V. Bhargavan Pillai v. State of Kerala and Others

**C.R.** IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU THURSDAY, THE 23RD DAY OF MARCH 2017/2ND CHAITHRA, 1939 WP(C).No. 27405 of 2015 (A) ---------------------------- PETITIONER: ----------V. BHARGHAVAN PILLAI, SON OF LATE VISWANATHA PILLAI, 'ASWATHI', MARUTHUMOOD, CHETTACHAL P.O., VIA VITHURA, THIRUVANANTHAPURAM. BY ADV. SRI.K.B.PRADEEP RESPONDENTS/RESPONDENTS:-: -------------------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF CO-OPERATION, GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001. 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), GOVERNMENT OF KERALA, VANCHIYOOR, THIRUVANANTHAPURAM, PIN - 695 001. 3. THE CHAYAM SERVICE CO-OPERATIVE BANK LTD.NO.1514 CHETTACHAL P.O., VITHURA, THIRUVANANTHAPURAM, PIN - 695 551, REPRESENTED BY ITS SECRETARY. 4. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) GOVERNMENT OF KERALA, NEDUMANGADU, THIRUVANANTHAPURAM, PIN - 695 001. R3 BY ADV. SRI.LATHEESH SEBASTIAN R BY GOVERNMENT PLEADER SMT.A.C.VIDHYA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 27405 of 2015 (A) ---------------------------- ## APPENDIX PETITIONER'S EXHIBITS ----------------------- EXHIBIT P1. TRUE COPY OF THE ORDER DATED 18.11.2010 PASSED BY THE 2ND RESPONDENT. EXHIBIT P2. TRUE COPY OF THE JUDGMENT DATED 29.08.2013 in WPC 15856/2011. EXHIBIT P3. TRUE COPY OF THE PROCEEDINGS DATED 06.05.2014. EXHIBIT P4. TRUE COPY OF THE SALARY STATEMENT. EXHIBIT P5. TRUE COPY OF THE COMPLAINT DATED 21.08.2014. EXHIBIT P6. TRUE COPY OF THE LETTER OF THE 2ND RESPONDENT ADDRESSED TO THE 4TH RESPONDENT DATED 01.09.2014. EXHIBIT P7. TRUE COPY OF THE STATEMENT OF SALARY PARTICULARS SUBMITTED TO THE 4TH RESPONDENT. EXHIBIT P8. TRUE COPY OF THE LETTER OF THE 4TH RESPONDENT ADDRESSED TO THE 3RD RESPONDENT DATED 01.01.2015. EXHIBIT P9. TRUE COPY OF LETTER DT. 16.9.2015 ISSUED BY THE 4TH RESPONDENT TO THE THIRD RESPONDENT WITH ENGLISH TRANSLATION. EXT.P10. TRUE COPY OF LETTER DTD.16.9.2015 ISSUED BY THE 4TH RESPONDENT WITH ENGLISH TRANSLATION. EXT.P11. COMMUNICATION DATED 28.12.2015 FROM THE SOCIETY. EXT.P12. TRUE COPY OF STATEMENT ATTACHED TO LETTER DTD.28.12.2015. RESPONDENT'S EXHIBITS --------------------- EXT.R3(a) TRUE COPY OF THE DECISION OF THE MANAGING COMMITTEE OF THE THIRD RESPONDENT BEARING NO.97/15-15 DTD.27.7.2015. EXT.R3(b) TRUE COPY OF THE SALARY STATEMENT OF THE PETITIONER. TRUE COPY p.s.to judge CSS/ **C.R.** ## **Dama Seshadri Naidu, J.** ------------------------------------------WPC No.27405 of 2015 -------------------------------------------Dated this the 23rd day of March, 2017 ## **JUDGMENT** V. Bharghavan Pillai, the petitioner, while working as a salesman in the third-respondent Society (“the Employer), faced certain disciplinary proceedings; was placed under suspension on 20[th] June 2009; and, eventually, was dismissed from service on 07.07.2010. Aggrieved, the petitioner initiated arbitration proceedings under the Kerala Co-operative Societies Act (“the Act”). Pending the arbitration proceedings, Bharghavan retired—notionally—on his attaining the age of superannuation. 2. The Arbitrator, in the course of time, declared Bharghavan's removal from service illegal and directed the Employer to treat as if Bharghavan had continued in service. This deemed continuation was because of Bharghavan’s attaining, by then, the age of superannuation. The Employer, undaunted, appealed to the Kerala Co-operative Tribunal, Thiruvananthapuram, where the appeal is pending now. W.P.(C.) No.27405/2015 -2- 3. Bharghavan had all along been working on a consolidated basis. While he was under suspension, Bharghavan complained to the Cooperative Department that his pay should have been fixed and he should have been allowed by the employer to draw regular pay on a par with other employees in the cadre of a salesman. After the employer's contest, the Joint Registrar of Co-operative Societies (General), the second respondent, issued the Ext.P1 order fixing Bharghavan's pay, thus, entitling him to draw regular pay with effect from the date of his joining, i.e., 1.11.1982. 