable. 7.3 It further appears that the petitioner - claimant, on such allegation filed claim/application before the Controlling Authority. 7.4 It appears that about 29 employees had also raised claims before the respondent No. 3 bank and the Controlling Authority had passed orders in 29 applications. 7.5 The said orders ultimately reached this Court by way of 29 writ petitions. The said 29 petitions came to be disposed of by common order passed by this Court and the matters were remanded to the Controlling Authority. 7.6 It is also submitted that before the Controlling Authority, settlement was arrived at between the parties when the applications were heard afresh pursuant to the remand order passed by this Court in said 29 petitions. 7.7 It is not in dispute that the Controlling Authority passed fresh order in terms of the settlement between the parties. 7.8 It is also not in dispute that the respondent No. 3 bank paid the amount payable as per the order of the Controlling Authority to the petitioner claimant. 7.9 Even Mr. Y.V. Shah, learned advocate for the petitioner, submitted that the claimant accepted the amount payable as per the order. 7.10 However, according to the claimant the amount which the LIC paid to the respondent No. 3 bank should have been paid to him, however, the respondent No. 3 bank paid only that amount which was payable in accordance with the provisions of the Act and despite the fact that LIC had actually paid more amount, the said amount was not paid to him and less amount was paid. Therefore, the petitioner claimant filed another application before the Controlling Authority and prayed for such higher amount. 7.11 The said application came to be rejected by the Controlling Authority on the ground of res judicata. Therefore, the petitioner claimant filed another application before the Controlling Authority and prayed for such higher amount. 7.11 The said application came to be rejected by the Controlling Authority on the ground of res judicata. The said order came to be confirmed by the Appellate Authority. 7.12 Therefore, the petitioner claimant is before this Court upon feeling aggrieved by the order whereby the Controlling Authority rejected his application on the ground of res-judicata. 8. It is not in dispute that under the LIC policy available benefit was better/higher than the benefit available in accordance with the formula under the Act. 8.1 It is also not in dispute that the amount paid by LIC to the respondent No. 3 bank, with regard to petitioner's claim, is more/higher than the amount payable to the petitioner under and as per the Act and also more/higher than the amount actually paid to the petitioner by the employer. 8.2 Before proceeding further, it is relevant to take into account Section 4(5) of the Act. The said provision reads thus:- “4(5) Nothing in this section shall affect the right of an employer to receive better terms of gratuity under any award or agreement or contract with the employer.” The said provision makes available better terms/benefit under any agreement/contract with the employer. 8.3 At this stage, it is also relevant to take into account the provision under Section 4A which is introduced in the Act since 1.10.1987 (by Sect.5 of Act 22 of 1987) which reads thus:- “[4A. Compulsory insurance.- (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer: Provided that different dates may be appointed for different establishments or class of establishments or for different areas. (2) To (6) xxx xxx” 8.4 The said provision imposes statutory obligation on employer to obtain insurance for the liability to pay gratuity. The employee would be beneficiary under such insurance/contract. 9. (2) To (6) xxx xxx” 8.4 The said provision imposes statutory obligation on employer to obtain insurance for the liability to pay gratuity. The employee would be beneficiary under such insurance/contract. 9. The benefit/amount available under the scheme/policy with LIC is for the benefit of and on account of the employees who are the actual beneficiaries and that therefore, it must go in the hands of concerned employee and the employer cannot retain, or even withhold, the benefit/amount paid under the scheme/policy. 9.1 Thus, when in present case, the LIC has paid more/higher amount to the respondent No. 3 bank in light of the provision under the policy and LIC has paid the said amount towards gratuity payable to present petitioner then, in light of the provision under Section 4(5) of the Act which provides, inter alia, that if better or higher benefit is available to the employee then the employee would be entitled to claim and receive such higher benefit/amount. The said better/higher benefit/amount is payable by virtue of or under the policy - which is a contract between the parties and the concerned employee is the beneficiary under such policy/contract and that therefore, in light of Section 4(5) read with Section 4(A) of the Act, the better/higher amount under the policy/contract must be passed on the beneficiary i.e. the concerned benefit. 9.2 Therefore, in those cases where such higher/better benefit, though available and payable to the employee, is not paid to the concerned employee then on an application submitted under the Act the authority can award - grant such better benefit and the employee would be entitled to receive such higher amount. 9.3 It is pertinent that this aspect becomes more clear in light of the provision under Section 4A of the Act. In view of said provision, employer is obliged to take out policy with LIC and insure the payment of gratuity to the employees. 9.4 The said provision amplifies the fact that the employer is merely a trustee of the amount payable to the concerned employee towards gratuity and whatever amount he receives from LIC, he must pass it over to the concerned employee and he cannot retain the higher amount or even any part of it. 9.4 The said provision amplifies the fact that the employer is merely a trustee of the amount payable to the concerned employee towards gratuity and whatever amount he receives from LIC, he must pass it over to the concerned employee and he cannot retain the higher amount or even any part of it. 9.5 On the contrary if, for any reason, the amount payable under the policy is less than or short of the amount payable under the Act, the employer shall be obliged to pay gratuity in accordance with the provision under the Act and for said purpose the employer must fill the gap and make the short-fall good since the amount payable in consonance with the formula under the Act is the minimum amount which an employee is entitled to receive. 