Khushi Bajpai
Published on: 10 August, 2022 at 19:44 IST
The National Consumer Issues Redressal Forum recently ruled that consumer courts would not have jurisdiction over any disputes involving the withholding of terminal benefits, like as gratuities or provident fund (employer contributions). State Bank of Hyderabad v. Kondareddygari Adinarayanareddy & Anr.
The order, which was delivered by the presiding member Dinesh Singh and member Karuna Nand Bajpayee, stated that the relevant services tribunal or civil court should decide all disputes involving terminal benefits.
“Gratuity is unquestionably a service-related issue, hence as such, it is not covered by The Consumer Protection Act of 1986. Though it is well-established that an employee-member of the employees’ provident fund scheme is a “customer” 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. Additionally, the immaculate rule currently in use states that the competent services tribunal or civil court must decide any disputes relating to the whole range of terminal benefits, including provident fund (bank contribution) and gratuity” the order stated.
A revision petition brought by the complainant against the decisions of the State Commission and District Commission was being considered by the NCDRC.
According to the facts, the complainant was fired from the bank where he worked in 2005 after it was discovered that he had obtained an employment in the reserved category by using a fraudulent caste certificate.
He appealed to the District Commission against the bank’s decision to deduct a portion of his provident fund (bank contribution) and gratuity upon termination of employment.
The respondent bank had filed a preliminary objection, claiming that because the complainant was not a “customer” as defined by the Consumer Protection Act, the petition could not be maintained.
The NCDRC did observe that both the District Commission and the State Commission disregarded this first objection and proceeded to discuss the case’s merits.
Since the case featured disputed factual issues, both the District Commission and the State Commission rejected it, giving the parties the freedom to pursue a civil court.
The NCDRC concluded that the District and State Commissions should have addressed the issue of jurisdiction first and issued spoken orders on it before moving to the merits of the case after reviewing the opposing arguments, relevant precedents, and information on file.
About the jurisdictional question, it was decided that the competent service tribunal or civil court should decide any complaints regarding the withholding of the bank’s payment to the provident fund or gratuity.
The District and State Commissions’ orders were thus overturned, giving the complaint the freedom to file a lawsuit in civil court or before the appropriate services tribunal, subject to Section 14 of the Limitation Act.
“The complaint is rejected because it cannot be maintained before the District Commission since the termination benefits, such as the provident fund (bank contributions) and gratuity, are a matter for the appropriate services tribunal or civil court. The complaint is returned unresolved, and the consumer protection forums do not consider the merits or the nature of the facts. The complainant is free to go before the appropriate services tribunal or civil court to seek legal redress. Regarding the time spent in litigation before the consumer protection fora, Section 14 of The Limitation Act, 1963 shall be applicable”the order stated.
Advocate Abhishek Chaudhary (appeared as Amicus Curiae) and Advocate Amit Singh represented the petitioner. Advocates Ritesh Khare, Siddharth Sangal and Pawan Kumar Ray represented the respondents.
