Sreelatha Sukumar vs Kerala Financial Corporation
2021 Latest Caselaw 5689 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

          THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

    WEDNESDAY, THE 17TH DAY OF FEBRUARY 2021 / 28TH MAGHA,1942

                      WP(C).No.10868 OF 2020(G)


PETITIONER:

               SREELATHA SUKUMAR, AGED 58 YEARS
               W/O.P.D.PRASAD, AISWARYA, LFC ROAD,
               KATTAYIL AVENUE, KALOOR, KOCHI-17
               (ASSISTANT GENERAL MANAGER, (RETD),
               ASSET MANAGEMENT DEPARTMENT, KFC, ERNAKULAM.

               BY ADVS.
               SRI.CHERIAN GEE VARGHESE
               SRI.P.HARIDAS
               SRI.BIJU HARIHARAN
               SRI.R.B.BALACHANDRAN
               SRI.RENJI GEORGE CHERIAN
               SRI.P.C.SHIJIN

RESPONDENTS:

      1        KERALA FINANCIAL CORPORATION
               REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR,
               HEAD OFFICE, VELLAYAMBALAM, THIRUVANANTHAPURAM,
               PIN-695 001.

      2        CHIEF MANAGER, KERALA FINANCIAL CORPORATION,
               BRANCH OFFICE, HOTEL MALABAR PALACE,
               MUTHALAKULAM, KOZHIKODE-673 001.

      3        EXECUTIVE DIRECTOR,
               KERALA FINANCIAL CORPORATION, HEAD OFFICE,
               VELLAYAMBALAM, THIRUVANANTHAPURAM, PIN-695 001.

               BY ADVS.
               SRI.M.R.VENUGOPAL
               SMT.DHANYA P.ASHOKAN

     THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD           ON
17.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WPC 10868/20
                                          2



                                 JUDGMENT

The petitioner is stated to have retired

from the services of the first respondent--

Kerala Financial Corporation, on 31.03.2020

and she has approached this Court seeking a

direction to the said Corporation to release

her terminal benefits, including Gratuity and

Provident Fund, along with interest at the

rate of 12%, from the date it became due,

until it is actually paid.

               2.    The     learned            counsel           for        the

      petitioner--Sri.P.Haridas                  submitted          that      his

      client's         request      for        release       of     terminal

      benefits         has     been           replied        to     by       the

Corporation through Exts.P7, P8, P10 and P11,

wherein, they have been insisted that she

should execute a bond, agreeing to repay any

liability that may be found against her. The

learned counsel asserts that the petitioner

had no liability fixed against her until the WPC 10868/20

date of her retirement, but concedes that a

couple of weeks before she superannuated, she

was served with a memo of charges, dated

05.03.2020, asking to show-cause why

disciplinary action should not be initiated

against her, allegedly for having adjusted

amounts into certain loan accounts, without

proper authorization.

3. The petitioner says that the

allegations in the charge memo are completely

untenable and that, in any event of the

matter, once his client had retired from the

services of the first respondent on

31.03.2020, in the absence of specific

provisions in the applicable Rules and

Regulations permitting continuation of

disciplinary proceedings after retirement, all

proceedings pursuant thereto would have to be

legally ceased.

4. The petitioner thus contends that WPC 10868/20

demand of the first respondent in requiring

that she execute an indemnity bond before her

retiral benefits are released, is untenable

and illegal. Sri.P.Haridas, therefore, prays

that this writ petition be allowed as prayed

for.

5. In response to the afore submissions

of Sri.P.Haridas, the learned counsel for the

KFC - Smt.Dhanya P. Asokan, submitted that the

petitioner has approached this Court without

any purpose because, as is evident from

Ext.P10, her client has never informed the

petitioner that her retirement benefits will

not be paid, but only that she will have to

execute an indemnity bond agreeing that the

employer's contribution towards Provident Fund

will be withheld till completion of

disciplinary proceedings against her. She

submitted that the 1st respondent-KFC is

authorised to do so in view of Ext.R1(a) WPC 10868/20

Minutes of its Board, whereunder, all

employees, against whom disciplinary action is

pending, are required to execute an indemnity

bond without collateral security pending such

enquiry. She, therefore, prayed that this Writ

Petition be dismissed and offered that

petitioner will be paid her entire retirement

benefits if she is willing to execute an

indemnity bond in terms of Ext.R1(a).

6. I have considered the afore rival

submissions very carefully and have also gone

through the materials and documents available

on record.

7. Though I do not propose to go in

detail into the allegations made against the

petitioner by the 1st respondent, prima facie,

it appears that she has been alleged to have

made certain adjustments in the loan account

of a particular company unauthorisedly.

Whether this amounts to misconduct or WPC 10868/20

otherwise is not something that this Court is

called upon to consider at this stage.

8. However, the specific allegation of

the petitioner is that since she retired on

31.03.2020, no disciplinary action can be

continued against her, based on a charge sheet

issued on 05.03.2020, since the Rules and

Regulations applicable to the 1st respondent do

not permit any such continuation. This

submission has some force because it is now

well settled, through a catena of judgments of

this Court and that of the Hon'ble Supreme

Court, that it is only in cases where there

are statutory provisions permitting

continuation of enquiry, can it be done after

an employee retires. That said, I do not

propose to speak on this affirmatively either,

since this is a matter which will have to be

decided by the KFC appropriately as and when

they intend to take the disciplinary action WPC 10868/20

forward against the petitioner.

