M.Sadasivan vs Kerala State Warehousing Corporation on 12 November, 2024

[Cites 7, Cited by 0]

Kerala High Court

M.Sadasivan vs Kerala State Warehousing Corporation on 12 November, 2024

These appeals arose on the common judgment dated 01.07.2020 in W.P.(C) Nos.4550 of 2020 and 4625 of 2020. The Kerala State Warehousing Corporation Pensioners' Association and a former employee of the Kerala State Warehousing Corporation filed W.P.(C) No.4550 of 2020. Another former employee of the Kerala State Warehousing Corporation filed W.P.(C) No.4625 of 2020. Similar reliefs were claimed. They sought a writ of mandamus directing the Kerala State Warehousing Corporation to re-fix pensionary benefits due to the retired employees of the Corporation taking into account the last pay at the revised rate drawn on the date of retirement of each of them. Arrears of pension was also claimed. As per the impugned judgment, the learned Single Judge disposed of the writ petitions ordering that the 2024:KER:84408 10 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 employees were entitled to pension as decided in R2(g) resolution alone after its date, i.e., 12.04.2018. It was further ordered as follows:

"18. xx xx The petitioners would therefore be entitled to pension as calculated on the basis of emoluments at revised rate but within the upper limit of Rs.3,650/- and dearness relief for the period upto 12.04.2018 and the respondents have to disburse pension accordingly. The respondents shall take note of the age of the petitioners, who have been fighting for the pension right from 2001 and take expeditious steps to disburse the pension due to them along with arrears for the period upto March, 2018 within a period of 3 months from the date of receipt of a copy of the judgment."

2. Aggrieved thereby, common respondents in the writ petitions filed W.A.Nos.1378 of 2020 and 1440 of 2020. The petitioners in W.P.(C) No.4550 of 2020 filed W.A.No.134 of 2021 and the petitioner in W.P.(C) No.4625 of 2020 filed W.A.No.191 of 2021.

3. The main plank of contentions of the Kerala State Warehousing Corporation (for short "the Corporation") is that in the event of making payment of pension in the revised 2024:KER:84408 11 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 rate along with arrears, the entire corpus of the pension fund would be depleted and the fund will lead to self-liquidation. This Court made several efforts by exploring the possibility of getting contributions from the Government as well as the Corporation to the corpus fund of the pension scheme. In that endeavour, this Court as per the order dated 22.07.2022 engaged an actuarial valuer to undertake a valuation of the pension fund created under the Kerala State Warehousing Corporation Employees' (Pension and Other Retirement Benefits) Regulations, 1998 (for short "the Pension Regulations"). A report was directed to be submitted within a period of three weeks. What came out from the examination by the actuarial valuer was that the pension fund available was Rs.14.86 crores and the liability was Rs.31.88 crores. It was also reported that the pension fund was heavily unfunded. This Court therefore directed to implead Employee's Provident Fund Organisation (EPFO). Impelading was thereby done also. But no solution could be arrived at.

2024:KER:84408 12 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021

4. As agreed to between the parties, this matter was referred for mediation in terms of the order dated 01.07.2024. A report dated 06.08.2024 was submitted by the Ernakulam Mediation Centre stating that the matter could not be settled. Hence we proceeded to hear the matter on its merits.

5. Heard the learned Senior Counsel, Sri. Renjith Thampan appeared on instructions for the appellants in W.A.Nos.1378 and 1440 of 2020, the learned Senior Counsel, Sri. Elvin Peter appeared on instructions for the appellants in W.A.No.134 of 2021, the learned counsel for the appellant in W.A.No.191 of 2021 and the learned counsel for the party respondents.

6. This is the second round of litigations concerning the matter in dispute. The facts leading to the present appeals are briefly stated below:

The Kerala State Warehousing Corporation was incorporated under Section 18 of the Warehousing Corporation Act, 1962 (for short "the Act"). Section 42 of the Act enables to 2024:KER:84408 13 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 formulate regulations with previous sanction of the Government, which are necessary for the purpose of giving effect to the Act, including conditions of service and remuneration payable to the employees. There was no scheme for payment of pension to the employees under the existing regulations. Hence, permission was availed from the Government for framing a regulation concerning payment of pension to the employees of the Corporation. As per G.O.(Ms) No.48/96/AD dated 01.02.1996, Ext.R2(a), the Government granted approval for the introduction of a pension scheme in the Corporation utilising the funds available under the Contributory Provident Fund Accounts and other resources, subject to the specific condition that there would be no funding support from the Government. Accordingly, Pension Regulations was formulated, which is Ext.R2(b).

