K.P. Beena v State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE AMIT RAWAL** **WEDNESDAY, THE 14[TH] DAY OF JULY 2021 / 23RD ASHADHA, 1943** **WP(C) NO. 29805 OF 2015** ## **PETITIONER:** K.P.BEENA, AGED 62 YEARS, W/O.K VIJAYAN, BINIL NIVAS, NANTHIATTUKUNNAM, N.PARUR-683513,(FORMER SECRETARY, SAMOOHYA KSHEMA SAHAKARANA SANGHAM NO E-779,NANTHIATTUKUNNAM, N.PARUR683513 BY ADVS. SRI.A.JAYASANKAR SRI.MANU GOVIND SRI.C.V.MANUVILSAN ## **RESPONDENT/S:** 1 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, CO-COPERATION DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001 2 REGISTRAR OF CO-OPERATIVE SOCEITIES, THIRUVANANTHAPURAM 695001 3 SAMOOHYA KSHEMA SAHAKARANA SANGHAM NO E-779 NANTHIATTUKUNNAM, N PARUR, 683513, REPRESENTED BY ITS SECRETARY BY ADV SRI.GEORGE POONTHOTTAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.07.2021, THE COURT ON 14.07.2021 DELIVERED THE FOLLOWING: WP(C) NO. 29805 OF 2015 -2- ## **JUDGMENT** Petitioner has approached this Court under Article 226 of the Constitution of India with the following prayers: "i.issue a writ of certiorari setting aside Exhibit P7 in so far as it exempt the 3rd respondent from implementing 2009 Pay Revision, as vitiated by violation of natural justice: ii.declare that the Petitioner is entitled to the benefits of 2009 Pay Revision; in the alternative, iii. issue a writ in the nature of mandamus or any other appropriate writ, direction or order commanding the 2nd respondent to take up the 3rd Respondent's resolutions dated 05.02.2007 and 03.08.2010 and their representation dated 08.07.2008 afresh and pass appropriate orders in accordance with law after affording an opportunity of being heard to the Petitioner and the 3rd Respondent expeditiously within the time frame to be fixed by this Honourable Court; iv. issue necessary direction to the 3d Respondent to disburse the amount due to the Petitioner, by implementing Exhibit P6 order without any further delay; v. be further pleased to issue such other writ order or direction as this Honorable Court deems just and proper in the circumstances of the case." 2. The facts leading to filing of the writ petition are that respondent No.1 i.e., State of Kerala revised the pay scales of the employees of the Co-operative Societies with WP(C) NO. 29805 OF 2015 -3- effect from 01.04.2004 which was made applicable to all Co-operative Societies throughout the State. On 22.04.2006 an application was submitted on behalf of the petitioner for extending the benefits of pay revision. But the Managing Committee of the Society i.e., respondent No.3 resolved not to implement the pay revision to their employees. A representation dated 12.05.2009 was submitted to respondent No.2 , i.e., Registrar of Cooperative Societies. It was forwarded to the Joint Registrar for enquiry and disposal. On the basis of the report received from the Assistant Registrar (General), the Joint Registrar failed to pass any orders necessitating the petitioner to approach this Court vide W.P.(C) No.21881 of 2012. Vide judgment dated 08.10.2012, Joint Registrar was directed to expedite the proceedings and vide order dated 20.01.2013 Ext.P1, aforementioned request has been dismissed. Petitioner preferred an appeal before the Government and vide order dated 10.02.2014 respondent No.3 was directed to implement 2004 pay revision. WP(C) NO. 29805 OF 2015 -4- Respondent No.3 challenged the aforementioned order in this Court vide W.P.(C) No.10377 of 2014 on the premise that they were making profit throughout the period between 2000 and 2011, except one of the financial year. This Court vide judgment dated 05.01.2015 disposed of the writ petition by directing to consider the representation on merit with notice within a period of three months. 3. Learned counsel appearing on behalf of the petitioner submitted that thereafter the copy of the order of this Court was communicated to respondent No.2. Without issuing any notice of hearing and affording any opportunity of hearing respondent No.2 passed two orders on 13.04.2015. As per the first order, respondent No.3 was directed to extend the benefit of the 2004 pay revision to the petitioner vide Ext.P6 and as per the second order respondent No.3 was exempted from implementing 2004 and 2009 pay revisions. Respondent No.3 challenged the aforementioned order vide W.A.No.641 of 2015, which was disposed of vide judgment dated 06.07.2015, whereby the WP(C) NO. 29805 OF 2015 -5- impugned action of the respondents in not implementing the 2009 pay revision was held arbitrary, unjust and illegal, particularly in view of the fact that in the earlier round of litigation this Court had evaluated the financial position of the Society vide judgment dated 05.01.2015 Ext.P3. 