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2012 DIGILAW 237 (KER)

T. O. Chacko v. Kerala State Co-Operative Employees Pension Board

2012-02-27

P.N.RAVINDRAN

body2012
Judgment :- P.N. Ravindran, J. 1. The petitioner is a former employee of the third respondent co-operative society. He entered service as a Lower Division Clerk on 15.4.1960 and attained the age of superannuation on 31.8.1998. He was a member of the Employees Provident Fund Scheme, 1952 with effect from 1.2.1966. 2. While the petitioner was working as Branch Manager, a theft occurred in the Othara branch where the petitioner was working, on 10.6.1994. By order passed on 25.6.1994 the petitioner was placed under suspension and disciplinary action was initiated against him. Later, by order passed on 28.8.1996, he was dismissed from service. The petitioner unsuccessfully challenged the order of dismissal from service in appeal before the Managing Committee of the third respondent society. He thereafter unsuccessfully moved the Joint Registrar of Co-operative Societies under rule 176 of the Kerala Cooperative Societies Act, 1969. His appeal to the Government was also dismissed. He, thereupon, filed O.P.No.1713 of 2000 in this Court. Though by judgment delivered on 20.3.2001 the learned single judge was pleased to set aside the order of dismissal from service for procedural lapses, the learned single Judge reserved liberty with the third respondent society to initiate fresh proceedings. 3. Aggrieved by the judgment of the learned single judge, the petitioner as well as the third respondent society filed W.A.Nos.1340 and 2111 of 2001 respectively in this Court. While the writ appeals were pending, the petitioner attained the age of superannuation. The writ appeals were thereafter disposed of by judgment delivered on 4.1.2002. The Division Bench held that as the petitioner has attained the age of superannuation, interests of justice will be met, if the petitioner is paid all consequential benefits and 50 % of the back wages. The relevant portion of the judgment of the Division Bench in W.A. Nos.1340 of 2001 and 2111 of 2001 is extracted below:- "We heard both sides. Having regard to the facts of the case, we suggested to the parties to settle the dispute. We thought such a course will be suitable to avoid the agony of remand, passing of a fresh resolution and further statutory proceedings against them. Counsel on both sides consulted their parties and submitted before us that this Court may pass appropriate orders in the matter. We find that the writ petitioner has already retired from service. Except the present incident, his service was blemishless. Counsel on both sides consulted their parties and submitted before us that this Court may pass appropriate orders in the matter. We find that the writ petitioner has already retired from service. Except the present incident, his service was blemishless. The criminal court has already acquitted the petitioner in the criminal case finding that he has no involvement. We find that the explanation of the writ petitioner that he trusted his colleagues and believed their words and therefore landed in the trouble is plausible. If we accept the contention of the petitioner, he will be deemed to be in service and entitled to all consequential benefits. In any view of the matter, since the members of the disciplinary committee also participated in the Board Meeting which considered the appeal, the appellate order is a nullity and the proceedings will definitely have to commence afresh from the stage of hearing the appeal. Having regard to the facts of the case and taking into account the views expressed at the Bar, we affirm the judgment of the learned single Judge to the extent it quashes the impugned orders. But we vacate the direction to take a fresh decision in the disciplinary proceedings, since the employee has already retired from service in August, 1998. We feel that interest of justice would be met if a direction is issued to the Bank to pay the petitioner all consequential benefits with fifty per cent of the wages. We do so. The Bank will pay fifty per cent of the arrears of pay and pay other benefits in full payable by it to the writ petitioner within three months from the date of receipt of a copy of this judgment." 4. The petitioner had in the meanwhile filed W.P.