7. Alleging nonpayment of pension to the employees based on the revised scale of pay, a few employees retired during the period from 1997 to 2000 approached this Court by filing O.P.No.2463 of 2022. The claim therein was that the 2024:KER:84408 14 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 pension should be calculated on the basis of the salary as revised with effect from 01.03.1997. This Court as per Ext.P1 judgment allowed the said original petition. The Government as well as the Corporation were directed to find out a solution in regard to the financial insufficiency. A writ appeal, W.A.No.2027 of 2010 was filed, which was allowed to the extent of exempting the Government from the responsibility of bailing out the Corporation from the financial stringency. Ext.P2 is the judgment.

8. The Corporation filed R.P.No.1017 of 2013. As per Ext.P3 order in the R.P., this Court ordered that the pensioners were entitled to get their pension computed only at their pre-revised rate with the minimum and maximum being Rs.375/- and maximum of Rs.3,650/- per month. The matter was taken up before the Apex Court in Civil Appeal Nos.3679-3680 of 2017. The appeals were allowed by the Apex Court ordering that the pension should be calculated in accordance with the rules as per applicable pay scales from the relevant time. Ext.P4 is the order. That entitled the 2024:KER:84408 15 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 pensioners to get their pension calculated on the basis of the salary they drew at the time of retirement at the revised scale.

9. The said direction was not timely implemented by the Corporation. Therefore, the employees approached the Apex Court by filing petitions for contempt of court and also seeking clarification. The Apex Court did not entertain the said petitions. Thereafter these writ petitions were filed.

10. The 2nd respondent has filed a detailed counter- affidavit producing therewith Exts.R2(a) to R2(g). Essential contention was that the Corporation calculated the pension due to the retired employees in terms of the directions contained in Ext.P4 order. But on account of the financial crunch, the pension fund trust committee invoked Clause 3(4) of the Pension Regulations and decided to restrict the maximum pension as Rs.3,650/-. It was so decided in order to save the fund from self-liquidation. The Corporation thus took the stand that the pensioners could not be paid pension calculated on the basis of the revised rate of salary as on the 2024:KER:84408 16 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 date of retirement, except interim relief upto Rs.1000/-. As regards the arrears of pension also, the Corporation has taken such a stand. The learned Single Judge, after considering the matter in detail, took the decision as stated above.

11. The learned Senior Counsel on behalf of the Corporation would submit that the question is not as to the entitlement of the pensioners to get pension on the basis of the salary at revised rate since, in that regard there can be no dispute inasmuch as the issue was concluded by the Apex Court in Ext.P4 order and that question is no longer amenable to a contest. The question is whether the decision taken by the Committee of Trustees as per Ext. R2(g) resolution is valid.

12. Clause-3 in the Pension Regulations is extracted below:

"3. Constitution of the Fund:- (1) The Corporation shall establish and maintain a Fund entitled "The Kerala State Warehousing Corporation Employees Pension and other Retirements Benefits Fund".

2. The Fund shall consist of:-

(a) a one time contribution of Rs.21 lakhs (Rupees twenty one lakhs only) from the accrued profits 2024:KER:84408 17 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 of the Corporation:

Provided that no further contribution shall be made by the Corporation, except as provided in this regulation, for any reason whatsoever and it shall be the duty of the Trust Committee to keep the Fund financially sound;

(b) The employer's contribution of 10% of basic pay plus D.A hitherto made and transferred from the contributory Provident fund Account of the Corporation together with interest as on 1.2.1996;

(c) The employer's annual contribution to the Fund at the rate at which the employer would have contributed, has the Contributory Provident Fund Scheme would have continued;

(d) The balance in the Corporation's contribution account standing to the credit of the subscribers in the existing contributory Provident Fund Account including investments made therefrom;

(3) The Fund shall vest in and be administered by a Committee of Trustees comprising of Managing Director of the Corporation as the Chairman, an official member of the Board of Directors nominated by the Board, two representatives of the management nominated by the Board, two representatives of the employees and one pensioner nominated by the Managing Director. The term of each member of the Committee shall be three years or for a shorter periods as may be decided by the Board of Directors.

2024:KER:84408 18 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 (4) In future at any point of time if the Fund cannot pay pension at the sanctioned rates due to financial problems the Committee of Trustees will have powers to take appropriate action to save the Fund from self liquidation."

