Kerala High Court
T.R. Sambasivan Nair vs The Kerala State Co-Operative ... on 22 May, 2012
Bench: C.N.Ramachandran Nair, P.S.Gopinathan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR
&
THE HONOURABLE MR.JUSTICE. P.S.GOPINATHAN
THURSDAY, THE 19TH DAY OF JULY 2012/28TH ASHADHA 1934
WA.No. 1332 of 2012 () IN WPC/34095/2010
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AGAINST THE ORDER/JUDGMENT IN WPC.34095/2010 DATED 22-05-2012
APPELLANT(S)/PETITIONER:
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T.R. SAMBASIVAN NAIR
S/O. P.N.RAMAN PILLAI, THURUTHIYIL PUTHENPURACKAL
VALLAMKULAM P.O., THIRUVALLA, PATHANAMTHITTA.
BY ADVS.SRI.S.SUBHASH CHAND
SRI.SHINDO VARGHESE
RESPONDENT(S)/RESPONDENTS:
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1. THE KERALA STATE CO-OPERATIVE EMPLOYEES PENSION BOARD
KALA NIVAS, TC NO.27/156, 157
CHINMAYA LANE, KUNNUMPURA, NEAR AYURVEDA COLLEGE,
THIRUVANANTHAPURAM-695 001,
REPRESENTED BY ITS SECRETARY.
2. THE VALLAMKULAM SERVICE CO-OPERATIVE BANK LTD.NO.2163
VALLAMKULAM P.O., THIRUVALLA-689 541,
REPRESENTED BY ITS SECRETARY.
BY ADV.SRI.K.R.SUNIL, SC, CO-OP.EMP.PENSION BOARD
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19-07-2012,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A.NO.1332/2012
APPENDIX
APPELLANT'S EXHIBITS
ANNEXURE-1 : COPY OF PROCEEDINGS BEARING NO.PB.PPO.324/PTA DATED
30/5/2011 ISSUED BY R1.
ANNEXURE-2 : COPY OF PROCEEDINGS BEARING NO.PB.PPO.324/PTA DATED
30/05/2011 ISSUED BY R1.
//TRUE COPY//
PA TO JUDGE.
jg
C.R.
C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ.
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W.A. No.1332 of 2012
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Dated this the 19th day of July, 2012.
J U D G M E N T
Ramachandran Nair, J.
Heard learned counsel for the appellant and learned Standing Counsel for the State Co-operative Employees Pension Board.
2. The question raised is whether the Pension Board is liable to pay interest for belated payment of pension. What is conceived under the Scheme is allotment of individual code numbers to employees and monthly remittance of contribution by the employer Society. The Scheme also provides for advance submission of application with recommendations through the Society, so that soon after retirement, the employee starts getting eligible pension. In this case, the defence put forward by the Pension Board is that the Society was a chronic defaulter in payment of contribution and in fact in the account of the appellant, first contribution was made W.A.No.1332/2012 -2- after 20 years of his service and thereafter also, with interest payments were made in installments. Learned Standing Counsel for the Pension Board submitted that application was received for pension only on 24/02/2011 and it took two months for processing and verification, and thereafter without any delay on 30/05/2011, the Pension Board gave arrears of pension of Rs.1,05,413/-. We agree with the contention of the learned Standing Counsel for the Pension Board that a reasonable time is required for processing and verification of pension papers and for sanction of pension. The three months period taken by the Pension Board cannot be said to be unreasonable for processing and release of pension. So much so, delay is on the part of the Society for forwarding pension papers of the appellant. Another reason for delayed filing of application for pension is that individual code number was not allotted by the Pension Board because of arrears remaining unpaid by the Society. The Society remitted the arrears with interest and thereafter only individual code number was allotted without which application for pension W.A.No.1332/2012 -3- could not be entertained. So much so, the delay in starting payment of pension to the appellant is on account of delay in the Society remitting arrears of contribution and in getting individual code number allotted to the appellant and thereafter forwarding of application for pension. We do not think we should consider the entitlement for interest for belated payment of pension and if so, the rate of interest; because in this case the delay in releasing payment is not proved to be attributable to the Pension Board. However, fact remains that the Pension Board has collected interest for belated payment of contribution by the Society. So much so, we feel a reasonable compensation should be given to the appellant for ten months delay in starting payment of pension, the arrears of which were paid on 30/05/2011. As a special case, we direct the Pension Board to give a compensation of Rs.5,000/- (Rupees five thousand only) to the appellant, which need not be treated as a precedent. This judgment should not be interpreted to mean that interest collected for delay in payment of contribution is also payable to the pensioners or W.A.No.1332/2012 -4- the pensioners have any right to it, which is an independent provision providing for deterrent rate of interest to ensure that Societies make contribution in time.
3. Learned Standing Counsel for the Pension Board submitted before the Court that several Societies are defaulting payment of contribution and as a result of which the Pension Board is compelled to initiate revenue recovery proceedings for recovering the arrears. We do not think the Pension Board should resort to revenue recovery proceedings for recovery of contribution because through other coercive methods, the Registrar of Co-operative Societies can ensure payment in time along with release of salary by the employer Societies to the employees. We direct the Registrar of Co- operative Societies to issue direction to all Societies to make contribution on due date, and if not, to disqualify the Secretary or Board of Directors for the failure and impose personal penalty or cost on them. The Secretary or the Board of Directors should be surcharged for interest payment to the Pension Board for belated remittance of contribution. Under W.A.No.1332/2012 -5- no circumstances, the default interest charged by the Pension Board should be debited to the Societies' account. Further, the deterrent rate of interest at 24% per annum is not compensatory but is provided only as penal rate to ensure that delay does not happen. In fact, if a Society fails to make contribution, the question to be considered is whether that is a sign of sickness and ultimate insolvency leading to winding up, which is a matter to be investigated in the case of defaulting Societies. The Registrar of Co-operative Societies is directed to issue appropriate directions under Section 66A of the Co-operative Societies Act, so that the Pension Board does not resort to any recovery proceedings.
Registry will forward copy of this judgment to the Registrar of Co-operative Societies for compliance.
This Writ Appeal is disposed of as above.
(C.N.RAMACHANDRAN NAIR, JUDGE) (P.S.GOPINATHAN, JUDGE) jg