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Judgment
Muralee Krishna, J.
This original petition is filed by the State and its officials, who are the respondents in O.A.No.119 of 2016 before the Kerala Administrative Tribunal, Thiruvananthapuram (the ‘Tribunal’ for short), challenging Ext.P3 order dated 03.03.2017 of the Tribunal in that original application, invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India.
The respondent-applicant was retired from service on 31.05.2015 as Regional Joint Labour Commissioner. He entered the service of the Labour Department under the State Government service as an Assistant Labour Officer Grade II on 19.05.1990. Before entering service in the Labour Department, he worked as L.D. Clerk in the Employees State Insurance Corporation under the Government of India (‘ESI Corporation’ for short) from 01.02.1982 to 17.05.1990. As per Annexure A1 Government order dated 29.08.1989, the said service in ESI Corporation was allowable to count for pensionary service in the State services, if the former employer would discharge its pension liability by paying in lump sum, as a one-time payment, the pro-rata pension/service gratuity, terminal gratuity and death cum retirement gratuity for the period up to the period the incumbent worked in the institution.
Based on Annexure A1 order, immediately after joining in the State service, the respondent submitted Annexure A2 representation dated 09.10.1991 to the 2nd petitioner, requesting to take action for getting the amount of pension contribution remitted by the ESI Corporation and to count his service in the Corporation for pensionary benefits along with the State service. Pursuant to the same, the 2nd petitioner, by Annexure A3 letter dated 26.12.1991, addressed the ESI Corporation. In response to Annexure A3 letter, the Assistant Regional Director of ESI Corporation furnished a demand draft of Rs.14,663/- towards pension liability of the respondent. By Annexure A5 letter dated 01.07.1998, the 1st petitioner directed the 2nd petitioner to remit the aforesaid pension contribution amount received from ESI Corporation to the Government exchequer, pointing out that the pensionary benefits in respect of the respondent have to be counted by counting the service under the ESI Corporation. Based on said direction, the 2nd petitioner remitted the amount to the Government and by Annexure A6 letter dated 29.09.1998 informed this fact to the 1st petitioner. The details are entered in the service book of the respondent, the relevant page of which is produced as Annexure A7 in the original application.
The respondent states that he is legally entitled to the benefits contemplated in Annexure A1 order. While submitting the pension papers, in Annexure A8 covering letter dated 29.09.2014, the respondent once again mentioned the above facts. However, the 2nd petitioner sanctioned the pensionary benefits to the respondent by Annexure A9 verification report dated 19.02.2015 only by counting the State service, excluding the period of service under the ESI Corporation. Being aggrieved, the respondent submitted Annexure A10 representation dated 02.03.2015 to the 2nd and 3rd petitioners. By Annexure A11 reply dated 13.04.2015, the 3rd petitioner informed the respondent that the service rendered by him in ESI Corporation cannot be considered as qualifying service for pensionary benefit as per the existing Rules. On receipt of Annexure A11 reply, the respondent again sent Annexure A12 letter dated 27.04.2015 to the 1st petitioner explaining the position. However, by Annexure A13 letter dated 25.11.2015, the 1st petitioner rejected the claim of the respondent. Contending that as per Annexure A14 Government order dated 03.06.2009 it was ordered that the Government order stopping prior service in the Central Public Sector Undertaking for calculation of pensionary benefits will have retrospective effect from 12.11.2002 and the cases already settled need not be reopened and the case of the respondent was already settled by the deposit of pro- rata pension contribution to the State exchequer, the respondent filed the original application before the Tribunal seeking the following reliefs;
“(i)Call for the relevant records leading to Annexure A11 of the 3rd respondent and to quash Annexure A11 order.
(ii)Call for the relevant records leading to Annexure A13 of the 1st respondent and to quash Annexure A13 order.
(iii)Declare that the applicant is duly eligible for pensionary benefits counting his prior service under E.S.I Corporation and direct the respondents to revise his pensionary benefits accordingly”.
In the original application, the 1st petitioner filed Ext.P2 reply statement dated 03.01.2016 and the 3rd petitioner filed Ext.P2(a) reply statement dated 31.05.2016, opposing the reliefs sought for. Thereafter, by Ext.P3 order dated 03.03.2017, the Tribunal allowed the original application. Paragraphs 8 to 12 and the last paragraph of that order read thus;
“8.As contended by the learned counsel for the applicant Annexure A1 entitles the applicant to reckon his prior service in the ESI Corporation for pensionary benefits, if the Corporation remits the pro-rata pension to the State Government. As requested by the 2nd respondent, the said amount as computed by the 2nd respondent, as per the provisions in the Kerala Service Rules, had been remitted by the ESI Corporation and the same was accepted by the State Government as early as on 15.09.1998. As contended by the learned counsel for the applicant, all the formalities to be complied with by the applicant and his former employer have thus been completed on 15.09.1998 and the State Government has undertaken the liability to sanction pension to the applicant reckoning the said service also. Denying the said benefits at the time of his retirement based on another Government Order issued long later is unjustifiable. Annexure A14 order is given retrospective effect from 12.11.2002 with a specific direction that settled cases need not be re-opened. The applicant is right in contending that his case has been settled by the acceptance of pension contribution made by the ESI Corporation on 15.09.1998. Therefore, denial of the same to the applicant cannot be justified.
