Committee of Management, Ernakulam District Co-operative Bank Employees Welfare Fund Scheme v. State of Kerala
2004-07-28
D.M.DHARMADHIKARI, Y.K.SABHARWAL
body2004
DigiLaw.ai
ORDER : Y.K. Sabharwal, J. In these appeals two categories of employees are parties either as appellants or as respondents. Firstly, those who retired prior to 10-6-1997. Secondly, those who retired between 10-6-1997 and 24-8-1998. 2. On 21-3-1991, a welfare fund was constituted to which the employees made contribution matched by contribution of the employer Bank to the extent provided for in the said Rules. The Welfare Fund Rules inter alia provide a formula on the basis of which payment had to be made to a member on retirement. The said formula is contained in Rule 8(5) which reads as under: "If one member retires from service on superannuation or voluntarily retires from the service after 28 years of the service of the Bank, caused to leave the service due to handicaps or paralysis or due to any other permanent disease, such member will be given a sum as per the formula given below. But the minimum amount should be Rs. 35,000 (Rupees thirty-five thousand only) and the maximum should not exceed 25 times the salary last drawn. A/2xB/4xC/2 A - Duration of service of the employee at the time of retirement. B - Last-drawn salary. C - Duration of service after the commencement of the uniform code. But in case of the persons who were members in the previous welfare fund of the Bank, the duration of service will be considered from the date on which they became members to the fund. But if the committee is fully convinced that an employee is unable to continue in service due to handicaps, or due to paralysis or due to any other permanent disease, when the duration of his service after the commencement of the uniform code is calculated, the number of years which he could have continued in service will also be considered." 3. It seems that the employees started contributing to the fund after 21-3-1991 and so also the Bank. Further it appears that in 1997 difficulties were faced by the Banks in the matter of disbursement of benefit worked out on the basis of the aforesaid formula. The payments to retiring employees from the Employees Welfare Fund Scheme was kept in abeyance until further orders in terms of the order of the Registrar of Cooperative Societies dated 10-6-1997.
Further it appears that in 1997 difficulties were faced by the Banks in the matter of disbursement of benefit worked out on the basis of the aforesaid formula. The payments to retiring employees from the Employees Welfare Fund Scheme was kept in abeyance until further orders in terms of the order of the Registrar of Cooperative Societies dated 10-6-1997. Prior to that, on 26-5-1997, a Review Committee had been appointed to re-examine the workability of payments in terms of the formula abovequoted. It appears that on the basis of the recommendations of the Review Committee, the Government of Kerala issued an Order dated 24-8-1998 whereby the Rules were amended. The Order dated 24-8-1998 records that a three-member Committee under the Chairmanship of the Registrar of Cooperative Societies was appointed to study the present position so as to disburse the benefits in appropriate time to the employees and directing them to submit their recommendations for financial stability and the smooth functioning of the fund. The reference to the three-member Committee, it seems, is to the Review Committee referred to above. For working out the amount, instead of length of service, the Order dated 24-8-1998 amended Rule 8(5) to read as under: "In case any member who retires from service within the prescribed period or becomes permanently unfit to do work due to handicap, paralysis or any other permanent disability, he will be entitled to get both the contribution of the employer as well as the employee along with 11% interest at compound rate and the same shall not be less than Rs 75,000." 4. The aforesaid Order dated 24-8-1998 did not specify the date from which it will be effected. By another Order dated 8-10-1998 of the Government of Kerala, it was directed that the amendments in the Order dated 24-8-1998 would be given effect to from 10-6-1997. 5. The first category of parties i.e. those who retired before 10-6-1997 are not affected by the aforesaid amendments. It cannot be disputed that the unamended Rules would be applicable to them. They are, therefore, to be paid the amount as worked out as per the formula under the unamended Rules. 6. This Court, by order dated 21-1-2002, directed that the employees who have retired be paid the admitted due amount within six weeks.