9.6 The Section 4(5) enables an employee to claim and receive better benefit, if available under the Rules of the establishment or by virtue of any settlement with the workmen/union or a contract or under the policy with LIC (which is, now, a statutory requirement). More so, when any provision under the scheme/policy does not limit or restrict payable amount towards gratuity upto the statutory limit and/or when the LIC's obligation is not restricted, by any clause under the policy, to the statutory limit. 9.7 The amount paid by the LIC under the policy belongs to the beneficiary/the employee and the bank/employer has no right in law to withhold or retain the amount or even part of the amount paid by LIC under the policy on the ground that it is more than the amount payable under and as per the Act. Such amount, if retained or withheld, shall be unauthorized and shall be payable with interest. 10. In this view of the matter, the Controlling Authority ought to have carefully examined the provisions under Section 4(5) and Section 4(A) of the Act and should have determined the claim on merits, as to whether the claim of the workman is sustainable and deserves to be granted or not. Instead, the controlling authority simply, and straight away, rejected the petitioner's application on the ground of res-judicata. Instead, the controlling authority simply, and straight away, rejected the petitioner's application on the ground of res-judicata. 10.1 In the first instance, in such cases, the claim of the petitioner cannot be said to be barred by res-judicata, inasmuch as the issue as to whether the petitioner is entitled for higher benefit/amount in light of the scheme or not was not decided in previous proceeding by the Controlling Authority or even by this Court (under the common order whereby the matters were remanded for fresh consideration by the Controlling Authority). 10.2 Moreover, the settlement under which the amount came to be paid to the workman did not refer to the policy and the settlement does not contain any condition that irrespective of the amount payable under the policy under Section 4A of the Act, the workmen agreed to accept the amount stipulated under the settlement and they waived the right to get better benefit available under the Scheme. The workmen never waived higher benefit and that therefore, the claim could not have been dismissed on ground of res-judicata. 11. The settlement and/or the earlier order of the Controlling Authority, do not provide or decide that the claimant workman was aware about and/or that he was informed that he is entitled to receive higher amount/better benefit available under the policy and/or that LIC had already paid higher amount under the policy and the petitioner had waived the right (under Section 4(5) of the Act) to receive such higher amount. 12. It is not the case even of the respondent No. 3 bank that the petitioner had waived said right consciously and with knowledge and information that he is entitled for said higher amount payable by LIC under the scheme/policy and agreed to accept less amount than the amount payable under the Scheme/policy. 12.1 Further, this issue was never raised, much less decided in any previous proceeding. 12.2 Therefore also, there was no reason or justification to reject the application on ground of res-judicata. 12.3 The provision under the Act prescribes that the workman would be entitled to claim and receive higher benefit if such benefit is available and the authority would not restrict adjudication of the claim only in terms of the provision under the Act. The controlling authority has the jurisdiction and authority as well as duty to adjudicate the claim for higher benefit. The controlling authority has the jurisdiction and authority as well as duty to adjudicate the claim for higher benefit. 12.4 In this view of the matter, the application filed by the claimant should have been considered and decided on merits instead of rejecting it on the ground of res-judicata. 13. Besides this, the principle, under Section 11 of the Code of Civil Procedure, is applicable in respect of suits/proceedings in the Court and can be invoked and applied by the Court. However, the authorities rejected present petitioner's application on the ground that the application was barred by principles of res-judicata. The controlling authority and the appellate authority committed error while rejecting present petitioner's application seeking better benefit. 13.1 Though the authority may refuse, to adjudicate second claim application by same employee against same employer for the same claim and on same facts, after one application between same parties for same claim on same facts is already decided on merits, but the controlling authority or appellate authority constituted under the provisions of the Payment of Gratuity Act cannot invoke provision under Section 11 of the Code of Civil Procedure to reject a claim application at its threshold disregarding the fact that the claim made under the claim application was neither pleaded nor raised nor adjudicated in any earlier/previous proceeding between the same parties. 13.2 In present case, before submitting the subject claim application (which is subject matter in this petition) the petitioner had not raised same claim. 13.3 There is nothing on record to establish that at the time when previous application was filed and/or the general settlement was arrived at he was aware that LIC had paid higher amount under the policy - contract (to which he was beneficiary) and that he had raised claim for said amount in said previous application. 13.4 Actually, there is no discussion in impugned orders in respect of above mentioned aspects and issues. The orders are completely silent on factual as well as legal aspects. The orders have been passed without application of mind on these issues. 