IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN THURSDAY, THE 3RD MARCH 2011 / 12TH PHALGUNA 1932 WP(C).No. 30746 of 2009(K) -------------------------- PETITIONER(S): ----------------------- CHACKO JOSEPH, KAIPPENPLACKAL HOUSE, KOZHUVANAL P.O., KOTTAYAM DISTRICT-686 523, (RETIRED SENIOR CLERK, ARYANKAVU SERVICE CO-OPERATIVE BANK LTD.NO.2965, ARYANKAVU P.O., KOLLAM DIST-PIN.691 316). BY ADV. SRI.V.VARGHESE RESPONDENT(S): ------------------------ 1. KERALA STATE CO-OPERATIVE EMPLOYEES' PENSION BOARD, P.B.NO.85, KALA NIVAS, T.C.NO.27/156,157, CHINMAYA LANE, KUNNUMPURAM, NEAR AYURVEDA COLLEGE, THIRUVANANTHAPURAM-1, REPRESENTED BY ITS SECRETARY. 2. ARYANKAVU SERVICE CO-OPERATIVE BANK LTD.NO.2965, ARYANKAVU P.O., KOLLAM DISTRICT, PIN-691 316), REPRESENTED BY ITS SECRETARY. ADV. SRI.P.C.SASIDHARAN FOR R2 SRI.P.V.MOHANAN,SC,K.ST.CO.OP.EMP.PENSI FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: kp W.P.C.NO.30746 OF 2009 APPENDIX: PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF THE REPRESENTATION DATED 10.7.2007 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXT.P2: TRUE COPY OF THE LETTER NO.PB/EM/Admn./4815/KLM DATED NIL ADDRESSED TO THE 2ND RESPONENT WITH COPY TO THE PETITIONER. EXT.P3: TRUE COPY OF THE REQUISIION SUBMITTED BEFORE THE 1ST RESPONDENT FOR THE GRANT OF PENSION TO THE PETITIONER. EXT.P4: TRUE COPY OF THE APPLICATION DATED 23.5.2003 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR PENSION UNDER THE PENSION SCHEME. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// P.A. TO JUDGE. P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 30746 OF 2009 -------------------------- Dated this the 3rd day of March, 2011 J U D G M E N T The petitioner is a former employee of the second respondent bank. He entered service in the second respondent bank on a provisional basis with effect from 11.5.1964. He was regularised in service with effect from 15.11.1965. He joined the Contributory Provident Fund established and maintained by the second respondent bank on 30.6.1971. He retired from service while working as Senior Clerk on 4.9.1989 on attaining the age of superannuation. Upon retirement, the second respondent bank disbursed to him the amounts standing to his credit in the Contributory Provident Fund. Long after the petitioner retired from service, the Kerala Co-operative Societies Act, 1969 was amended by introducing section 80A. Section 80A as it originally stood was as follows:- “80A.Pension Scheme:-(1) The Government may, by notification in the Gazette, frame a Self Financing Pension Scheme for the establishment of a Pension Fund for payment of pension to the employees of the societies in the manner provided therein and may appoint different dates for the application of the scheme WPC No.30746/09 2 to different classes of societies. (2) The pension fund established under the Self Financing Pension Scheme framed under sub-section (1) shall vest in, and be administered by, such body or authority as may be specified in the said scheme.” 2. Section 80A came into force with effect from 20.8.1993. In exercise of the power conferred under section 80A, the Government framed and issued the Kerala Co-operative Societies Employees Self Financing Pension Scheme (hereinafter referred to as 'the Scheme' for short) and it came into force on 3.6.1993. Under section 80A as introduced and the Scheme, persons like the petitioner who retired from service prior to 3.6.1993 were not entitled to pension. Long after the Scheme was introduced, the State Legislature amended section 80A by introducing sub-section (1A) therein. It was provided that the Self Financing Pension Scheme framed under sub-section (1) may also provide for payment of pension from the pension fund at such rates and subject to such conditions and restrictions as may be specified therein, to persons who retired from the service of any society during the period between 1st January, 1974 and 3rd June 1993 and are alive. Sub-section (1A) of section 80A reads as follows: “(1A) The Self Financing Pension Scheme framed WPC No.30746/09 3 under sub-section (1) may also provide for payment of pension from the pension fund at such rates and subject to such conditions and restrictions as may be specified therein to person retired from service of any society during the period between 1st January, 1974 and 3rd June 1993 and are alive.” 3. Consequently, Clause 38A was introduced in the Scheme as per G.O.(P) No.58/2003/Co-op. dated 24.3.2003 and it reads as follows: 38.A. Special provision for pension to certain persons:- (1) Every person who has retired from the service of a society during the period between 1st January, 1974 and 3rd June, 1993, and are alive on the date of commencement of the Kerala Co-operative Societies Employees Self Financing Pension (Amendment) Scheme, 2003, shall be paid a monthly pension subject to the following conditions and restrictions, namely:- (a) any person who opts for pension shall, within six months, remit to the Pension Fund an amount equal to such portion of the Contributory Provident Fund as may constitute the employer's contribution; (b) pension shall be payable with effect from 4.5.2002; (c) the amount of pension shall be determined in the manner provided in clause 22; (d) no family pension shall be payable on the death of the recipient of pension. (2) The provisions of clauses 19, 20, 22A, 26 and 27 WPC No.30746/09 4 shall, mutatis mutandis apply to the payment of pension under sub-clause (1).” 