Krishnan P. Pensioner v. State of Kerala and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 20TH DAY OF MARCH 2012/30TH PHALGUNA 1933 WP(C).No. 19909 of 2008 (T) --------------------------- PETITIONER: ------------- KRISHNAN P. PENSIONER, RESIDING AT 'DEVI SADANAM' NEAR BLOCK OFFICE, KELOTH OF PAYYANUR AMSOM AND DESOM OF TALIPARAMBA TALUK. BY ADV. SRI.MAHESH V RAMAKRISHNAN RESPONDENTS: -------------- 1. STATE OF KERALA AND OTHERS SECRETARY TO GOVERNMENT, SECRETARIAT THIRUVANANTHAPURAM. 2. SECRETARY TO GOVERNMENT, CO-OPERATION (B)DEPARTMENT, THIRUVANANTHAPURAM. 3. THE KERALA CO-OPERATIVE EMPLOYEES PENSION BOARD, REPRESENTED BY ITS SECRETARY THIRUVANANTHAPURAM. 4. REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM. BY ADVOCATE SRI.K.R.SUNIL,SC,CO-OP.EMP.PENSION BOAR BY GOVERNMENT PLEADER SRI.V.VIJULAL BY SRI.P.V.MOHANAN,SC,K.ST.CO.OP.EMP.PENSI THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 2003-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **APPENDIX TO W.P.C.No.19909 of 2008** ## **PETITIONER'S EXHIBITS:** EXT.P1: TRUE COPY OF THE CERTIFICATE DATED 28/5/2008 ISSUED BY THE SECRETARY OF THE PAYYANUR SERVICE CO-OP BANK LTD., PAYYANNUR. EXT.P2: TRUE COPY OF THE KERALA CO-OP EMPLOYEES SELF FINANCING PENSION SCHEME, 1994. EXT.P3: TRUE COPY OF THE ORDER NO.PB.PPO.395/KNR DATED 4/12/2007 ISSUED BY THE 3RD RESPONDENT. EXT.P4: A TRUE COPY OF THE REPRESENTATION DATED 1/2/2008 MADE BY THE PETITIONER BEFORE THE 3RD RESPONDENT. ## **RESPONDENT'S EXHIBITS:** NIL // True Copy// PA to Judge ## **A.M.SHAFFIQUE, J * * * * * * * * * * * * *** W.P.C.No.19909 of 2008 ---------------------------------------Dated this the 20[th] day of March 2012 ## **J U D G M E N T** The petitioner retired from a primary Co-operative Society while holding the office of Secretary, on superannuation. He joined service on 17/09/1976 and attained superannuation on 30/09/2007. According to him, including the probation service of one year, he has an actual effective service of 31 years and 14 days. 2. The complaint of the petitioner is that though he is having a qualifying service of more than 30 years and was entitled to half of the average pay as superannuation pension per month as per clause 20 and 22 of Ext.P2 pension scheme, by virtue of Ext.P3 order, he was sanctioned only Rs.10,000/- as pension from 01/10/2007. 3. The petitioner challenges Ext.P3 and seeks a direction for payment of pension after reckoning 30 years of qualifying 2 W.P.C.No.19909 of 2010 service. The 3[rd] respondent filed a statement contending that the Pension Board is constituted under Section 80-A of the Kerala Co-operative Societies Act and Rules 1969 for the payment of pension to the employees of Co-operative Societies. It is admitted that the petitioner is a member of the Self-Financing Pension Scheme. It is contended that the Pension Scheme is functioning purely on the basis of employee's contribution and these contributions are effectively deposited and are getting maximum interest. It is further contended that the said income is not sufficient to pay pension to all the members of the scheme and the Government as well as the Pension Board has to safeguard the interest of the employees who was still in service. It is further contended that as per G.O.P.No.129/06/Co-op; dated 12/07/2006, the Government by incorporating a proviso to sub paragraph (1) of paragraph 22 decided to amend the scheme to remove the ambiguity and make these provisions applicable to all employees also to limit the maximum pension that can be allowed to an employee under the scheme to Rs.10,000/-. It is further stated that the pension board has proposed an amendment to clause 22 for limiting the average pay of 3 W.P.C.No.19909 of 2010 Rs.20,000/- for calculation of pension. It is further stated that there occurred a clerical mistake in G.O.P.No.129/06/Co-op which is sought to be corrected and the Pension Board has recommended the Government to issue the Government Order after necessary rectification. 4. It is therefore submitted on behalf of the 3[rd] respondent that the amendment sought for does not take away a valid right on the employee and whereas it is only of a clarificatory nature and hence the petitioner is entitled for pension in terms of Ext.P3 only. 5. Heard the learned counsel appearing on either side. It is contended by the learned counsel for the petitioner that pension being a legal right available to the petitioner as on the date of superannuation, the Rules as on the date of retirement applies and if as per the Rules prevailing as on the date of superannuation the petitioner is entitled for a higher pension, the petitioner is entitled to claim the same amount. According to the petitioner, calculated on the basis of Ext.P2, the petitioner is 4 W.P.C.No.19909 of 2010 entitled for a pension of Rs.14,396/-. The learned counsel also relied upon the following judgments to contend for the said position. ## (i) **D.S.Nakara v. Union of India [AIR 1983 SUPREME** **COURT 130]** is relied upon by the learned counsel for the petitioner to indicate that it is not open to introduce an arbitrary eligibility criteria for being eligible for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being not based on any discernible rationale principle and being wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary. ## (ii) **Salabuddin Mohamed Yunus v. State of Andhra** **Pradesh [AIR 1984 S.C.1905]** is relied upon to contend for the position that: “Where a Government