Allowed

Rejina.C.T. v. the Head Master, S.M.M.A.U.P. School

Kerala HC7 Dec 2023WP(C)/12290/2023

Case brief

AI extract

What is this about?

In this writ petition, the High Court of Kerala held that a retired school assistant is entitled to Death-cum-Retirement Gratuity despite owing amounts to financial institutions. The Court directed the respondents to verify consent for deduction and release the full amount pending such proof.

What did the court decide?

Respondents directed to verify consent for deduction; if none, pay DCRG with interest within one month; if consent exists, adjust liability and pay balance.

Rejina.C.T. Vs the Head Master, S.M.M.A.U.P… — Pension and Retirement Benefits | Kerala HC (2023)

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W.P.(C)No.12290/2023

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE T.R.RAVI

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THURSDAY, THE 7 T H DAY OF DECEMBER 2023/16TH AGRAHAYANA, 1945

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WP(C) NO. 12290 OF 2023

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PETITIONER:

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REJINA.C.T. AGED 58 YEARS RESIDING AT SRIPREKASH, KARUMALA, KOZHIKODE673612., PIN - 673612

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BY ADV SRI JACOB ABRAHAM

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RESPONDENTS:

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1 THE HEAD MASTER, S.M.M.A.U.P. SCHOOL SIVAPURAM, KARUMALA, KOZHIKODE-673612., PIN - 673612

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2 THE ASSISTANT EDUCATIONAL OFFICER THE OFFICE OF THE ASSISTANT EDUCATIONAL OFFICER, BALUSSERY, KOZHIKODE-673612., PIN - 673612 3 SPECIAL DEPUTY TAHSILDAR (REVENUE RECOVERY) OFFICE OF THE SPECIAL DEPUTY TAHSILDAR (REVENUE RECOVERY), KALLAI ROAD, KOZHIKODE-673002., PIN - 673002

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4 KERALA STATE FINANCIAL ENTERPRISES LTD REPRESENTED BY ITS CHAIRMAN, BHADRATHA, MUSEUM ROAD, THRISSUR-680020., PIN - 680020

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5 PANANGAD CO-OPERATIVE URBAN SOCIETY LTD REPRESENTED BY ITS SECRETARY, BRANCH KINALOOR, KOZHIKODE-673612., PIN - 673612 6 BALUSSERY CO-OPERATIVE URBAN BANK LTD REPRESENTED BY ITS MANAGER, BALUSSERY P.O., KOZHIKODE-673612., PIN - 673612 BY ADVS. SMT.K.G.SAROJINI, GOVT.PLEADER SRI MADHAVANUNNI V T SRI SALIL NARAYANAN K.A. (SC) SRI M.VIVEK RABINDRANATH

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13.10.2023, THE COURT ON 07.12.2023 DELIVERED THE FOLLOWING:

W.P.(C)No.12290/2023

T.R. RAVI, J.

W.P.(C)No.12290 of 2023

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Dated this the 7 th day of December, 2023

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JUDGMENT

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The petitioner was a Lower Primary School Assistant working in an Aided School who retired from service on superannuation on 30.04.2021. The petitioner is found entitled to get a sum of Rs.11,69,831/- towards Death-cum-Retirement Gratuity (DCRG). The amount is not released for the reason that the petitioner owes amount as surety and as a principal debtor to respondents 4, 5, and 6. The 4^th respondent is Kerala State Financial Enterprises Ltd. and respondents 5 and 6 are Co-operative Societies registered under the Co-operative Societies Act. The contention of the petitioner is that the above reason is not valid, and the provisions of the Payment of Gratuity Act will apply to the case of the petitioner. The question raised in the writ petition is whether the gratuity due to a teacher in an Aided School can be withheld or attached for reasons other than that are mentioned in the Payment of Gratuity Act.

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The 2^nd respondent has filed a counter affidavit wherein it is stated that the petitioner owes a sum of Rs.6,53,867/- to the

