IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 14TH DECEMBER 2010 / 23RD AGRAHAYANA 1932 WP(C).No. 8761 of 2009(M) --------------------------------- PETITIONER(S): -------------------- P.VELAYUDHAN, ACCOUNTANT (RETD.), MARAKKARA SERVICE CO-OP. BANK, LTD.NO.F.10738, P.O.RANDATHANI, MALAPPURAM DIST., NOW RESIDING AT PARAYANKUNNATHU VEEDU, P.O.KALLARMANGALAM, MALAPPURAM DISTRICT, PIN-676 553. BY ADV. SRI.P.N.MOHANAN RESPONDENT(S): -------------------- 1. KERALA STATE CO-OPERATIVE EMPLOYEES' PENSION BOARD, REPRESENTED BY SECRETARY, P.B.NO.85, KALA NIVAS, TC 27/156,157, CHINMAYA LANE, KUNNUMPURAM, NEAR AYURVEDA COLLEGE, THIRUVANANTHAPURAM-1. 2. MARAKKARA SERVICE CO-OPERATIVE BANK, LTD.NO.F.10738, REPRESENTED BY PRESIDENT, P.O.RANDATHANI, MALAPPURAM DISTRICT. R1 BY ADV.SRI.P.V.MOHANAN,SC,K.ST.CO.OP.EMP.PENSI R2 BY ADV. SRI.A.KRISHNAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02/12/2010, THE COURT ON 14/12/2010 DELIVERED THE FOLLOWING: svs/ WP(C).No. 8761/2009(M) APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE COMMUNICATION DATED 31/03/2006 PERMITTING THE PETITIONER TO RETIRE VOLUNTARILY FROM SERVICE. P2: COPY OF THE ORDER DATED 09/12/2008 SANCTIONING PENSION TO THE PETITIONER. P3: COPY OF THE SRO 118/2007 PUBLISHED IN KERALA GAZETTE DATED 25/01/2008. RESPONDENT'S EXHIBITS NIL /TRUE COPY/ P.A. TO JUDGE svs/ T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.8761 of 2009-M - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 14th day of December, 2010. JUDGMENT In this writ petition the sole question raised is concerning the interpretation of Clause 21 of the Kerala Co-operative Societies Pension Scheme, 1994 as amended by the notification Ext.P3 which came into force on 25.1.2008. The short facts for the disposal of the writ petition are the following: 2. The petitioner herein was an employee of the second respondent Bank. Due to ill health he put in a request on 21.3.2006 for voluntary retirement from service. The same was sanctioned by the Managing Committee of the Bank as per Ext.P1, to be effective from 1.4.2006. The date of birth of the petitioner is 1.4.1957. He retired at the age of 49 after completing 26 years and 4 months of service to his credit. By Ext.P2, the Pension Board sanctioned monthly pension at the rate of Rs.3,143/- for every month commencing from 4.1.2008. According to the petitioner, he is entitled to get pension with effect from 1.4.2006 instead of 4.1.2008. 3. The Pension Board has filed a counter affidavit. It is pointed out that at the time of retirement the petitioner had completed 26 years of wpc 8761/2009 2 service, but had not completed the age of 50 years. As on the date of retirement, clause 21 provided that “a retiring pension shall be granted to an employee who retired voluntarily after completing a minimum of twenty years of qualifying service on attaining the age of 50 years.” This was brought into force with effect from 1.4.1998. Therefore, he had to satisfy both the conditions and he was not eligible for retiring pension accordingly. The amendment Ext.P3 made the conditions alternative by adding the word 'or' before the words “on attaining the age of 50 years”. The date of the Government Order is 4.1.2008. Accordingly he was granted pension from 4.1.2008. 4. Heard learned counsel for the petitioner Shri P.N. Mohanan and learned Standing Counsel for the Pension Board, Shri P.V. Mohanan. 5. Learned counsel for the petitioner contended that the amendment of clause 21 introduced with effect from 4.3.2001 substituting the earlier clause provided that a person who completed a minimum of 20 years of qualifying service on attaining the age of 50 years, can voluntarily retire from service. The word 'on' therein did not give any meaning, as the idea was to make the condition alternative. Both conditions cannot be satisfied, evidently. That is why the later amendment was brought in by Ext.P3 which was published in the Gazette dated 25.1.2008. Learned counsel submitted that except the addition of the omitted word 'or', all other parts have been wpc 8761/2009 3 retained. The explanatory note will show that the Government found that the word 'or' is an omission after the words “twenty years of qualifying service”. Therefore it is submitted that actually the amendment is declaratory as it is curative. Reliance is placed on the decision of the Apex Court in Shakti Tubes Ltd. v. State of Bihar and others {(2009) 7 SCC 673}. 