(C) No.25992 of 2003 in this Court claiming the pension under the Kerala Co-operative Societies Employees Self Financing Pension Scheme, 1994, (hereinafter referred to as `the Scheme' for short). While the said writ petition was pending, the State Government issued a notification dated 19.6.2006 under section 17(1)(c) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, exempting Primary Co-operative Societies in the State of Kerala (the third respondent is such a society) from the operation of the Employees Pension Scheme, 1995, with effect from 30.6.2006. While the said writ petition was pending, the State Government issued a notification dated 19.6.2006 under section 17(1)(c) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, exempting Primary Co-operative Societies in the State of Kerala (the third respondent is such a society) from the operation of the Employees Pension Scheme, 1995, with effect from 30.6.2006. Consequently, a learned single judge of this Court disposed of W.P.(C) 25992 of 2003 by Ext.P1 judgment delivered on 19.7.2007 with a direction to the Regional Provident Fund Commissioner, Employees Provident Fund Organisation, Thiruvananthapuram, to take appropriate action to transfer the employer's share of contribution, as far as the petitioner is concerned, to the Kerala State Co-operative Employees' Pension Board (hereinafter referred to as the `Pension Board' for short) within a period of one month from the date of production of a copy of the judgment. The notification exempting Primary Co-operative Societies from the provisions of the Employees Provident Fund Scheme 1995 took effect from 30.6.2006. Pursuant thereto, the Regional Provident Fund Commissioner, Employees Provident Fund Organisation, Thiruvananthapuram, issued a circular dated 7.11.2008 wherein he inter alia directed that the transfer value as per clause 39 B of Employees Provident Fund Scheme in respect of employees who are on the rolls of the establishment as on 30.6.2006 may be transferred. The petitioner was not on the rolls of the establishment. Consequently there was some confusion which resulted in delay in transferring the employer's share of contribution standing to the credit of the petitioner by the Employees Provident Fund Organisation. The sum of Rs.2,94,546/- representing the employer's share of contribution was transferred by the Regional Provident Fund Commissioner, Thiruvananthapuram to the Pension Board only on 19.12.2008. Thereafter, steps were taken to fix and pay pension to the petitioner and Ext.P2 pension docket was prepared. 5. By a resolution adopted on 16.1.2009, the Pension Board decided to sanction pension to the petitioner under the provisions of the Scheme. Under the provisions of the scheme, especially paragraph 22 thereof, pension is to be determined on the basis of length of service and average pay of the employee. The term 'average pay' is defined in paragraph 2 (c) of the Scheme to mean the average pay drawn by an employee of a society during the last ten months of his qualifying service. The term 'average pay' is defined in paragraph 2 (c) of the Scheme to mean the average pay drawn by an employee of a society during the last ten months of his qualifying service. With effect from 21.7.2010, the words "twenty months" has been substituted in the place of ten months. In the instant case, as the petitioner retired from service long before the amendment was introduced, the average pay of the petitioner has to be determined on the basis of the pay drawn by him during the last ten months of his qualifying service. The word 'pay' was originally defined in paragraph 2(g) of the scheme to include basic pay, special pay, personal pay and any other amount ordered to be treated as pay for the purpose of pension under the Scheme. Long after the petitioner retired from service, the definition of the term 'pay' was amended with retrospective effect from 1.4.1998. By that amendment, dearness allowance was also included in the definition of the term 'pay'. Though pursuant to the judgment of a Division Bench of this Court in W.A. Nos. 1340 of 2001 and 2111 of 2001, the third respondent society paid gratuity by treating the petitioner as in service without break and had also given him other benefits in full, when it came to the question of payment of pension, the society took the stand that the petitioner is entitled to have only 50% of the average pay reckoned for the purpose of computing pension. 6. The petitioner thereupon filed W.P.