Kerala High Court
K.Y.Varghese vs Puthuppady Service Co-Operative Bank ... on 6 June, 2008
Bench: J.B.Koshy, P.N.Ravindran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA.No. 881 of 2007()
1. K.Y.VARGHESE, S/O YOHANNAN,
... Petitioner
Vs
1. PUTHUPPADY SERVICE CO-OPERATIVE BANK LTD
... Respondent
2. THE JOINT REGISTRAR OF CO-OPERATIVE
3. STATE OF KERALA REP. BY SECRETARRY TO
4. KERALA STATE CO-OPERATIVE PENSION BOARD,
For Petitioner :SRI.P.P.JACOB
For Respondent :SRI.V.G.ARUN
The Hon'ble MR. Justice J.B.KOSHY
The Hon'ble MR. Justice P.N.RAVINDRAN
Dated :06/06/2008
O R D E R
J.B. KOSHY & P.N. RAVINDRAN, JJ.
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W.A.NO.881 OF 2007
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Dated this the 6th day of June, 2008.
JUDGMENT
Ravindran, J:
The petitioner in W.P.(C)No.27835 of 2004 is the appellant. By judgment delivered on 13.10.2006, the learned Single Judge dismissed the writ petition. Hence this writ appeal. The brief facts of the case are as follows:
2. The appellant entered service as Peon in the first respondent bank on 16.11.1964. He was promoted as Clerk with effect from 1.1.1969. While so, he was placed under suspension on 10.5.1971.
On 18.7.1971 the President of the first respondent bank issued a memo to the appellant calling for his explanation to the allegations levelled therein. The appellant submitted his explanation on 22.7.1971. Thereafter a memo dated 29.7.1971 was issued to the appellant calling upon him to state his case before a sub committee of the bank on 3.8.1971. Without holding an enquiry into the charges, by order passed on 4.8.1971 the sub committee of the first respondent bank, dismissed the appellant from service. The WA.NO.881/2007 .
2appellant filed an appeal before the Board of Directors of the first respondent bank. The appeal was rejected. The appellant thereupon raised an industrial dispute . It was referred to the Labour Court, Kozhikode and taken on file as I.D.No.87 of 1976. By Ext.P1 award passed on 28.3.1978, the Labour Court set aside the order of dismissal and directed the first respondent bank to reinstate the appellant in service with full benefits as regards back wages. The first respondent bank challenged Ext.P1 award in O.P.No.2939 of 1978. By Ext.P2 judgment delivered on 7.11.1980 this Court dismissed O.P.No.2939 of 1978. The award evidenced by Ext.P1 has thus become final.
3. Though this Court had by Ext.P2 judgment upheld Ext.P1 award, the first respondent bank did not reinstate the appellant in service. It appears that on 16.3.1981 the appellant and the first respondent bank entered into Ext.P3 agreement whereby the bank agreed to reinstate him in service as Clerk with effect from 16.3.1981 with continuity of service. However, taking note of the poor financial condition of the bank, the appellant volunteered to forgo a portion of the back wages and agreed to receive the sum of Rs.15,000/= towards back wages for the period from 4.8.1971 to WA.NO.881/2007 .
316.3.1981. The appellant also agreed to receive Rs.5,000/= in lump and the balance in monthly instalments of Rs.416.66 to be paid along with his salary. The appellant retired from service on 31.7.2000 on attaining the age of superannuation.
4. After his reinstatement in service, the appellant submitted Ext.P4 representation dated 21.7.1995 to the President of the first respondent bank requesting that the P.F contribution may be remitted on the basis that he is in continuous service without break. He also requested that arrears of salary may be paid to him treating him as in continuous service from 16.11.1964. After the appellant retired from service, by Ext.P5 proceedings dated 20.9.2001, the Secretary, Kerala State Co-operative Employees Pension Board sanctioned to him a monthly pension of Rs.2,103/=. He was also paid a sum of Rs.29,442/= towards arrears of pension from 1.8.2000 to 30.9.2001. Aggrieved by the pension sanctioned as per Ext.P5, the appellant moved the Joint Registrar of Co-operative Societies. By Ext.P6 letter dated 24.7.2002 the Registrar of Co- operative Societies informed him that the period from 4.8.1971 to 15.3.1981 during which he was out of service cannot be reckoned for the grant of higher grade and that he is entitled only to one WA.NO.881/2007 .