6. Learned Standing Counsel for the Pension Board, Shri P.V. Mohanan submitted that as on the date of retirement of the petitioner, he had not completed 50 years of age. Therefore, as per the provision which stood then, he was not entitled for grant of pension. Only because of the amendment Ext.P3, he became eligible for pension. The date of the Government Order is 4.1.2008. There is nothing to show that the amendment is retrospective. He had no vested right for pension on the date of retirement. It is pointed out that when a provision is substituted by another one, unless the amendment is made retrospective, it will have only prospective operation. My attention was invited to the general principles in this regard, by relying upon the decisions of the Apex Court in Bhagat Ram Sharma v. Union of India and others (AIR 1988 SC 740), Ramkanali Colliery of BCCL v. Workmen by Secy. Rashtriya Colliery Mazdoor Sangh and another {(2001) 4 SCC 236}, Zile Singh v. State of Haryana and others {(2004) 8 SCC 1) and Government of India and wpc 8761/2009 4 others v. Indian Tobacco Association {(2005) 7 SCC 396}. 7. Before going into the various disputes, it is profitable to refer to the provisions of the Scheme itself. The Kerala Co-operative Societies Employees Self Financing Pension Scheme, 1994 was brought into force with effect from 3.6.1993, as per G.O.(P) No.44/95/Co-op. dated 14.3.1995. The Scheme enables an employee who comes within the definition, to get pension on satisfying various conditions. Clause 18 concerns “Eligibility for Pension” and Clause 19 concerns “Qualifying Service”. Clause 20 deals with “Superannuation Pension” which originally provided that “every employee who has a minimum of ten years qualifying service shall be eligible for superannuation pension on retiring at the age of 58 years.” Clause 21 is applicable here, which is under the heading “Retiring Pension”. As per the original Scheme, it provided as follows: “21. Retiring Pension.-- A retiring pension shall be granted to an employee who retired voluntarily after completing a minimum of twenty years of qualifying service subject to the following conditions, namely:- (a) the employees shall give a notice in writing to the appointing authority indicating his intention to retire, atleast three months before the date on which he wishes to retire: Provided that the appointing authority may accept a notice of less than three months if the reasons stated therein are acceptable to that authority. wpc 8761/2009 5 (b) voluntary retirement shall take effect only on the grant of permission to retire by the appointing authority: © where any disciplinary or judicial proceedings are pending against an employee, the appointing authority shall not grant the permission to retire till such proceedings are finally disposed of.” Therefore, as per the above provision, an employee who retires voluntarily after completing a minimum of 20 years of qualifying service, was entitled for retiring pension. This provision was amended in the year 2001 as per G.O.(P) No.53/2001/Co-op. dated 7.3.2001. The amendment was brought into effect from 1.4.1998. There was amendment of different clauses of the Scheme. Clause 6 of the amendment is important which provides as follows: “6. In clause 21 for the words “after completing a minimum of twenty years of qualifying service”, the words “after completing a minimum of twenty years of qualifying service on attaining the age of 50 years shall be substituted.” Therefore, the provision was substituted providing that instead of completing a minimum of 20 years of qualifying service, the eligibility will be determined for a person who completes a minimum of 20 years of qualifying service on attaining the age of 50 years. Thereafter, in 2008 the present amendment has been introduced. The amendment reads as follows: “2. Amendment of the Scheme-- In the Kerala C0-operative Societies Employees Self Financing Pension Scheme, 1994 in wpc 8761/2009 6 clause 21, for the words “after completing a minimum of twenty years of qualifying service on attaining the age of 50 years” the words “after completing a minimum of twenty years of qualifying service or on attaining the age of fifty years”, shall be substituted.” Except the addition of the word 'or' there is no other amendment. The explanatory note for the amendment reads as follows: “As per G.P.