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Prameshwar Prasad Choudhary v/s State of Bihar


Company & Directors' Information:- PRASAD CORPORATION PRIVATE LIMITED [Active] CIN = U32301TN1994PTC028160

Company & Directors' Information:- PRASAD AND CO. PRIVATE LIMITED [Active] CIN = U67120DL1995PTC068088

Company & Directors' Information:- M. PRASAD AND CO LIMITED [Active] CIN = U67120WB1999PLC090325

Company & Directors' Information:- CHOUDHARY CORPORATION PRIVATE LIMITED [Active] CIN = U67120OR2010PTC011997

Company & Directors' Information:- H PRASAD & CO PVT LTD [Strike Off] CIN = U51109WB1944PTC011797

    M.J.C. 685 Of 2004

    Decided On, 26 August 2005

    At, High Court of Bihar

    By, THE HONOURABLE MR. JUSTICE RADHA MOHAN PRASAD

    For the Appearing Parties: Umesh Prasad Singh, Rajendra Kumar Jain, Achuta Nand Sinha, Advocates.



Judgment Text

RADHA MOHAN PRASAD, J.

(1.) This application has been filed by the petitioner for initiating contempt proceeding against the opposite parties for their wilful disobedience of the order of this Court dated 3.2.2004 passed in CWJC No. 1418 of 2004, whereby the Opposite parties were directed to comply the general direction of this Court dated 19.9.2003 passed in CWJC No. 7054 of 2003 and analogous cases with only modification that two paragraphs affidavit personally sworn by the concerned authority must be filed by 22nd March, 2004.

(2.) Petitioner "had filed a writ petition bearing CWJC No. 1418 of 2004 for directing the respondents to make payment of his gratuity amount of Rs. 1,89,813/- and the amount of leave encashment Rs. 73,000/-, which was disposed of along with other analogous-cases vide order dated 3.2.2004 in terms of the directions of this Court dated 19.9.2003 passed in CWJC No. 7054 of 2003 and analogous cases.

(3.) Petitioner retired from the services of the Bihar State Small Industries Corporation Limited on 31.1.1998. Learned counsel appearing for the petitioner has submitted that Group Gratuity Cash Accumulation Scheme was introduced by the Life Insurance Corporation of India, hereinafter referred as 'L.I.C. and after retirement of the petitioner gratuity amount of Rs. 1,89,813/- was sanctioned by the Managing Director of Bihar State Small Industries Corporation, hereinafter referred as Corporation vide memo No. 217/98 dated 24.2.1998 (Annexure 4) with a request to L.I.C. to release the aforesaid gratuity amount to the petitioner, but, till date the L.I.C. has not paid the said amount.

(4.) A counter affidavit has been filed on behalf of Industrial Development Commissioner-cum-Secretary, Department of Industries (Opposite party No. 2) in which it is stated that pursuant to Department's direction the Corporation filed modification petition being M.J.C. No. 461 of 2004, which was disposed of vide order dated 16.4.2004 incorporating the submission of the petitioner that he has no grievance against the Corporation and the grievance of the petitioner is against L.I.C. and Provident Fund Commissioner, who have not released the amount of gratuity and pension. This has been reiterated by the present Managing Director of the Corporation in his separate show cause.

(5.) A show cause and rejoinder to the reply to show cause have been filed on behalf of Branch Manager of L.I.C. (Opposite party No. 5) in which it has been stated that the claim of the petitioner regarding gratuity is not payable. The Master Policy No. G.G. (C.A.) 27608 obtained by the employer of the petitioner stood lapsed due to non-payment of premium since January, 1994 and the liability was of the employer to pay the premium to continue the policy. It is further stated that since the Corporation has already gone under liquidation by filing company petition No. 5 of 1999, petitioner can raise his claim only before the company Court.

(6.) Learned counsel appearing for the L.I.C. has stated that neither the Corporation nor any authority of the Corporation was ever served with a copy of the writ petition and the petitioner also did not communicate the order passed in the writ petition. Opposite party No. 5 could know about the order only when a copy of the contempt petition was served on the counsel appearing for the L.I.C. Learned counsel further submitted that since January, 1994 the Corporation had not paid any amount of premium, as a result thereof the policy lapsed in the year 1994 itself. He further submitted that this fact has been brought to the notice of the authority of the Corporation from time to time and requests have been made even to surrender the policy and take surrender value of the same but there was no response in that direction. He submitted that the Gratuity Link Scheme was started by the employer through the Trustees of gratuity funds to cover up their liability as employer to pay the gratuity to an employee in accordance with the provisions of payment of Gratuity Act, 1972. The L.I.C. does not have contractual obligation with any employee of the Corporation. He further submitted that the fund available as on date is Rs. 1,23,860/- and the L.I.C. is always ready and willing to pay the surrender value out of the fund available to the Corporation.

