Ambalavayal Service Co-operative Bank Ltd. v. Kerala State Co-operative Employees Pension Board, and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN MONDAY, THE 28TH JULY 2008 / 6TH SRAVANA 1930 THE AMBALAVAYAL SERVICE CO-OPERATIVE BANK LTD., NO.F.7604,AMBALAVAYAL P.O. WAYANAD REP. BY ITS SECRETARY. BY ADV. SRI.V.N.ACHUTHA KURUP (SR.) SRI.BINDU SREEKUMAR 1. KERALA STATE CO-OPERATIVE EMPLOYEES - PENSION BOARD, THIRUVANANTHAPURAM, REP. BY ITS SECRETARY ADDITIONAL REGISTRAR. 2. C.C.CHACKO, SANTHALAYAM, AMBALAVAYAL P.O. WAYANAD. 3. DEPUTY TAHSILDAR (R.R), UNIT AMBALAVAYAL, WAYANAD. BY ADV SRI.P.V.MOHANAN, SC FOR R1 BY ADV SRI.P.RAMAKRISHNAN FOR R2 BY GOVERNMENT PLEADER SHRI. SANDESH RAJA FOR R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/7/2008, THE COURT ON THE SAME DAY DELIVERED THE ## APPENDIX PETITIONER'S EXTS: EXT.P1: TRUE COPY OF THE JUDGMENT DT. 8.4.2002 IN W.A. NO: 736/1992 OF THE HONOURABLE HIGH COURT OF KERALA EXT.P2: -DO- OF DEMAND NOTICE NO: PB/P2/1105/WND DT. 5.5.2003 ISSUED BY 1ST RESPONDENT TO THE PETITIONER BANK ALONG WITH STATEMENT EXT.P3: -DO- OF THE REPRESENTATION DT. 25.6.2003 OF THE PETITIONER BANK EXT.P4: -DO- OF THE NOTICE DT. 4.8.2003 OF THE 1ST RESPONDENT EXT.P5: -DO- OF THE REPRESENTATION DT. 19.8.2003 OF THE PETITIONER BANK EXT.P6: -DO- OF THE LETTER NO: PB/P2/1105/WND DT. 1.10.2003 OF THE 1ST RESPONDENT EXT.P7: -DO- OF THE REPRESENTATION DT. 28.10.2003 OF THE PETITIONER BANK EXT.P8: -DO- OF DEMAND NOTICE NO: C.118/MISC/03-04 DT. 1.11.2003 OF THE 3RD RESPONDENT RESPONDENTS' EXTS: EXT.R1A: TRUE COPY OF THE PROPOSAL SUBMITTED BY THE PETITIONER BANK, DT. 18.9.1995 EXT.R1B: -DO- OF THE LETTER DT. 18.9.1995 EXT.R2A: -DO- OF JOINT MEMO DT. 13.7.1972 SUBMITTED BY THE ADVOCATES FOR THE PETITIONER AND THE 2ND RESPONDENT BEFORE THIS HONOURABLE COURT IN O.P.NO: 1787/1972 EXT.R2B: -DO- OF JUDGMENT DT. 26.7.1985 OF THE KERALA CO-OPERATIVE TRIBUNAL, TRIVANDRUM IN A.P.NO: 44/83 AND 57/83 EXT.R2C: -DO- OF LETTER DT. 18.9.2003 OF THE JOINT REGISTRAR (GENERAL) KALPETTA TO THE PETITIONER jj /TRUE COPY/ P.A. TO JUDGE ## P.N.RAVINDRAN, J. -------------------------- W.P.(C) No. 35437 OF 2003-R -------------------------Dated this the 28[th] July, 2008. ## JUDGMENT The petitioner, a Co-operative Society challenges the demand made by the first respondent Board for payment of arrears of contribution to the provident fund and the pension fund in respect of the second respondent, with interest thereon. The brief facts of the case are as follows: 2. The second respondent entered service as Clerk in the petitioner bank on 1.6.1964. He was promoted as Secretary of the bank on 1.12.1965. A contributory provident fund scheme was introduced in the petitioner bank with effect from 1.7.1967 in terms of Section 61 of the Kerala Co-operative Societies Act 1969, read with Rule 58 of the Kerala Co-operative Societies Rules, 1969. The second respondent became a member of the contributory provident fund with effect from 1.7.1967. The petitioner bank terminated the services of the second respondent on 18.10.1970 on the ground that he was not qualified to hold the post of Secretary. This lead to a dispute. Ultimately the dispute was settled and the second WPC 35437/03 2 respondent was reinstated in service on 20.7.1972 as Assistant Secretary. The terms of settlement are evidenced by Ext.R2(a) memo dated 13.7.1972. Though the appellant was reinstated in service on 20.7.1972 as Assistant Secretary, he continued to receive salary in the scale of pay of Secretary. This is evident from Ext.R2(a) memo. The second respondent thereafter initiated arbitration proceedings claiming arrears of emoluments for the period from 19.10.1970 to 19.7.1972. The Arbitrator directed that the period of absence from 19.10.1970 to 19.7.1972 should be treated as eligible leave and that the second respondent will be entitled to leave salary. The petitioner bank as well as the second respondent filed appeals before the Kerala Co-operative Tribunal. By Ext.R2(b) order passed on 26.7.1985 the Kerala Co-operative Tribunal, allowing