(P) No.53/2007/Co-op. dated 7th March, 2001, published as S.R.O. No.271/2001 in the Kerala Gazette Extraordinary No.387 dated the 14th March 2001 the Kerala Co- operative Societies Employees Self Financing Pension Scheme, 1994 have been amended. When the amendment is made to clause 21 of the said Scheme the word 'or' is omitted after the words “twenty years of qualifying service”. Therefore, Government have decided to amend the said scheme for rectifying the said omission. This notification is intended to achieve the above object.” 8. A reading of the explanatory note thus shows that actually when the amendment was introduced in the year 2001, the word 'or' was omitted after the words “twenty years of qualifying service”. It is expressly stated in the explanatory note that the amendment is for rectifying the said omission. It is therefore evident that it is curative in nature, even though the word 'substituted' finds a place in clause 2. It is not a case where the earlier provision was repealed and a new provision was added by way of substitution. The earlier provision of the Scheme as such is retained except by adding the omitted word. wpc 8761/2009 7 9. Therefore, as originally stood, a person who had completed 20 years of qualifying service and who avails voluntary retirement, was entitled for grant of pension. That was the minimum period required. The same period is retained in the amendments of the years 2001 and 2008. In that view of the matter, one of the eligibility conditions has not seen any change. The important amendment of the year 2001 as clarified now is that a person who has attained the age of 50 years, can also aspire for a retiring pension after voluntarily retiring from service. Therefore, the object of the Scheme is quite evident. It was not cumulative in nature, but alternative. 10. The amendment of the year 2001 was effective from the year 1998, with effect from 1.4.1998. Therefore, if the word 'or' was there in the year 2006, there would not have been any difficulty for getting pension by the petitioner. He had completed the requirement of 20 years of qualifying service as his total service is more than 26 years. 11. In the decision reported in Bhagat Ram Sharma's case (AIR 1988 SC 740), the distinction between 'repeal' and 'amendment' was pointed out. While interpreting the meaning of the words 'repeal' and 'amendment', it was laid down in paragraphs 17 and 18 as follows: “It is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and a new provision substituted. Such deletion has the effect of repeal of the existing provision. Such a law may also wpc 8761/2009 8 provide for the introduction of a new provision. There is no real distinction between “repeal” and “amendment”. Amendment is, in fact, a wider term and it includes abrogation or deletion of a provision in an existing statute. If the amendment of an existing law is small, the Act professes to amend; if it is extensive, it repeals a law and re-enacts it. An amendment of substantive law is not retrospective unless expressly laid down or by necessary implication inferred.” Therefore, when the amendment is extensive, it repeals a law and re-enacts it. It was also held that when one provision is deleted and a new provision is substituted, it will have the effect of repealing of the existing provision. If the amendment herein is thus construed, there is no deletion of the relevant provision. The omission alone is supplied. In that view of the matter, it cannot be said that there is a repeal of the existing provision as known to law. 12. The scope of the expression 'substituted' was considered by the Apex Court in Ramkanali Colliery of BCCL's case {(2001) 4 SCC 236}. Therein also, it was held that when there is a repeal and introduction of another provision in its place, by a single exercise, the expression “substituted” is used. In para 8 of the judgment the relevant principles have been stated thus and reliance is placed upon the decision of the Apex Court in Bhagat Ram Sharma's case (AIR 1988 SC 740): wpc 8761/2009 9 “What we are concerned with in the present case is the effect of the expression “substituted” used in the context of deletion of sub- sections of Section 14, as was originally enacted. In Bhagat Ram Sharma v. Union of India (1988 Supp SCC 30) this Court stated that it is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and a new provision substituted. If there is both repeal and introduction of another provision in place thereof by a single exercise, the expression “substituted” is used. Such deletion has the