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W.P.(C)No.12290/2023

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KSFE, Quilandy Branch, a sum of Rs.2,04996/- to the KSFE Kozhikode Palayam Branch, a sum of Rs.94,474/- to the 6^th respondent and a sum of Rs..50,3855 to the 4^th respondent totalling to Rs.14,57,192/- which is much more than the amount of DCRG that has been sanctioned to the petitioner. It is also stated that revenue recovery proceedings were initiated against the petitioner by the first two loans by the KSFE, and the Headmaster of the school was directed by the above financial institutions not to release non-liability certificate till clearance certificates are produced by them. It is further stated in the counter affidavit that the advances were paid on the basis of a written agreement from the petitioner, consenting to recovery of the defaulted monthly remittance. The counter affidavit does not, however, say that the petitioner had agreed that the liability could be set off against the DCRG payable. It is further stated that the petitioner's husband had appeared for a personal hearing before the 2^nd respondent and had agreed to settle the amounts that are due to the creditors. It is contended that the Aided School Teachers are governed by the Kerala Service Schools and the Kerala Education Rules. The liability certificate has been produced along with the counter affidavit as Ext.R2(b). Ext.R2(b) is seen issued on 13.02.2023 and it certifies that the amount due is a sum of Rs.9,15,723/- and that

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W.P.(C)No.12290/2023

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the same is towards liability to the Government. The amount shown in Ext.R2(b) is less than the amount payable as DCRG. However, no document is produced to show that the petitioner has agreed or consented to adjust the DCRG towards these amounts.

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The 6^th respondent has filed a counter affidavit wherein it is stated that the petitioner is a Government Servant and KSR is applicable to the petitioner. However, the 6^th respondent has also not produced any document to show that the petition er has consented to set off the amounts due to the 6 th respondent from the DCRG payable to the petitioner. All that is stated is that the loan was granted on the basis of the salary certificate of the petitioner.

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The 5^th respondent has also filed a counter affidavit, taking similar contentions as that of the 6^th respondent. It is stated that the Payment of Gratuity Act is not applicable to the petitioner and that the bar under Sections 13 and 14 of the Act has no application to the case.

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The counsel for the petitioner relied on the decision in the State of Kerala & Ors. v. Omana S. N. [2017 (4) KLT 1043] to submit that the Payment of Gratuity Act will apply. The Division Bench of this Court, in the above said decision was considering the case of a retired Associate Professor in an Aided

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W.P.(C)No.12290/2023

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College. The Court found that the petitioner therein was the person coming within the definition of Section 2(e) of the Payment of Gratuity Act. The case was not related to any deduction to be made from the gratuity payable on account of liability towards other financial institutions. The decision is relied on to submit that the provisions of the Payment of Gratuity Act have an overriding effect over the provisions of the KSR. Another Division Bench of this Court in the decision in Manager, KSFE, Thiruvananthapuram v. K.B.Unnikrishnan Nair & Ors. [2022 (1) KLT 807] considered the question of a loan liability being adjusted towards the gratuity payable. That was the case of an employee of the KSRTC who had taken a loan from the KSFE. Recovery was sought by the KSFE from the gratuity payable to the employee. This Court held that the provisions of the Payment of Gratuity Act have primacy over other enactments and directed that the DCRG due to the petitioner should be paid. The counsel for the p etitioner also submitted that the amount payable as gratuity is not even liable to be attached in execution of a decree or order of any civil, revenue, or criminal court, and as such, denial of payment of gratuity cannot be justified in law.

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6 . In Muhammed Asharaf M.K. & Anr. v. Hajj Committee of India [2019 (3) KLJ 925] , a learned Judge of

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W.P.(C)No.12290/2023

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this Court had held that the Aided School Teachers cannot be treated as Government employees. The decision was rendered in the context of the appointment of Haj volunteers. In Mohanan Nair P.G. v. Omallur Service Co-operative Bank Limited &

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Ors. [ILR 2022 (2) Ker. 1123] , a Division bench of this Court considered the effect of the provisions of the Payment of Gratuity Act in the case of employees of a Co-operative Society. That was a case in which the terminal benefits due to the employee were withheld in view of the liability certificate issued based on audit objections. The Division Bench held that even if the respondents, in that case, propose to initiate any proceedings against the petitioner therein under the Kerala Co-operative Societies Act, such proceedings that may be initiated in the future cannot be a bar to directing the release of the pensionary benefits like gratuity, provident fund, etc. The Court held that withholding the payment of gratuity based on audit objections is illegal, ultra vires, and unreasonable and directed the respondents therein to disburse the full gratuity amount due to the petitioner therein with interest at the rate of 8% per annum to be paid within a stipulated time and on non-payment, it was directed that interest shall be paid at the rate of 10% per annum. The counsel for the respondents submitted that as per Rule 3 of Chapter 27B of Kerala Education

