SURAJ P S v. KERALA STATE FINANCIAL ENTERPRISES LTD

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **TUESDAY, THE 19[TH] DAY OF APRIL 2022 / 29TH CHAITHRA, 1944** ## **WP(C) NO. 19082 OF 2021** ## **PETITIONER/S:** SURAJ P S AGED 60 YEARS SENIOR MANAGER (RTD), THE KERALA STATE FINANCIAL ENTERPRISES LTD, (PERMANENTLY RESIDING AT RADHAMADHAVAM, ALTHARAMOODU, KADAKKAL, KOLLAM-691 536) BY ADVS. S.K.ADHITHYAN KEERTHI S. JYOTHI ## **RESPONDENT/S:** 1 KERALA STATE FINANCIAL ENTERPRISES LTD, REP BY ITS MANAGING DIRECTOR, BHADRATHE, P.B NO 510, MUSEUM ROAD, THRISSUR-680 020. 2 THE MANAGING DIRECTOR THE KERALA STATE FINANCIAL ENTERPRISES LTD, BHADRATHE, PB NO 510, MUSEUM ROAD, THRISSUR-680 020 3 THE DEPUTY GENERAL MANAGER (P & HR), THE KERALA STATE FINANCIAL ENTERPRISES LTD, BHADRATHE, PB NO 510, MUSEUM ROAD, THRISSUR-680 020. BY ADVS. M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD** **ON 22.03.2022, THE COURT ON 19.04.2022 DELIVERED THE FOLLOWING:** W.P.(C) No.19082 of 2021 -2- ## **JUDGMENT** ## **Dated this the 19[th ] day of April, 2022** The petitioner retired as ‘Senior Manager’ from the Kerala State Financial Enterprises (‘the Company’, for short) on 31.05.2019 and is aggrieved by the non-disbursal of his terminal benefits. The reason for non-disbursal put forth by the Company _via_ Exts.P2 and P5 communications, is grant of sticky loans/chits in violation of the Companies Circulars and norms and improper valuation of secured assets from the Branches where the petitioner had worked in different capacities. 2. The petitioner contends that the allegations are baseless and the alleged liabilities were not quantified with notice to him, while in service. Terminal benefits being the reward for his hard work, is liable to be paid immediately after retirement and cannot be ## W.P.(C) No.19082 of 2021 -3- withheld and doled out at the whims and fancies of the employer. 3. The Company's stand as reflected from the counter affidavits filed in similar case is that the practice being followed is to quantify the liability in the name of each employee, prior to the settlement of retirement benefits. On verification of the liability/non liability reports of the petitioner called forth from various Departments at the Head Office and Branches where the petitioner had worked, it was seen that the sanctioning of loans and chitties by the petitioner without adequate security had resulted in the Company being disabled from recovering the amounts due under those transactions. Even though the petitioner was called upon to settle the liability thus incurred before retirement, he superannuated without settling the liability. The fact that the petitioner is retired does not exempt or immunise W.P.(C) No.19082 of 2021 -4- him against the contumacious conduct that had caused irreparable loss to the Company. Therefore, the Company has every right to adjust the liability incurred by the petitioner against the terminal benefits due to him. 4. Indubitably, no proceedings were initiated against the petitioner while he was in service. No rule or regulation enabling the Company to initiate proceedings for recovery after retirement or to withhold terminal benefits is brought to my notice. Being so, it can unhesitatingly be held that, non-disbursal of terminal and other benefits, based on an unsubstantiated allegation of having caused loss to the Company is not only illegal, but is antithesis to the mutual trust on which the employer-employee relationship is founded. 5. The precedents on the point are plenty. In _**Khem Chand v. Union of India [AIR 1963 SC**_ W.P.(C) No.19082 of 2021 -5- _**687],**_ the Apex Court held the right to arrears of pay and allowance to be property within the meaning of Article 19(1)(f) of the Constitution of India. In _**Deoki Nandan Prasad v. State of**_ _**Bihar [AIR 1971 SC 179]**_ , the right to receive pension was held to be property under Article 31(1)and Article 19(1)(f). Taking note of the repeal of Articles 19(1)(f) and 31(1) by the Constitution (Forty-fourth) Amendment Act, the Apex court in _**State of W.B. v. Haresh C. Banerjee [(2006) 7 SCC 651]**_ declared it to be a constitutional right, as contemplated in Article 300-A of the Constitution. The legal position needs no further reiteration in the light of the finding in _**State of Jharkhand v. Jitendra Kumar**_ _**Srivastava [(2013) 12 SCC 210].**_ Contextually relevant portion of the judgment is extracted hereunder; _“The fact remains that there is an imprimatur_ ## W.P.(C) No.19082 of 2021 -6- _to the legal principle that the right to receive pension is recognised as a right in “property”. Article 300-A of the Constitution of India reads as under:_ _300-A.Persons not to be deprived of property save by authority of law.—No person shall be deprived of his property save by authority of law. Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the constitutional mandate enshrined in Article 300-A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced.”_ As observed in _**D.S.Nakara v.Union of India**_ _**[(1983) 1 SCC 305]**_ , the antiquated notion of pensionary or retiral benefits being a bounty or a gratuitous payment, depending upon the sweet will or grace of the employer and not a right enforceable through court, has been swept under the carpet by a catena of decisions. W.P.(C) No.19082 of 2021 -7- 6. It may also be apposite to note that as per the judgment in W.P(C).No.33750 of 2017, filed by another set of disgruntled pensioners, this court had directed the respondents to pay the entire benefits within three months. A conspectus of the above precedents leads to the irrefragable conclusion that the Company is bound to disburse the terminal and other benefits due to the petitioner forthwith. In the result, the writ petition is allowed and the following directions are issued; i. The Company shall disburse the DCRG and other benefits due to the petitioner within three months of receipt of a copy of this judgment. ii. The unpaid gratuity will carry 6% interest at the rate of 6% per annum, computed from the first day of the next month of petitioner's retirement. ii. In case of failure to pay the amounts W.P.(C) No.19082 of 2021 **==> picture [16 x 9] intentionally omitted <==** within three months, the Company will be liable to pay 9% interest on the entire balance amount, reckoned from the date of retirement of the petitioner. Sd/- **V.G.ARUN JUDGE** _scl_ W.P.(C) No.19082 of 2021 -9- ## **APPENDIX OF WP(C) 19082/2021** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE LETTER WRITTEN BY THE 3RD RESPONDENT TO THE PETITIONER DATED 2.5.2019 Exhibit P2 TRUE COPY OF THE LETTER WITH REF NO 47102 SEND BY THE 3RD RESPONDENT DATED 08/05/2019 Exhibit P3 TRUE COPY OF THE LETTER SEND TO THE 3RD RESPONDENT DATED 31.8.2019 Exhibit P4 TRUE COPY OF THE REPRESENTATION FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER DATED 27.12.2019 Exhibit P5 TRUE COPY OF THE LETTER NO 47102 DATED 4.2.2020 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P6 TRUE COPY OF THE JUDGMENT IN WPC NO 33750/2017 BY THE HON'BLE HIGH COURT OF KERALA DATED 7.10.2018