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2017 DIGILAW 736 (KER)

P. C. John v. Kottayam District Co-Operative Bank

2017-04-11

DEVAN RAMACHANDRAN

body2017
JUDGMENT : Devan Ramachandran, J. The State Co-operative Banks and District Co-operative Bank Employees Self Financing Scheme 2005 [for brevity, 'the Scheme'] was brought into force with effect from 01.04.2005. At the time when the Scheme was introduced, the eligibility for pension was confined to such category of employees of the Banks particularized in the Scheme. 2. Subsequently, by an amendment of the year 2008, certain provisions were introduced to take effect from 01.04.2005. Under this amendment, employees who had retired from the service of the Bank in between 01.01.1974 and 31.03.2005 were also included as a category of persons eligible for pension under the Scheme. Consequent to this inclusion, a proviso was also added that such employees, who had retired from the service between 01.01.1974 and 31.03.2005, will be eligible for pension only on the remittance of the entire portion of the Employees Provident Fund contribution earlier received by him into the corpus of the fund. When this category of retirees were also included, certain anomalies were brought in to the notice of the Government in the working of the Scheme, consequent to such inclusion. The Government found that even though the employees who retired from service from 01.01.1974 to 31.03.2005 were made eligible to be included in the Scheme, they were excluded from the liability of remitting interest into the pension fund. This led to a situation where even though those category of retirees were eligible to full pension, they were not under the rigor of remitting the provident fund contribution received by them earlier with any interest at all. This apparently forced the Government to introduce a subsequent amendment in the year 2009 by GO(P) No.213/09/Co-op. dated 09.12.2009, wherein a sub-paragraph was added to paragraph No.5 of the Scheme as under: "(2) In respect of the persons mentioned in clause (i) and (ii) of sub-paragraph (a), pension shall be payable only from the succeeding month of the month on which the remittance of entire portion of the employer's contribution to pension fund is made and to arrears of pension shall be payable to the month of such remittance." 3. The petitioners in these writ petitions challenge the amendments brought into the Scheme by the Government Orders dated 06.08.2008 and 09.12.2009 on various contentions but primarily on the ground that it causes an illegal and unlawful discrimination between retirees of the Bank. 4. The petitioners in these writ petitions challenge the amendments brought into the Scheme by the Government Orders dated 06.08.2008 and 09.12.2009 on various contentions but primarily on the ground that it causes an illegal and unlawful discrimination between retirees of the Bank. 4. I am considering these writ petitions jointly and I am proposing to dispose it of in this judgment, because the issues contained in these writ petitions are entwined to each other and the reliefs to be granted in one would depend upon the reliefs sought for in the other. 5. I have heard the learned counsel for the petitioners appearing in these writ petitions M/s. R. Pushpangathan Pillai, P.P. Jacob, V.A. Mohammed and P.N. Mohanan, learned Standing Counsel appearing for various District Co-operative Banks, Mr. M. Sasindran, the learned Standing Counsel for the Kerala Cooperative Employees Pension Board, and the learned Government Pleader appearing for the official respondents. 6. Paragraph 5 after the amendments referred in these writ petitions read as under: "5. Eligibility for pension-(1) Subject to the provisions of the Scheme, the following persons shall be eligible for pension, namely:- "(i) Every employee of a bank; (ii) Employees who have retired from service of a Bank in between 1st January, 1974 and 31st March, 2005; Provided that in respect of the employees who have retired in between 1st January, 1974 and 31st March, 1993, only those who are alive on the date of publication of the Scheme in the official Gazette shall be eligible for pension: Provided also that an employee who has received the Contributory Provident Fund and is in receipt of pension from any other pension scheme shall be eligible for pension only on the remittance of entire portion of the employers contribution to him, to the corpus of the fund. [xxx] (2) In respect of persons mentioned in clause (ii) of sub-paragraph (1) pension shall be payable only from 1st April, 2005 and no arrears pension shall be payable upto 31st March, 2005. (3) Persons retired from the service of a Bank in between 1st January, 1974 and 31st March, 1993, and who are alive on the date of publication of the scheme in the official Gazette shall be eligible for monthly pension only and no family pension shall be payable on the death of such pension." 7. (3) Persons retired from the service of a Bank in between 1st January, 1974 and 31st March, 1993, and who are alive on the date of publication of the scheme in the official Gazette shall be eligible for monthly pension only and no family pension shall be payable on the death of such pension." 