(7.) Petitioner in his reply to the show cause filed on behalf of opposite party No. 5 has stated that it is wrong to say that master policy No. GGCA 27608 obtained by the employer of the petitioner stood lapsed due to non-payment of the premium since January, 1994. In support of this assertion he referred to the letter of L.I.C. dated 7.4.2000, contained in Annexure 10, whereby a cheque of Rs. 72,111/- has been sent to the Corporation for payment of full claim of one Mohan Prasad Srivastava under aforesaid master policy. In reply to this, learned counsel for the L.I.C. has failed to give any plausible explanation, as to how the cheque for payment of full claim of said Mohan Prasad Srivastava was sent to the Corporation when the said master policy stood lapsed.

(8.) However, in a letter dated 10.3.2005 written by the Corporation to the Industries Department, contained in Annexure 11 it has been mentioned that due to bad economic condition of the Corporation the payment of premium after 1993 could not be made. Petitioner in para 29 of his reply stated that there is no dispute on this fact that the Corporation has paid the policy premium to the L.I.C. up to the year 1993, but, the said Policy is still in existence.

(9.) Learned counsel appearing for the L.I.C. has submitted that no policy survives if the premium are not paid on due date and/or within the grace period. Learned counsel further submitted that in the case of Nanda Ram v. The Regional Provident Fund Commissioner and Ors. CWJC No. 12538 of 2002, disposed of on 4.2.2003, contained in Annexure-A to the show cause filed on behalf of opposite party No. 5, the Corporation admitted that the premium could not be deposited with the L.I.C. since 1994 in view of paucity of fund which, in fact, led to filing of winding up proceeding vide Company Petition No. 5 of 1999 in this Court and in view of pendency of the said Company Petition, on the prayer made on behalf of the petitioner this Court gave liberty to the petitioner to raise his claim with respect to gratuity in the said company petition.

(10.) This Court vide order dated 11.8.2005 directed Mr. Singh learned counsel appearing, for L.I.C. as also learned counsel appearing for the Corporation to produce the policy taken for the purpose of payment of gratuity, Clause 6 and 7 of the General conditions of the Master Policy read as follows :

6. The Grantees shall pay to the Corporation on the 24th day of January, 1992 i.e. the date of commencement of the Policy and the 24th day of January every year thereafter the premium according to Schedule II provided that if the Grantees desire and the Corporation agrees, the premium hereunder shall be paid in one yearly instalments commencing from the said date of commencement.

7. A period of 15 days of grace will be allowed for payment of premium hereunder and if the premium is not paid within the days of grace, the Grantees shall unless the Corporation otherwise agrees, be deemed to have discontinued payment of the premium and they shall not be entitled to resume payment except with the consent of the Corporation and on such terms and conditions as the Corporation may prescribe in this regard.

(11.) It is clear from bare perusal of Clause 7 aforementioned that if the premium is not paid within the days of grace, the policy will be deemed to have discontinued. It is admitted by the petitioner in his reply affidavit as also by the Corporation in Annexure 11 itself that due to bad economic condition of the Corporation, the Corporation has paid the policy premium to L.I.C. only up to the year 1993. Thus, it seems that the policy has lapsed after 1993.

(12.) Clause 4 of Part II of the Schedule of Master Policy reads as under:

4. When gratuity becomes payable to a Member on his retirement or cessation of service, the Corporation shall pay to the Grantees the benefits according to the Schedule IV of the Policy out of the accumulated b

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alance remaining in the running account.... Learned counsel appearing for the L.I.C. has submitted that the L.I.C. is ready to pay to the Corporation the benefits out of the accumulated balance remaining in the account. (13.) Thus, in the facts and circumstances of the case and the fact that neither the L.I.C. nor any authority of the L.I.C. was ever served with a copy of the writ application as also the fact that even after passing of the order dated 3.2.2004, violation of which has been complained, the petitioner did not communicate the order to the L.I.C., I am of the opinion that no case for initiating contempt proceeding against opposite party No. 5 has been made out. As the Corporation has gone under liquidation by filing company petition No. 5 of 1999, the petitioner is given liberty to move before the Honb'le Company Judge for redressal of his grievance. The M.J.C., application is, thus, disposed of.
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