IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN TUESDAY, THE 9TH MARCH 2010 / 18TH PHALGUNA 1931 WP(C).No. 33123 of 2009(I) ---------------------------------------- PETITIONER(S): ------------------------ C.R.SUMATHY, PUTHIYATTIL HOUSE, CHETTARICKAL, KORATTY SOUTH P.O., THRISSUR-680 308. BY ADV. MR.V.G.ARUN RESPONDENT(S): ------------------------- 1. KORATTY SERVICE CO-OPERATIVE BANK LTD., KORATTY P.O., THRISSUR, REPRESENTED BY ITS SECRETARY. 2. THE KERALA STATE CO-OPERATIVE EMPLOYEES PENSION BOARD, KALA NIVAS, P.B.NO.85, CHINMAYA LANE, THIRUVANANTHAPURAM-695 001, REPRESENTED BY ITS SECRETARY. R1 BY MR.ABRAHAM VAKKANAL, SENIOR ADVOCATE R1 BY ADVS.MR.PAUL ABRAHAM VAKKANAL, MR.DIJO SEBASTIAN. R2 BY MR.P.V.MOHANAN,SC,K.ST.CO.OP.EMP.PENSION THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.33123/2009 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE PENSION DOCKET OF THE PETITIONER. P2:- COPY OF THE RESLUTION DTD. 3.10.08 OF THE COMMITTEE OF IST RESPONDENT SOCIETY. P3:- COPY OF THE COVERING LETTER. P4:- COPY OF THE LETTER ISSUED BY THE 2ND RESPONDENT DTD. 17.8.09. RESPONDENT'S EXHIBITS R1(a):- COPY OF THE DEMAND NOTICE DTD. 12.12.08. R1(b):- COPY OF THE REPLY WITHOUT THE ANNEXURES DT.D 20.12.08. R1(c):- COPY OF THE LETTER OF THE 2ND RESPONDENT DTD. 25.2.09. R1(d):- COPY OF THE LETTER DTD. 12.5.09. R1(c):- COPY OF THE CIRCULAR ON THE ABOVE ONE TIME SETTLEMENT DTD. 12.2.09. R1(f):- COPY OF THE LETTER WITH PAY-IN-SLIP STATEMENT OF OTS REMITTANCE, AND PENSION FUND CALCULATION. DTD. 28.7.09. R1(g):- COPY OF THE LETTER DTD. 17.8.09. R1(h):- COPY OF THE LETTE DTD. 14.9.09. R1(i):- COPY OF THE RESOLUTION OF THE IST RESPONDENT DTD. 1.12.09. TRUE COPY P.A. TO JUDGE tss K.SURENDRA MOHAN, J. ------------------------------------------- W.P.(C) No.33123 of 2009 ------------------------------------------- Dated this the 9th day of March, 2010 JUDGMENT The petitioner retired as an Assistant Secretary from the first respondent bank on 31.7.2008. She had joined service of the bank on 1.3.1976 and had more than 31 years of service at the time of her retirement. The second respondent is a class-I bank and is a member of the Co- operative Employees Self Financing Pension Scheme, 1994, hereinafter referred as the 'Pension Scheme' for short. According to the petitioner, consequent to her retirement, she should have been paid pension in accordance with the provisions of the Pension Scheme. However, she complains that her pension has not been paid till date. 2. The second respondent Pension Board has filed a counter affidavit stating that the pension has not been granted to the petitioner for the reason that the payment to be made by the first respondent bank has not been made as contemplated by the Pension Scheme. As per the wpc No.33123/2009 2 Pension Scheme, the arrears of contribution payable by the contributory societies were liable to be recovered with 20% interest thereon. However, the Government had introduced a One Time Settlement Scheme ('OTS' for short) for the benefit of the employees' bank/societies by which, they were permitted to remit the arrears due as pension fund contribution calculating interest at the rate of 12% per annum instead of 24%. The first respondent has calculated the dues payable by the second respondent bank and had by issuing Ext.P4 proceedings directed them to remit the arrears of contribution. According to the first respondent, the arrears works out to Rs.1,93,327/-. However, the amount has still not been paid by the second respondent bank. The counsel for the first respondent points out that the method of calculation adopted for computing the actual amount due from the second respondent is in accordance with the dictum laid down by this Court in the judgment dated 20.8.2009 in W.P.(C) No.20987/2009. In the said judgment, this Court has noticed that the concessional rate of interest at 12% per annum is only on the arrears that is due from a Society wpc No.33123/2009 3 from 1.2.1999. 3. The second respondent bank has filed a counter affidavit producing Exts.R1(a) to R1(i) documents. According to the second respondent, the bank has remitted the entire arrears of pension fund contribution due and payable by them which, according to them amounts only to Rs.21,549/-. The said amount has been remitted by the second respondent on 28.7.2009. Therefore, the second respondent contends that no further amounts are due or payable by the bank. According to the second respondent bank, since the OTS Scheme was applicable for arrears from 1.2.1999 onwards, the bank was entitled to calculate interest on the full amount of pension contribution due in respect of the petitioner's pension for the period from 1.2.1999 onwards. Calculated on the above basis, according to the second respondent bank, the amount of arrears payable works out only to Rs.21,549/-. The contention of the second respondent is disputed by the counsel for the first respondent by pointing out that the OTS scheme was made available only for the purpose of clearing the wpc No.33123/2009 4 arrears of pension contribution that was due. Since the expression 'arrears' contemplates contributions that are remaining unpaid and due, the benefit of the OTS scheme could not be made applicable to the contribution amounts already remitted by the bank. The counsel for the petitioner points out that as per clause-38 of the Pension Scheme, the second respondent Board is armed with sufficient powers for the recovery of the amount of dues payable by the second respondent and that the omission to resort to the powers under clause-38 of the scheme was without any justification whatsoever. Therefore, according to the counsel for the petitioner, the petitioner is entitled to recover interest on the amount of pension that she should have received from the date of her retirement onwards. 