4. Clause 38A of the Scheme provides for payment of pension to former employees of co-operative societies like the petitioner who had retied during the period between 1.1.1974 and 3.6.1993 and were alive on the date of introduction of clause 38A. The conditions subject to which monthly pension will be paid to such employees are also set out in clause 38A. It was inter alia provided that any person who opts for pension under the Scheme shall, within six months, remit to the Pension Fund an amount equal to such portion of the Contributory Provident Fund as may constitute the employer's contribution. It was also provided that pension shall be payable with effect from 4.5.2002, that the amount of pension shall be determined in the manner provided in clause 22 and that no family pension shall be payable on the death of the recipient of pension. In sub-clause (2) of clause 38A it was provided that the provisions of clauses 19, 20, 22A, 26 and 27 shall, mutatis mutandis apply to the payment of pension under sub-clause (1) of clause 38A. The effect of clause 38A was that persons like the petitioner who became eligible for payment of pension and had opted for payment of pension under the WPC No.30746/09 5 Scheme had to remit to the pension fund an amount equal to such portion of the Contributory Provident Fund as may constitute the employer's contribution within six months computed with reference to the date of publication of clause 38A in the Official Gazette, namely 24.3.2003. 5. Upon the Scheme being amended by the introduction of clause 38A, the petitioner submitted Ext.P4 petition dated 23.5.2003 to the President of the first respondent bank requesting him to take steps to enable him to draw pension under clause 38A. Though the President of the bank received Ext.P4 petition, he or the Secretary of the bank did not send a reply to the petitioner. The petitioner had in Ext.P4 petition stated that he came to know of his eligibility to draw pension from the newspapers on 8.5.2003. The petitioner was also not informed of the necessity to remit to the pension fund an amount equal to such portion of the Contributory Provident Fund as may constitute the employer's contribution. Though the petitioner made repeated enquiries with the first respondent bank, no action was taken in the matter. He was therefore compelled to sent Ext.P1 letter dated 10.7.2007 to the Secretary of the Pension Board requesting for payment of pension. In that letter, he had stated that WPC No.30746/09 6 the managing committee of the second respondent bank that met on 30.6.2003 had resolved to request the Pension Board to grant him pension. No reference was however made in Ext.P1 letter to the remittance of the employers' share of contribution to the Contributory Provident Fund. Upon receipt of Ext.P1 letter, the Secretary of the Pension Board sent Ext.P2 letter to the Secretary of the second respondent bank stating that as the petitioner's application for payment of pension was received only after the last date stipulated for receipt of applications, namely 31.3.2005, pension cannot be sanctioned to him. A copy thereof was sent to the petitioner as well. This writ petition was thereupon filed on 28.10.2009 challenging Ext.P2 letter and seeking a direction to the first respondent to grant pension to the petitioner with retrospective effect in terms of clause 38A of the Scheme. The petitioner also prayed for a declaration that the cut off date mentioned in Ext.P2 for submission of applications for pension under clause 38A is only directory and not mandatory and that any Government order or direction which imposes fresh restrictions or conditions to claim and enjoy pension under clause 38A of the Scheme is ultravires and unenforceable. The petitioner contends that the denial of pension to him is arbitrary and illegal and WPC No.30746/09 7 that he cannot be penalised for the delay on the part of the second respondent bank in forwarding his application for pension (Ext.P4) and taking necessary follow up action including the failure to inform him that he is required to pay an amount equal to the employers' share of the Contributory Provident Fund to the pension fund. 6. The first respondent has filed a counter affidavit contending that as per G.O.