Thomas P. Mathew v. Kerala State Cooperative Employees' Pension Board and Others

_**WP(C).30770/11**_ 1 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941** # **WP(C).No.30770 OF 2011(U)** ## **PETITIONER/S:** **THOMAS P.MATHEW S/O MATHEW, RESIDING AT KANNAMKARA PUTHENPURALYIL,, NELLIKKAMAN PO. RANNI, PATHANAMTHITTA DISTRICT.** **BY ADVS. SHRI.JAWAHAR JOSE SMT.CISSY MATHEWS** ## **RESPONDENT/S:** |**1**|**THE KERALA STATE COOPERATIVE EMPLOYEES**| |---|---| ||**EMPLOYEES PENSION BOARD,, REPRESENTED BY ITS**| ||**SECRETARY,, POST BOX NO. 85, TC NO. 27/156-157,,**| ||**CHINMAYA LANE, KUNNUMPURAM,, NEAR AYURVEDA COLLEGE,**| ||**TRIVANDRUM, PIN- 695 001.**| |**2**|**THE DEVIKULAM PATTIKAVARGA SERVICE**| ||**CP-OPERATIVE SOCIETY, COLONY ROAD, EDAMALAKKUDY,,**| ||**MUNNAR P.O, IDUKKI DISTRICT,, PIN- 685 612.**| |**3**|**THE STATE OF KERALA**| ||**REPRESENTED BY SECRETARY,, CO-OPERATIVE**| ||**DEAPRTMENT,, GOVERNMENT SECRETARIAT,,**| ||**THIRUVANANTHAPURAM- 695 001.**| **R1 BY SRI.M.SASINDRAN, SC, KERALA STATE COOPERATIVE EMPLOYEES PENS** ## **OTHER PRESENT:** ## **SMT.RAJI.T.BHASKAR, GP** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20.09.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _**WP(C).30770/11**_ 2 **“C.R”** ## **V.G.ARUN, JJ. ----------------------------------------------W.P(C).No.30770 of 2011 ----------------------------------------------Dated this the 20[th] day of September, 2019** ## **JUDGMENT** The petitioner had joined the service of the 2[nd] respondent Co-operative society on 9.12.1977 and retired on 31.3.2007, after rendering about 30 years of service. The grievance of the petitioner is that even though, on superannuation, he is entitled to full pension under the Kerala Co-operative Societies Employees Self-financing Pension Scheme 1994, ( “the Pension Scheme” for brevity), he is being paid only a monthly pension of Rs.3,169/- with effect from 1.11.2010, as against his entitlement of Rs.10,000/with effect from 1.4.2007. The reason for payment of a lesser amount of pension from a future date is alleged to be the delay in remittance of pension contribution by the employer Society. 2. According to the petitioner, after establishment of the Pension Scheme, the 2[nd] Respondent Society had, in the year 1999, submitted application for enrolment as a member of the Scheme. The Society had also applied for allotment of code numbers to the Society and its employees. Since the periodical reminders sent by the Society to the Pension Board evoked no response, resulting in the petitioner being denied pension on his _**WP(C).30770/11**_ 3 retirement on 31.3.2007, the petitioner filed a complaint before the Kerala Lok Ayukta. By Exhibit P1 order, the Lok Ayukta held that the petitioner is entitled to get pension from the Pension Board at the prescribed rate and rejected the contention of the Pension Board that Code number will be allotted to the Society and the employees only after remittance of the contributory pension fund to the account of the Board. It was only after Exhibit P1 order that the Pension Board swung into action and issued Exhibit P2 communication requiring the Society to remit an amount of Rs.5,72,506/- towards employers pension contribution to the petitioner's account. According to the Society, having submitted application for enrolment under the Pension Scheme way back in the year 1999, it was liable to pay only the amount which was due as on the date of its application, which was only Rs.2,36,325/-. The said amount was remitted by the Society, as evidenced by Exhibit P4. Meanwhile, the petitioner submitted a request before the Pension Board stating that the Society having remitted the pension contribution and having submitted the requisite documents, the pension due to him be disbursed with arrears at the earliest. To this request, the Pension Board issued Exhibit P7 reply stating that, as per its accounts, an amount of Rs.5,72,506/- is liable to be remitted by the Society in the petitioner's pension account and that even though demand was 4 _**WP(C).30770/11**_ raised for the amount, the Society had remitted only Rs.2,36,325/-. The Board also stated that as per G.O. (P).No.185/2010 dated 8.11.2010, decision had been taken to disburse proportionate pension to the petitioner with effect from 1.11.2010. Accordingly, Exhibit P9 was issued by the Pension Board. 3. The petitioner challenges the decision of the Pension Board to disburse only proportionate pension and seek the issue of a writ of mandamus directing the Kerala State Co-operative Employees' Pension Board to disburse full superannuation pension to the petitioner from 1.4.2007 onwards, with interest at the rate of 12% per annum. The further prayer is to quash Exhibit P9 Pension Payment Order, to the extent it limits pension payable to the petitioner to be proportionate to the amount deposited by the 2[nd] respondent Society and the entitlement of the petitioner for pension to be from 1.11.2010. 4. Heard Sri.Jawahar Jose, learned counsel for the petitioner, Sri.M.Sasindran, learned Standing Counsel for the Pension Board and Sri.Raji T.Bhaskar, learned Government Pleader. 