servant in the State of Hyderabad who was governed by R.299 (1) (b) and thus was entitled to receive pension of Rs.1,000/-, retired before 1[st] Nov., 1956, i.e. the date of reorganisation of States, would be 5 W.P.C.No.19909 of 2010 entitled to receive pension of Rs.1,000/- in Indian currency and not to the amount of Rupees 857.15 as substituted by retrospective amendment of the rule brought about by the notification as the right to receive pension flowed immediately on retirement and was property within meaning of Articles 19(1) (f) and 31(1) of the Constitution i.e. a fundamental right and could not be taken away either under Cause (5) of Article 19(1) and such deprivation was also not justified under Article 31(1) since the same could not be said to be for public purpose and no compenstion was being paid to the public servant. Writ Appeal No.628 of 1974 (Andh Pra), Reversed.” ## (iii) In **K.C.Arora v. State of Haryana [AIR 1987 SUPREME COURT 1858]** it is held that “Thus the persons who joined the army during the emergency as commissioned officers and who after serving the Indian Army for more than five years were appointed in the service of the Haryana Government as temporary Assistant Engineers against the posts reserved for the exemergency commissioned officers were to be given seniority by counting period of military service. Immediately on appointment as 6 W.P.C.No.19909 of 2010 temporary Assistant Engineers they became entitled to get their seniority fixed giving them the benefit of their military service. The Haryana Government could not take away the accrued rights of such persons by making amendment of the rules with retrospective effect by adding proviso to Rs.4(ii) taking away the benefit of counting military service towards seniority or by making amendment in the definition of the expression military service in Rule 2 restricting the benefits of military service up to 10[th] of January, 1968, (1980) 3 Serv LR 338 (Punj & Har), Reversed; 1983 Lab IC 391 (SC), Followed; 1969 Lab IC 100 (SC), Distinguished.” (iv) In **Union of India & Ors. v. Dr.Vijayapurapu Subbayamma [Appeal (Civil) No.5346 of 1997]** it is held as follows: “The conspectus of legal position that emerges from the aforesaid decisions are these: a) Where an employee under the terms and conditions of service or under the relevant rules relating to pension is not eligible to earn pension on his or her retirement, any amendment of the rules covering a new class of 7 W.P.C.No.19909 of 2010 pensioner would not confer pensionary benefits on the employee who has retired prior to coming into force of such amendment of Rules. b) However, the position would be different if such an amendment in the relevant pension rules is with retrospective effect as to cover a new class of employee including those employees who, at the relevant time, were not entitled to earn pension under the then existing rules and conditions of service. c) Where an employee at the time of retirement is entitled to pension under the relevant rules any subsequent amendment to the relevant rules enhancing pension or conferring additional benefit would be also applicable to him.” 6. Whereas on the other hand, the learned counsel for the 3[rd] respondent relied upon judgment of this Court in **Velayudhan v. State Co-operative Employees Pension Board [2011(1)KLT 399** to contend that when an amendment is made in the form of a clarification, it will have retrospective operation. In the said judgment, this Court was concerned with an amendment made in clause 21 of the Kerala Co-operative 8 W.P.C.No.19909 of 2010 Societies Employees of the Self-Financing Pension Scheme 1994. The question that was considered was whether the incorporation of the word 'or' in the amendment was prospective or had retrospective operation. This Court held that the amendment was only intended to correct a mischief since it being an obvious omission of the former statute, the amendment does not amount to a substitution of the provision and it is not an introduction of a new provision after repeal of an existing provision. Hence this Court found that the Government was only rectifying the omission of the word “or” in the provision after 20 years of qualifying service. 7. It is submitted by the learned counsel for the 3[rd] respondent that in this case also Ext.P2 scheme was amended and the present clause was in the nature of a clarification. It is stated that since there was an ambiguity in the previous Rule, Government had decided to amend the scheme to remove the ambiguity and make this provision applicable to all employees and also to limit the maximum pension that can be allowed to an employee under the Scheme to Rs.10,000/-. 9 W.P.C.No.19909 of 2010 8. The point to be considered is what was the real position as on the date of retirement of the petitioner and whether the amendment to the said Rule will affect his entitlement of the pension as per the unamended Rules. 