(P) No.58/2003/Co-op. dated 24.3.2003 the employers' share of the Contributory Provident Fund had to be remitted within six months from 24.3.2003 namely on or before 25.9.2003, that the last date was extended up to 31.3.2005 that it was only thereafter the managing committee of the second respondent bank that met on 22.6.2005 resolved to apply for the enrolment of the petitioner as a member of the pension fund and therefore the application for enrolment of the petitioner was rejected as belated. It is also contended that the application was received after the last date stipulated by the Government for receipt of applications, that there is no provision for acceptance of belated applications and that if belated applications are entertained, a large number of persons will claim pension thereby affecting the viability of the pension scheme and therefore, it cannot be entertained. WPC No.30746/09 8 7. The second respondent has filed a counter affidavit contending inter alia that the bank had resolved as per resolution No.715 dated 30.6.2003 to apply for enrolment of the petitioner as a member of the pension fund. The second respondent has also stated that though the petitioner had applied for enrolment as a member of the pension fund by submitting Ext.P4 application dated 23.5.2003 he had not remitted the contribution in terms of the rules and that in implementation of the resolution adopted by the managing committee of the bank on 30.6.2003, Ext.R2(b) letter was sent to the Pension Board along with all available records and that thereafter the Board informed the Secretary of the society that as the application is belated, the petitioner cannot be enrolled. The second respondent contends that it had taken prompt action in the matter and that it was for the petitioner to remit the employers share of contribution with the pension fund. 8. I heard Sri.V.Varghese, learned counsel appearing for the petitioner, Sri.P.V.Mohanan, learned standing counsel appearing for the first respondent and Sri.P.C.Sasidharan, learned standing counsel appearing for the second respondent bank. I have also gone through the pleadings and the materials on record. It is evident WPC No.30746/09 9 from the submissions made at the Bar and the pleadings and materials on record that the second respondent had at no point of time prior to 31.3.2005 informed the petitioner that he should remit the employers share of contribution to the pension fund. The pleadings and the materials on record disclose that the employers' share of contribution which the petitioner was bound to remit with the pension fund before 31.3.2005 was the sum of Rs.10,040/-. Though in the additional counter affidavit dated 12.2.2011 filed by the first respondent Pension Board it is stated that the sum of Rs.10,040/- was transferred as contribution on 25.6.2005, the learned counsel for the petitioner submitted during the course of arguments that the petitioner remitted the sum of Rs.10,040/- only after the writ petition was filed. In the additional counter affidavit dated 12.2.2011 filed by the first respondent it is stated that as on 31.5.2010, the contribution which the petitioner was bound to make towards the pension fund was the sum of Rs.38,802/- consisting of the sum of Rs.10,040/- (the employers' share of contribution to the Contributory Provident Fund) and the interest thereon at the rate of 24% per annum. The additional counter affidavit proceeds to state that on the petitioner remitting the said amount, pension will be granted to him with effect WPC No.30746/09 10 from 4.5.2002. It is not in dispute that after the writ petition was filed, by Ext.P5 order dated 28.5.2010 sanction was accorded by the first respondent Board for the payment of the sum of Rs.500/- per mensem as pension to the petitioner with effect from 3.6.2010. Though there is no material on record to indicate the date on which the petitioner had remitted the sum of Rs.10,040/- with the pension fund, it is not disputed that such remittance was made and that the petitioner is presently being paid pension at the rate of Rs.500/- per mensem with effect from 3.6.2010. The only dispute that now survives is whether the petitioner is entitled to pension from 4.5.2002. It is evident from the submissions made at the Bar by Sri.P.V.Mohanan, learned standing counsel appearing for the Pension Board that it was because of the petitioner's failure to remit interest on the sum of Rs.10,040/- at the rate of 24% per annum computed with effect from 1.6.2005 that payment of pension with effect from 4.5.2002 has been denied to him. From the pleadings and the materials on record it is evident that the petitioner had immediately after the introduction of clause 38A requested the second respondent bank to take steps to enrol him as a member of the pension fund. The bank admits having received Ext.P4 letter. WPC No.30746/09 11 Though the bank claims that it had passed a resolution on 30.6.2003 [Ext.R2(a)] to take steps to request the Pension Board to enrol the petitioner as a member of the pension fund, on the banks' own showing the bank took steps in that regard only on 9.7.2005 when they sent Ext.R2(b) letter. By then, the time limit fixed for claiming the benefit of clause 38A had expired. The bank has no case that at any point of time after receipt of Ext.P4 letter and before Ext.R2(b) letter was sent, the petitioner was informed in writing that he has to pay the sum of Rs.10,040/-. In view of the subsequent events, the controversy had narrowed down to the payment of interest on the sum of Rs.10,040/-. The short question that arises for consideration is whether as claimed by the Pension Board, the petitioner is liable to pay interest on the sum of Rs.10,040/-. Incidentally, the question whether any interest at all is payable also arises in this writ petition. 