Satheesan Pillai. G vs State Of Kerala
2023 Latest Caselaw 13496 Ker

Kerala High Court

Satheesan Pillai. G vs State Of Kerala on 21 December, 2023

Author: V Raja Vijayaraghavan

Bench: V Raja Vijayaraghavan

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
           THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
    THURSDAY, THE 21ST DAY OF DECEMBER 2023 / 30TH AGRAHAYANA, 1945
                        WP(C) NO. 22370 OF 2022
PETITIONER/S:

           SATHEESAN PILLAI. G
           AGED 58 YEARS
           (1572) (RETIRED) AGED 58 YEARS, S/O. GOVINDAPILLAI CHIEF
           MANAGER, KSFE LTD. PARIPPALLY BRANCH, PIN-681574, RESIDING
           AT VC BHAVAN, KADAMPATTUKONAM PARIPPALLY.P.O.,
           KOLLAM - 691574.
           BY ADVS.
           T.P.DEYANANTHAN
           A.V.RAMAKRISHNA PANICKER
           KRISHNALAL

RESPONDENTS:

     1     STATE OF KERALA
           REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT,
           DEPARTMENT OF FINANCE GOVERNMENT OF KERALA,
           THIRUVANANTHAPURAM-695001.

     2     THE BOARD OF DIRECTORS,
           REPRESENTED BY THE MANAGING DIRECTOR, KERALA FINANCIAL
           ENTERPRISES LTD BHADRATHA, THRISSUR - 680 020.

     3     SECRETARY,
           REPRESENTING THE KERALA STATE FINANCIAL ENTERPRISES STAFF
           CO-OPERATIVE SOCIETY LTD, T.777 SILVER JUBILEE BUILDING,
           STATUE, THIRUVANANTHAPURAM - 695 001.

           BY ADVS.
           M.GOPIKRISHNAN NAMBIAR
           VINOD KUMAR C
           K.JOHN MATHAI
           JOSON MANAVALAN
           KURYAN THOMAS
           PAULOSE C. ABRAHAM
           RAJA KANNAN
           SRI.VINOD KUMAR C, SC


     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION           ON
21.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 22370 OF 2022                      2




                                           JUDGMENT

The petitioner states that he joined the service of the 1st respondent

on 01.07.1991 and attained superannuation while working as Chief

Manager on 31.03.2022. His grievance in this writ petition concerns the

non-disbursement of the terminal benefits due to the petitioner.

2. According to the petitioner, the retirement benefits have not

been disbursed on the ground that the 1st respondent has assessed

liabilities upon the petitioner to the tune of Rs.33,97,040/- towards sticky

loans. They have also taken a stand that the KSFE Staff Co-operative

Society has requested the 1st respondent to withhold a sum of

Rs.13,03,274/- under various liabilities as is evident from Ext.P3 letter. It is

in the said circumstances that the Director Board of the respondent

company has taken a decision to withhold certain amounts from the

Terminal Earned Leave Surrender due to the petitioner. It is on these

assertions that this writ petition is filed seeking the following reliefs.

(i) to call for details relating to Ext.P1, Ext.P2, P3 and P4 and quash the same and direct the second respondent to disburse the Earned Leave Surrender Salary, gratuity and other terminal benefits to the petitioner with 18% interest from the date of retirement to the date of disbursement.

(ii) to issue a writ of mandamus, or any other writ, direction or order to the second respondent to

disburse salary of Terminal Surrender of Earned Leave in the credit of the petitioner and gratuity and other terminal benefits with 18% interest within a time frame.

(iii) to declare that the petitioner is entitled to salary of Terminal surrender of Earned Leave and gratuity and other Terminal benefits with 18% interest from the date of retirement to the date of disbursement.

3. A counter affidavit has been filed by respondents 1 and 2. It is

stated towards sticky loans, the total liability found to be existing in the

name of the petitioner amounts to Rs.33,97,040/-. Furthermore, the KSFE

Staff Co-operative Society has requested the respondents to recover an

amount of Rs.13,03,274/- under various liabilities. It is stated that in the

light of Ext.P3, the KSFE has withheld the terminal leave surrender

amounting to Rs.23,53,553/- and pay revision arrears amounting to

Rs.2,25,666/- due to the petitioner. It is stated that as huge financial

losses have been caused to the respondents by virtue of the actions and

ineptitude of the petitioner, certain non-statutory terminal benefits have

been withheld by the company.