13.5 Therefore also, there was no justification to reject the claim application on the ground of res-judicata. 13.4 Actually, there is no discussion in impugned orders in respect of above mentioned aspects and issues. The orders are completely silent on factual as well as legal aspects. The orders have been passed without application of mind on these issues. 13.5 Therefore also, there was no justification to reject the claim application on the ground of res-judicata. 13.6 Besides this, while rejecting present petitioner's application for better benefit, the said authorities failed to appreciate that Section 4(5) of the Act which confers a right on an employee to seek better or higher benefit, if available under any scheme or policy or contract and the controlling authority would be obliged to adjudicate such application and pass appropriate order on merits. 13.7 The authority also failed to take into account Section 4(A) of the Act which imposes obligation to take out policy/insurance for payment obligation. 13.8 The authority also did not consider that the policy does not restrict the benefit to the statutory limit. 13.9 The authority also failed to consider that the employer is merely trustee of the amount paid under the policy by LIC and therefore, could not retained/withheld the amount/part of the amount paid by LIC. Before imparting and applying the principle under Section 11 of the Code of Civil Procedure the authority failed to consider above mentioned aspects. 13.10 Therefore also, the application seeking better benefit could not have been rejected by importing, from Civil Procedure Code, principle of Res-judicata, particularly when the employee had earlier not raised claim for better benefit. 14. The issue as to whether the petitioner was aware about the policy and/or about the fact that LIC had paid higher/more amount to the employer and the bank had not passed-on full amount to the beneficiary and/or whether he had settled the claim with knowledge about said facts, are issues of fact which must be considered by the authority and they can be decided only in light of proper evidence. Therefore also, the application could not have been rejected without considering and deciding said aspects. 15. Therefore also, the application could not have been rejected without considering and deciding said aspects. 15. Even if it is assumed that present respondent had also taken out an application seeking direction for payment of gratuity (he was one of the applicants along with said 29 applicants) and in such application he had claimed gratuity, but the fact that claim was raised in accordance with the formula/provision under the Act (and not in light of the agreement with LIC and any claim for higher amount paid by LIC was not made in said application) cannot be overlooked and the authority could not have ignored it while rejecting the application on ground of res judicata. 15.1 The fact of the matter is that at any previous stage the petitioner had not put forward claim for higher benefit on strength and/or in respect of the policy with LIC and/or in respect of higher amount paid by LIC. 15.2 In this view of the matter, there is nothing in the Act which would prevent the employee from preferring substantive application to claim difference of amount i.e. higher/better benefit available under any policy or contract. 16. It is employer's obligation to pay full amount of gratuity to the employee at the time when gratuity becomes payable as provided under Section 4(1) of the Act. At that stage, it would be the employer's obligation to compute the gratuity as per the formula under the Act as well as the policy or contract and to pay the gratuity at such rate which is more beneficial. 17. If the employer fails to discharge his said obligation and does not pay the amount towards gratuity, then, the employee can approach the controlling authority with appropriate application, but merely because at initial stage the employee fails to claim better or higher benefit in his application and restricts his claim to the amount calculated as per the formula under the Act (possibly because he was not aware/not even informed about the policy with LIC and/or about the fact that higher/more amount is available/payable according to the terms of the policy), then, such shortfall in claim by the applicant/employee would not justify the employer's action of not paying better benefit (if available by virtue of any policy or contract) and would not bar the claim for better benefit. 18. 18. The controlling authority cannot rule out, at the threshold, the possibility that earlier (i.e. when he initially raised the claim according to the formula under the Act) the employee did not know and he was never informed about the policy and/or about the fact that more amount is payable/paid by LIC, according to the terms of the policy. 18.1 Thus, from any perspective, the decision to dismiss the application at threshold on ground of Res-judicata, is not justified and cannot be sustained. 19. In the event, such higher benefit, if available, is not paid by the employer or awarded by the authority, then, another application seeking difference between the amount paid and amount receivable by virtue of Section 4(5) of the Act would be maintainable and cannot be rejected by importing and applying Section 11 of the Code of Civil Procedure. In view of the provision under Section 4(5) of the Act, the authority can, if it finds from the facts of the case and if it is satisfied, grant higher/better benefit, though the applicant may, for some reason (e.g. for want of knowledge or information) not have claimed such benefit in the previous application. 20. The Payment of Gratuity Act is a beneficial legislation and Section 4(5) of the Act allows an employee to seek, by an application before the authority, better benefit, in terms of higher amount, payable towards gratuity. Therefore, a beneficial right created by special law and conferred on the employee cannot be denied on technical ground of principle of Res-judicata. 