the appeal filed by the second respondent and held that he is entitled to the arrears of emoluments with 6% interest per annum. It is not in dispute that Ext.R2(b) has become final. While the second respondent was thus continuing in service as Assistant Secretary, he was placed under suspension on 27.2.1978. WPC 35437/03 3 An enquiry was held and he was dismissed from service with effect from 14.7.1978. The second respondent thereupon raised an industrial dispute which was referred to the Labour Court, Kozhikode. By award passed on 31.8.1988 the Labour Court, Kozhikode directed his reinstatment in service with full back wages and continuity of service. The petitioner bank thereupon filed O.P.No: 1893 of 1989 in this Court. While the said original petition was pending, pursuant to the interim orders passed by this Court, the second respondent was reinstated in service on 21.3.1989. By judgment delivered on 31.3.1992, a learned single Judge of this Court allowed the original petition and set aside the award of the Labour Court. The second respondent carried the matter in appeal. Though O.P. No: 1893 of 1989 was allowed and the award passed by the Labour Court was set aside, by judgment delivered on 31.3.1992, the second respondent continued in service, by virtue of the interim orders passed by this Court in W. A.No: 732 of 1992. While the said writ appeal was pending he retired from service on 31.8.1995, on attaining the age of superannuation. WPC 35437/03 4 3. By Ext.P1 judgment delivered on 8.4.2002, in W.A.No: 736 of 1992, a Division Bench of this Court while upholding the decision of the learned single Judge, directed as follows:- “ 11. Though on the aforesaid findings it would be sufficient to dismiss the appeal, after hearing counsel, we are not satisfied that interests of justice would be advanced, if we merely dismiss the appeal. It appears to us that the charges on which punishment has been imposed were not very individually serious, though the cumulative effect of them might have justified the respondent Bank in losing confidence in the appellant for his fitness to continue as Asst. Secretary. The issue of reinstatement today has become irrelevant, since the appellant was reinstated by an interim order of this court and he retired from service on 31.8.1995. 12. We are informed that even in the long interregnum it is not as if the appellant was without means of sustenance. The appellant was carrying on a business of stationary shop and running a coffee powder grinding unit which even by any reckoning, could not have been unremunerative. We, however, find that the appellant has not bothered to place on record the details of these activities, though he did admit before us that he was carrying on these two businesses. Taking an overall view of the matter, we are of the view that awarding a sum of Rs.35,000/- as compensation would meet the ends of justice. The interests of justice also demand that the services rendered by the appellant between 14.7.1978 and 21.3.1989, which have been totally washed away, must be restored. We dispose of this appeal on the following order:- WPC 35437/03 5 i) The appellant shall be paid a lump sum amount of Rs. 35,000/- as compensation. ii) The period between 14.7.1978 and 21.3.1989 shall be treated as continuous service for the purpose of reckoning all terminal dues of the appellant, such as gratuity and pensionary benefits, if any. The last drawn salary for this purpose would be the salary that the appellant was actually paid on the date of his retirement on 31.8.1995. iii) All monetary benefits available to the appellant under this judgment shall be computed and paid to him, after giving credit to the amounts already paid, within a period of three months from today, failing which they shall carry interest at the rate of 12% per annum.” 