9. It is relevant to note that the above pension scheme has been framed in pursuance of the powers conferred in the Government under Section 80A of the Kerala Co-operative Societies Act 1969. The Scheme had come into force on 03/06/1993. Clause 18 coming under Chapter III indicates that every employee of a Society to which the Scheme applies shall, subject to the other provisions of the Scheme, be eligible for pension under this Scheme. Clause 19 refers to qualifying service. Qualifying service for granting pension under the Scheme is in the case of an employee who was in the service of a Society on the date of application of this Scheme to that Society the length of service commencing from the date of joining the Contributory Pension Fund. Proviso further indicates that whether an employee was a subscriber to any pre-existing 10 W.P.C.No.19909 of 2010 Provident Fund Scheme implemented in that Society and contribution made thereon has been transferred to the Pension Fund, such period will also qualify for pension. The third proviso further indicates that if an employee was on probation and on whose behalf the Contributory Provident Fund contribution has not been remitted at the time of implementation of the Scheme, such period of probation shall also qualify for pension, if proportionate employers' contribution together with interest thereon has been credited to the Pension Fund. 10. No doubt, going by Ext.P3, the petitioner is eligible for pension under the Scheme. The point for determination is whether the amendment to Clause 22 can be made applicable to the petitioner in so far as amendment fixes the average pay to Rs.20,000/- and the maximum amount of pension to Rs.10,000/-. It is relevant to note that in Ext.P2 relied upon by the petitioner, the 2[nd] proviso read as follows: “Provided further that for calculating pension, the average pay shall be limited to Rs.20,000/(Rupees twenty thousand only) in case the length of service is less than 30 years and the pension shall be calculated as follows:- 11 W.P.C.No.19909 of 2010 **==> picture [285 x 41] intentionally omitted <==** 11. The petitioner's case is that the limitation of average pay of Rs.20,000/- is only for persons whose length of service is less than 30 years and insofar as the petitioner is concerned, the proviso has no application and pension is to be computed as per Clause 22(1) which is Average pay X Qualifying service (Subject to Pension = ------------------------------------------------- a maximum of 60 30 years) 12. The second proviso was incorporated as per G.O.P.No.129/2006/Co-op. The above proviso was amended with effect from 28/10/2008 as follows: “Provided also that for calculating pension, the average pay shall be limited to Rs.20,000/(Rupees twenty thousand only) and the maximum amount of pension shall be limited to Rs.10,000/- (Rupees ten thousand only).” 12 W.P.C.No.19909 of 2010 13. The real position as on the date when the petitioner retired is apparently as per Ext.P2 whereas it was by an amendment which had come into effect as per S.R.O.1099/08 published in Kerala Gazette 53 with effect from 28/10/2008 that the maximum amount of pension as Rs.10,000/- was incorporated. It is therefore clear that the average pay was limited to Rs.20,000/- even in respect of persons who had retired on 30/09/2007 in terms with Ext.P2, whereas the amendment had come into effect only on 28/10/2008. 14. The question is whether there has been any change in calculation of the pension. According to the petitioner, he is having more than 30 years of service and therefore he is eligible for pension on the basis of actual pay and cannot be limited to Rs.20,000/-. This apparently is not the interpretation that could be given to Clause 22 even going by Ext.P2. 15. It is clear from Clause 22(1) that the previous years of qualifying service are subject to a maximum of 30 years. 13 W.P.C.No.19909 of 2010 Therefore, even if a person has more than 30 years of service, his qualifying service will be considered as only 30 years. According to 2[nd] proviso to Clause 22(1) which had come into effect on 07/08/2006 as per S.R.O.No.579/2006, average pay is limited to Rs.20,000/- in case of length of service is less than 30 years. There is no contradiction between the qualifying service in clause 22(1) of the 2[nd] proviso. The Scheme considers the qualifying service only to a maximum extent of 30 years and therefore even if the petitioner had worked for more than 30 years he cannot have pension fixed overlooking the second proviso. If that be considered, the maximum pension payable is only Rs.10,000/-even going by Clause 22(1). In other words, the actual pay received by an employee cannot be taken into consideration for the purpose of computing pension even under Clause 22(1) as the qualifying service is limited to 30 years in terms with the very same clause. Even going by clause 22(1) the computation of pension will be as follows: Rs.20,000 x 30 ---------------------- = Rs.10,000/60 14 W.P.C.No.19909 of 2010 16. The amendment to the second proviso made with effect from 28/10/2008 does not change the position. It only clarifies a doubt that could be created in the mind of any person regarding the quantum of pension. The amendment therefore only clarifies the Clause and does not take away any legal right the petitioner had as on the date of his retirement. Under these circumstances, I do not find any merit in the writ petition and the same stands dismissed. (sd/-) ## **(A.M.SHAFFIQUE, JUDGE)** jsr W.P.C.No.19909 of 2010 15 16 W.P.C.No.19909 of 2010 ## **THOMAS.P.JOSEPH,J.** Crl.M.C.No. of 200 ORDER 19/01/2011 In fact, it is alleged that instead of “provided further that for calculating pension, the average pay shall be limited to Rs.20,000/- in case the length of service is less than 30 years and pension shall be calculated as follows: a. Pension: Average Pay X Qualifying service (in number of months) ----------------------------------------------------------- a.720 to be corrected as