(C) No.8302 of 2009 in this Court. By Ext.P3 judgment delivered on 21.5.2009, a learned single Judge of this Court held that the stand taken by the bank is not justified. The learned single Judge held that the petitioner is entitled to have the full salary adopted as the basis for working out his pension as that was the basis adopted for reckoning the last drawn wages for paying him gratuity. The learned single Judge thereafter directed the Pension Board to pay pension to the petitioner reckoning his full salary for the purpose of quantifying the average pay and also directed payment of pension within eight weeks from the date of receipt of a copy of the judgment. The learned single Judge thereafter directed the Pension Board to pay pension to the petitioner reckoning his full salary for the purpose of quantifying the average pay and also directed payment of pension within eight weeks from the date of receipt of a copy of the judgment. When the said direction was not complied with, the petitioner filed Contempt Case No.1005 of 2009 joining the Secretary of the Pension Board and the General Manager of the third respondent society as respondents. When the Contempt Case came up for hearing on 20.11.2009, the learned standing counsel appearing for the Pension Board submitted that the Pension Board will sanction and disburse pension to the petitioner reckoning 1.2.1966 as the date on which he joined the provident fund. In view of that submission, by Ext.P4 order passed on 20.11.2009 this Court directed the Pension Board to decide whether any further contribution is liable to be remitted by third respondent society and to call upon the society to pay the same. It was observed that once the demand is made, it is the obligation of the society to pay the additional contribution without any further delay. The Pension Board thereafter resolved as per resolution dated 16.12.2009 to sanction a monthly pension of Rs.3,886/-to the petitioner with effect from 1.9.1998. Arrears of pension to the tune of Rs.5,28,496/-for the period from 1.9.1998 till 31.12.2009 was also sanctioned. The Pension Board also decided to issue notice to the third respondent society to remit the sum of Rs.4,67,420/-. It was at that stage that the instant writ petition was filed contending that personal pay and dearness allowance were not reckoned for the purpose of computing the average pay and therefore the quantification of pension is liable to be revised. Relying on the definition of the term 'average pay' and 'pay' and the provisions contained in paragraph 22 of the Scheme it is contended that as the definition of the term `pay' has been amended with effect from 1.4.1998, to include dearness allowance, the petitioner is entitled to have dearness allowance and personal pay reckoned for the purpose of computing pay and consequently his average pay. 7. 7. The Pension Board has filed a counter affidavit dated 15.5.2010 wherein, in paragraph 16 it is stated that as dearness allowance was included in the definition of `pay' with effect from 1.4.1998, dearness allowance was reckoned as part of `pay' for the purpose of calculating the average pay only with effect from 1.4.1998. As regards personal pay, the stand taken by the Pension Board in the additional affidavit dated 10.10.2010 is that personal pay if any eligible for pension can be reckoned only after the service book is received from the third respondent bank. It is contended that though by letter dated 28.6.2010, the third respondent society was called upon to submit the service book of the petitioner in order to revise his pension according to eligibility, the first respondent society has no so far made available the service book of the petitioner. 8. I heard Sri.S.Subhash Chand, learned counsel appearing for the petitioner, Sri.K.R.Sunil, learned standing counsel appearing for the Pension Board and Sri.P.Haridas, learned counsel appearing for the third respondent society. I have also gone through the pleadings and the materials on record. The short point that arises for consideration in this writ petition is whether, as contended by the petitioner, he is entitled to have his pension revised having regard to the amended definition of the term 'pay' occurring in paragraph 2(g) of the scheme. Ext.P2 pension docket prepared by the bank and certified by the Assistant Registrar of Co-operative Societies discloses that the petitioner was paid a personal pay of Rs.1,000/-per month in April 1998, May 1998 and June 1998 and a personal pay of Rs.750/-per month in July 1998 and August, 1998. It also discloses that he was paid various amounts by way of dearness allowance during the last ten months of his service from November 1997 to August 1998 (vide page 13 of Ext.P2). The stand taken by the Pension Board is that as dearness allowance was made a part of pay by amending the definition of the term pay only with effect from 1.4.1998, dearness allowance paid to the petitioner during the period from April, 1998 to August, 1998 alone can be reckoned for the purpose of computing the average pay. As regards personal pay, the stand taken by the Pension Board is that in the absence of the service book, the personal pay cannot be verified. As regards personal pay, the stand taken by the Pension Board is that in the absence of the service book, the personal pay cannot be verified. The term 'pay' as defined in paragraph 2(g) of the Scheme as it originally stood was as