4. Long after the second respondent retired from service, the first respondent issued Ext.P2 demand notice calling upon the petitioner bank to remit the sum of Rs.2,22,961/- (Rupees two lakhs twenty two thousand nine hundred and sixty one only) towards arrears of contribution payable to the contributory provident fund and the pension fund constituted under the Kerala Co-operative Societies Employees Self Financing Pension Scheme, 1994, hereinafter referred to as the 'Scheme' for short. The objections raised by the petitioner bank to the demand therein were rejected by Exts.P4 and P6 and Ext. P8 demand notice was issued. WPC 35437/03 6 The petitioner bank has, thereupon filed this writ petition challenging Exts.P2, P4, P6 and P8 and seeking a declaration that they are not liable to pay interest in terms of paragraph 38 of the scheme. 5. I have heard Smt. Bindu Sreekumar, the learned counsel appearing for the petitioner, Shri. P.V.Mohanan, the learned standing counsel appearing for the first respondent, Shri. P.Ramakrishnan learned counsel appearing for the second respondent and Shri. K. Sandesh Raja, the learned Govt. Pleader appearing for the third respondent. The learned counsel for the petitioner contended that the computation of arrears of contribution to the provident fund/pension scheme made in Ext.P2 is without any basis. It was contended that during the period from 19.10.1970 to 20.7.1972 and from 14.7.1978 to 20.3.1989 the second respondent was not in service and, therefore, no contribution is payable in respect of the said period. It was also contended that the basic pay of the second respondent during the period from 1.3.1978 to 31.3.1989 was only Rs.200/- per mensem. In short, WPC 35437/03 7 the contention of the petitioner is that the quantification of the share of contribution and interest in Ext.P2 is not sustainable. 6. Per contra, Shri. P.Ramakrishnan, the learned counsel appearing for the second respondent contended that in the light of Ext.R2(b) order and the findings in Ext.P1 judgment, the petitioner's contentions are without any merit. Shri. P.V.Mohanan, the learned counsel appearing for the first respondent Board also submitted that levy of interest under Paragraph 38 of the scheme has been upheld by a learned single Judge of this Court in - Kodukulanji Service Co operative Bank v. State of Kerala {2003(1) KLT 250} and that the amount payable by the petitioner as contribution to the contributory provident fund/pension scheme was determined on the basis of the salary payable to the second respondent. 7. I have considered the submissions made at the Bar by the learned counsel appearing on either side. In the light of the categorical findings in Ext.P1 judgment, the period during which the petitioner was kept out of service viz., the period from 14.7.1978 to WPC 35437/03 8 21.3.1989 has to be treated as service qualifying for all benefits including pension. The petitioner was reinstated in service on 21.3.1989 when O.P.No: 1893 of 1989 was pending and he continued in service till he attained the age of superannuation, by virtue of the interim orders passed by this Court. As regards the earlier period from 18.10.1970 to 20.7.1992, in view of the directions issued in Ext.R2(b), the petitioner bank is not entitled to contend that the said period is liable to be excluded for the purpose of computing the pensionary benefits. I therefore hold that there is no merit in the petitioner's contention that the fixation made in Ext.P2 is without reference to the actual salary that the second respondent was entitled to. As regards the challenge to the levy of interest, in the light of the decision of this Court in Kodukulanji Service Co-operative Bank v. State of Kerala (supra), the challenge must necessarily fail. In short, no grounds have been made out to hold that demand in Ext.P2 which is sought to be enforced by Ext.P8 is in any way infirm. From the past conduct of the petitioner it appears to me that the attempt of the petitioner bank is to delay WPC 35437/03 9 payment of the terminal benefits, which the second respondent is entitled to. I therefore hold that there is no merit in the challenge to Exts. P2, P4, P6 and P8. The writ petition accordingly fails and it is dismissed. No costs. P.N.RAVINDRAN, JUDGE jj