Usha Kumari P.V v. Joint Registrar of Co-operative Societies (General), Assistant Registrar of Co-operative Societies (General), Balagram Service Co-Operative Bank Ltd

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **&** **THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR** **MONDAY, THE 5[TH] DAY OF FEBRUARY 2024 / 16TH MAGHA, 1945** **WA NO. 1452 OF 2023** **AGAINST THE ORDER/JUDGMENT WP(C) 4678/2023 OF HIGH COURT OF KERALA APPELLANT/PETITIONER IN WP:** USHA KUMARI P.V AGED 59 YEARS W/O JANARDHANAN PILLAI, SECRETARY (RETIRED), THE BALAGRAM SERVICE CO OPERATIVE BANK LTD, NO. I.150, H.O. BALAGRAM, IDUKKI, RESIDING AT PULIPRA, MUNDIYERUMA, KALLAR P.O., IDUKKI, PIN - 685552 BY ADVS. P.NANDAKUMAR AMRUTHA SANJEEV VIVEK VIJAYAKUMAR RIYA TOMY INDU C. SREEKUMAR ## **RESPONDENTS/RESPONDENTS IN WP:** 1 THE JOINT REGISTRAR OF CO OPERATIVE SOCIETIES (GENERAL) PAINAVU, IDUKKI, PIN - 685603 2 THE ASSISTANT REGISTRAR OF CO OPERATIVE SOCIETIES (GENERAL), UDUMPANCHOLA, IDUKKI, PIN - 685554 3 THE BALAGRAM SERVICE CO OPERATIVE BANK LTD NO. I.150, H.O. BALAGRAM, IDUKKI, PIN – 685552 REPRESENTED BY ITS SECRETARY, SRI.P.C.SASIDHARAN SRI.SAIGI JACOB PALATTY, SR.GP THIS WRIT APPEAL HAVING COME UP FOR HEARING ON 08.01.2024, THE COURT ON 05.02.2024 DELIVERED THE FOLLOWING: **WA NO. 1452 OF 2023** **2** ## **ANU SIVARAMAN, J. & C. PRATHEEP KUMAR, J.** **== = = = = = = = = = = = = = = = = = = = W.A. No.1452 of 2023 = = = = = = = = = = = = = = = = = = = = = Dated this the 5th day of February, 2024** ## **JUDGMENT** ## **Anu Sivaraman J.** 1. Heard the learned counsel appearing for the appellant and the learned counsel for the respondent. 2. This appeal is preferred against the judgment dismissing the writ petition filed by the appellant seeking terminal benefits from the respondent Bank. The learned single Judge held that the grievance of the appellant is liable to be adjudicated under Section 69 of the Kerala Co-operative Societies Act, 1969 and therefore the writ petition is not maintainable. The learned counsel for the appellant submits that the appellant while working as the Secretary of the 3[rd] respondent Bank was placed under suspension for a period of six months. Memo of charges was issued on 18.1.2020 and a written statement of defence was submitted thereafter. Exhibit P1 request dated 24.7.2020 was submitted by the appellant before the President of the 3[rd] **WA NO. 1452 OF 2023** **3** respondent to reinstate her in service on condition that she would seek voluntary retirement on such reinstatement. Exhibit P2 letter was issued by the President of the 3[rd] respondent informing her that the Committee of the 3[rd] respondent had resolved to relieve her from service on 20.8.2020. She submitted representations before respondents 2 and 3. Thereafter, an amount of Rs.3,22,121/- was disbursed to the appellant as salary arrears for the suspension period from 25.10.2019 to 20.08.2020. 3. On 2.7.2021, Exhibit P5 letter was issued by the 3[rd] respondent directing the appellant to appear for processing the pension papers after considering the period of suspension as Leave Without Allowance. Exhibit P6 representation was submitted by the appellant objecting to the illegality in converting the period of suspension as Leave Without Allowance without notice and after having treated it as duty and disbursing all benefits flowing therefrom. Exhibit P8 letter was issued on 22.02.2021 directing the appellant to remit an amount of Rs.7,97,394/- which includes the amount drawn as subsistence allowance amounting to Rs.4,75,273/- as well. The said orders were challenged before this Court. **WA NO. 1452 OF 2023** **4** ## 4. By Exhibit P11 judgment, this Court held as follows:- “As regards the first objection of the Bank, their stand that the period of suspension was regularized as Leave Without Allowances can hold water only if they are able to establish, through cogent and reliable evidence, that they had issued orders to such effect after notifying and hearing the petitioner. There is nothing on record to show this as of now, though 1 am aware that Sri.P.C.Sasidharan had requested for some time to file counter pleadings to establish this.” 5. The writ petition was allowed. Exhibits P8 and P10 were set aside and the competent authority of the bank was directed to hear the petitioner and consider all the documents and precedents and pass orders within a period of one month. It was clarified that “recovery of salary paid to the petitioner can be permitted only if the Bank is able to establish and prove that they had regularised the period of suspension as Leave Without Allowance and that too after hearing and considering her version.” 6. Thereafter, Exhibit P14 order has been passed again rejecting the claim, which was subjected to a challenge again which led to Exhibit P15 judgment. It was found that the earlier judgments directed the Bank to establish that the period of suspension had been regularised as Leave Without Allowance after hearing her **WA NO. 1452 OF 2023** **5** which was not reflected in Exhibit P14. It is submitted that Exhibit P16 order has, thereafter, been issued again rejecting the request which had led to the present writ petition. 7. The learned counsel for the appellant submits that the issue raised is squarely covered by a judgment of a Division Bench of this Court in **Mohanan Nair P. G. v. Omallur Service Cooperative Bank Ltd. No.Q 228 and others** [2022 KHC 433]. After considering the arguments identical to the ones raised by the Society in the instant case, the Division Bench came to the conclusion that an employer-society cannot unilaterally quantify alleged loss from retirement benefits of an employee without getting it adjudicated by raising a claim under Section 69 of the Co-operative Societies Act. It was further held that retiral benefits like gratuity, provident fund, etc. are not liable for attachment in adjudicatory proceedings. 