K.N.Sreekumaran Nambiathiri vs Thekkekkara Service ...
2023 Latest Caselaw 4785 Ker

            IN THE HIGH COURT OF KERALA AT ERNAKULAM
                             PRESENT
            THE HONOURABLE MR. JUSTICE SATHISH NINAN
 THURSDAY, THE 13TH DAY OF APRIL 2023 / 23RD CHAITHRA, 1945
                     WP(C) NO. 1880 OF 2023
PETITIONER:

           K.N.SREEKUMARAN NAMBIATHIRI
           KALARIKKAL SREYAS, PONNEZHA, OLAKETTIYAMBALAM
           P.O, MAVELIKKARA, ALAPPUZHA, PIN - 690510
           BY ADVS.
           P.N.MOHANAN
           C.P.SABARI
           AMRUTHA SURESH
           GILROY ROZARIO


RESPONDENTS:

   1     THEKKEKKARA SERVICE CO-OPERATIVE BANK LTD.NO.A218,
         REPRESENTED BY ITS SECRETARY,
         PONAKAM, MAVELIKKARA, ALLEPPEY, PIN - 690101
   2     THE MANAGING COMMITTEE OF THEKKEKKARA SERVICE CO-
         OPERATIVE BANK LTD.NO.A 218, REPRESENTED BY ITS
         PRESIDENT, PONAKAM,MAVELIKKARA,ALLEPPEY,PIN - 690101
           BY ADV LATHA ANAND


OTHER PRESENT:

           SRI. SUNIL KUMAR KURIAKOSE. G.P.


       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.1880 of 2023
                  ==========================
            Dated this the 13th day of April, 2023

                                  JUDGMENT

The petitioner retired from the services of the 1 st

respondent Society on 30.06.2019 as its Secretary.

Aggrieved by the non-disbursal of the arrears of revised

salary and pensionary benefits, the petitioner has

approached this Court.

2. Consequent on the delay in disbursal of

retirement benefits, the petitioner had earlier

approached this Court in W.P(C) No.6035 of 2022. There

the stand of the respondent Society was that, all

eligible amounts due to the petitioner has been

disbursed and that the claim of the petitioner is for

amounts in excess of the statutory limit. The Writ

Petition was disposed of by this Court as per Ext P5

judgment, directing the managing committee to take a

decision on the claim of the petitioner.

3. Thereafter the managing committee issued Ext P7

order declining the claim. In Ext P7, the stand adopted

by the Society is that, the petitioner has caused loss W.P(C) No.1880 of 2023

-: 2 :-

to the Society and hence the same is liable to be

appropriated from his retirement benefits. It is

thereupon that the writ petition is filed.

4. The contention of the Society is that, the Writ

Petition could not be maintained against the Society and

that the remedy of the petitioner is to approach the

appropriate forum under Section 69 of the Co-operative

Societies Act. It is further contended that the

petitioner has caused pecuniary loss to the Society to

the tune of Rs.9,87,739/- which is liable to be

recovered from his retirement benefits.

5. Heard the learned counsel on either side.

6. 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 co-

operative 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 W.P(C) No.1880 of 2023

-: 3 :-

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 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."

7. 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 W.P(C) No.1880 of 2023

-: 4 :-

disciplinary proceeding was pending against the

petitioner at the time of his retirement. Therefore,

Rule 198(7) has no application.

8. 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

at hand, though the petitioner retired on 30.06.2019,

within the 30 days period prescribed, the non-liability

certificate was not issued; even as of now, the same has

not been issued.

9. 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.

10. A Division Bench of this Court in Mohanan Nair P.

G. v. Omallur Service Co-operative Bank Ltd. And Ors. ILR 2022 (2) W.P(C) No.1880 of 2023

-: 5 :-

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

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 Co-

operative Societies Act.

11. 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 W.P(C) No.1880 of 2023

-: 6 :-

Society is bound to disburse the pensionary benefits to

the petitioner.

12. When the statutory benefits payable to the

petitioner is not being disbursed, there is no substance

in the contention of the Society that a Writ Petition

could not be entertained. The Society is bound to

disburse all the eligible benefits to the petitioner

without effecting any deductions therefrom.

Resultantly the Writ Petition is allowed. The

amounts payable to the petitioner under the head of

arrears of salary and all the retirement benefits, shall

be disbursed to the petitioner without effecting any

recovery therefrom, within a period of three months from

the date of receipt of a copy of this judgment.

Sd/-

Sathish Ninan, Judge vdv APPENDIX OF WP(C) 1880/2023

PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE G.O.NO.32/2021 DATED 15.02.2021 OF THE GOVERNMENT Exhibit P2 A TRUE COPY OF THE JUDGMENT IN SOCIETY OF RETIRED FOREST OFFICERS VS. STATE OF U.P REPORTED IN 2008 (3) KLT 788 Exhibit P3 A TRUE COPY OF THE JUDGMENT IN CHRYSOSTOM V.

FEDERAL BANK LTD AS REPORTED IN 1992 (2) KLT

Exhibit P4 A TRUE COPY OF THE JUDGMENT PHILIP V.

REGISTRAR OF CO-OP.SOCIETIES REPORTED IN 2018 (3) KHC 780 DB) Exhibit P5 A TRUE COPY OF THE JUDGMENT DATED 30.09.2022 IN W.P.(C).NO.6035/2022 Exhibit P6 A TRUE COPY OF THE LETTER DATED 02.12.2022 OF THE PETITIONER Exhibit P7 A TRUE COPY OF THE ORDER DATED 21.12.2022 OF THE SECOND RESPONDENT Exhibit P8 A TRUE COPY OF THE MEDICAL CERTIFICATE DATED 13.07.2022 ISSUED BY THE MEDICAL BOARD RESPONDENT EXHIBITS Exhibit R1(b) True copy of the demand notice dated 21.02.2022 Exhibit R1(a) True copy of the audit report for the period from 2017 - 2018 and 2018 - 2019 of the 1st respondent