13. Obligation of the Corporation to contribute to the pension fund is as per Sub clause 3(2)(a) and it is one time payment of Rs.21 lakhs. Citing that the learned Senior Counsel would submit that there can be no further contribution by the Corporation. The proviso to sub-clause 3(2)(a) of the Pension Regulations says that no further contribution shall be made by the Corporation, except as provided in the Pension Regulations, for any reason whatsoever. The said clause casts absolute duty on the Committee of Trustees to keep the fund financially sound.

14. The subsequent clauses govern the contribution to be paid by the Corporation under the Pension Regulations. The obligation to contribute under the said provisions are pre existing and periodical payments. The said provisions do not oblige the Corporation to make any other contribution to the pension fund.

2024:KER:84408 19 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021

15. The further submission of the learned Senior Counsel is that the financial condition of the Corporation is not at all viable to make any contribution also. The annual financial statements reflecting accumulated loss in the successive years have been produced. Annual statements for the years 2014-2015 to 2018-2019 were produced along with a memo dated 24.06.2021 in obedience to the direction of this Court. On the basis of the said aspects, the learned Senior Counsel would submit that payment of pension based on the last drawn salary at the revised rate with effect from 01.03.1997 would be an impossibility and therefore the decision in Ext.R2(g) is justified.

16. Ext.R2(g) contains the data which the committee considered for taking a decision invoking clause-3(4) of the Pension Regulations would be a necessity. Relevant portion of the minutes is as follows:

"നനിലവനിൽ പപെൻഷണണേഴഴഴ്സ് 430 ണപെരരരും ഫഫാമനിലനി പപെൻഷൻകഫാർ 74 ണപെരരരും ജജീവനകഫാർ 295 ണപെരരമഫാണേരള്ളതഴ്സ് പപെൻഷണണേഴഴനിൻ്ഴ്സ്പറെ എണരും കകൂടരകയരരും ജജീവനകഫാരരപട എണരും കരറെയരകയരരും പചെയരന്നതര മകൂലരും പപെൻഷൻ ടടസനിണലകഴ്സ് കനിടനി പകഫാണനിരനികരന്ന Corporation contribution 2024:KER:84408 20 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 ആനരപെഫാതനികമഫായനി കരറെഞ്ഞ പകഫാണനിരനികരകയഫാപണേന്നഴ്സ് ടശജീ.സജജീവഴ്സ്കരമഫാർ.സനി.പക കമനിറനിയനിൽ ണബഫാദദ്ധ്യപപ്പെടരതനി.

ണകഫാർപ്പെണറെഷനഴ്സ്പറെ നനിലവനിപല ജജീവനകഫാർകഴ്സ് സഫാമ്പതനിക ബഫാധദ്ധ്യത മകൂലരും രണഴ്സ് ണപെ റെനിവനിഷൻ നടപ്പെനിലഫാകനിയനിടനിലഫാത സഫാഹചെരദ്ധ്യമഫാണേരള്ളപതന്നരരും, ജജീവനകഫാർകഴ്സ് ലഭനിണകണ അർഹമഫായ DA ണപെഫാലരരും യഥഫാസമയരും ലഭനിചനിടനിപലന്നരരും കമനിറനി പമമ്പറെഫായ സജജീവഴ്സ്കരമഫാർ കമനിറനിപയ അറെനിയനിചര.

പപെൻഷൻ വർദനവഴ്സ് നടപ്പെനിലഫാകരണമ്പഫാൾ ണവണനി വരരന്ന അധനിക ബഫാദദ്ധ്യത എടപെകഫാരരും കപണതണേപമന്നഴ്സ് കമനിറനി ഡയറെകഴ്സ്ടർ ണബഫാർഡനിനഴ്സ് നൽകരന്ന ശരപെഫാർശയനിൽ ഉൾപപ്പെടരതണേപമന്നഴ്സ് ടശജീമതനി. സജീമ.സനി.സനി അഭനിടപെഫായപപ്പെടര.

പപെൻഷണണേഴഴ്സ്സനിനഴ്സ്പറെ ആവശദ്ധ്യങ്ങൾ അനരഭഫാവ പെകൂർവരും പെരനിഗണേനികഫാപമന്നരരും ഇതര മകൂലരും വരരന്ന അധനിക സഫാമ്പതനിക ബഫാദദ്ധ്യത തഫാങ്ങരവഫാൻ പപെൻഷൻ (ടടസനിനഴ്സ് മതനിയഫായ ഫണഴ്സ് ഇലഫാതതനിനഫാൽ ഫണഴ്സ് കപണതരന്നതനിനരണവണനി ണബഫാർഡഴ്സ് മരൻപെഫാപക പടപെഫാണപ്പെഫാസൽ സമർപ്പെനികഫാവരന്നതഫാപണേന്നരരും ടശജീ.അനനിൽ കരമഫാർ അഭനിടപെഫായപപ്പെടര.