5. As per Section 61 of the Kerala Co-operative Societies Act, a Society shall establish a Contributory Provident Fund for the benefit of its employees, to which shall be credited all contributions made by the employees and the Society in _**WP(C).30770/11**_ 5 accordance with the rules or the Employees Provident Funds Act, 1952, whichever is more beneficial. As per Amendment Act 16 of 1993, dated 20.8.1993, Section 80A was incorporated in the Cooperative Societies Act, which reads as follows: _“_ _**80A. Pension Scheme:** (1) The Government may, by notification in the Gazette, frame a Self Financing Pension Scheme for the establishment of a pension fund for payment of pension to the employees of the societies in the manner provided therein, and may appoint different dates for the application of the Scheme to different classes of societies.”_ 6. The pension fund established under the Self Financing Pension Scheme framed under Sub-section (1) shall vest in, and be administered by, such body as may be specified in the said Scheme. 7. On the introduction of Section 80A, corresponding amendment was brought about to Section 61(1) in the form of a proviso, which reads as follows: _“provided that the Contributory Provident Fund established under this sub-section shall not apply to the employees of such society to which the provisions of the Self Financing Pension Scheme framed under subsection (1) of Section 80A are made applicable and such society shall establish a provident fund in such manner and subject to such conditions or restrictions, as may be prescribed, for the benefit of such employees.”_ 8. In exercise of the power under Section 80A, the _**WP(C).30770/11**_ 6 Government framed the Kerala Co-operative Societies Employees Self Financing Pension Scheme, 1994, as per G.O.(P) No.44/95/Coop dated 14.3.1995. Clause 13 of the Scheme stipulates that the Scheme shall apply to such class or classes of societies and from such date as the Government may, from time to time, by notification in the Gazette, specify. Thereafter, the Government issued the GO P No. 99/95/Co-op dated 16.6.1995, notifying that the scheme shall apply to all primary Co-operative Societies under the Co-operative Department which are not covered under the Employees Provident Funds and Miscellaneous Provision Act, 1952. On issuance of the notification, the Pension Scheme became applicable to all primary co-operative societies, including the 2[nd] respondent Society. 9. As per Paragraph 18 of the Pension Scheme, every employee of a Society to which the scheme applies shall, subject to the other provisions of the scheme, be eligible for pension under the scheme. As per sub-paragraph 2 of Paragraph 18, an employee who has been dismissed or removed for misconduct, insolvency or inefficiency shall not be eligible for pension. Paragraph 20 further provides that every employee shall be eligible for superannuation pension on attaining the age of superannuation. As per Paragraph 29, superannuation pension shall be payable from the beginning of the month succeeding the _**WP(C).30770/11**_ 7 month in which the employee retires after attaining the age of fifty-eight years. There being no dispute about the fact that the petitioner was an employee of the 2[nd] respondent Society and had retired on attaining the age of superannuation, the petitioner's eligibility for pension, in so far as the pension scheme is applicable to the 2[nd] respondent Society, cannot also be disputed. 10. As per Paragraph 39 of the Pension Scheme, with the effect on and from the date of application of the Scheme to a Society, the portion of the employer’s contribution with interest accrued thereon standing to the credit of the employees in the contributory provident fund established by the Society shall be transferred and credited by the Society to the Pension Fund under the Scheme. Sub-paragraph 1A of a Paragraph 39, which was inserted by SRO No.123/99 dated 24.2.1999, read as follows: _“If any society fails to transfer the employer’s contribution with interest accrued thereon after the commencement of Section 80A of the Kerala Cooperative Societies Act 1969 and the Kerala Co-operative Societies Employees Self Financing Pension Scheme, 1994 within a period of one year from 14.3.1995, that is the date of implementation of the pension scheme or has transferred only a part thereof, shall be liable to transfer such amount or part thereof, as the case may be with interest at the rate of 24% per annum.”_ _**WP(C).30770/11**_ 8 In this context, it is also the relevant to refer to some of the duties and functions of the Pension Board stipulated under Paragraph 17. A reading of Paragraph 17 would show that the Pension Board is conferred with the duty of collection of contribution to the Pension Fund, launching of prosecution against defaulting societies, speedy settlement of claims and sanction of pension, proper and timely recovery of any amount due to the Board, etc. 11. A conjoint reading of the provisions of the Scheme makes it abundantly clear that irrespective of whether the required contribution has been remitted by the employer Society or not, the Pension Board is bound to disburse pension to a superannuated employee from the beginning of the month succeeding the month of his superannuation. The