4. When the employer refused to honour Ext.P1 order and to fix Bharghavan's pay, he filed WP (C) No.15866 of 2011; on the other hand, the employer filed WP (C) No.32287 of 2011 assailing Ext.P1 order. This Court, through Ext.P2 common judgment, dated 29th August 2013, dismissed the employer's writ petition, but allowed Bharghavan's. Though the employer carried the matter in writ appeal, it could not succeed. The contempt case was closed. 5. Thereafter, Bharghavan initiated contempt proceedings as the employer refused to pay to Bharghavan the arrears of salary in tune with Ext.P1 order. In the teeth of contempt proceedings, the employer issued Ext.P3 order quantifying the arrears due to Bharghavan to be `33,970/-. W.P.(C.) No.27405/2015 -3- 6. On the inadequacy of the arrears, Bharghavan once again approached the Co-operative Department (“the Department) through Ext.P5: he wanted the authorities to direct the employer to calculate the arrears in tune with the Ext.P1 and to pay the balance amount. The Department, in turn, issued Exts.P8, P9 and P10 proceedings, but to no avail. The employer remained unmoved. 7. Left with no other alternative, Bharghavan filed this writ petition. While the writ petition was pending, the employer issued Ext.P11 proceedings revising the arrears from `33,970/- to 82,550/-. Bharghavan, in fact, complains that even the revised amount is woefully inadequate and that he is due to get much more. 8. Before proceeding further, I may record a word of appreciation for the fair advocacy displayed by both the counsel. Sri K. B. Pradeep, the counsel for Bharghavan, has acknowledged that Sri Latheesh Sebastian, the Counsel for the employer, persuaded it to recalculate the arrears and to issue a revised statement, the writ petition notwithstanding. True, Counsel, as the very word suggests, must counsel the party, before contesting on his behalf. 9. Thus, pending the disposal of the writ petition, the employer paid to Bharghavan `1,00,000/- on 6.4.2016. Thereafter, the employer filed an additional counter affidavit on 13th June 2016, once again W.P.(C.) No.27405/2015 -4- revising the figure of arrears to `1,38,137/-. In these circumstances, the matter is taken up today for consideration. Bharghavan’s plea, still, remains that he is entitled to more. 10. Sri K.B.Pradeep, the learned Counsel for Bharghavan, has submitted that because of the developments pending the writ petition, now, there is not much of a dispute to be resolved. He has straight away drawn my attention to the Ext.R3(b) calculation memo filed by the employer. At the foot of the calculation memo, the employer provided a summary: Total amount due up to 30.6.2009 ` 16,94,483 Amount drawn ` 15,56,346 Pending Payment ` 1,38,137 Part Payment WPC No.27405/2015 ` 1,00,000 (DCB SB.2 cheque No.4534 dt.6.4.2016) Balance amount ` **38,137** 11. As seen from the above table, the total amount due to Bharghavan, by the date he was placed under suspension, was `16,94,483/-. The amount already paid to Bharghavan is shown as `15,56,346/-. The amount in arrears was `1,38,137/-. Recently, the employer paid to Bharghavan `1,00,000/-. So the amount still due to W.P.(C.) No.27405/2015 -5- Bharghavan is `38,137/-. 12. Sri Pradeep contends that the figures are indisputable, so are the payments. But the employer has also deducted, from the amounts due, the subsistence allowance paid to Bharghavan so far. On this count, Sri Pradeep submits that the arbitrator has already declared Bharghavan's removal from service as illegal. Though the appeal is pending, the Tribunal has not suspended the award. The award, therefore, is still in force. 13. At this juncture, Sri Pradeep has also brought to my notice that Bharghavan has faced not only the employer’s apathy but also the crippling systemic delay: the learned Arbitrator took over five years to dispose of Bharghavan's application questioning his removal from service. Bharghavan was constrained to file a writ petition for its expeditious disposal, and then contempt, too. Thus came the eventual disposal. 