4. Ext.P7, whereby exemption granted to the 3[rd] respondent is vitiated on account of the fact that respondent No.3 made profit during the entire period between 2000 to 2009 and again during 2010-2011 as per the balance sheet which has been extracted in ground No.E of the writ petition. Petitioner retired from the service on 31.12.2010 and after lapse of more than five years arrears have not been disbursed. 5. In support of the contention the judgment of this Court in 2018 (4) KHC 475 **Viswanathan** vs. **Haripad Service Co-operative Bank** has been relied upon by the petitioner. WP(C) NO. 29805 OF 2015 -6- 6. On the contrary, the aforesaid judgment is opposed by the respondents relying upon the Division Bench judgment of this Court in **the Employees Provident Fund Organisation, Thiruvananthapuram Vs. Kerala State Co-operative Employees Pension Board, Thiruvananthapuram (2016 (5) KHC 414** ) that the exemption granted to the Society from implementation of 2009 pay revision was legal and justified on point that the Society was financially unstable and the resolution of the Administrative Committee was also noticed. Even the petitioner was afforded an opportunity as evident from Ext.P7. The order of exemption is totally legal and justified and cannot be tinkered with until and unless found to be apparently illegal, arbitrary or without jurisdiction. 7. I have heard counsel for the parties and appraised the paper books. 8. It is a matter of record that the Society is a Primary Society and in this regard the judgment of this WP(C) NO. 29805 OF 2015 -7- Court in W.P.(C) No.13504 of 2011 titled as Soleman N.M., Mudakkuzha Service Co-operative Bank Vs. State of Kerala and Others has been overruled in the Review Petition reported in **2016 (5) KHC 414** (supra), wherein it has been held that the Government had introduced a Self Financing Pension Scheme for establishment of pension fund for payment of pension to the employees of the Co-operative Societies. On advent of the scheme the establishment of the bills remain registered under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act 1954 (hereinafter referred to as 'EPF Act' for short). For the purposes of the implementation of the pension scheme introduced by the State Government it was necessary to get exemption and exclusion from the provisions of the EPF Act i.e., Section 17 of the aforementioned Act prescribed the provisions. The contention that EPF Act is more beneficial to the employees and compelled to join the self financial scheme had been negated in paragraph Nos.7 & 8 of the judgment WP(C) NO. 29805 OF 2015 -8- in **Employee Provident Fund Organisation** (supra). The same are extracted hereinbelow: “7. The Pension Board constituted under the 'Self Financing Pension Scheme' formulated by the State Government went up in appeal against the above said judgment of the Single Judge. Those writ appeals were disposed of through the judgments which are sought to be reviewed herein. While disposing the writ appeals the Division Bench observed that, it is not necessary to decide the issue as to which among the schemes is more favourable to the employees. It was observed that, it would be safe to leave such question to the decision of the employees, as to which among the Employees Pension Scheme, 1995 or the Self Financing Pension Scheme of the State Government is more beneficial to them. Crux of the issue considered by the Division Bench is that, whether there is any mandatory legal requirement under the KCS Act or under the EPF Act to terminate the existing membership of the employees in the Employees Pension Scheme, 1995 and to transfer the funds to the Self Financing Pension Scheme, with respect to the retired and working employees who are members of the 1952 scheme. Referring to the proviso introduced to S.61(1) of the KCS Act and also to the provisions of the R.58 of the Kerala Co-operative Societies Rules, this Court noticed that, after establishment of the Self Financing Pension Scheme the provisions of EPF Act do not apply to the establishments, which are required to establish a Provident Fund by itself, so