9. As far as this case is concerned, the

only question is whether the petitioner is

required to execute an indemnity bond and to

forgo the employer's contribution towards

Provident Fund until the disciplinary action

is completed against her.

10. On this issue I find force in the

submissions of Sri.P.Haridas, learned counsel

for the petitioner, because for one, I am not

sure if any disciplinary enquiry can continue

against the petitioner after her retirement;

and for the second, Ext.R1(a) only mentions

about an indemnity bond but does not speak

about withholding of the employer's

contribution. To that extent the impugned

orders are in error.

11. Coming to the question of execution of

indemnity bond, I fail to understand why the

1st respondent should now insist on the same WPC 10868/20

since it would be nothing but an empty

formality, because the said bond only provides

that the petitioner should repay all

liabilities that may be found against her in

future. However, since she is now no longer in

service, obviously, any such recovery can be

made only as per the mandate of law and

through the jurisdictional assistance of the

competent Court/Forum.

12. I cannot, therefore, see insistence of

the indemnity bond to have any legal worth,

except that in Ext.R1(a), the Board of

Directors of the KFC has mentioned it as one

of the conditions for release of retirement

benefits of employees against whom

disciplinary action is pending.

In the afore circumstances, I order this

writ petition and direct the 1st respondent-KFC

to release the entire retirement benefits to

the petitioner; however, leaving them full WPC 10868/20

liberty to initiate any legally mandated and

sanctioned procedure for recovery of any

liability that may be found against her; for

which purpose, I leave open all contentions

and make it clear that my observations in this

judgment will not fetter such right of theirs

in any manner whatsoever.

The retirement benefits as ordered above

shall be released to the petitioner as

expeditiously as is possible, but not later

than one month from the date of receipt of a

copy of this judgment.

After I dictated this judgment,

Sri.P.Haridas - learned counsel for the

petitioner, submitted that his client has also

sought interest for the delay in payment of

her retirement benefits and prayed that this

Court order the same. However, I am of the

view that it will not be justified for this

Court to consider this aspect on its merits, WPC 10868/20

since, if I am to decide whether any interest

is to be paid to the petitioner, I will have

to make assessment of various materials and

documents in the factual realm, which this

Court is proscribed from doing, while acting

under Article 226 of the Constitution of

India.

I, therefore, leave open all contentions

to be pursued by the petitioner appropriately

before a competent Court, if she is so

interested in future.

Sd/-

                                         DEVAN RAMACHANDRAN
      RR                                       JUDGE
 WPC 10868/20




                           APPENDIX
      PETITIONER'S/S EXHIBITS:

      EXHIBIT P1        TRUE COPY OF THE CONSENT DATED
                        23.08.2014 OF THE LOANEE.

      EXHIBIT P2        TRUE COPY OF THE REPORT OF THE FILED
                        OFFICER DATED NIL.

      EXHIBIT P3        TRUE COPY OF THE STATEMENT OF CREDIT
                        DATED 26.02.2015 IS PRODUCED
                        HEREWITH AND MARKED AS.

      EXHIBIT P4        TRUE COPY OF THE REQUESTS DATED
                        19.03.2015.

      EXHIBIT P5        TRUE COPY OF THE REQUESTS DATED
                        31.03.2015.

      EXHIBIT P6        TRUE COPY OF THE REQUEST OF THE
                        COMPANY DATED 29.02.2016.

      EXHIBIT P7        TRUE COPY OF THE MEMO DATED
                        05.03.2020 ISSUED BY THE 1ST
                        RESPONDENT.

      EXHIBIT P8        TRUE COPY OF THE REPORT TO THE

VIGILANCE OFFICER BY THE CHIEF MANAGER, KERALA FINANCIAL CORPORATION DATED 03.12.2019.

EXHIBIT P9 TRUE COPY OF THE REPLY SUBMITTED BY THE PETITIONER DATED 20.03.2020 TO EXT.P7.

EXHIBIT P10 TRUE COPY OF THE MAIL DATED 23.03.2020 FROM THE 3RD RESPONDENT.

EXHIBIT P11 TRUE COPY OF THE MAIL DATED 31.03.2020 FROM THE 3RD RESPONDENT.

EXHIBIT P12 TRUE COPY OF THE RELEVANT PORTION OF THE STAFF REGULATION 1996 OF THE KFC.

WPC 10868/20

EXHIBIT P13 TRUE COPY OF THE RECOMMENDATIONS OF BRANCH LEVEL COMMITTEE DATED 15.5.2012.

EXHIBIT P14 TRUE COPY OF MINUTES OF THE TASK FORCE COMMITTEE DATED 20.2.2020 APPROVING COMPROMISE SETTLEMENT (CS) AND RELEASE OF COLLATERAL SECURITY.

EXHIBIT P15 TRUE COPY OF THE MASTER CIRCULAR DATED 01.07.2015 ISSUED BY THE RESERVE BANK OF INDIA.

EXHIBIT P16 TRUE COPY OF THE STANDARD POWER OF ATTORNEY WHICH AUTHORISES THE CORPORATION TO MAKE APPRORTIONMENTS DATED NIL

RESPONDENT'S/S EXHIBITS:

EXHIBIT R1(A) TRUE COPY OF THE MINUTES DT.

12.12.2012 OF THE BOARD OF THE CORPORATION.