4. I have heard Mr.V.G.Arun who appears for the petitioner, Senior Advocate Mr.Abraham Vakkanal who appears for the first respondent and Mr.P.V.Mohanan, the counsel for the second respondent bank. The dispute in the present case is confined only to the quantum of the arrears demanded by the second respondent from wpc No.33123/2009 5 the first respondent. It is not in dispute that the petitioner is entitled to receive pension under the scheme. According to the first respondent bank, since the pension fund contribution was in arrears, the bank was entitled to calculate the entire amount due as pension fund contribution in respect of the petitioner with effect from 1.2.1999 with interest thereon at the concessional rate of 12% per annum as provided by the OTS scheme. According to the counsel for the second respondent, since the OTS scheme was introduced to facilitate clearance of the amounts that were remaining in arrears, the benefit can apply only to the contribution that was remaining unpaid. According to the counsel for the second respondent, in the case of the petitioner, the pension contribution fell into arrears only from 3.5.2005 onwards. Therefore, the concessional rate of interest at 12% is applicable only for the amounts that were remaining unpaid and in arrears from 3.5.2005. 5. The question regarding the manner in which the arrears are to be calculated has been considered by this Court in the judgment in W.P.(C) No.20987/2009. It has wpc No.33123/2009 6 been noticed in the said judgment that as per the directions in clause-2 of Ext.R1(e), the benefit available to the second respondent is to clear the arrears for the period subsequent to 1.2.1999 and to pay the arrears with 12% interest thereon. Since the arrears in this case is from 3.5.2005, the first respondent bank is entitled to the concessional rate of interest at 12% per annum only from the said date. I am supported in this view by the judgment of this Court referred to above. In paragraph- 10 of the said judgment, this Court has made the following observations: “It is to be reiterated that in terms of clause 2 of Ext.P12(a) the benefit available to the society is to clear the arrears for the period subsequent to 1.2.1999 and pay the arrears with interest at 12% thereon. In these cases arrears have been quantified, after giving credit to the partial payments made in the case of Amminikutty as on 18.11.2005 and in the case of Sri.Soman Pillai as on 15.9.2005, when the last partial payments were made. Once arrears were quantified in this manner, interest at 12% has been levied for the period thereafter.” 6. I am in respectful agreement with the above observations. In view of the above, I do not find any error in the calculation that is adopted by the second wpc No.33123/2009 7 respondent in computing the amount of pension fund contribution due from the first respondent. 7. The other contention raised by the counsel for the second respondent is that the pension due to the petitioner was not paid for the reason that the contributions were not remitted by the first respondent bank. Clause-38 of the Pension Fund Scheme reads as follows: “If any amount due from a society to the Pension Fund under this Scheme is in arrears, the secretary or any other officer authorised by him in this behalf shall, after due enquiry, ascertain the amount of arrears and if the society fails to clear the arrears within the time as may be specified in the notice issued thereon, issue a certificate for that amount with interest at the rate of 24% p.a. till date or Rs.500 whichever is higher, from the date of such notice to the collector of the District in which the demand arised and the Collector on receipt of such certificate shall proceed to recover the amount with interest in the same manner as arrears of Public revenue due on land.” 8. The above provision confers on the second respondent ample powers to recover the amount wpc No.33123/2009 8 demanded as arrears of contribution due from the Society/Bank. There is no justification for the second respondent not to have resorted to the above provision to recover the amount of arrears due to the pension fund. The omission on the part of the second respondent has resulted in needless misery and anguish to the petitioner who has been agitating for her pension ever since her retirement. Therefore, the contention of the second respondent that the pension of the petitioner would be paid only after the amounts due from the first respondent are recovered is unsustainable. 9. For the above reasons, this Writ Petition is allowed. There shall be a direction to the second respondent to disburse the amount of pension due to the petitioner as expeditiously as possible and at any rate within a period of one month. The second respondent shall be at liberty to recover the contributions due from the first respondent in accordance with law. However, it is made clear that the payment of pension due to the petitioner shall not be kept in arrears pending recovery of the contributions wpc No.33123/2009 9 from the first respondent bank. 10. The counsel for the petitioner has made a claim for interest for the reason of delay in payment of pension. The question of interest is left open. K.SURENDRA MOHAN, JUDGE css/