W.P.(C) No. 267 of 2023, Reema Paul v. Joint Registrar of Co-operative Societies (General), Thrissur; Kolazhy Service Co-operative Bank Ltd.; Board of Directors of Kolazhy Service Co-operative Bank Ltd.; Assistant Registrar of Co-operative Societies (General), Thrissur

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **THURSDAY, THE 13[TH] DAY OF APRIL 2023 / 23RD CHAITHRA, 1945** **WP(C) NO. 267 OF 2023** ## **PETITIONER:** REEMA PAUL, AGED 58 YEARS, W/O.PAUL KONIKKARA HOUSE, KUTTOOR P O, THRISSUR - 680013 BY ADVS. M.SASINDRAN P.SHAHEED ## **RESPONDENTS:** 1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THRISSUR - 680001 2 THE KOLAZHY SERVICE CO-OPERATIVE BANK LTD. NO.564 KOLAZHY P O., THRISSUR DISTRICT - 680010, REPRESENTED BY ITS SECRETARY. 3 THE BOARD OF DIRECTORS OF THE KOLAZHY SERVICE CO-OPERATIVE BANK LTD.NO.564 KOLAZHU P O, THRISSUR DISTRICT, PIN – 680010, REPRESENTED BY ITS PRESIDENT 4 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THRISSUR – 680001. ## **OTHER PRESENT:** SRI. P.C SASIDHARAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W.P.(C) No.267 of 2023** **= = = = = = = = = = = = = = = = = = Dated this the 13[th] day of April, 2023** ## **J U D G M E N T** The petitioner retired from the services of the second respondent Society on 31.03.2022 as Secretary. She has approached this Court consequent on the inordinate delay in disbursing her retirement benefits. 2. The respondent Society has filed a counter affidavit contending that surcharge proceedings under Section 68 are pending against the petitioner whereunder, a show-cause notice under Section 68(2) has been issued to her. The petitioner is liable for an amount of ` 20,75,220.77, and hence the retirement benefits are not liable to be disbursed, is the contention. 3. Heard Sri.M.Sasindran, learned counsel for the petitioner, Sri.P.C.Sasidharan, learned counsel for respondents 2 and 3 and the learned Government Pleader. **W.P.(C) No.267 of 2023** -: 2 :- 4. The relevant Rules of the Co-operative Societies Rules are, Rule 198(7) and Rule 198(8). They read thus :- _“(7) In the event of any pendency of disciplinary proceedings against any employee of a co-operative society or any cooperative institution pursuant to any charge of grave misconduct, irregularity, corruption or other charge involving moral turpitude, no retirement benefits shall be sanctioned to such employee or retired employee and in case of sanctioning of any retirement benefits to any such employee or retired employee, the name and designation of the sanctioning authority together with the reason for such sanctioning shall be recorded by the sanctioning authority by himself and such authority shall be held responsible for any loss to the society owing to such sanctioning of retirement benefits if found that such sanctioning was unwarranted._ _(8) In respect of all employees save the Chief Executive Officer of a society, no retirement benefits shall be sanctioned and disbursed until after the due issuance of a Non-liability Certificate by the Chief Executive Officer and approval of the same by the committee of the society within thirty days from the date of retirement of such employee. In the event of the retirement of the Chief Executive Officer, the Non-liability_ **W.P.(C) No.267 of 2023** -: 3 :- _Certificate shall be issued by the committee of the society. For any loss to the society due to the non adherence of the forgoing procedure, the Chief Executive Officer along with the committee of the society shall be held responsible collectively and severally in respect of the issuance of Non-liability Certificate to any employee other than the Chief Executive Officer and the members of the committee shall be held collectively and severally responsible for the issuance of Non-Liability Certificate to the Chief Executive Officer.”_ Rule 198(7) empowers the Society not to sanction any retirement benefits to an employee as against whom a disciplinary proceeding is pending. Admittedly, no such disciplinary proceeding was pending against the petitioner at the time of her retirement. Therefore, Rule 198(7) has no application. 5. Rule 198(8) provides that no retirement benefits shall be sanctioned and disbursed until after the issuance of a non-liability certificate within 30 days from the date of retirement of the employee. In the case **W.P.(C) No.267 of 2023** -: 4 :- at hand, though the petitioner retired on 31.03.2022, within the 30 days period, the non-liability certificate was not issued; even as of now, the same has not been issued. 6. Though Section 4 of the Payment of Gratuity Act enables forfeiture of gratuity on certain circumstances, to attract the said provision, the services of the employee must have been terminated under a disciplinary proceeding. In the case at hand, there has been no such termination. The petitioner demitted office on attaining superannuation. 7. A Division Bench of this Court in _**Mohanan Nair P. G. v. Omallur Service Co-operative Bank Ltd. And Ors. ILR 2022 (2) Kerala 1123**_ held that, if the liability is not fixed and liability certificate issued within the statutory time limit of 30 days from the date of retirement, and if there has been no termination of the employee for the reasons stated under Section 4 of the Payment of **W.P.(C) No.267 of 2023** -: 5 :- Gratuity Act, the retirement benefits including gratuity is not liable to be withheld. In _**C.M.Philip v. Registrar of Co-**_ _**operative Societies, 2018 (3) KHC 780 and Kottayam District Co-operative Bank Ltd. v. Co-operative Tribunal 2018 (1) KLJ 636,**_ this Court held that the Society cannot unilaterally quantify the damages and have it set off from the retiral benefits. As held in the said judgments, for the Society to recover amounts, if any due even from a retired employee, there is a remedy under Section 69 of the Cooperative Societies Act. 8. The mere fact that the proceedings under Section 68 is pending does not enable the Society to withhold the retirement benefits of the petitioner. In the light of the law laid down by the Division Bench of this Court in _**Philip's case and Mohanan Nair's case (supra),**_ the Society is bound to disburse the pensionary benefits to the petitioner. **W.P.(C) No.267 of 2023** -: 6 :- Resultantly, the writ petition is allowed. Respondents 2 and 3 shall disburse the entire retirement benefits to the petitioner within a period of two months from the date of receipt of a copy of this judgment. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 267/2023** ## PETITIONER EXHIBITS |Exhibit P1|A TRUE COPY OF THE ORDER DATED 11/06/2021 OF| |---|---| ||THE 3RD RESPONDENT| |Exhibit P2|A TRUE COPY OF THE SECTION 65 INQUIRY REPORT| |Exhibit P3|A TRUE COPY OF THE NOTICE NO. CRP/5900/2020| ||DATED 10/05/2022 OF THE 1ST RESPONDENT| |Exhibit P4|A TRUE COPY OF THE REPLY SUBMITTED BY THE| ||PETITIONER DATED 23/11/2022| |Exhibit P5|A TRUE COPY OF THE REQUEST DATED 10/11/2021| ||OF THE PETITIONER FOR THE SANCTIONING THE| ||RETIREMENT BENEFITS| |Exhibit P6|A TRUE COPIES OF THE REQUESTS DATED| ||21/02/2022 SUBMITTED BY THE PETITIONER BEFORE| ||THE 3RD RESPONDENT| |Exhibit P7|A TRUE COPY OF THE DISCHARGE SUMMERY ISSUED| ||FROM THE HOSPITAL ASTER MEDCITY DATED| ||26/11/2016| -----