8. Relying on the decision of another Division Bench in **Philip C.M. v. Registrar of Co-operative Societies Tvm. and others** [2018 (3) KHC 780] and affirming the view of a learned single Judge in **Kottayam District Co-operative Bank v. Co-operative** **WA NO. 1452 OF 2023** **6** **Tribunal** [2018 (3) KHC 780], it was clearly held that Rule 198 (7) of the Kerala Co-operative Societies Rules can be pressed into service only where disciplinary action was pending against the employee pursuant to a memo of charges of grave misconduct, irregularity, corruption or other charges involving moral turpitude. The liability certificate referred to in Rule 198 (8) of the Kerala Co-operative Societies Rules has to be issued within 30 days from the date of retirement of the pensioner concerned. After referring to the series of judgments on the point, it was held that the view of the learned single Judge to the extent it permits withholding of gratuity, provident fund etc. until adjudication as per Section 69 of the Kerala Co-operative Societies Act does not reflect the correct legal position and would stand overruled. The Society was directed to release payments of all retiral benefits to the employee. 9. Reliance is placed on the decision of the Division Bench in **Philip C. M. v. Registrar of Co-operative Societies. Tvm. and others** as well, where it was held that even where a penalty of reduction to lower rank had been imposed by the Society, the Society cannot _suo motu_ appropriate amounts from retiral benefits to recompense the loss suffered as such loss has to be **WA NO. 1452 OF 2023** **7** quantified by an adjudicatory process as envisaged under Section 69 of the Act. In **Kerala State Warehousing Corporation Ltd.and Others v. Pauly John T.** [2006 (3) KLT 27], it was held that subsistence allowance once paid cannot be recovered even if the period of suspension is later treated as leave or non-duty. In **Paul Anthony v. Bharat Gold Mines Ltd.** [1999 (3) SCC 679], the Apex Court held that subsistence allowance is a payment made to ensure non violation of right of life of the employee and amounts paid as subsistence allowance cannot be recovered from the employee under any circumstances. 10.It is specifically contended by the learned counsel for the appellant that in view of the earlier adjudications which have already occurred in the instant case, it was not proper for the learned single Judge to have non-suited the appellant and required her to approach the Kerala Co-operative Arbitration Court under Section 69 of the Kerala Co-operative Societies Act. - 11.Having considered the contentions advanced, we notice that the appellant had made a request for being reinstated in service and for being relieved on availing compulsory retirement due to health reasons by Ext.P1. By Ext.P2, the Society considered the **WA NO. 1452 OF 2023** **8** request and resolved to relieve her from service with effect from 20.08.2020. From the materials on record, it is evident that the disciplinary proceedings against the appellant were dropped and her service benefits, including salary for the entire period of suspension were released to her, treating the period of suspension as duty. Thereafter, Ext.P5 proceedings dated 02.07.2021 was issued requiring her to appear before the Society for treating the period of suspension as LWA and filling up her pension docket. 12.It is, therefore, clear that at least until the date of Ext.P5, no order treating the period of suspension as leave without allowance had been issued by the Society. It is thereafter that Ext.P8 notice had been issued requiring the appellant to refund the entire amount of Rs.7,97,394/- which was paid to her by the Society after her compulsory retirement, which included subsistence allowance drawn by her as well. It is, therefore, clear from the materials on record that as on the date of compulsory retirement of the appellant, there were no disciplinary proceedings pending against her. It was on closing the disciplinary proceedings against her that she was permitted to voluntarily retire from service on 20.08.2020. It is also clear **WA NO. 1452 OF 2023** **9** that by oversight or otherwise, the period of suspension was treated as duty and payments released to her. 13.In the absence of any order being passed treating the period of suspension as leave without allowance with notice to the petitioner, we are of opinion that the stand of the respondents that the appellant is liable to refund the entire amounts paid by the Society towards pay and allowances for the period of suspension to enable her to draw pension was completely unjustified. The contention that the period is now treated as LWA by the order impugned in the writ petition cannot be accepted in the light of the specific directions in the earlier judgments. In the facts and circumstances of the instant case where this specific issue had been adjudicated twice before this Court, we are of the opinion that the further contention that the appellant-employee has to approach the Co-operative Arbitration Court for an adjudication with regard to the amounts due to her is completely incorrect and impermissible. - 14.In the above view of the matter, we are of the opinion that this appeal is liable to be allowed. This appeal is, accordingly, allowed. The judgment of the learned single Judge is set aside. **WA NO. 1452 OF 2023** **10** The writ petition is ordered setting aside Ext.P8. There will be a direction to the respondents to compute the retirement benefits due to the employee on her voluntary retirement with effect from 20.08.2020 and to release all amounts due to her, at the earliest, at any rate, within a period of three months from the date of receipt of a copy of this judgment, failing which the amounts shall carry interest at the rate of 6% per annum. This writ appeal is ordered accordingly. Sd/- **Anu Sivaraman, Judge** Sd/- **C. Pratheep Kumar, Judge** SJ/NP/15/1