9. Paragraph 38A of the Scheme which is extracted above sets out the conditions subject to which employees like the petitioner who had retired during the period between 1.1.1974 and 3.6.1993 are entitled for payment of pension. One of the requirements is that the employee who is governed by clause 38A must remit with the pension fund an amount equal to such portion of the Contributory WPC No.30746/09 12 Provident Fund as may constitute the employers contribution within six months. The period of six months expired on 25.9.2003. But the Pension Board fixed 31.3.2005 as the last date for submission of applications. Therefore, interest need not be paid till 31.3.2005. Then the short question is whether for payments which were made thereafter, any interest is payable. Clause 38A does not in express terms state that interest shall be payable on the employers share of contribution in the event of belated payment. Though clause 38A stipulates that the provisions of clauses 19, 20, 22A, 26 and 27 shall, mutatis mutandis apply to the payment of pension under sub-clause (1), the aforesaid provisions do not relate to payment of interest. The provision regarding payment of interest on the employers' share of contribution is contained in clause 18. Clause 18 does not apply to persons like the petitioner. It applies only to persons who were in service as on 3.6.1993, the date on which the pension scheme was introduced. In such cases it is stipulated that the employee who has received the Contributory Provident Fund shall be eligible for pension under the pension scheme only on remittance of the portion of the employers' contribution to the Contributory Provident Fund together with interest thereon in the Pension Fund. Such remittance has to be WPC No.30746/09 13 made before applying for pension. Therefore, employees who were in service as on 3.6.1993 but retired immediately prior to the introduction of the scheme, will have to refund the employers' share of contribution to the Contributory Provident Fund together with interest at the rate stipulated in clause 39(1A), namely interest at the rate of 24% per annum to the Pension Fund before applying for pension. Further, the Government did not while introducing clause 38A stipulate that the employees who retired between 1.1.1974 and 3.6.1993, who form a vanishing class and to whom certain concessions were extended in the year 2003 should pay interest on the employers' share of the contribution to the Contributory Provident Fund. In other words, the Government made a conscious departure in their case and did not insist on remittance of interest. In such circumstances, the Pension Board cannot in my opinion claim interest on the employers' share of contribution from employees like the petitioner who are entitled to the benefit of clause 38A of the scheme. As per clause 38A, the last date for submission of applications and for remittance of the employers share of the Contributory Provident Fund was 25.9.2003. The last date was later extended till 31.3.2005. In the instant case, the pleadings disclose WPC No.30746/09 14 that though the petitioner had taken all possible steps for claiming pension under clause 38A, the second respondent bank did not inform the petitioner in writing of the necessity to remit the employers' share of contribution to the Contributory Provident Fund with the Pension Board within six months or within the last date that was extended up to 31.3.2005. Instead the bank waited till 9.7.2005 to forward the petitioner's application for enrolment to the Pension Board. The petitioner retired from service on 4.9.1989. More than 12 years had passed by the time clause 38A was introduced. In the counter affidavit filed by the second respondent bank there is no explanation for the long delay in forwarding the petitioner's application for enrolment as a member of the pension fund. In such circumstances, I am of the opinion that the failure of the bank to act in time cannot operate to the detriment of the petitioner. I accordingly hold that the stand taken by the first respondent Pension Board in Ext.P2 cannot be sustained. In the result, I allow the writ petition, quash Ext.P2 and declare that the petitioner will be entitled to pension with effect from 4.5.2002. The first respondent Board shall pass consequential orders amending Ext.P5 order expeditiously and in any event within WPC No.30746/09 15 one month from today. The first respondent Board shall also take steps to disburse arrears of pension to the petitioner for the period from 4.5.2002 to 3.6.2010 within another month thereafter. P.N.RAVINDRAN, (JUDGE) vps WPC No.30746/09 16 WPC No.30746/09 17