4grade promotion in the category of Junior Clerk on completion of 10 years of service from 15.3.1981. Aggrieved by Ext.P6, the petitioner moved the State Government. By Ext.P7 order passed on 16.6.2004, the State Government rejected the appeal but directed that he will be eligible for pensionary benefits if he remits his share of the contribution for pension. Aggrieved by Exts.P6 and P7 the appellant filed W.P.(C)No.27835 of 2004 contending inter alia that in view of Ext.P1 award passed by the Labour Court which was affirmed by Ext.P2 judgment of this Court, the period from 4.8.1971, the date on which he was dismissed from service, till his reinstatement on 15.3.1981 has to be reckoned as service qualifying for pension and that it was the responsibility of the employer, the first respondent bank, to pay the contribution to the provident fund. The appellant contended that negligence on the part of the employer in remitting the pension contribution cannot result in denial of pension to him. It was further contended that the bank as well as the official respondents cannot go behind Ext.P1 award and Ext.P2 judgment. The appellant had in W.P.(C).No.27835 of 2006 prayed for the following reliefs :
"i. issue a writ of certiorari or any other writ or order calling for the records leading to the issue of Exts.P6 and P7 and quash the same.
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ii. issue a writ of mandamus or any other
writ, order or direction directing respondents 1 and 2 to qualified the monetary benefits of 2 Grade Promotions allowable to the petitioner and consequent benefits and pay the same to the petitioner.
iii. issue a writ of mandamus or any other writ or order directing the 1st respondent to pay the balance contribution payable to the pension board considering the petitioner continuity of service as ordered in Exts.P1 and P2.
iv. direct the pension board to refix the pension and pay the arrears due considering continuity of service of the petitioner.
v. direct the respondents 1 and 2 to qualify the leave benefits entitled for the period from 4.8.1971 to 15.3.1981 and pay the same without delay."
5. The first respondent bank resisted the writ petition contending inter alia that the appellant was enrolled as a member of the provident fund with effect from 1.1.1970, that remittance was being made towards the fund till 28.2.1971, that the appellant stopped payment of contribution to the fund thereafter, that he was suspended from service on 10.5.1971 and later dismissed from service with effect from 4.8.1971, that during the period from 1.3.1971 to 16.3.1981 the appellant did not remit any contribution WA.NO.881/2007 .6
to the fund and that, on the terms of Ext.P3 settlement the appellant is not entitled to put forward any claim in that regard. The first respondent further contended that after the pension scheme was introduced by the State government, the appellant was enrolled in the pension scheme with effect from 1.1.1970 . However as the appellant had not made any contribution to the pension fund during the period from 1.3.1971 to 16.3.1981 the said service was not reckoned for grant of pension. The first respondent also filed an additional counter affidavit contending inter alia that the first respondent bank had started a non-statutory pension scheme with effect from 1.1.1970, that the appellant joined the said scheme with effect from 1.1.1970 that, all employees who had joined the scheme had to contribute 10% of the basic pay to the scheme and that the employer had to contribute a like amount to the scheme. It was also contended that from 1.3.1971 till 16.3.1981 the appellant had not made any contribution to the provident fund, that he was reinstated in service on 16.3.1981 as Clerk in the scale of pay of Rs.115-7-150-10-210 that, the said scale of pay is applicable to him only from 16.3.1981, that prior to that date he was being paid only a consolidated pay of Rs.150/= and that from 16.3.1981 onwards the appellant has contributed to the scheme and that the WA.NO.881/2007 .7
employer was also contributing a like sum. In the additional counter affidavit it was also contended that after the Kerala Co.operative Societies Employees Self Financing Pension Scheme, 1994 was introduced the first respondent had transferred the employer's share of the contribution in respect of the employees covered under the pension scheme including the contribution payable in respect of the appellant to the Kerala State Co-operative Employees Pension Board and that, thereafter contribution at the rate of 8.33% was being remitted to the Board. The first respondent further contended that the Board had not raised any demand for the provident fund contribution in respect of the appellant for the period from 1.3.1971 to 16.3.1981 and that the employer, the first respondent, is not therefore liable to pay any further contribution.