pension thus disbursed, in the case of an employee whose pension contribution has not been remitted in full by the employer society, can be realised by the Pension Board from the employer Society with interest at the rate of 24%. This view is supported by the decision of this Court in _**Thulasi Devi v. Kerala Cooperative Societies Employees' Pension Board**_ [2008 (4) KLT 647], wherein this Court held as under: ## _**Cooperative Societies Employees' Pension Board**_ [2008 (4) _“Inability to pay, is no answer in a matter relating to pension. A survey of the provisions of the pension scheme_ _**WP(C).30770/11**_ 9 _in the backdrop of the objects sought to be achieved by the Act and the concept of socialism embodied in the Constitution of India, would show that pension was a social security measure. Non-payment of the contribution by an employer is not a ground on which the pension board can delay the payment of pension.”_ 12. The legal position being thus, the petitioner is entitled for full amount of superannuation pension with effect from 1.4.2007, computed on the basis of his qualifying service and last drawn salary. The dispute between the 2[nd] respondent and the Pension Board, with respect to the amount of pension contribution to be remitted by the Society towards the petitioner's account, would not in any manner fetter the petitioner's right for superannuation pension. 13. It is a fact that as per SRO.1034/2010 dated 10.11.2010, a proviso has been incorporated to Paragraph 39(1)(a) to the following effect; _“Provided that if the society/bank fails to transfer the pension fund arrears in full, pension proportionate to the fund remitted by the society/bank shall be paid to the employees.”_ The amendment is given effect from 10.11.2010. The petitioner having retired from service on 31.3.2007 and the amendment being prospective, the newly added proviso would not have any impact on the petitioner's claim for superannuation pension. It is settled law that the right to pension of an employee gets _**WP(C).30770/11**_ 10 crystallised on his superannuation. Any subsequent modification/amendment brought about to the conditions of service cannot have an adverse effect on the pension claim of the superannuated employee. Even otherwise, the legal position is very clear to the effect that unless specifically stated, an amendment would not have retrospective effect. In _**Kodukulanji Service Cooperative Bank v. State of Kerala**_ [2003(1) KLT 250] interpreting Paragraph 39(1)(a), which was incorporated in the Pension Scheme as per notification dated 4.2.1999, providing for interest at the rate of 24% for delayed payment of contribution under the scheme from 13.3.1996, this Court held that imposition of interest at the rate of 24% retrospectively from 13.3.1996, is clearly unreasonable, since the enhanced rate of interest was notified only on 4.2.1999. Hence, Rule 39(1)(a), to the extent it provides for interest from a date anterior to the notification, was declared to be _ultra vires._ Thus, even in a case where a provision was incorporated in the Pension Scheme with retrospective effect, this Court held the provision to be prospective. Therefore, it has to be held that the proviso to Paragraph 39(1)(a), incorporated vide notification dated 10.11.2010 would not in any way effect the already crystallized claim of the petitioner for superannuation pension, irrespective of whether the entire pension contribution has been remitted by the _**WP(C).30770/11**_ 11 employer Society or not. 14. The claim of the petitioner for interest on the delayed payment of pension is rejected, considering the fact that the Pension Scheme is a self-financing scheme and that the dispute between the Pension Board and the 2[nd] respondent Society, with regard to the exact quantum of pension contribution to be remitted, is yet to be resolved. In the result, the writ petition is partly allowed. The 1[st] respondent Board is directed to quantify and disburse the eligible amount of superannuation pension to the petitioner, and arrears with effect from 1.4.2007 till payment of full amount of eligible monthly pension. The payment as above shall be effected within a period of three months from the date of receipt of a copy of this judgment, failing which the 1[st] respondent would be liable to pay the amount with interest at 12% per annum with effect from 01.04.2007. No order as to costs. Sd/- ## **V.G.ARUN, JUDGE** _vgs_ _**WP(C).30770/11**_ 12 ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE ORDER DATED 20.08.2009 PASSED BY LOK AYUKTA** - **EXHIBIT P2 TRUE COPY OF COMMUNICATED DATED 29-092009 ISSUED BY THE IST RESPONDENT.** **EXHIBIT P3 TRUE COPY OF THE TABULATION SHEET.** - **EXHIBIT P4 TRUE COPY OF THE PENSION STATEMENT AND PAYMENTS SLIP** - **EXHIBIT P5 TRUE COPY OF THE LETTER DATED 10-112009 ISSUED BY THE IST RESPONDENT.** **EXHIBIT P6 TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER TO THE IST RESPONDENT, DATED 17-08-2011.** **EXHIBIT P7 TRUE COPY OF THE COMMUNICATION DATED 6- 9-2011, RECEIVED BY THE PETITIONER IN REPLY TO EXHIBIT-P4 REPRESENTATION.** **EXHIBIT P8 TRUE COPY OF G.O(P) NO.185/2010 DATED 8-11-2010.** **EXHIBIT P9 TRUE COPY OF THE ORDER DATED 21-10-2011.**