Case Note & Summary
The appellant, Issac T M, was an employee of the Idukki District Co-operative Bank Ltd from 1978 until his superannuation on 31 January 2007. The Government of Kerala had formulated a self-financing pension scheme called the State Co-operative Bank and District Co-operative Bank Employees Self Financing Pension Scheme 2005. The appellant was eligible for pension under para 5(1)(i) of the Scheme. However, a week before his retirement, disciplinary proceedings were initiated against him, resulting in a liability of Rs 6.76 lakhs. Consequently, the Bank withheld his retiral dues and did not forward his pension papers to the Kerala State Co-operative Employees Pension Board. The appellant expressed willingness to join the Pension Scheme but objected to the interest demanded on the employer's contribution. After his exoneration by a Sub Committee on 28 September 2013, the Bank finally recommended pension and the appellant deposited the required amount on 12 October 2013. Pension was eventually paid from 1 November 2013. The appellant filed a writ petition seeking pension from 1 February 2007 with interest. The Single Judge dismissed the petition, holding that para 5(2) of the Pension Scheme stipulates pension only from the month succeeding remittance of employer's contribution. The Division Bench affirmed this view. The Supreme Court allowed the appeal, setting aside the High Court's judgment. The Court noted that para 19 of the Scheme entitles the appellant to pension from 1 February 2007. It relied on the decision in T K Jayan vs State of Kerala & Ors, which struck down para 5(2) to the extent it denies arrears of pension due to employer's delay. The Court directed the Pension Board to pay arrears from 1 February 2007 to 1 November 2013 within four weeks, and if any interest is payable due to delayed receipt of contribution, the Bank must remit it within one week of intimation. The appeal was allowed with no order as to costs.
Headnote
A) Service Law - Pension - Entitlement from date of retirement - Para 19 of the State Co-operative Bank and District Co-operative Bank Employees Self Financing Pension Scheme 2005 - The appellant, an employee who retired on 31 January 2007, was eligible for pension under para 5(1)(i) and para 19 provides that superannuation pension shall commence from the month succeeding retirement. The Court held that the appellant is entitled to pension from 1 February 2007, and the employer's delay in remitting contribution cannot deprive him of arrears. (Paras 5-6) B) Service Law - Pension Scheme - Para 5(2) - Ultra vires - The provision that pension is payable only from the month succeeding remittance of employer's contribution was struck down by the Kerala High Court in T K Jayan vs State of Kerala & Ors. The Supreme Court applied the same reasoning, holding that any delay by the Bank cannot result in detrimental consequences for retirees. (Para 6) C) Service Law - Pension - Employer's obligation - Interest on delayed payment - The Bank delayed forwarding pension papers due to disciplinary proceedings, but the appellant was exonerated. The Court directed the Pension Board to pay arrears of pension from 1 February 2007 to 1 November 2013 within four weeks, and if any interest is payable due to delayed receipt of contribution, the Bank must remit it within one week of intimation. (Paras 7-8)
Issue of Consideration
Whether the appellant is entitled to pension from the date of retirement (1 February 2007) despite the employer's delay in remitting the employer's contribution to the pension fund, and whether para 5(2) of the Pension Scheme can be applied to deny arrears of pension.
Final Decision
Appeal allowed. Impugned judgment of High Court set aside. Second respondent (Pension Board) directed to pay arrears of pension from 1 February 2007 to 1 November 2013 within four weeks. If any interest is payable due to delayed receipt of contribution, first respondent (Bank) to remit within one week of intimation. Arrears to be paid within two months of receipt of certified copy. No order as to costs.
Law Points
- Pension entitlement
- Delay in remittance
- Employer's obligation
- Interest on delayed payment
- Ultra vires of para 5(2) of Pension Scheme