6. The second respondent, the Joint Registrar of Co-operative Societies filed a counter affidavit stating that the period from 1.3.1971 to 16.3.1981 was not taken into account while computing the pensionary benefits payable to the appellant since the first respondent bank had not made any contribution to the provident fund for the said period. It was further contended that Ext.P1 award only directed reinstatement in service with full benefits as regards WA.NO.881/2007 .8
back wages and as there was no order as regards attendant benefits, the period during which the appellant was out of service cannot be considered as duty. It was also contended that as the appellant was not drawing salary in a scale of pay but only a consolidated pay, he is eligible only to one time bound higher promotion on completion of ten years of service from 16.3.1981.
7. In the judgment under challenge, the learned Single Judge held that as the appellant had not worked in a scale of pay till 16.3.1981 and had agreed to receive the sum of Rs.15,000/= towards past benefits, he is not entitled to count the period during which he was out of service, as service qualifying for pension. The learned Single Judge, however, held that in view of Section 61 of the Kerala Co- operative Societies Act, 1969, the first respondent bank was bound to make contributions to the fund,.
8. We have heard Sri. V.P. Jacob, the learned counsel appearing for the appellant, Sri.P.V. Lohithakshan, the learned counsel appearing for the first respondent bank, Sri. Benny Gervacis, the learned Government Pleader appearing for respondents 2 and 3 and Sri.V.G. Arun, the learned counsel appearing for the 4th respondent.
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The learned counsel for the appellant contended that in view of Ext.P1 award which was upheld by this Court in Ext.P2 judgment, the period from 4.8.1971 to 16.3.1981 cannot be excluded while computing the pensionary benefits payable to him. Per contra, Sri. P.V. Lohithakshan, the learned counsel appearing for the first respondent bank reiterating the contentions raised in the counter affidavits contended that as the appellant had not contributed any amount to the provident fund from 1.3.1971 to 15.3.1981, he is not entitled to any relief. The learned counsel for the first respondent bank contended relying on Ext.P3 that the appellant has in clear terms given up all other benefits when he chose to receive Rs.15,000/= towards service benefits for the period from 4.8.1971 to 16.3.1981. Sri.V.G. Arun the learned counsel appearing for the fourth respondent Board submitted that as held by the State Government in Ext.P7, the appellant would be eligible for pensionary benefits provided he remits his share of the contribution to the provident fund.
