THOMAS P. MATHEW v. THE STATE OF KERALA

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN & THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR WEDNESDAY, THE 24TH DAY OF JANUARY 2024 / 4TH MAGHA, 1945 WA NO. 212 OF 2023 AGAINST THE ORDER/JUDGMENT WP(C) 30770/2011 OF HIGH COURT OF KERALA APPELLANT/1ST RESPONDENT: THE KERALA STATE CO-OPERATIVE EMPLOYEES PENSION BOARD REPRESENTED BY ITS SECRETARY, POST BOX NO.85, T.C.NO.27/156-157 CHINMAYA LANE, KUNNUMPURAM, NEAR AYURVEDA COLLEGE, TRIVANDRUM,, PIN - 695001 BY ADV M.SASINDRAN RESPONDENTS/PETITIONER AND RESPONDENTS 2 AND 3: 1 2 3 THOMAS P.MATHEW S/O.MATHEW, RESIDING AT KANNAMKARA PUTHENPURAYIL NELLIKKAMAN P.O., RANNI PATHANAMTHITTA DISTRICT, PIN - 689674 THE DEVIKULAM PATTIKAVARGA SERVICE CO-OPERATIVE SOCIETY, COLONY ROAD, EDAMALAKKUDY, MUNNAR P.O., IDUKKI DISTRICT, PIN - 685612 THE STATE OF KERALA REPRESENTED BY SECRETARY, CO-OPERATIVE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001 BY ADV JAWAHAR JOSE THIS WRIT APPEAL HAVING COME UP FOR HEARING ON 29.11.2023 ALONG WITH WA.1899/2022, THE COURT ON 24.01.2024 DELIVERED THE FOLLOWING: WA NOS.1899/2022 & 212/2023 3 ANU SIVARAMAN, J. & C. PRATHEEP KUMAR, J. = = = = = = = = = = = = = = = = = = = W.A.Nos.1899 of 2022 and 212 of 2023 = = = = = = = = = = = = = = = = = = = Dated this the 24th day of January, 2024 Anu Sivaraman J. JUDGMENT

The question which arises for consideration is with regard to the quantum of pension payable to an employee of a co-operative society. W.A.No.1899 of 2022 is filed by the aggrieved employee against judgment dated 1.11.2022 in W.P.(C).No.26376/2022. W.A.No.212 of 2023 is filed by the Kerala State Co-operative Employees Pension Board against judgment dated 20.09.2019 in W.P.(C).No.30770 of 2011.

The basic facts necessary for consideration of the questions raised are as follows:- The appellant in W.A.No.1899 of 2022 was working as Secretary of the 3rd respondent-Society. He retired from service on 31.3.2007. Since there occurred a delay in determining and paying pension to him, he approached the Lok Ayukta, who directed the Pension Board to allot code number to the employee as well as to the respondent society. Code number was allotted on 29.9.2009. By Exhibit P3 in W.P.(C).No.30770/2011, the Board calculated the WA NOS.1899/2022 & 212/2023 4 contribution payable by the society in respect of the employee and required the payment of Rs.5,72,506/- as contribution for payment of full pension. However, the society paid only an amount of Rs.2,36,325/- as evidenced by Exhibit P4 in W.P.C).No.30770/2011 and asserted that they were not liable to pay interest from the year 1999, since no demand had been made for payment of the contribution and it is only once notice is issued by the Board and amount is not paid that the question of payment of interest would arise. On the basis of the amounts paid by the society, the Pension Board determined the pension amount as Rs.3169/- per month. The employee approached this Court by filing W.P.(C).No.30770 of 2011, which was disposed of directing the Board to quantify the full pension w.e.f. 1.4.2007 and to pay the same failing which the amount would carry interest at 12%.

Thereafter, monthly pension was recalculated as Rs.9847/- by order dated 7.8.2020 and an amount of Rs.9,55,582/- was also paid as pension arrears from 1.4.2007 to 31.08.2020. Challenging the determination of pension and the payment of the amounts, an appeal was preferred by the appellant before the Government under Rule 28A of the Co-operative Societies Employees Pension Scheme claiming arrears of Rs.14,75,814/-, which was rejected by WA NOS.1899/2022 & 212/2023 5 order dated 5.5.2022. The said order was again challenged in W.P. (C).No.26376 of 2022 by the employee.

In the meanwhile, a Review Petition was filed against judgment in W.P.(C).No.30770 of 2011. The review petition was dismissed on

14.10.2022 and W.P.(C).No.26376 of 2022 was disposed of on

1.11.2022, rejecting the claim of the petitioner, however, requiring the 2nd respondent Board to recompute the amount payable to the petitioner after hearing the petitioner as well as the society, taking note of the calculations relied on by the employee.

This Court, while admitting the appeals, had issued an interim order staying the directions in the judgment to recompute the amount and had also required instructions to be furnished with regard to the financial situation of the society. A statement is made available by the learned Government Pleader which reads as follows:- “As Instructed by the Hon’ble DB of the High court in W.A. in 212 /2023 filed by Kerala State Co-Operative Employees Pension Board against the direction to disburse the pensionary benefits to Thomas P. Mathew, former employee of 2nd respondent society, it is submitted that the Devikulam Scheduled Tribe Service Co-Operative Society Ltd. is presently facing serious financial Stringency and is unable to remit the Pension Fund claimed by the Kerala State Co-operative Pension Fund Board. As per the audit Report of the Society for 2021/22 ; WA NOS.1899/2022 & 212/2023 6 The other statutory liabilities due by Society is as follows: Due to Government - 1,87,500.00 RF to be invested for maintaining fluid resources. - 311,427.00 Employee PF due to retired employees - 36,80,509.00 Due to credit purchase (tentative) - 6,67,933.00 As per the audit report only cash available with the Society as on