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W.P.(C)No.12290/2023

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Rules, the Rules on retirement benefits, including family pension and DCRG, and all conditions for grant of those benefits applicable to Government servants as laid down in Part III of KSR as amended from time to time shall mutatis mutandis apply to the teachers governed by the Rules. It is hence submitted that provisions of Part III KSR will be applicable, and the said provisions permit withholding of DCRG. Regarding the judgment of the Division Bench in Omana (supra) , the counsel submitted that the conditions of service of teachers therein are governed by the University First Statutes, and even there, Part III KSR has been made applicable. The counsel also referred to the judgment in The Secretary, Local Self Government Department & Ors. v. K.Chandran & Ors. [Civil Appeal Nos.7437-7438 of 2021]

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rendered by the Hon'ble Supreme Court, whereby the judgment of a Full Bench of this Court was reversed with regard to the applicability of Rules 3 and 3A of Part III KSR. Reliance is placed on the sentence in the judgment, which says that “even in the absence of disciplinary or judicial proceedings, in certain eventualities, amounts can be recovered from the DCRG”.

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7 . The question to be decided is whether amounts can be deducted from the DCRG on the allegation that the petitioner owes money to financial institutions, which can be treated as

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W.P.(C)No.12290/2023

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Government. The Service Laws relating to the employees of the State contain provisions for deducting amounts from the DCRG towards liabilities owed to the Government. That does not by itself require the State to be a collecting agent for other financial institutions. There may be cases where, based on agreements executed between the parties, the employees concerned agree or consent for deductions being made from the DCRG towards such debts. However, there is no such material placed before the Court that says that the parties have agreed to such a deduction. A contention is taken in the counter affidavit that the petitioner has agreed in writing, permitting the Society to recover from the emoluments in case of default. That permission is with regard to deduction from the salary and not from the retirement benefits. As such, deduction cannot be permitted as a matter of right in such situations. On facts, it is seen that even though it was stated that the amounts due towards loans to the financial institutions are more than the amount that is receivable as DCRG, later it is brought out that the amount is lesser. Even if a right to deduct is to be recognised, there can be no justification for withholding amounts that are more than the amounts which are due. The liability certificate issued shows that amount due is lesser than the amount due as DCRG.

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W.P.(C)No.12290/2023

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8 . The petitioner is, hence, entitled to succeed. The writ petition is allowed. There will be a direction to respondents 1 and 2 to verify whether the petitioner has in any manner consented to the deduction of the amounts due to respondents 4 and 5 from the DCRG and, if there is no such agreement, respondents 1 and 2 are directed to pay the entire amount payable towards DCRG with statutory interest from the date of the retirement of the petitioner , within one month from the date of receipt of a certified copy of this judgment. In case, it is found that there is consent to the deduction of the amount due from the DCRG payable, respondents 1 and 2 shall , after adjusting towards the liability as seen from the liability certificate , pay the balance amount of DCRG to the petitioner with statutory interest, within one month from the date of receipt of a certified copy of this judgment. In such an event, steps shall also be taken to pay the amounts deducted to the financial institutions/creditors.

Sd/-

T.R. RAVI JUDGE

dsn

W.P.(C)No.12290/2023

APPENDIX OF WP(C) 12290/2023

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PETITIONER EXHIBITS

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Exhibit-P1	COPY OF 2ND RESPONDENT'S NOTICE TO PETITIONER DATED 18.1.23 BEARING NO.A/3479/2020.
Exhibit- P2	COPY OF PETITIONER'S LETTER DATED 28.2.23 TO THE 2ND RESPONDENT.
Exhibit-P3	COPY OF LIABILITY CERTIFICATE-DATED 4.3.23 BEARING NUMBER AEOBSY/46/2023-A ISSUED TO THE TREASURY OFFICER BY THE 2ND RESPONDENT.
Exhibit-P4	A COPY OF THE 1ST RESPONDENT'S LETTER DATED 23.3.23 ISSUED TO THE PETITIONER.
Exhibit-P5	A COPY OF GO (P) NO.90/2021 FINANCE DATED 28.6.2021.

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RESPONDENTS' EXHIBITS

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EXHIBIT R2(A)	TRUE COPY OF THE HUSBAND 01-2023	THE OF T	LETTERS SUBMITTED BY HE PETITIONER DATED 31-
EXHIBIT R2(B)	TRUE COPY OF DATED 13-02-	THE 2023	LIABILITY CERTIFICATE
EXHIBIT R2(C)	TRUE COPY OF	THE	WRITTEN CONSENT
	SUBMITTED BY 2020	THE	PETITIONER DATED 14-11-
ANNEXURE R(4) A	THE TRUE COP EXECUTED BY	Y OF THE	THE UNDERTAKING PETITIONER

Rejina.C.T. v. the Head Master, S.M.M.A.U.P. School

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Rejina.C.T. v. the Head Master, S.M.M.A.U.P. School

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