K.N. SREEKUMARAN NAMBIATHIRI KALARIKKAL SREYAS v. Thekkekkara Service Co-operative Bank Ltd. and The Managing Committee of Thekkekkara Service Co-operative Bank Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** ## **THURSDAY, THE 13[TH] DAY OF APRIL 2023 / 23RD CHAITHRA, 1945** ## **WP(C) NO. 1880 OF 2023** ## **PETITIONER:** K.N.SREEKUMARAN NAMBIATHIRI KALARIKKAL SREYAS, PONNEZHA, OLAKETTIYAMBALAM P.O, MAVELIKKARA, ALAPPUZHA, PIN - 690510 BY ADVS. P.N.MOHANAN C.P.SABARI AMRUTHA SURESH GILROY ROZARIO ## **RESPONDENTS:** - 1 THEKKEKKARA SERVICE CO-OPERATIVE BANK LTD.NO.A218, REPRESENTED BY ITS SECRETARY, PONAKAM, MAVELIKKARA, ALLEPPEY, PIN - 690101 - 2 THE MANAGING COMMITTEE OF THEKKEKKARA SERVICE COOPERATIVE BANK LTD.NO.A 218, REPRESENTED BY ITS PRESIDENT, PONAKAM,MAVELIKKARA,ALLEPPEY,PIN - 690101 BY ADV LATHA ANAND ## **OTHER PRESENT:** SRI. SUNIL KUMAR KURIAKOSE. G.P. **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON** **13.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **Sathish Ninan, J.** ## **============================== W.P(C) No.1880 of 2023 ========================== Dated this the 13[th] day of April, 2023** ## **JUDGMENT** The petitioner retired from the services of the 1[st] respondent Society on 30.06.2019 as its Secretary. Aggrieved by the non-disbursal of the arrears of revised salary and pensionary benefits, the petitioner has approached this Court. 2. Consequent on the delay in disbursal of retirement benefits, the petitioner had earlier approached this Court in W.P(C) No.6035 of 2022. There the stand of the respondent Society was that, all eligible amounts due to the petitioner has been disbursed and that the claim of the petitioner is for amounts in excess of the statutory limit. The Writ Petition was disposed of by this Court as per Ext P5 judgment, directing the managing committee to take a decision on the claim of the petitioner. 3. Thereafter the managing committee issued Ext P7 order declining the claim. In Ext P7, the stand adopted by the Society is that, the petitioner has caused loss W.P(C) No.1880 of 2023 -: 2 :- to the Society and hence the same is liable to be appropriated from his retirement benefits. It is thereupon that the writ petition is filed. 4. The contention of the Society is that, the Writ Petition could not be maintained against the Society and that the remedy of the petitioner is to approach the appropriate forum under Section 69 of the Co-operative Societies Act. It is further contended that the petitioner has caused pecuniary loss to the Society to the tune of Rs.9,87,739/- which is liable to be recovered from his retirement benefits. 5. Heard the learned counsel on either side. 6. The relevant Rules of the Co-operative Societies Rules are, Rule 198(7) and Rule 198(8). They read thus :- _“(7) In the event of any pendency of disciplinary proceedings against any employee of a co-operative society or any cooperative institution pursuant to any charge of grave misconduct, irregularity, corruption or other charge involving moral turpitude, no retirement benefits shall be sanctioned to such employee or retired employee and in case of sanctioning of any retirement benefits to any such employee or retired_ W.P(C) No.1880 of 2023 -: 3 :- _employee, the name and designation of the sanctioning authority together with the reason for such sanctioning shall be recorded by the sanctioning authority by himself and such authority shall be held responsible for any loss to the society owing to such sanctioning of retirement benefits if found that such sanctioning was unwarranted._ _(8) In respect of all employees save the Chief Executive Officer of a society, no retirement benefits shall be sanctioned and disbursed until after the due issuance of a Non-liability Certificate by the Chief Executive Officer and approval of the same by the committee of the society within thirty days from the date of retirement of such employee. In the event of the retirement of the Chief Executive Officer, the Non-liability Certificate shall be issued by the committee of the society. For any loss to the society due to the non adherence of the forgoing procedure, the Chief Executive Officer along with the committee of the society shall be held responsible collectively and severally in respect of the issuance of Non-liability Certificate to any employee other than the Chief Executive Officer and the members of the committee shall be held collectively and severally responsible for the issuance of Non-Liability Certificate to the Chief Executive Officer.”