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Terminal Benefits Like Gratuity, Bank’s Contribution in PF Not within Jurisdiction of Consumer Courts: NCDRC

While dismissing an appeal filed by a bank employee, the National Consumer Disputes Redressal Commission (NCDRC) clarified that terminal benefits, such as gratuity or provident fund (employer’s contribution), would not fall under the jurisdiction of consumer courts.

In an order issued in the past month, the bench of Dinesh Singh (presiding member) and justice Karuna Nand Bajpayee (member) says, “The complaint is dismissed as not maintainable before the district commission, as the terminal benefits like provident fund (Bank’s contribution) and gratuity not being granted on dismissal from service is the subject-matter of the competent services tribunal or civil court. The complaint is returned un-adjudicated, the merits or the nature of the facts remain unexamined by the consumer protection fora.”

“In so far as the question of jurisdiction is concerned, the time-honoured remedial measure adopted by government or public sector employees having any grievance in regard to a service matter has been to seek redressal of such service matters before the competent services tribunal or civil court. In the present case, the complainant’s grievance is relating to the withholding of the provident fund (bank contribution) and the gratuity,” it observed.

Nellore-based Kondareddygari Adinarayanareddy had filed revision petition before the NCDRC after the district and state commission dismissed his complaint. On 6 July 2005, he was dismissed from services by State Bank of Hyderabad (SBH) after it found that he was appointed to a post for the reserved category by submitting a false caste certificate. His grievance related to the Bank withholding portion of the terminal benefits, provident fund contribution by the Bank and gratuity on dismissing him from service. His contribution to the provident fund was released to him.

NCDRC noted that, in its submission before the district commission, SBH had raised a preliminary objection in the first paragraph itself. The Bank stated that the complainant was not a ‘consumer’ as per the Consumer Protection Act as he was seeking relief of the payment of the Bank’s contribution towards provident fund and gratuity together with interest.

“The district commission vide its order dated 29 August 2008 ignored the preliminary objection and entered into the merits of the case…In appeal, the state commission vide its impugned order dated 18 October 2012 also ignored the preliminary objection and entered into the facts of the case,” the bench observed.

During the previous hearing, Mr Adinarayanareddy submitted that, because of his financial condition, he could not afford an advocate’s fee and beseeched that legal aid may be provided to him. NCRDC then requested advocate Abhishek Chaudhary to appear as amicus curiae to represent the complainant.

In his submission, advocate Chaudhary stated that the preliminary issue regarding maintainability needed to be decided first. If the complaint was found to be not maintainable, it ought not to have been further adjudicated on merits by the consumer commission.

The counsel for SBH stated that, while the district commission dismissed the complaint on merit, the state commission found that the case involved disputed questions of fact and returned the complaint to the complainant with liberty to take his case before a civil court.

After hearing both sides, NCDRC says, “…we are of the opinion that both the fora below ought to have addressed the preliminary issue of jurisdiction first, dealt with it with reasons given and should have passed speaking orders on the issue before proceeding further into the case.”

Reiterating that gratuity is undisputedly a service matter and is not within the purview of The Consumer Protection Act, the bench noted, “As far as bank’s contribution in the provident fund is concerned, though it is settled that an employee-member of the employees’ provident fund scheme is a ‘consumer’ within the meaning of Section 2(1)(d)(ii) of the Act, 1986 the same cannot be said of the Bank’s provident fund scheme.”

“…the pristine rule in vogue is that the issues relating to the entire gamut of terminal benefits as a whole, including provident fund (Bank’s contribution) and gratuity, have been the subject matter of adjudication by the competent services tribunal or civil court. Selectively segregating one particular benefit and taking it to the consumer protection fora is neither desirable nor tenable or sustainable,” NCDRC says, while disposing of the petition.

Revision Petition No71 of 2013 Dated: 20 July 2022

Source: https://www.moneylife.in/article/terminal-benefits-like-gratuity-banks-contribution-in-pf-not-within-jurisdiction-of-consumer-courts-ncdrc/68023.html