വനിശദമഫായ ചെർചകൾകഴ്സ് ണശഷരും എടരത തഫാപഴ പെറെയരന്ന തജീരരമഫാനങ്ങൾ ണകഫാർപ്പെണറെഷൻ്ഴ്സ്പറെ Board ൽ സമർപ്പെനികരവഫാൻ കമനിറനി തജീരരമഫാനനിചര.

1. ബഹര. സരടപെജീരും ണകഫാടതനി ഉതരവഴ്സ് No. Civil Appeal Nos.3679-3680/2017 നടപ്പെനിലഫാകരന്നതരമഫായനി ബന്ധപപ്പെടഴ്സ് ലഭനിച നനിയമ ഉപെണദശതനിൻ്ഴ്സ്പറെയരരും, പപെൻഷൻ റെഗരണലഷൻ 6(4)നഴ്സ്പറെയരരും അടനിസഫാനതനിൽ റെനിടയർ പചെയരന്ന ജജീവനകഫാർകഴ്സ് അവരരപട സർവജീസനിനഴ്സ്പറെയരരും റെനിടയർ പചെയരന്ന സമയപത ആനരപെഫാതനികമഫായ അടനിസഫാന ശമ്പളതനിനഴ്സ്പറെയരരും അടനിസഫാനതനിൽ പെരമഫാവധനി 3650/-

രകൂപെയനിൽ ണബസനികഴ്സ് പപെൻഷൻ നനിജപപ്പെടരതനി G.O.(MS) No.356/99/AD dated 27-12-99 ടപെകഫാരരും ഗവപണ്മെനഴ്സ്റെഴ്സ് അരുംഗജീകരനിച 2024:KER:84408 21 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 ഡനി.എ യരരും ഉൾപപ്പെടരന്ന തരക പപെൻഷനഫായനി കണേകഫാകരവഫാൻ ടടസഴ്സ് പമമ്പറെരരും, പപെൻഷണണേഴഴസഴ്സ് അണസഫാസനിണയഷൻ്ഴ്സ്പറെ ടപെസനിഡൻ്ഴ്സ്റെരമഫായ ടശജീ. എ.ശശനിധരൻ്ഴ്സ്പറെ വനിണയഫാജനിണപ്പെഫാപട കമനിറനി തജീരരമഫാനനിചര.

2. അടനിസഫാന ശമ്പളതനിൻ്ഴ്സ്പറെ പെരമഫാവധനി 3650/- രകൂപെ നനിജപപ്പെടരതനി പപെൻഷൻ നടപ്പെനിലഫാകരകയഫാപണേങനിൽ ടപെതനിമഫാസരും ഏകണദശരും 20 ലകരും രകൂപെയഴ്സ്കര ണമൽ അധനിക ബഫാധദ്ധ്യത ണകഫാർപ്പെണറെഷനഴ്സ് വരരന്നതഫാപണേന്നഴ്സ് കമനിറനികഴ്സ് ണബഫാദദ്ധ്യപപ്പെടര. അതനരസരനിചഴ്സ് ഇകഫാരദ്ധ്യതനിൽ വരരന്ന അധനിക ബഫാധദ്ധ്യത കണേകഫാകനി വനിശദമഫായ ണടപെഫാണപ്പെഫാസൽ ണബഫാർഡനിനര മരൻപെനിൽ സമർപ്പെനികരന്നതനിനഴ്സ് ടടസഴ്സ് കമനിറനി തജീരരമഫാനനിചര. ഇണപ്പെഫാഴപത ടടസനിനഴ്സ്പറെ സഫാമ്പതനിക സനിതനിയനരസരനിചഴ്സ് ണമൽപ്പെറെഞ്ഞ പപെൻഷൻ തരക പകഫാടരകരകയഫാ പണേങനിൽ ടടസഴ്സ് ഫണഴ്സ് തപന്ന ചെരരരങ്ങനിയ കഫാലരും പകഫാണഴ്സ് നഫാമഫാവണശഷമഫാവരരും എന്ന കഫാര ണേതഫാൽ ണമൽപ്പെറെഞ്ഞ പപെൻഷൻ തരക ണകഫാർപ്പെണറെഷനഴ്സ്ണറെണയഫാ സർകഫാരനിൻ്ഴ്സ്ണറെണയഫാ സഫാമ്പതനിക സഹഫായരും കനിടരന്നതനരസരനിചഴ്സ് പകഫാടരകരവഫാൻ തജീരരമഫാനനിചര.

