P. Indira Devi v. General Manager, District Co-operative Bank, Kottayam

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** # **FRIDAY,THE 01ST DAY OF FEBRUARY 2019 / 12TH MAGHA, 1940** # **WP(C).No. 27854 of 2014** ## **PETITIONER:** **P.INDIRA DEVI** **CLERK (RETIRED), DISTRICT CO-OPERATIVE BANK, KOTTAYAM, RESIDING AT SREE SAI, THIRUNAKKARA KARA, KOTTAYAM VILLAGE, THIRUNAKKARA WEST P.O, KOTTAYAM DISTRICT 686001** **BY ADV. SRI.KISHOR B.** ## **RESPONDENT:** **GENERAL MANAGER, DISTRICT CO-OPERATIVE BANK DISTRICT CO-OPERATIVE BANK BUILDING, KOTTAYAM 686001** **BY ADVS. SRI.ATHUL SHAJI SRI.GEORGE POONTHOTTAM (SR.)** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.P.(C)No.27854 of 2014** ## **:-2-:** ## **J U D G M E N T** The petitioner retired from service while working as Clerk in the respondent District Cooperative Bank. The petitioner has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P3 notice dated 16.11.2011 issued by the respondent to the extent the petitioner is required to remit an amount of Rs.1,49,429/-. The petitioner has also sought for a writ of mandamus commanding the respondent to forthwith pay him an amount of Rs.1,49,429/- along with interest at the rate of 18% per annum from 30.11.2011, at the earliest. 2. On 28.11.2014 when this writ petition came up for admission, the learned Standing Counsel took notice for the respondent and the respondent was directed to place on record the counter affidavit within two weeks. ## **W.P.(C)No.27854 of 2014** **:-3-:** 3. A counter affidavit has been filed by the respondent and paragraphs 4 and 5 of the said counter affidavit read thus; “4. The petitioner retired from service of the respondent bank, which is a central society. Due to negligence of the petitioner, the bank suffered loss. The bank initiated disciplinary proceedings and the negligence on the part of the petitioner along with two other employees of the bank was proved. The audit also raised objections. Therefore, the bank withheld the proportionate amount from the terminal benefits of the petitioner. This was not as a measure of penalty but only by way of restitution of loss caused to the bank due to the negligence of the petitioner, which is estimable in terms of money. 5. On 24/12/2012, while the petitioner was working in the main Branch of the Bank an SB account as A/C No.9086 was opened in the name of one M.H.Ismath without following the mandatory requirements for opening S.B.Account in the Bank. The account was allowed to be opened without proper enquiry about the identity and whereabouts of the person. The ## **W.P.(C)No.27854 of 2014** **==> picture [34 x 8] intentionally omitted <==** applicant was not properly introduced. Accordingly, two bogus Mail Transfers involving an amount of Rs.3,75,000/- and Rs.2,50,000/were made through the said account. An enquiry was ordered into the incident and the enquiry officer submitted a report dated 22.11.2007. Negligence and dereliction of duty was proved on the part of the petitioner and 2 others.” 4. Heard the learned counsel for the petitioner and also the learned Standing Counsel for District Co-operative Bank. 5. The sole issue that arises for consideration in this writ petition is as to whether any interference is warranted on Ext.P3 notice dated 16.11.2011 issued by the respondent. Ext.P3 notice reads thus; “That while you were working in the Kottayam Main Branch of the Kottayam District Cooperative Bank Ltd. along with Sri.V.K.Shajimon and Smt.K.M.Lilly you have caused to en-cash a fake money transfer for Rs.448287/- in favour of Sri.Ramakrishnan. While making the payment you have not taken due care and caution expected of **W.P.(C)No.27854 of 2014** ## **:-5-:** an employee. By your default and negligence, the Kottayam District Co-operative Bank Ltd. has sustained loss of Rs.448287/-. Had you been vigilant the miscreant act could have been detected. There for you along with the said employees are liable to pay the amount to the Kottayam District Co-operative Bank Ltd. Hence you are called up on to pay Rs.1,49,429/(Rupees One lakh Forty Nine thousand Four hundred and Twenty Nine only) on or before 30.11.2011, failing which legal proceedings will be initiated against you, in which case you will be held liable for the costs also.” 6. By issuing Ext.P3 notice, the respondent has made an attempt to recover a sum of Rs.1,49,429/- from the petitioner and she was informed that if she fails to remit the said amount on or before 30.11.2011, legal proceedings will be initiated against her. While disbursing the terminal benefits payable to the petitioner, the sum of Rs.1,49,429/- shown in Ext.P3 towards her liability was withheld. The question as to whether such a recovery or withholding of the gratuity is ## **W.P.