31.03.2023 is Rs.85,650/- .As per the audit report for 2021-22, furniture and other fixed assets available with the society is only for Rs. 207,249/- and stock in trade amounts to Rs. 21,57,626/- . It is true, that society is still carrying on its activities by conducting three provision shops and a ration shop. All these shops were running in Government owned building and having 8 daily wage persons to engage their business activities. All the 3 consumer shops were running in loss and having a yearly trade loss of Rs 8.92 lakh. The ration shop is the only public distribution system for the tribal people in Edamalakkudy Panchayat, situated 57 kms from Adimali town. That’s for the only reason, why the society is carrying out the distribution system, even it bears a burden on the financial position of the society. It is most respectfully submitted that the réspondent/the secretary had 30 years of service and according to the society,- no other employee other than the respondent had been enrolled by the then secretary, Thomas P Mathew in the self financing pension scheme.

Neither the said 5 permanent employees, who were presently working in the society were also not been enrolled in the self financing pension scheme, by the society. It is as read above, the respondent had misguided the Board of Directors of the society, and had availed all retirement benefits for himself rather not provided any such benefits to those retired employees in his tenure, as society secretary. Since all these 30 years of service, as society secretary, the respondent had not turned up to remit the WA NOS.1899/2022 & 212/2023 7 contributions of employer society, as he is empowered to remit the statutory contribution to government and other authorities, like welfare board, self financing pension board etc. At present, there are 5 permanent staff in the society. The day to day expense and other operational expenses were hardly met from the business run by the society. The Ration shop and consumer shop at Edamalakkudy is the only provision shop for the Tribal Community at the most remote centre in the state of Kerala.

As to the averments to para 8 of the interim order in W.A.212/2023, it may submitted that this respondent has no records to verify the tenability of the clause 19(1)a, of the pension scheme and so this respondent is unable to comment upon the contentions raised by the respondent Thomas claiming higher amount of pension benefits against the amount granted by the employees pension board.”

The learned counsel for the Pension Board would rely on the provisions of Kerala Co-operative Societies Self Financing Pension Scheme, especially paragraph 18 and 19(1)(a) thereof to contend that the quantum of pension payable is to be commensurate with the contributions made by the society and grant of pension in excess of the corresponding contribution would lead to a situation where the corpus of the Pension Fund is eroded and pension will have to be granted to employees of society, who do not make contributions from out of the contributions made by individual societies in respect of their employees. WA NOS.1899/2022 & 212/2023 8

The learned counsel for the employee would contend that the 2nd proviso to Clause 18 has been inserted in the statute book only in 2010 and since the employee admittedly retired from service in 2007, the said Rule would not be applicable to him.

Having considered the contentions advanced, we see that it is an undisputed fact that only an amount of Rs.2,56,000/- had been paid by the society as contribution in respect of the employee. It appears that the society has no means to pay the remaining contribution. It is clear that though the employee was held entitled for payment of pension, the employer society had made only part payments of the amounts demanded as contribution by the Pension Board. Clause 18(1) of the Scheme reads as follows:- Eligibility for Pension.- (1) Every employee of a society [and a Board constituted under the Act to which this Scheme applies shall, subject to the other provisions of the Scheme, be eligible for pension under this Scheme;

The second proviso to the said clause was inserted on 21.7.2010 which provides as under:- Provided further that an employee of a society coming under the administrative control of the Functional Registrars to whom this Scheme apply, shall subject to the other provisions of the Scheme WA NOS.1899/2022 & 212/2023 9 be eligible for pension under the Scheme if the society remits to the Pension Fund, the entire portion of Society's contribution with interest, with a minimum of Fifty Thousand rupees except in the case of invalid pensioners. The initial remittance will be treated as initial contribution.”

We notice that the proviso to Clause 19(1)(a) of the Co-operative Employees Pension Scheme was inserted by amendment which was notified on 14.3.2001 w.e.f. 1.4.1998. Clause 19 of the Scheme provides for qualifying service. Provison to clause 19(1)(a) reads as follows:- “provided that the qualifying service shall be limited to the period for which the employer's contribution towards the Provident Fund has been fully paid by the Society in respect of that employee.” The contention, therefore, that the 2nd proviso to Clause 18(1) was inserted only on 21.7.2010 will not make any difference to the situation, since the period of qualifying service for pension is governed by Clause 19 and since the proviso in Clause 19 was already in existence, the fact that 2nd proviso to Clause 18 was incorporated by amendment only in 2010 will not, by itself, entitle the employee to receive the higher pension, since he has qualifying service only in terms of Clause 19.

In the result, W.A.No.212 of 2023 filed by the Pension Board is allowed. W.A.No.1899 of 2022 is dismissed. The respondent Board WA NOS.1899/2022 & 212/2023 10 can take an appropriate decision as directed in the judgment in W.P.(C).No.26376 of 2022. However, the amounts already paid to the employee shall not be required to be refunded. Sd/- Anu Sivaraman, Judge Sd/- C. Pratheep Kumar, Judge sj14/12 WA NOS.1899/2022 & 212/2023 11 APPENDIX OF WA 212/2023 PETITIONER'S ANNEXURES: NIL RESPONDENTS' ANNEXURES: ANNEXURE-R(1)(A) TRUE COPY OF THE APPLICATION DATED 18.2.1999 SUBMITTED BY THE WRIT PETITIONER BEFORE THE PENSION BOARD.