3. പപെൻഷൻ ടടസഴ്സ് ഫണനിൻ്ഴ്സ്പറെ നനിലവനിലരള്ള സഫാമ്പതനിക പെരനിമനിതനിയനിൽ നനിന്നര പകഫാണഴ്സ് ഏകണദശരും 1000 രകൂപെണയഫാളരും ഇടകഫാല ആശശഫാസമഫായനി ഗവൺപമനഴ്സ്റെനിൻ്ഴ്സ്പറെ അനരമതനി കനിടനിയഫാൽ ഉടൻതപന്ന തരക വനിതരണേരും പചെയരവഫാനരരും ടടസഴ്സ് കമനിറനി തജീരരമഫാനനികരകയരണഫായനി."

English translation of the above decision reads,-

"At present, there are 430 pensioners, 74 family pensioners and 296 employees. Mr. Sajeev Kumar C.K. apprised the Committee that the Corporation's contribution to the Pension Trust is decreasing proportionately due to the increase in the number of pensioners and the decrease in the number of 2024:KER:84408 22 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 employees. Mr. Sajeev Kumar, a member of the committee, told the committee that there exists a situation where two pay revisions have not been implemented for the current employees of the corporation due to financial liability and that the employees have not even received their eligible DA on time.

Smt. Seema C.C. suggested that the recommendations of the Committee to the Board of Directors should include how to identify the additional liability that would be incurred while implementing the pension enhancement.

Shri Anil Kumar opined that the demands of the pensioners may be considered benevolently and a proposal may be placed before the Board for finding funds as the Pension Trust does not have sufficient funds to meet the additional financial liability arising out of this.

After detailed deliberations, the Committee decided to submit the following decisions before the Corporation Board.

1. Based on the legal advice received in connection with the implementation of the Supreme Court Order No. Civil Appeal Nos 3679-3680/2017 and in accordance with the provisions of Pension Regulation 6 (4), the Committee has decided to fix the basic pension for the retiring employees on the basis of their service and proportional basic pay at the time of retirement at a maximum of Rs.3650/- and the amount including DA as 2024:KER:84408 23 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 approved by the Government under G.O.(MS) No 356/99/AD dated 27-12-99 shall be considered as pension, with dissent from Mr. A. Sashidharan, Trust member and the President of pensioner's association.

2. The committee stands convinced that if the pension is implemented with a maximum of Rs 3,650/- of the basic pay, then the corporation will have an additional liability of about Rs 20 lakh per month. Accordingly, the Trust Committee decided to submit a detailed proposal to the Board considering the additional liability in this regard. In view of the fact that if the above pension amount is paid according to the current financial state of the trust, the trust fund itself will be exhausted in a short time, it has been decided to pay the above pension amount according to the financial assistance received from the corporation or the government.

3. It has also been decided to disburse an interim relief of about Rs.1000 from the existing financial limit of the Pension Trust Fund, as soon as the Government approves it."

17. The learned Single Judge accepted the contentions of the Corporation that invocation of sub-clause (4) of Clause-3 of the Pension Regulations was unavoidable and therefore the decision as per Ext.R2(g) cannot be held to be invalid. However, the learned Single Judge held that such a decision was taken only on 12.04.2018 and therefore the 2024:KER:84408 24 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 pensioners are entitled to get pension arrears at revised rate till the said date. The learned Senior Counsel appearing for the Corporation assails the said view since the same would result in depletion of the entire pension fund and to its self- liquidation. Having invited our attention to the data concerning available corpus of the pension fund, number of pensioners and family pensioners and also the monthly contribution to the fund by the operation of Clause-3(2) of the Pension Regulations, the learned Senior Counsel would submit that payment of pension based on the salary at the revised rate is an impossibility. It is accordingly submitted that this is a case where the principle, lex non cogit ad impossibilia is applicable. In that regard, the learned Senior Counsel places reliance on the decisions of this Court in Thomas P.J. v. Vijayakumari [2014 (2) KHC 265], Thomas v. Piravanthoor Panchayat [1985 KLT SN 70] and T.K.Gopinathan v. State of Kerala [1984 KLT 726] and also the decision of the Apex Court in Raj Kumar Dey v. Tarapada Day [(1987) 4 SCC 398].

2024:KER:84408 25 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021

18. The learned Senior Counsel appearing for the appellants in W.A. No.134 of 2021, on the other hand, would submit that the learned Single Judge totally went wrong in accepting Ext.R2(g) and absolving the Corporation from making payment of the pension, which the pensioners are entitled to get. Going by the provisions of Pension Regulations, particularly, Clause 3(1)(a), the Corporation cannot escape from the liability of contributing required funds to the pension corpus, especially when the pension is not a bounty, but the constitutional right of the employees.