9. We have considered the rival contentions. In our opinion the stand taken by the first respondent bank that the appellant is not entitled to count his service from 4.8.1971 to 16.3.1981 for the WA.NO.881/2007 .10
purpose of pensionary benefits is plainly untenable. In Ext.P1 award the Labour Court held that none of the charges levelled against appellant stand proved. The Labour Court has in Ext.P1 award categorically held that the appellant is entitled to be reinstated in service with full benefits including back wages. Thus Ext.P1 award has become final. In our opinion, in view of Ext.P1 award the appellant should be deemed to have been in service from 10.5.1971, the date on which he was placed under suspension till 16.3.1981, the date on which he was reinstated in service. The dispute referred to the Labour Court was whether the dismissal of the appellant from service is in order. That issue was found in his favour by the Labour Court. The question whether the appellant would be entitled to pensionary benefits for the period during which he was kept out of service was not an issue which was referred for adjudication. The award of the Labour Court cannot in our opinion to be interpreted to mean that the appellant would not be entitled to count the period during which he was kept out of service for pensionary benefits. It is not in dispute that the appellant was a member of the provident fund scheme set up by the first respondent bank. It is also not in dispute that after the Pension Scheme was introduced in the year 1994, the appellant was enrolled WA.NO.881/2007 .11
as a member of the pension scheme and all the amounts to his credit in the provident fund account were transferred to the pension fund. The only dispute is whether the employer (the first respondent herein) was bound to make any contribution to the provident fund which later merged with the pension fund during the period the appellant was kept out of service. In law, the employer is bound to make a contribution equal to the amount payable by the employee to the provident fund. The stand taken by the first respondent that Ext.P3 deprives the appellant of any benefit during the period he was kept out of service except the right to receive Rs.15,000/= is in our opinion plainly untenable. Ext.P3 is the out come of a negotiation between the parties as regards back wages only. Taking note of the poor financial condition of the bank, the appellant was gracious enough to give up a substantial portion of back wages. Ext.P3 specifically states that since the bank is not in a position to pay "the arrears of salary" ( ) in full, in view of the poor financial position of the bank he agreed to receive Rs.15,000/= towards back wages., Ext.P3 does not state in clear terms or even indicate that the period during which the appellant was out of service will not be counted for any other service benefit. Ext.P3 does not also by implication lead to such an inference. In our opinion in view of Ext.P1 WA.NO.881/2007 .12
award which was affirmed by this Court in Ext.P2 judgment, the employer became liable to remit their share of contribution to the provident fund during the period when the appellant was kept out of service irrespective of the question whether the appellant had made any contribution or not. It was solely on account of the fact that the appellant was placed under suspension on 10.5.1971onwards and illgally dismissed from service on 4.8.1971 that at least from 10.5.1971 he did not make any contribution to the provident fund. Ext.P3 award was passed on 23.3.1978. Instead of complying with the award, the bank chose to challenge it. The challenge to award was repelled on 17.10.1980. Even thereafter the bank did not reinstate the appellant in service. It was only on 16.3.1981 that the appellant was reinstated in service. In our opinion the bank cannot take the plea that not withstanding Ext.P1 award they are not bound to pay the employer's share of contribution to the provident fund by reckoning the appellant as an employee in service without break from 10.5.1971 onwards. The bank had a statutory duty under the Kerala Co-operative Societies Act and the Employees Provident Funds and Miscellaneous Provisions Act, 1951 to contribute its share to the provident fund. In otherwords, the bank cannot contend that it is not bound to contribute to the provident fund during the period from WA.NO.881/2007 .13
10.5.1971 to 16.3.1981. The first respondent bank had a statutory duty to contribute its share to the provident fund account of the appellant, who was admittedly a member of the fund for the period from 10.5.1971 (the date on which the appellant was placed under suspension) to 16.3.1981 (the date on which he was reinstated in service). Such contribution has to pay based on the pay whether consolidated or on a scale of pay that the appellant was entitled to during the said period. The appellant would also be liable to remit his share of contribution to the pension fund during the said period.
11. We accordingly hold that the period from 10.5.1971 to 16.3.1981 has to be treated as service qualifying for payment of pension. There will be a direction to first respondent bank to pay its share of contribution at the rate then in force to the provident fund account of the appellant, in relation to the said period. This shall be done within one month from the date of receipt of a copy of this judgment. The appellant shall also make a similar contribution. With a view to enable the appellant to make the contribution, the first respondent bank shall determine the amount of contribution payable by it and remit it with the 4th respondent and simultaneously inform the appellant. The appellant shall within one WA.NO.881/2007 .14
month thereafter remit his share of the contribution to the fourth respondent. The fourth respondent shall within one month thereafter re-determine and pay the pension payable to the petitioner. The arrears on such refixation shall also be paid.
12. As regards petitioner's claim for grant of higher grade, We are of the opinion that as admittedly he was placed in a scale of pay only with effect from 16.3.1981 he will not be entitled to second higher grade reckoning his past service from 10.5.1971 to 16.3.1981 also as service qualifying for higher grade.
The writ appeal is allowed as above. No costs.
J.B. KOSHY, JUDGE.
P.N. RAVINDRAN, JUDGE.
cl
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