It cannot be disputed that the unamended Rules would be applicable to them. They are, therefore, to be paid the amount as worked out as per the formula under the unamended Rules. 6. This Court, by order dated 21-1-2002, directed that the employees who have retired be paid the admitted due amount within six weeks. There is no dispute as to the amount payable to the first category of parties who have retired before 10-6-1997 as their dues are to be calculated in terms of the unamended Rules. It seems that the order dated 21-1-2002 has not been complied with and full admitted amount has not been paid to them. 7. Under the aforesaid circumstances when there is no dispute about the liability or the amount to be paid in respect of the first category of parties, it is wholly unnecessary to go into any other aspect in the appeals to which they are parties. The appeals in respect of this category of parties are disposed of with directions that the payments of the remaining amount shall be made to them within two months. 8. Now considering the cases of second category i.e. those who retired between 10-6-1997 and 24-8-1998, the effect of the aforesaid orders was that the amounts had to be worked out as per amended Rules which provide for payment at the time of retirement of amount contributed by the employee as well as the employer with 11% interest at the compounded rate, further providing that the amount shall not be less than Rs 75,000. In the unamended rule minimum amount payable was Rs 35,000 but the working of the amount was on the basis of duration of service of the employee at the time of retirement despite the fact that he had started contributing to the fund only from the year 1991. Undoubtedly, the original rule was more beneficial to the employees. Therefore, the amended rule was challenged in the writ petitions filed in the High Court. 9. A learned Single Judge of the High Court allowed the writ petitions and directed payment to be made to this category of employees as per the original unamended Rules. The decision of the learned Single Judge was, however, reversed in writ appeals. The writ petitions were dismissed. Under these circumstances, we are considering the case of parties of the second category. 10.
The decision of the learned Single Judge was, however, reversed in writ appeals. The writ petitions were dismissed. Under these circumstances, we are considering the case of parties of the second category. 10. To illustrate the burden on the Bank, two charts have been filed. One showing the contribution towards the fund and, second, showing the amount that will be payable as per the unamended Rules. The details of contributions in respect of the 21 employees who retired before 10-6-1997 show that from the year 1991 till their retirement they have contributed about Rs. 3,00,000 which was matched with the Bank's contribution of Rs. 1,60,000, total being about Rs. 4,60,000. If the said employees were to be paid as per original rule, the payment would be to the range of about Rs. 59,00,000, for their contribution of Rs. 3,00,000 and the Bank's contribution of about Rs. 1,60,000 during 1991 and 1997. It was on account of these anomalies, the Review Committee was reconstituted. Though the chart pertains to the employees who retired prior to 10-6-1997 but the effect would be same and may be more when considered in respect of the employees who retired between 10-6-1997 and 24-8-1998. As far as those who have retired prior to 10-6-1997, their appeals have been disposed of as above since admittedly the amended rule was not made applicable to them. 11. It was also submitted on behalf of the Bank that the cooperative banks were not in a position to bear such a burden and make huge payments to the employees at the cost of the customers of the Bank which had necessitated a fresh look being given to the matter resulting in appointment of a Review Committee, as aforesaid and the amendment of the Rules. 12. Admittedly, under the amended Rules, minimum amount payable to this category is Rs. 75,000. As already noticed they retired between 1997 and 1998. In this background, we are of the view that it will be expedient and would meet the ends of justice, if without examining the legal questions the equities may be balanced by directing the Bank to pay to this category of employees who are parties in the appeals before us and have retired between 10-6-1997 and 24-8-1998, a sum of Rs. 50,000 in addition to Rs. 75,000 i.e. Rs. 1,25,000.
50,000 in addition to Rs. 75,000 i.e. Rs. 1,25,000. It does not appear that any one of them would be entitled to get more than Rs. 75,000 since contribution to the fund started only in the year 1991. Be that as it may, we clarify that if on the working of the amended Rule 8(5), anyone becomes entitled to more than Rs. 75,000 then the higher amount would be paid and in addition a sum of Rs. 50,000 would also be paid. The payment would be made within a period of three months. The points of law decided by the High Court are left open. 13. The appeals are disposed of accordingly.