_ 7. Rule 198(7) empowers the Society not to sanction any retirement benefits to an employee as against whom a disciplinary proceeding is pending. Admittedly, no such W.P(C) No.1880 of 2023 -: 4 :- disciplinary proceeding was pending against the petitioner at the time of his retirement. Therefore, Rule 198(7) has no application. 8. Rule 198(8) provides that no retirement benefits shall be sanctioned and disbursed until after the issuance of a non-liability certificate within 30 days from the date of retirement of the employee. In the case at hand, though the petitioner retired on 30.06.2019, within the 30 days period prescribed, the non-liability certificate was not issued; even as of now, the same has not been issued. 9. Though Section 4 of the Payment of Gratuity Act enables forfeiture of gratuity on certain circumstances, to attract the said provision, the services of the employee must have been terminated under a disciplinary proceeding. In the case at hand, there has been no such termination. The petitioner demitted office on attaining superannuation. 10. A Division Bench of this Court in _**Mohanan Nair P.**_ _**G. v. Omallur Service Co-operative Bank Ltd. And Ors. ILR 2022 (2)**_ W.P(C) No.1880 of 2023 -: 5 :- _**Kerala 1123**_ held that, if the liability is not fixed and liability certificate issued within the statutory time limit of 30 days from the date of retirement, and if there has been no termination of the employee for the reasons stated under Section 4 of the Payment of Gratuity Act, the retirement benefits including gratuity is not liable to be withheld. In _**C.M.Philip v. Registrar of Cooperative Societies, 2018 (3) KHC 780 and Kottayam District Co-operative Bank Ltd. v. Co-operative Tribunal, 2018 (1) KLJ 636,**_ this Court held that the Society cannot unilaterally quantify the damages and have it set off from the retiral benefits. As held in the said judgments, for the Society to recover amounts, if any due even from a retired employee, there is a remedy under Section 69 of the Cooperative Societies Act. 11. The mere fact that the proceedings under Section 68 is pending does not enable the Society to withhold the retirement benefits of the petitioner. In the light of the law laid down by the Division Bench of this Court in _**Philip's case and Mohanan Nair's case (supra),**_ the W.P(C) No.1880 of 2023 -: 6 :- Society is bound to disburse the pensionary benefits to the petitioner. 12. When the statutory benefits payable to the petitioner is not being disbursed, there is no substance in the contention of the Society that a Writ Petition could not be entertained. The Society is bound to disburse all the eligible benefits to the petitioner without effecting any deductions therefrom. Resultantly the Writ Petition is allowed. The amounts payable to the petitioner under the head of arrears of salary and all the retirement benefits, shall be disbursed to the petitioner without effecting any recovery therefrom, within a period of three months from the date of receipt of a copy of this judgment. **==> picture [32 x 12] intentionally omitted <==** **Sathish Ninan, Judge** **vdv** ## **APPENDIX OF WP(C) 1880/2023** PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE G.O.NO.32/2021 DATED 15.02.2021 OF THE GOVERNMENT Exhibit P2 A TRUE COPY OF THE JUDGMENT IN SOCIETY OF RETIRED FOREST OFFICERS VS. STATE OF U.P REPORTED IN 2008 (3) KLT 788 Exhibit P3 A TRUE COPY OF THE JUDGMENT IN CHRYSOSTOM V. FEDERAL BANK LTD AS REPORTED IN 1992 (2) KLT 167 Exhibit P4 A TRUE COPY OF THE JUDGMENT PHILIP V. REGISTRAR OF CO-OP.SOCIETIES REPORTED IN 2018 (3) KHC 780 DB) Exhibit P5 A TRUE COPY OF THE JUDGMENT DATED 30.09.2022 IN W.P.(C).NO.6035/2022 Exhibit P6 A TRUE COPY OF THE LETTER DATED 02.12.2022 OF THE PETITIONER Exhibit P7 A TRUE COPY OF THE ORDER DATED 21.12.2022 OF THE SECOND RESPONDENT Exhibit P8 A TRUE COPY OF THE MEDICAL CERTIFICATE DATED 13.07.2022 ISSUED BY THE MEDICAL BOARD RESPONDENT EXHIBITS Exhibit R1(b) True copy of the demand notice dated 21.02.2022 Exhibit R1(a) True copy of the audit report for the period from 2017 - 2018 and 2018 - 2019 of the 1st respondent