7. As is ineluctable therefrom, every employee of the Bank and employees who retired from service of the Bank in between 01.01.1974 and 31.03.2005 have been made eligible for pension. However, as regards the employees who retried prior is concerned, they have been obligated to remit back the employer's contribution under the contributory provident fund received by them earlier, to be eligible for such pension. I see that in some of the writ petitions, the 2nd proviso to paragraph 5 has also been challenged on the ground that a retiree ought not to have been obligated to return the portion of the employer's contribution to the corpus. I cannot countenance these submissions, because originally, when the Scheme was introduced, such retirees were never included therein. They were subsequently included by the amendment of the year 2008 and for such inclusion, a condition was imposed that they shall be obligated to refund the employer's contribution received by them earlier. I do not see that this is oppressive or discriminative in any manner, but on the contrary, the option being that of the retiree, if it is only to his benefit that he return the employer's contribution under the provident fund and elect to be governed by the Scheme, so as to obtain pension in future. Since I find these provisions to be salutary in nature and intended for the benefit of retirees, the detriment of having to return the employer's contribution is justified and completely logical. I cannot find anything arbitrary or capricious in such provisions. 8. As regards sub-paragraph (2) to paragraph (5) is concerned, the petitioners challenge the said paragraph because it provides that no arrears of pension shall be paid for the months prior to which the entire portion of the employer's contribution is made over into the pension corpus. An analysis of this provision presents certain obvious difficulties. This is because the petitioners in question are all persons who were in service when the Scheme came into operation on 01.02.2005. An analysis of this provision presents certain obvious difficulties. This is because the petitioners in question are all persons who were in service when the Scheme came into operation on 01.02.2005. They retired from service subsequently and obviously therefore, they were expecting legitimately to be paid pension from the date on which they retired from service. The portion of the employer's contribution availed by them were to be remitted by their respective Banks into the corpus maintained by the pension fund and on such remittance they, under the Scheme, are authorisedly entitled to the receipt of pension thereafter. 9. I notice that there is a faint allegation in some of these cases by the Board that the remittances were made by the respective Banks belatedly. I do not think this would be a relevant criterion because I see that in paragraph 29 of the Scheme, the respective Banks are boundened to transfer the employer's contribution with interest accrued thereon. This provision for payment of interest, incontestably is intended for the benefit of employees, who retired from service after the Scheme came into operation. Otherwise the obligation to pay interest on the contribution and then the rigor of not being eligible to obtain arrears of pension prior to such payment, would operate as a double jeopardy to the employee, who retired from service. This is more so because paragraph No.29 of the Scheme even provides that a penal interest of 25% will be charged on the respective Bank. 10. The Banks in question in these cases inform me that they have all remitted the employer's contribution with interest as also penal interest @25%. View from that angle, I do not find any justification in denying the arrears of pension to those employees, who were in service on 01.04.2005 and retired thereafter. 11. I am fortified in my view also on account of the manner in which paragraph 5 of the Scheme is worded paragraph 5 makes two categories of employees eligible. One is an employee of the Bank, obviously meaning a person who was in service when the Scheme came into effect and the other are retirees, prior to the coming into force of the Scheme. One is an employee of the Bank, obviously meaning a person who was in service when the Scheme came into effect and the other are retirees, prior to the coming into force of the Scheme. The employee of a Bank at the time when the Scheme came into effect, would have elected for the pension under the Scheme and, therefore, once he retires, the obligation to pay the employer's contribution into the pension Scheme corpus is rested with the respective Banks. Any delay on their part cannot visit the retirees with detrimental consequences, since the Statute imposes penal culpability on the Bank for such delay. 12. The pattern of these provisions are, therefore, very clear. It is intended not to cause any prejudice to the retirees, but at same time is intended to keep the Banks under a tight leash. This is perspicuous even from the explanatory note to the amendment to the Government Order dated 09.12.2009, whereby the second set of amendments were brought into effect. The explanatory note makes an interest reading and I deem it idoneous to extract it under: "As per GO(P) No.103/2005/Co-op. dated the 29th April, 2005, published as S.R.O. No.421/2005 in the Kerala Gazette Extraordinary No.922, dated the 2nd May, 2005, the State Co-operative Bank and District Cooperative Bank Employees Self Financing Pension Scheme, 2005 was introduced. As per amendment made to the said Scheme vide G.O (P) No.176/2008/Co-op. dated 28th July, 2008 published as S.R.O. No.838/2008 in the Kerala Gazette Extraordinary No.1750 dated 6th August, 2008, those employees who retired from service from 1st January, 1974 to 31st March, 2005 and joined the Scheme were excluded from remitting interest for the Pension Fund. But the payment of arrears of pension was not restricted. Also the rate of contribution per month to the pension fund was not specified. Further, in the said Scheme the maximum pension payable is Rs.10,000/- [Rupees Ten thousand] and minimum pension is Rs.1,000/- [Rupees Thousand]. As per the Scheme, pension will be granted irrespective of the contribution remitted by the Bank in the name of the employees. As the employees of the Banks under the Scheme are drawing high salary, majority of the employees will get the same maximum pension of Rs.10,000 [Rupees Ten thousand]. In order to avoid these anomalies, the Government have decided to amend the said Scheme. As the employees of the Banks under the Scheme are drawing high salary, majority of the employees will get the same maximum pension of Rs.10,000 [Rupees Ten thousand]. In order to avoid these anomalies, the Government have decided to amend the said Scheme. The Government have also decided to increase the minimum pension payable to Rs.1,500/- [Rupees One thousand five hundred]." 