19. Another contention raised on behalf of the employees is that when the Managing Director of the Corporation along with other members of the Trust Committee, executed a trust deed, Annexure R1(a) produced along with I.A.No.1 of 2020 in W.A.No.1378 of 2020, the obligation of the Corporation to contribute to the pension fund cannot be evaded. Clause (7) in Annexure R1(a), which is extracted below has been highlighted.

"7. The Warehousing Corporation agrees to make the contributions to the Trustees as provided in the Rules 2024:KER:84408 26 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 and also such additional contributions which the Trustees shall require the Warehousing Corporation to make providing benefits under the Rules and the Trustees shall utilise the same for effecting the aforesaid assurances and maintaining the fund for providing the benefits described in the Rules."

It is submitted the said clause binds the Corporation, but it had suppressed the deed without being producing in the writ petitions. It is accordingly urged that the Corporation should provide sufficient funds to satisfy the obligations under the Pension Regulations.

20. The learned Senior Counsel and also the learned counsel for the appellant in W.A.No.191 of 2021 further would submit that the liability of the Corporation and the Trust Committee to pay pension proportionate to the salary at revised rate was confirmed by the Apex Court as per Ext.P4 order and as such the plea of the Corporation now against it is barred by constructive res judicata. So the Trust Committee could not fall upon Ext.R2(g) resolution and try to get absolved from that obligation. It is accordingly contended that the writ petitions ought to have been allowed as prayed.

2024:KER:84408 27 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021

21. As per Ext.P4, the Apex Court directed that pension should be calculated in accordance with the rules as per applicable pay scales at the relevant time. In view of that direction, the Corporation cannot now contend that the pensioners did not have the right to claim pension calculated on the basis of the revised pay scale as on the date of retirement. Any plea against it is barred by constructive res judicata. The contention of the Corporation, however, is on a different plane. While it is maintained that the Corporation did not dilute its obligation, the plea is that the Corporation is compelled to resort to Clause-3(4) of the Pension Regulations in order to save the pension fund from self liquidation.

22. As could be seen from the said resolution, number of pensioners was 430 and family pensioners 74. Number of serving employees was only 295. Going by Clause-3(1) of Pension Regulations, the periodical contribution to the pension fund is only based on the salary of serving employees at the prescribed rate. It is pointed out that the monthly revenue thereby towards the pension fund is only Rs.9.5 lakhs.

2024:KER:84408 28 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 Whereas, the amount required to pay pension at the revised rate would be Rs.40 lakhs a month. It is further pointed out that the amount required to make payment of arrears of pension at the revised rate is Rs.40 crores. (As per the verification by actuarial valuer it is Rs.31.88 crores.) That being the state of affairs, depletion of the corpus fund, which is now Rs.14.5 crores (as per the verification of actuarial valuer it is Rs.14.86 crores), in a few months is certain. It is in the said circumstances, the Corporation and the Trust Committee take the stand that the decision as per Ext.R2(g) is the need of the hour.

23. From the statement of accounts produced and the report of the actuarial valuer the aforementioned data cannot be said to be incorrect. The writ petitioners would rather raise no contention that those data are incorrect. In such circumstances the question is as to how far the Government and the Corporation have an obligation to provide funds in order to meet the obligation under the Pension Regulations.

2024:KER:84408 29 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021

24. As pointed out above, the Government accorded permission as per Annexure R2(a) to introduce pension scheme in the Corporation without any funding support from the Government. The said position has been accepted by this Court in Ext.P3 order and the same was not interfered with by the Apex court in Ext.P4 order.

25. Concerning the obligation of the Corporation the writ petitioners have a definite plea that it has undeniable duty to provide sufficient funds. The learned senior counsel Advocate Elvin Peter would urge that Clause 3(2)(a) of the Pension Regulations itself obligates the Corporation to contribute necessary funds for the payment of pension to the employees. That apart clause-7 in Annexure R1(a) is an unequivocal undertaking by the Corporation to provide additional funds which the trustee would require for providing benefits under the pension regulation. It is submitted that when Pension Regulations has a statutory effect as observed in Ext.P2 judgment and binding the Corporation, clause 7 in Annexure R1(a) which is in the nature of an undertaking 2024:KER:84408 30 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 cannot be obliterated by the Corporation. Therefore, it is contended that the plea of impossibility is not available to the Corporation and the Trust Committee.