(C)No.27854 of 2014** **:-6-:** legally permissible on the ground stated in Ext.P3 is no more res integra in view of the law laid down by the Division Bench decision of this Court in **Philip v. Registrar of Co-operative Societies (2018 (3)KLT 347)** . In the said decision, after taking note of the statutory provisions under Section 69 of the Kerala Co-operative Societies Rules, 1969 and Rule 198 of the Kerala Co-operative Societies Rules, 1969, the Division Bench held that a Co- operative Society cannot suo motu appropriate the amounts from the retiral benefits to recompense the loss suffered as it has to be quantified by an adjudicatory process going by Section 69 of the Act. Paragraphs 4 and 5 of the said decision read thus; “4.The following penalties can be imposed on any member of the establishment of a co-operative society under Rule 198 of the Kerala Cooperative Societies Rules, 1969 ['the Rules for short'] for good and sufficient reasons: ## **W.P.(C)No.27854 of 2014** ## **:-7-:** “(a) Censure; - (b) Fine (in the case of employees in the last grade); - (c) Withholding of increments with or without cumulative effect; - (d) Withholding of promotion; (e) Recovery from pay of the whole or part of any pecuniary loss caused to the society, by negligences or breach of orders or otherwise; (f) Reduction to a lower rank; (g) Compulsory retirement; - (h) Dismissal from service.” The disciplinary authority could have imposed the punishment of recovery from pay of any pecuniary loss caused to the Bank while the appellant was in service as a member of the establishment. No such penalty was imposed and the disciplinary authority was rest contended with imposing the penalty of reduction to a lower rank which the appellant has already suffered. A fresh disciplinary proceedings for imposing the penalty of recovery from pay (even if it includes pension) can be initiated only if the appellant is still a member of the establishment. No other disciplinary proceedings are possible at this juncture after the appellant has retired from service on 30.4.2014 ## **W.P.(C)No.27854 of 2014** ## **:-8-:** and four years have elapsed since then. There is therefore no rationale or justification in the Bank retaining the retiral benefits of the appellant which are no longer a bounty but valuable rights in his hands. 5.The learned single Judge has observed that the principles of unjust enrichment and restitution enables the bank to suo motu appropriate the amounts from the retiral benefits to recompense the loss suffered. We are unable to subscribe to that view since the loss allegedly suffered by the Bank has to be quantified by an adjudicatory process as envisaged under Section 69 of the Act. A dispute of that nature can be raised by the Bank even against a past member going by the terminology of Section 69 of the Act and the retirement of the appellant is immaterial. But it is a fact conceded that the Bank has not hitherto raised a dispute before the Cooperative Arbitration Court and has only issued a notice dated 25.11.2014 pending writ petition. Even otherwise the Bank is debarred from being an arbiter in its own cause and the maxim nemo debet esse judex in propria sua causa is too well known to be overlooked. There is a real likelihood of bias if the Bank were to unilaterally appropriate the amounts from the ## **W.P.(C)No.27854 of 2014** ## **:-9-:** retiral benefits after quantifying the damages by itself in the circumstances. The principles of unjust enrichment recognised in Sections 70 and 72 of the Indian Contract Act, 1872 cannot be imported to service jurisprudence in the absence of specific rules.” 7. In view of the law laid down by the Division Bench of this Court in the decision referred to supra, the respondent is not justified in withholding a portion of the gratuity payable to the petitioner amounting to Rs.1,49,429/-, for the reason stated in Ext.P3 notice. In such circumstances, this writ petition is disposed of by setting aside Ext.P3 notice dated 16.11.2011. It is for the respondent Bank to pay the balance amount of gratuity amounting to Rs.1,49,429/- to the petitioner together with 6% interest from the due date; however, without prejudice to the right, if any, of the respondent Bank to invoke the adjudication process under Section 69 of the Kerala Co-operative Societies ## **W.P.(C)No.27854 of 2014** ## **:-10-:** Act. All pending interlocutory applications are closed. Sd/- **ANIL K.NARENDRAN JUDGE** ami/ ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE MEMO ISSUED TO THE PETITIONER DATED 12-03-2003** **EXHIBIT P2 TRUE COPY OF THE MEMO OF CHARGES AND APPOINTMENT OF SRI BIJU ABRAHAM, ADVOCATE, TO CONDUCT A DOMESTIC ENQUIRY TO THE CHARGES LEVELLED AGAINST PETITIONER** **EXHIBIT P3 TRUE COPY OF THE NOTICE DATED 16-11-2011 ISSUED BY THE RESPONDENT, NO.EST/ 605/2011-12 REQUIRING HER TO REMIT AMOUNT OF RS.1,49,429/EXHIBIT P4 TRUE COPY OF THE REPRESENTATION/ EXPLANATION SUBMITTED BY THE PETITIONER, DATED 22-11-2011 EXHIBIT P5 TRUE COPY OF THE ENQUIRY ALONG WITH THE ORIGINAL COVERING LETTER FROM THE KOTTAYAM DISTRICT CO-OPERATIVE BANK DATED 15-05-2012 EXHIBIT P6 TRUE COPY OF THE ORDER DATED 28.1.2014 IN APPEAL NO.92/2013 OF THE KERALA COOPERATIVE TRIBUNAL, TRIVANDRUM**