13. The explanatory note above, makes it indubitable that the anomaly which the Government saw was only with respect to the employees, who retired from service from 01.01.1974 to 31.03.2005, since they were expressly excluded from remitting interest from the pension fund. Irrefragably, the mentation of the Government in making this amendment was that since these persons were obtaining a benefit by not remitting the interest, they should not be given an undue advantage over the others in being granted pension with arrears. This is possibly why the Government decided, by the amendment, to order that no arrears of pension shall be payable prior to the month of remittance of the employer's contribution availed by the retiree. This would not in any manner apply in the case of the employees, who retired after the coming into force of the Scheme, since the obligation to pay interest, as indicated above, is automatically ingrained in the provisions of the Scheme itself and, therefore, the rigor in sub-paragraph (2) of paragraph 5 should not, operate against persons who were in service at the time when the Scheme came into force. 14. I see that the problem in this case has a genesis in the fact that paragraph 5(2) is seen to relate even to employees of the Bank. This is why paragraph 2 starts by saying that it is intended to operate in respect of persons mentioned in paragraph 1 and sub-paragraph (2) of sub-paragraph (1). This leculently indicates that even employees of the Bank, at the time when the Scheme came into effect, would also be hit by the rigor of that sub-paragraph. As I have already recorded above, this will lead to a very inequitable situation, where persons, who are obligated to pay interest, are then denied arrears merely because of the delay in remittance of their employee's contribution into the pension corpus. 15. As I have already recorded above, this will lead to a very inequitable situation, where persons, who are obligated to pay interest, are then denied arrears merely because of the delay in remittance of their employee's contribution into the pension corpus. 15. In fact, the provisions of the Scheme itself make it ineluctable that every employee shall be eligible for superannuation pension on attaining the age of 58 years. This is unambiguously stated in the Scheme itself under paragraph 8 thereof, without any exception or deviation. If that be so, the introduction of sub-paragraph (2) in paragraph 5 of the Scheme, to restrict payment of arrears to the retirees, appears to be completely illogical and irrational. 16. In a summation of all that I have recorded above, I am of the view that the challenge against sub-paragraph (2) of paragraph 5 of the Scheme, to the extent to which it orders that no arrears of pension to be paid even to employees of the Bank, who retired after the Scheme came into force is unlawful and, therefore, unconstitutional. The discrimination ordered by that paragraph is completely without any reason and the classification of the employees into two classes, based merely on the date on which the employer's contribution to the pension fund is made by the respective Banks is without any intelligible differentia and without any reasonable nexus to a purpose that is sought to be achieved. 17. I, therefore, declare that the inclusion of employees of the Bank, serving on the date of coming into force of the Scheme in the rigor of sub-paragraph (2) is illegal and unlawful. I, therefore, strike down sub-paragraph (2) of paragraph 5 to such extent and declare that the employees of Banks, who were in service as on 01.04.2005 will be entitled to arrears of pension, provided the respective Banks had remitted the employer's contribution to the pension corpus with eligible interest and additional interest of 25%, if attracted, under paragraph 29 of the Scheme. 18. As regards the retirees, who have retired from service between 01.01.1.4 and 31.03.2005, they would be entitled to the pension only from the month after which they remit the employer's contribution, earlier obtained by them, into the corpus fund, as has been provided for in paragraph 5 of the Scheme. 18. As regards the retirees, who have retired from service between 01.01.1.4 and 31.03.2005, they would be entitled to the pension only from the month after which they remit the employer's contribution, earlier obtained by them, into the corpus fund, as has been provided for in paragraph 5 of the Scheme. Obviously, since their eligibility for pension will be only after such remittance, they would not be entitled to any arrears and to that extent I confirm sub-paragraph (2) of paragraph 5 of the Scheme. 19. These writ petitions are thus ordered. In the peculiar facts and circumstances of this case, I make no order as to costs and I direct the parties to suffer their respective costs.