effect of the repeal of the existing provision and also provides for introduction of a new provision. In our view there is thus no real distinction between repeal and amendment or substitution in such cases. If that aspect is borne in mind, we have to apply the usual principles of finding out the rights of the parties flowing from an amendment of a provision. If there is a vested right and that right is to be taken away, necessarily the law will have to be retrospective in effect and if such a law retrospectively takes away such a right, it can no longer be contended that the right should be enforced. However, that legal position, in the present case, does not affect the rights of the parties as such.” Therefore, when there is a deletion, it has the effect of repealing of the existing provision. The Apex Court held that when, in such cases, there is an introduction of a new provision, there is no real distinction between repeal or amendment or substitution. 13. In a later decision in Zile Singh's case {(2004) 8 SCC 1}, the principles relating to retrospective operation of the Statutes and the wpc 8761/2009 10 question whether any curative or declaratory provision will be retrospective or not, was considered. Paragraphs 13 and 14 of the judgment laid down the proposition thus: “13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only -- “nova constitutio futuris formam imponere debet non praeteritis” -- a new law ought to regulate what is to follow, nor the past. (See Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn. 2004 at p.438). It is not necessary that an express provision be made to make a statute retrospective and the presumption against retrospectivity may be rebutted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid. p. 440). The test for considering the retrospective nature of the provision was laid down in para 15 as follows: “Though retrospectivity is not to be presumed and rather there is presumption against retrospectivity, according to Craies (Statute Law, 7th Edn.), it is open for the legislature to enact laws having retrospective operation. This can be achieved by express enactment or by necessary implication from the language employed. If it is a wpc 8761/2009 11 necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation. In the absence of a retrospective operation having been expressly given, the courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated. (p.388) The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right. (p.392).” Therefore, in the absence of express words, the true intention of the legislature will have to be considered. Finally, with respect to a Statute which is passed for the purpose of supplying an obvious omission in a former statute or to explain a former statute, it was held thus in para 16: “Where a statute is passed for the purpose of supplying an obvious omission in a former statute or to “explain” a former statute, the subsequent statute has relation back to the time when the prior Act was passed. The rule against retrospectivity is inapplicable to such legislations as are explanatory and declaratory in nature.” 14. Finally, the legislative device of “substitution” was also adverted to in paragraphs 24 and 25 in the following words: “24. The substitution of one text for the other pre-existing text is wpc 8761/2009 12 one of the known and well-recognised practices employed in legislative drafting. “Substitution” has to be distinguished from “supersession” or a mere repeal of an existing provision. 25. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision (see Principles of Statutory Interpretation, ibid. p. 565). If any authority is needed in support of the proposition, it is to be found in West U.P. Sugar Mills Assn. v. State of U.P. (2002) 2 SCC 645), State of Rajasthan v. Mangilal Pindwal - (1996) 5 SCC 60, Koteswar Vittal Kamath v. K. Rangappa Baliga and Co. - (1969) 1 SCC 255, and A.L.V.R.S.T. Veerappa Chettiar v. S. Michael - AIR 1963 SC 933. In West U.P. Sugar Mills Assn. case, a three-Judge Bench of this Curt held that the State Government by substituting the new rule in place of the old one never intended to keep alive the old rule. Having regard to the totality of the circumstances centring around the issue the Court held that the substitution had the effect of just deleting the old rule and making the new rule operative. In Mangilal Pindwal case, this Court upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held