26. Annexure R1(a) is a registered trust deed. It is dated 22.04.2003 and was registered on 19.05.2003. The contention of the Corporation is that Annexure R1(a) is a civil document executed by the Trust and it does not bind the Corporation. This is a trust deed executed by the committee members of the trust fund and registered without any concurrence from the Corporation or its Board of Directors. Of course, the Managing Director of the Corporation is the Chairman of the fund committee also. A nominated member from the Board of Directors, two representatives of the management nominated by the Board, two representatives of the employees and one pensioner nominated by the Managing Director are its members. They resolved to register Annexure R1(a) trust deed. The conditions therein cannot be said to be with consent or concurrence of the Board of Directors of the Corporation. Therefore, the contention that in view of clause-7 2024:KER:84408 31 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 in Annexure R1(a), it shall be the obligation of the Corporation to make contributions to the pension fund to keep it financially viable, cannot be accepted.

27. The specific stipulation in the proviso to sub-clause 2(a) of clause-3 of the Pension Regulations is that the Corporation would have no obligation to contribute to the pension fund except as provided in the Pension Regulations. What is provided in the Pension Regulations concerning contribution to the pension fund is in terms of sub-clauses (a) to (d), which are extracted above. Therefore, the provisions in the Pension Regulations also do not obligate the Corporation to contribute funds required for keeping the pension fund sound and viable. On the other hand, it shall be the duty of the Trust Committee to keep the fund financially sound in terms of the said provision.

28. Yet another contention set forth on behalf of the Corporation is that owing to slowing down of activities of the Corporation, loss is being accumulated every year. Since the number of the serving employees is considerably reduced, 2024:KER:84408 32 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 monthly contribution to the pension fund is also less. Along with a memo dated 24.06.2021 annual statements of the Corporation from the year 2014-2015 to 2018-2019 were produced. It is seen that in those years huge loss has been recorded. That makes contribution by the Corporation to the pension fund practically impossible also. The contention that making payment of pension in terms of the salary of the employees at the revised rate is impossible, has to be considered in the light of the aforementioned circumstances.

29. The Apex Court considered the principle underlying the maxim lex non cogit ad impossibilia in Raj Kumar Dey [(1987) 4 SCC 398] and held,-

"The other maxim is lex non cogit ad impossibilia (Broom's Legal Maxims-P. 162)-The law does not compel a man to do that which he cannot possibly perform. The law itself and the administration of it, said Sir W. Scott, with reference to an alleged infraction of the revenue laws, must yield to that to which everything must bend, to necessity; the law, in its most positive and peremptory injunctions, is understood to disclaim, as it does in its general aphorisms, all intention of compelling impossibilities, and the 2024:KER:84408 33 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 administration of laws must adopt that general exception in the consideration of all particular cases."

30. A Division Bench of this Court observed in T.K.Gopinathan [1984 KLT 726] that a statutory rule may be perfectly reasonable and practicable in its general application, but in a particular instance, owing to inevitable circumstances, it may be impossible for an individual to comply with it. The maxim lex non cogit ad impossibilia then applies.

31. Although in a different context, the impropriety in compelling a person to do an act which he is unable to do was considered by this Court in Thomas P.J. [2014 (2) KHC 265]. It was held that one could not be compelled or expected to do something which is not possible for him to do. In such situations, the Court while interpreting the provision should bear in mind the principle lex non cogit ad impossibilia, which means the law does not compel a man to do that which he cannot possibly perform.

32. Dilating the principles of Section 56 of the Indian Contract Act, 1872 this Court in Thomas [1985 KHC 322] 2024:KER:84408 34 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 considered the application of the principle of impossibility. Of course, the obligation of the Corporation is under the Pension Regulations, which is not a contract, but a statutory regulation. However, the principle laid down in the said decision has relevance. It was held,-

"7. xx xx If at the time when the contract was entered into both the promisor and the promisee were under the impression that the promisor had a right and on that basis he could give the contract, but before the performance of the contract it became evident that he did not, as a matter of fact, hive that right, then also the promisee cannot be made liable under the contract. It will be inequitable to make a party liable if for no fault of his he could not perform his part of the contract. Even if the subsequent event was not the making of the promisor, the promisee will be absolved from liability when the contract becomes impossible of performance because of that."