14. Sri Pradeep has further submitted that Bharghavan's entitlement to subsistence allowance is a statutory right and it cannot be treated as any ex-gratia paid by the employer. It cannot even be treated as part of the salary to be deducted. In the end, he has submitted that if the subsistence allowance, that is `1,44,171/- is added to the admitted figure, the arrears will come to `1,82,308/-, which is to be paid. W.P.(C.) No.27405/2015 -6- ## **The Employer’s:** 15. Sri Latheesh Sebastian, the learned counsel for the employersociety, on the other hand, has submitted that the employer’s error in quantifying the arrears is _bona fide_ . To begin with, he has submitted that the employer offered to Bharghavan `33,970/- on 6.5.2014, but he did not receive it. Instead, he approached this Court. 16. He has further submitted that Bharghavan has already been paid subsistence allowance. Because the appeal is still pending, it cannot be said that Bharghavan had a final declaration on his reinstatement. So the employer’s adjusting the subsistence allowance from the arrears, argues Sri Sebastian, cannot be said to be perverse. He has, nevertheless, submitted in the alternative: If this Court is to conclude that the deduction is improper, it may not allow to Bharghavan any interest on the arrears, as Bharghavan has demanded. Therefore, Sri Sebastian has urged this Court to hold that Bharghavan is entitled to only the arrears of revised pay, but not interest on that amount. 17. Heard Sri K.B.Pradeep, the learned counsel for the petitioner, Sri Latheesh Sebastian, the learned standing counsel for respondents 2 to 4, and Smt. A.C. Vidhya, the learned Government Pleader, besides from perusing the record. W.P.(C.) No.27405/2015 -7- ## **Issue:** **18.** While an employee was under suspension, his pay was fixed retrospectively. He is entitled to arrears. The employer calculated the arrears till the date of the employee’s suspension. Because of the administrative delays, the employer took many years to settle the dues. While settling the dues, it deducted from the arrears the subsistence allowance it had paid to the employee till then. The disciplinary proceedings are still pending. Is the deduction permissible? ## **Discussion:** 19. As admitted by the learned counsel on either side, given the later developments pending the writ petition, the only issue now to be resolved is whether the employer is entitled to deduct the subsistence allowance from the arrears of salary. 20. We need not indulge in any long-drawn reasoning to answer this question. Suffice it to say that the arrears were calculated only up to the date Bharghavan had been in service; the period of his suspension was excluded. In other words, the Employer calculated the arrears for the period Bharghavan had actually worked. 21. Deducting from past arrears any future payment is unconscionable. W.P.(C.) No.27405/2015 -8- 22. We may approach the issue from another perspective: It is well established that the subsistence allowance is a statutory benefit conferred on a suspended employee. It ameliorates the suspended employee’s financial hardship. The allowance enables the delinquent to survive, to subsist, and to defend himself in the disciplinary proceedings. So long as the charge remains in the realms of an allegation, driving a suspended employee to the extremes of finding another source of livelihood and, at the same time, of focusing on defending himself is unconscionable and opposed to all canons of fairness. Until the dereliction is determined, the delinquent continues to enjoy full rights, save his actually working. ## 23. In **O.P. Gupta v. Union of India and others[1] ,** the Supreme Court has observed that an order of suspension of a Government servant does not put an end to his service under the Government. He continues to be a member of the service despite the order of suspension. In **Capt. M. Paul Anthony v. Bharat Gold Mines Ltd.