follows:- (g) "pay" includes- (i) basic pay; (ii) special pay; (iii) personal pay; and (iv) any other amount ordered to be treated as pay for the purpose of pension under this Scheme" (g) "pay" includes- (i) basic pay; (ii) special pay; The definition of the term `pay' was amended by SRO 1034/2010 with effect from 10.11.2010 by including dearness allowance as part of pay. The term 'pay' as defined in paragraph 2(g) as amended is as follows:- (iii) personal pay; (iv) dearness allowance; (iv) any other amount ordered to be treated as pay such as consolidated pay. 9. The definition of the term `average pay' at the relevant time was as follows: "(c) average pay means the average of pay drawn by an employee of a society during the last ten months of his qualifying service." 10. Going by the definition of the term `average pay' and the term `pay' as amended with effect from 1.4.1998, I am of the opinion that the stand taken by the Pension Board that dearness allowance can be reckoned as part of pay only with effect from 1.4.1998 is perfectly in order. Though the learned counsel appearing for the petitioner contended relying on the first proviso to paragraph 22 of the scheme that as employees who have retired from service between 3.6.1993 and 31.3.1998 are entitled to have their pension determined by taking into account pay including dearness allowance from 1.4.2000, the petitioner is entitled to have his pension determined taking into account the pay including dearness allowance for the last ten months of his service, I am of the opinion that such an interpretation cannot be placed on the first proviso to paragraph 22. It was only with effect from 1.4.1998 after the category of persons mentioned in paragraph 22 of the Scheme retired from service that the term `pay' was amended to include within its fold dearness allowance. Going by the definition of the term 'average pay', the average pay drawn by an employee during the last ten months of his qualifying service alone can be taken into account. Going by the definition of the term 'average pay', the average pay drawn by an employee during the last ten months of his qualifying service alone can be taken into account. Dearness allowance was made a part of the pay under the Scheme only with effect from 1.4.1998. Therefore, the dearness allowance if any paid to the petitioner for the period prior to 1.4.1998 cannot be reckoned as part of `pay' for the purpose of computing the pension payable to him. However as regards the inclusion of personal pay', I am of the opinion that the stand taken by the Pension Board cannot be sustained. 11. Ext.P2 pension docket which was prepared by the employer society and verified by the Assistant Registrar of Co-operative Societies indicates that during the last five months of his service, the petitioner was paid personal pay. As the Assistant Registrar of Co- operative Societies had verified the correctness of entries in Ext.P2 pension docket, the stand taken by the Pension Board that in the absence of the service book of the petitioner, the personal pay drawn by him cannot be verified and for that reason they cannot redetermine the pension payable to him is not tenable. The Pension Board should, having regard to the entries in Ext.P2 pension docket, determine the pension payable to the petitioner with effect from 1.9.1998 taking into account the pay including personal pay which he had admittedly drawn during April, May, June, July and August 1998. The petitioner is in my opinion entitled to succeed to that extent. I accordingly allow the writ petition in part, declare that the petitioner is entitled to have the personal pay drawn by him during the last five months of his service, as set out in page 13 of Ext.P2 reckoned for the purpose of determining the pension payable to him and direct the Pension Board to redetermine the pension payable to him on that basis and disburse arrears thereof within one month from the date on which the petitioner produces a certified copy of this judgment before the Secretary of the Pension Board. The claim made by the petitioner that the dearness allowance paid to him for the period prior to 1.4.1998 should be reckoned for the purpose of computing pension is rejected. The claim made by the petitioner that the dearness allowance paid to him for the period prior to 1.4.1998 should be reckoned for the purpose of computing pension is rejected. I make it clear that the liability of the third respondent society to pay any further amount by way of contribution to the Pension Board is left open to be decided in W.P.(C) No.21065 of 2011 wherein the third respondent society has challenged the demand made by the Pension Board for payment of additional contribution. The parties shall bear their respective costs.