that the substitution would have the effect of amending the operation of law during the period in which it was in force. In Koteswar case, a three-Judge Bench of this Court emphasised the distinction between “supersession” of a rule and “substitution” of a rule and held that the process of substitution consists of two steps: first, the old rule is made to case to exist and, next, the new rule is brought into existence in its place.” wpc 8761/2009 13 It is therefore clear that the word 'substitution' really results in repeal of an earlier provision and enactment of a new provision. Therefore, even though the learned Standing Counsel for the Pension Board submitted that the amendment herein is a real substitution going by the word “substituted” in clause 2 of the amended scheme, in the light of the object and scope of the amendment as clear from the explanatory note, it cannot be said that herein there is a real substitution in the legal sense of the term. There had not been any repeal of the earlier provision and enactment of a new provision. The earlier provision brought in the year 2001 is not at all replaced. It is not a case where the old rule has ceased to exist and a new rule is brought into force. Evidently, the idea was only to supply an omission and therefore the amendment is only a clarificatory and curative one and therefore the provision will relate back to the time when the prior provision was introduced. 15. In the decision of the Apex Court in Indian Tobacco Association's case {(2005) 7 SCC 396} also, the meaning of the term “substituted” was emphasised thus in para 15: “The word “substitute” ordinarily would mean “to put (one) in place of another”; or “to replace”. In Black's Law Dictionary, 5th Edn. at p. 1281, the word “substitute” has been defined to mean “to put in the place of another person or thing”, or “to exchange”. In Collins English Dictionary, the word “substitute” has been wpc 8761/2009 14 defined to mean “to serve or cause to serve in place of another person or thing”; “to replace (an atom or group in a molecule) with (another atom or group)”; or “a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague”.” On the facts of the said case, it was held in para 16 that only an obvious mistake was sought to be removed by the amendment and there was no substitution. Finally, the effect of supplying an omission was laid down thus in para 27: “There is another aspect of the matter which may not be lost sight of. Where a statute is passed for the purpose of supplying an obvious omission in a former statute, the subsequent statute relates back to the time when the prior Act was passed. (See Attorney General v. Pougett - (1816) 2 Price 381.” Even though Shri P.V. Mohanan, learned Standing Counsel for the Pension Board relied upon the above decision to contend that herein there is real substitution, but in the light of the aspects pointed out above, it can be seen that what is supplied is only an obvious omission in the former amendment in 2001. In the above decision, the Apex Court relied upon the decision in Zile Singh's case {(2004) 8 SCC 1}. 16. The decision in Zile Singh's case {(2004) 8 SCC 1} was relied upon by the Apex Court in Shakti Tubes Ltd.'s case {(2009) 7 SCC 673}, wherein the principles regarding retrospective operation of statutes as wpc 8761/2009 15 reiterated in paragraphs 15 and 16 of Zile Singh's case {supra) was affirmed. 17. In an earlier decision of the Apex Court in Channan Singh v. Jai Kaur (AIR 1970 SC 349), while considering the retroactive nature of a provision which explains a former one, it was held in para 5 that “It is well settled that if a statute is curative or merely declares the previous law retroactive operation would be more rightly ascribed to it than the legislation which may prejudicially affect past rights and transactions.” Therefore, the legal position with regard to the retroactive nature of a curative provision cannot be doubted. 18. The amendment which was introduced in the year 2001, going by the explanatory note therein, was to provide some more benefits to employees. Therefore, the object of the amendment was to benefit the employees by liberalising the scheme. It is a welfare measure also. Therefore, an interpretation which promotes the object will have to be attempted. 19. Herein, the notification states that it shall come into force at once. It was published in the Extra-ordinary Gazette dated 25.1.2008 and the Govt.