4. A statement has been filed by the counsel for the 3rd

respondent. It is stated therein that a sum of Rs.13,03,274/- is due from

the petitioner towards the loan availed by him and the society has

requested the KSFE to recover the said amount from his retirement

benefits. It is stated that since a police investigation is pending in respect

of certain other transactions, the documents evidencing the loan availed by

the petitioner are not available with the 3rd respondent.

5. A reply affidavit has been filed by the petitioner to the counter

filed by the respondents. It is stated therein that the dues against the

members of the society have to be recovered only from the salary under

Section 37(2) of the Co-operative Societies Act. The DCRG of the retired

employee cannot be withheld by recourse to Rule 37 of the Act.

6. I have heard the submissions and have gone through the

records.

7. After having perused the records, I find that the respondents

have no case that while the petitioner was in service, any disciplinary

proceedings were initiated against him. The computation of the liability by

the respondents is a onesided proceeding initiated without notice to the

petitioner. No regulations have been cited to allow the Company to

withhold terminal benefits after retirement. Thus, the non-payment of

terminal and other benefits based on unproven allegations is clearly illegal

and violates the mutual trust fundamental to employer-employee

relationships. The Apex Court has held in a slew of cases that the right to

pension and other benefits is a constitutional right and not just a

discretionary benefit from the employer and is a property right protected

under the Constitution of India. The view that pension or retirement

benefits are a mere bounty and not enforceable through court has also

been rejected. ( See: Khem Chand v. Union of India1; State of W.B.

v. Haresh C. Banerjee, [(2006) 7 SCC 651] State of Jharkhand v.

Jitendra Kumar Srivastava, [(2013) 12 SCC 210], D.S.Nakara

v.Union of India [(1983) 1 SCC 305]. These precedents lead to the clear

conclusion that the Company is obligated to immediately disburse the

terminal and other benefits owed to the petitioner.

8. The next contention concerns the liability of the petitioner

towards the 3rd respondent society. It appears that Ext.P3 letter has

been issued stating that certain loans were availed, and the petitioner has

not closed the same. As per Section 37 of the Act, agreements can be

executed by the members of the society in favor of the society,

authorizing their employers to make deductions from the salary payable to

them and to pay the amount so deducted to the society. The said

provision refers only to salary. Since the petitioner has already retired

from service, the question of deduction from the salary no longer arises.

Furthermore, in Surendran v. Mavelikkara Primary Co-operative

Agricultural and RD Bank Ltd (2005 (4) KLT 619), a Division Bench of

this Court has held that the expression 'salary' used in Section 37 will not

include DCRG. It was also held that Rule 3 Part III KSR would only apply

if consent in writing is given by a Government employee to effect recovery

from DCRG. In that view of the matter, it would not be open to the

[AIR 1963 SC 687]

respondents to withhold any amounts due to the petitioner towards

terminal benefits on the above counts.

Resultantly, this writ petition will stand ordered, and the following

directions are issued:

a. The Respondents 1 and 2 shall initiate expeditious steps to release the entire retirement benefits due to the petitioner, including the Earned Leave Surrender, Terminal benefits of gratuity, the balance of EPF, and such other benefits due within a span of three months from the date of receipt of a copy of this judgment.

b. In case of failure to pay the amounts as ordered within a period of three months, the 1st respondent shall be liable to pay interest at the rate of 9% on the entire balance amount reckoned from the date of his retirement.

Sd/-

RAJA VIJAYARAGHAVAN V JUDGE Sru

APPENDIX OF WP(C) 22370/2022

PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE LETTER NO.672/2014 DATED 07-07-2014 INFORMING OF 3RD RESPONDENT.

Exhibit P2 THE TRUE COPY OF THE REPLY DATED 14-07-2014 BY THE PETITIONER.

Exhibit P3 THE TRUE COPY OF THE LETTER NO. NIL DATED 14-03-2022 FROM THE 2ND RESPONDENT.

Exhibit P4 THE TRUE COPY OF THE LETTER NO. 47281 DATED 19-03-2022 OF THE 2ND RESPONDENT.

Exhibit P5 TRUE COPY OF THE REPLY GIVEN BY THE PETITIONER TO DY. MANAGER OF THE SECOND RESPONDENT DATED 31.03.2022.

Exhibit P6 TRUE COPY OF THE REPRESENTATION DATED 2005-2022 SUBMITTED TO THE SECOND RESPONDENT.

RESPONDENTS ANNEXURES Exhibit R2(a) True copy of the Relevant extract of the service book of the petitioner, evidencing issuance of such certificates.