20.1 Having regard to the fact that the Act is beneficial and social welfare Act, the adjudication power of the controlling authority cannot be and should not be construed narrowly or strictly and it is not necessary to restrict or curtail authority's power but the authority's power should be construed in a manner which would advance the object of the Act. The controlling authority is competent to pass appropriate order to do substantial justice and make available full amount towards gratuity payable to the workman without feeling handicapped by the amount claimed in the application, more so when the Act contains provision such as Section 4(5) which permits claim for higher benefit in addition to the amount payable according to the formula under the Act. 20.2 The use of the term - expression “payable” in Section 7(3) and Section 7(3A) and the expression “....authority shall.... determine ... and if as a result of inquiry any amount is found to be payable .... authority shall direct the employer to pay such amount....” clarify that the obligation on the authority is to pass order and direction to “pay such amount which is found payable” and that therefore, in light of said provisions under Section 7 read with Section 4(5) of the Act, it is authority's obligation to find out and determine the “amount payable” and to pass order for such amount and it need not restrict the order - direction only to the extent mentioned by the applicant in the application. The authority also cannot and should not import and apply the provision under Section 11 of the Code of Civil Procedure and/or Order-2 Rule-2 of the Code of Civil Procedure to bar the claim and cannot reject the application on the premise that the petitioner did not put forward entire/whole of the claim and did not claim better/higher benefit while seeking direction for payment of gratuity by applying said provision or on the premise that the applicant is barred in light of Section 11 of the Code of Civil Procedure. 20.3 In present case, the authorities committed error in rejecting present petitioner's application whereby the applicant prayed for payment of difference of amount receivable by him by way of higher/better benefit. 21. It is pertinent that from the facts of the case, it has emerged that actually, the employer bank itself, considering the fact that it is trustee of the amount and for the employee/beneficiary, should have passed on entire amount received by it from LIC to the petitioner employee. 21.1 But the employer unauthorisedly and arbitrarily and unjustifiably retained the higher amount and paid only that much amount which was payable as per the provision/formula under the Act. According to the petitioner when he learnt that LIC had paid more/higher amount, then, he realised that he was entitled to receive higher amount/better benefit and that therefore, he filed the subject application. 21.2 Unfortunately, the authorities rejected the application by importing principle of res judicata. According to the petitioner when he learnt that LIC had paid more/higher amount, then, he realised that he was entitled to receive higher amount/better benefit and that therefore, he filed the subject application. 21.2 Unfortunately, the authorities rejected the application by importing principle of res judicata. In view of the fact that unaware about his entitlement for more/higher amount, the applicant had not prayed for such higher amount in his application but when he learnt about his entitlement for higher amount, he preferred the subject application. In light of such facts, even otherwise, the authority was not justified in rejecting the application on the ground of res judicata. 22. In this view of the matter, the petition deserves to be allowed and the orders passed by the authorities deserve to be set aside. Therefore, following order is passed:- [a] The orders passed by the authorities rejecting present petitioner's application on the ground of res judicata are set aside. [b] It is hereby declared that it is obligation of the authority to adjudicate and decide the application filed by present applicant and the subject application could not have been rejected on said ground. [c] It is also held and declared that the respondent bank is the trustee of the amount received from LIC and it is not entitled to withhold or retain the amount which is otherwise payable towards gratuity to the petitioner. The respondent bank/employer holds the amount paid by LIC as trustee and it should pass on the amount to the concerned employee and the Bank/employer has no right in law to retain the amount paid by LIC i.e. the difference between the amount payable as per the Act and the amount payable (and paid by LIC) under the policy. The respondent bank/employer holds the amount paid by LIC as trustee and it should pass on the amount to the concerned employee and the Bank/employer has no right in law to retain the amount paid by LIC i.e. the difference between the amount payable as per the Act and the amount payable (and paid by LIC) under the policy. [d] So as to facilitate the determination of the exact amount payable to the applicant after taking into account the amount payable as per the Act and the amount paid by LIC and so as to also facilitate the determination and quantification of the amount required to be paid to the applicant and also to facilitate determination of the interest (which would be payable on the unpaid amount in light of the delay in payment) the proceedings are remitted to the controlling authority with direction to entertain the application and determine and quantify the amount payable to the applicant with interest and pass appropriate order directing the bank to pay the amount of gratuity to the applicant with interest to be determined in accordance with the provisions of the Act. [e] The authority is also directed to complete entire process as expeditiously as possible but not later than one month from the date of receipt of certified copy of this order. With aforesaid observations and direction, present petition stands disposed of. Rule is made absolute to the aforesaid extent. Order accordingly.

Jyotindra Shambuprasad Bhatt v. Controlling Authority