33. The Apex Court considered the applicability of the doctrine of impossibility insofar as the court orders are concerned in State of U.P. v. In Re:Inhuman condition at Quarantine Centres and for providing better treatment to Corona Positive [Order dated 21.05.2021 in Special 2024:KER:84408 35 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 Leave to Appeal (C) No.7147 of 2021]. The observations therein are the following:

"While again appreciating the efforts of the judges of the High Court in looking to the matter in depth while passing orders, we are of the opinion that the High Court should normally consider the possibility of the implementation of the directions given by it, and such directions which are incapable of being implemented should be avoided. The doctrine of impossibility, in our view, would be equally applicable to court orders as well."

34. The position in this case is described above. If pension on the basis of the salary of the retired employees at the revised rate as on the date of retirement is paid together with the arrears, the available corpus of the pension fund would soon be depleted. The result would be that the employees who already retired and retiring in future will not get pension at all. Thereby the pension fund would result in self-liquidation. As pointed out above, neither the Government nor the Corporation can be compelled to make contributions to the pension fund under any of the provisions of the Act or Pension Regulations. In such circumstances, the doctrine of 2024:KER:84408 36 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 impossibility as explained by the Apex Court and this Court in the aforementioned decisions applies to the situation. The doctrine of necessity also applies. Therefore, the view taken by the learned Single Judge that there could not be a direction to the Corporation to pay pension based on the salary at the revised rate as on the date of retirement disregarding the resolution in Ext.R2(g) is devoid of any infirmity.

35. The learned Single Judge further held that the decision regarding payment of pension contained in Ext.R2(g) cannot have retrospective application. The learned Senior Counsel appearing for the Corporation would submit that the available corpus of the pension fund of Rs.14.5 Crores would not be sufficient to meet even that expense. Such a contention cannot stand since the entitlement of the employees to get pension on the basis of the salary at the revised rate is vested in view of Ext.P4 order of the Apex Court. Since the Trust Committee decided only on 12.04.2018 to invoke sub-clause (4) of Clause-3 of the Pension Regulations the right accrued in favour of the employees 2024:KER:84408 37 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 before that date cannot be meddled with by Ext. R2(g) decision. Hence, we find no reason to interfere with the said finding in the impugned judgment as well.

The result is that the appeals deserve to be dismissed. Accordingly, these appeals are dismissed.

Sd/-

ANIL K. NARENDRAN, JUDGE Sd/-

P.G. AJITHKUMAR, JUDGE dkr 2024:KER:84408 38 W.A.Nos.1378 & 1440 of 2020 and 134 & 191 of 2021 APPENDIX OF WA 134/2021 PETITIONER ANNEXURES ANNEXURE-A1 TRUE COPY OF THE APPLICATION UNDER THE RIGHT TO INFORMATION ACT SUBMITTED BY SRI. JAYARAJAN K P, BEFORE THE PUBLIC INFORMATION OFFICER ON 03.04.2018.

ANNEXURE-A2 TRUE COPY OF THE COMMUNICATION NO.

KSWC/RTI/2018-19 DATED 11.05.2018 ISSUED BY THE PUBLIC INFORMATION OFFICER.

ANNEXURE-A3 TRUE COPY OF THE MEMORANDUM OF REVIEW PETITION ALONG WITH ANNEXURE-A1 AND A2.

ANNEXURE-A4 TRUE COLPY OF THE ACTUARIAL REPORT PREPARED BY THE FIRM ON THE PENSION SCHEME IN THE KERALA STATE WAREHOUSING CORPORATION.


ANNEXURE-A5              TRUE COPY OF THE GOVERNMENT ORDER G.O.
                         (RT)       NO.221/2021/AGRI      DATED
                         26.02.2021.

ANNEXURE A6              TRUE COPY OF THE FINA.L REPORT DATED
                         15.12.2020 WHICH IS OBTAINED BY THE
                         APPELLANTS   UNDER  THE   RIGHT   TO
                         INFORMATION ACT.
                                                  2024:KER:84408
                                  39
W.A.Nos.1378 & 1440 of 2020 and
134 & 191 of 2021



                       APPENDIX OF WA 191/2021

PETITIONER ANNEXURES

ANNEXURE I               TRUE COPY OF THE APPLICATION UNDER THE
                         RIGHT TO INFORMATION ACT SUBMITTED BY
                         SRI.JAYARAJAN K.P.BEFORE THE PUBLIC
                         INFORMATION OFFICER ON 03/04/2018.

ANNEXURE II              TRUE   COPY   OF    THE  COMMUNICATION
                         NO.K.S.W.C./R.T.I./2018-19       DATED
                         11/05/2018   ISSUED   BY   THE  PUBLIC
                         INFORMATION OFFICER.

Unlock Advanced Research with PRISMAI

Kerala High Court