as to enable the operation of the Self Financing Pension Scheme But at the same time, this Court noticed that the proviso to R.58(1) as well as subrule (4) of R.58 and found that, neither the State Government nor the Board administering the Self Financing Scheme cannot compel transfer of the funds of individual employees, who are members of the Employees Provident Fund Scheme, 1952 and Employees Pension Scheme, 1995, without their consent. But after arriving at such a finding, the WP(C) NO. 29805 OF 2015 -9- ## Division Bench in the judgment impugned herein observed as follows: "Since both the appellant as well as Employees Provident Fund Organisation and the Pension Fund operate for the benefit of the employees, we feel those who wish to opt to transfer the membership from the Employees Provident Fund Scheme, 1952 and the Employees Pension Scheme, 1995 can apply for the same and in such cases the EPF Commissioner should transfer the funds. In other words, transfer of fund from EPF Scheme, 1952 and Employees Pension Scheme, 1995 of any retired or continuing member should be made only with his/her consent. It is for the appellant to fix a time limit for exercising the option for retired employees and for serving employees and in all such cases fund will be transferred to the appellant Board from the Employees Provident Fund and Pension Schemes." 8. The Employees Provident Fund Organisation is seeking review of the above quoted observations, by raising contention that exemption / exclusion cannot be granted to individual employees of a registered establishment. Rather, the contention is that, the exemption or exclusion contemplated under S.17(1C) or under S.16(1)(b) can be granted only to an establishment. On behalf of the employee's organisations and the individual employees, who were petitioners in the writ petitions, it is vehemently contended that, their membership in the Employees Pension Scheme, 1995 are not liable to be terminated or that they cannot be compelled to join the Self Financing Pension Scheme. Referring to various provisions in the EPF Act and in the schemes formulated thereunder it is contended that, such transfer can be made only on the basis of consent of the individual employee concerned. In this regard much emphasis was placed on provisions contained in S.17C of the EPF Act, 1952 as well as in Paragraph 13 of the Employees Pension Scheme, 1995. It is also pointed out that, with respect to retired employees benefits available to them or any of their service conditions could not be altered WP(C) NO. 29805 OF 2015 -10- unilaterally, after their retirement, in any manner prejudicial to them. Various legal precedents settled on this point were also pointed out during the argument.” It is prerogative of the Government to grant exemption from the applicability of the EPF Act. Employees cannot compel the authorities from laying challenge to exemption. No ground for interference is made out. Writ petition is dismissed. **Sd/AMIT RAWAL JUDGE** **VV** WP(C) NO. 29805 OF 2015 -11- ## **APPENDIX OF WP(C) 29805/2015** ## **PETITIONER EXHIBITS** EXHIBIT P1 COPY OF THE ORDER DTD 20/1/2013 ISSUED BY THE JOINT REGISTRAR OF CO-OPERATIVE SOCEITIES, (GENERAL)ERNAKULAM, ALONG WITH TRANSLATION - EXHIBIT P2 COPY OF THE ORDER DTD 10/2/2014 ISSUED BY THE IST RESPONDENT ALONG WITH TRANSLATION - EXHIBIT P3 COPY OF THE JUDGMENT DTD 5/1/2015 IN WPC 10377/2014 - EXHIBIT P4 COPY OF THE LETTER DTD 19/1/2015 FROM THE PETITIONER TO THE 2ND RESPONDENT - EXHIBIT P5 COPY OF THE REGISTERED LETTER DTD 5/3/2015 FROM THE PETITIONER TO THE 2ND RESPONDENT - EXHIBIT P6 COPY OF THE ORDER NO EM(3)8272/14(1)DTD 13/4/2015 ISSUED BY THE 2ND RESPONDENT ALONG WITH TRANSLATION - EXHIBIT P7 COPY OF THE ORDER NO EM(3)8272/14 K.DIS (II)DTD 13/4/2015 ISSUED BY THE 2ND RESPONDENT ALONG WITH TRANSLATION - EXHIBIT P8 COPY OF THE JUDGMENT DTD 6/7/2015 IN WA 641/2015 ## **RESPONDENT'S EXHIBITS** - EXHIBIT R3(a) TRUE COPY OF THE JUDGMENT DATED 02.11.2009 IN WP(c) nO.21705 OF 2004 OF THIS HON'BLE COURT - EXHIBIT R3(b) TRUE COPY OF THE JUDGMENT DATED IN WP(c) NO.9110 OF 2009 OF THIS HON'BLE COURT EXHIBIT R3(c) TRUE COPY OF THE JUDGMENT DATED 07.11.2016 IN RP No.45 OF 2013 WP(C) NO. 29805 OF 2015 -12- EXHIBIT R2(a) TRUE COPY OF THE JUDGMENT DATED 07.02.2012 IN W.P(c)NO.13504/2011 ALONG WITH W.P.(C) NO.187/2010 EXHIBIT R2(b) TRUE COPY OF THE JUDGMENT IN R.P.NO.992/2016 AND CONNECTED CASES DATED 27.07.2016