[2]** , the Supreme Court has graphically observed that if the subsistence allowance is not paid, the act of non-payment can be likened to slowpoisoning as the employee, “if not permitted to sustain himself because of non-payment of Subsistence Allowance, would gradually starve > 1 1987(4) SCC 328 > 2 AIR 1999 SC 1416 W.P.(C.) No.27405/2015 -9- himself to death.” The payment of subsistence allowance is mandatory, of course, in tune with the statutory mandate. It cannot be treated as a benefit extended to an employee to be adjusted at the first given opportunity. The adjustment, if any, should take place only on the judicial precedings getting concluded. Conversely, if a delinquent employee has to be dismissed from service on a proven act of misconduct, the subsistence allowance paid is not recoverable. 24. Thus, viewed from either perspective the employer's deducting the subsistence allowance from the arrears accrued for the period before the employee was suspended could not pass judicial muster. ## **What Should Happen to the Subsistence Allowance?** 25. Because of Sri Sebastian's persistent plea, I may observe that the issue of subsistence allowance—the employer’s justification to adjust it from any other benefits to be received by Bharghavan—is left open. It is, perhaps, an issue the parties may urge before the Tribunal. ## **Interest to be Paid:** 26. Now, the next issue to be resolved is whether Bharghavan is entitled to any interest on the arrears paid or to be paid to him. As seen from Ext.P1, the Department declared on 18.11.2010 that Bharghavan be paid regular pay beginning from 1983, the year of Bharghavan’s joining the service. Only in 2014, almost four years later, the employer W.P.(C.) No.27405/2015 -10- first offered to pay a paltry sum of `33,970/-. Bharghavan did not receive the amount, but the offer remained. He agitated, first, before the Department and, later, before this Court that the amount offered as arrears is paltry. What ought to have been paid to him on 18.11.2010 was not paid till 06.05.2014, when the employer offered to pay `33,970/-. Later, `1,00,000/- was paid on 06.04.2016, pending writ petition. In essence, accrued arrears, due to have been paid to the employee long back, remained with the employer for no fault of the employee. 27. I, therefore, hold that from 18.11.2010 the total arrears of `2,82,308/- should carry simple interest at 6% till 6.5.2014, when the employer offered to pay Bharghavan `33,970/-. Despite Bharghavan's refusal to receive the money, I reckon that the amount should be deducted for the purpose of interest from the total arrears as if Bharghavan received it. Then what remains is `2,44,338/- rupees. It should carry interest from 6.5.2014 till 6.4.2016 when the employer paid `1,00,000/-. Then the balance, inclusive of the subsistence allowance deducted, comes to `1,44,338/-. That amount should carry simple interest of 6% from 6.4.2016 till that is actually paid. 28. Though the employer has vehemently objected to this method of awarding interest, I reckon that the treatment the employer meted W.P.(C.) No.27405/2015 -11- out to Bharghavan boarders on harassment, if not vendetta. The employer initially offered `33,970/-. And that was after four years from Ext.P1. That amount could not bear even remote semblance to the actual arrears i.e. `2,83,208/-. In these circumstances, I am of the opinion that Bharghavan is entitled to simple interest, at least, at 6%. 29. This Court hopes and trusts that the employer, instead of indulging in inventive, yet avoidable, litigation, will focus on better administration. It may flourish, but not at the cost of its employees, its very strength. 30. Given the inordinate delay in the Employer’s settling the arrears due to Bharghavan, the employer should pay the arrears, as mentioned above, along with interest, expeditiously, at any rate, within two months from the date of receipt of a copy of this judgment. No order on costs. ## **sd/- Dama Seshadri Naidu, Judge** css/ true copy P.S.TO JUDGE