9.The learned Government Pleader submits that in the matter of pension, employees will.be governed by the rules prevailing at the time of retirement and therefore, the case of the applicant can be finalised only on the basis of Annexure A14. He also points out that Note 2 to Rule 11 was subsequently amended with effect from 12.11.2002 in tune with the terms of Annexure A14. Therefore, the applicant cannot claim the benefits of his service rendered in the ESI Corporation.
10.Learned counsel for the applicant relies on the judgment of the Division Bench of the Hon'ble High Court reported in George K.P. v. Law Secretary (2009 (1) KHC 832) wherein relying on the decisions of the Supreme Court it is held that pension is a social welfare measure, rendering socio economic justice to those who have rendered qualifying service to the Government. While interpreting such a provisions relating to pension the Court should adopt a beneficent rule of construction. The observations of the Hon'ble Supreme Court in Workmen of F.T.&R. Co. v. The Management (1973 (1) SCC 813) that in construing the provision of a welfare legislation, Courts should adopt beneficent rule of construction and as far as reasonably possible construction more beneficial to the employees has to be preferred have been relied on in the judgment.
11.The learned counsel for the applicant is right in his contention that the amendment has been given retrospective effect only from 12.11.2002 and the respondents cannot be allowed to refuse to discharge a liability undertaken by them on 15.09.1998. Annexure A14 which preceded the amendment clearly stated that settled cases need not be reopened. Since the respondents have accepted the amounts demanded from the former employer of the applicant on the assurance that he would be granted pension in respect of his former service the applicant's claim is in respect of a settled claim. His rights in this regard got crystalised on 15.09.1998. Such rights cannot be denied by the subsequent amendment to the Rule and contending that he would be governed only by the rules prevailing at the time of retirement.
12.In the result, the applicant succeeds. Annexures A11 and A13 orders are set aside. There will be a direction to the respondents to revise the pensionary claims of the applicant reckoning his service rendered in the ESI Corporation also as his qualifying service. Required orders in this regard shall be issued and the entire arrears released to the applicant within three months from the date of receipt of a certified copy of this order.
Original Application is allowed to the above extent”.
Being aggrieved by Ext.P3 order, the petitioners are now before this Court with this original petition.
Heard the learned Government Pleader and the learned counsel for the respondent.
The learned Government Pleader argued that the finding of the Tribunal that the case of the respondent is settled long back before Annexure A14 Government order dated 03.06.2009 is incorrect. In view of the issuance of Annexure A14 Government order, the pensionary benefits of an employee can be computed only in tune with it. The mere remittance of amount by the ESI Corporation cannot be said to mean that the final settlement of pensionary benefits of the respondent was already over. The learned Government Pleader further submitted that as far as pension is concerned, the rule that is in existence as on the date of retirement is applicable. Therefore, Rule 11 of Part III Kerala Service Rules (‘KSR’ for short) as amended with effect from 12.11.2002 applies to the case of the respondent.
On the other hand, the learned counsel for the respondent submitted that as per Annexure A14 Government order, the said order has retrospective effect from 12.11.2002. However, the cases already settled were held not to be reopened. As requested in Annexure A3 letter dated 26.12.1991 issued by the Labour Commissioner along with Annexure A4 covering letter dated 02.04.1997, a demand draft of Rs.14,663/- was furnished towards the pension liability of the respondent, which was accepted and deposited in the Government Exchequer. Therefore, before Annexure A14 order of the Government itself, the entitlement of the respondent was finalised by treating him as falling under Rule 11(1) of Part III KSR. Therefore, the benefit of cases already settled mentioned in Annexure A14 will be available to the respondent.
There is no dispute on the point that the respondent was working as an LD Clerk in ESI Corporation, which is a Central Public Sector Undertaking, from 01.02.1982 to 17.05.1990. He entered the State Government service on 19.05.1990 and retired from service on 31.05.2015. As requested by the respondent, the ESI Corporation remitted an amount of Rs.14,663/- towards the pension liability of the respondent. From Annexure A5 letter dated 01.07.1998, it is clear that the amount paid by the ESI Corporation was deposited in the treasury as other items. From Annexure A7 extract of the service book of the respondent, it can be seen that the aforesaid remittance was entered in the service book as such.
Annexure A14 Government order dated 03.06.2009, which is relied by both sides to buttress their arguments, reads thus;
“ORDER
As per the Government Orders read above, Government have ordered that the employees of State Government Departments who left the former service in Central Government/Central Public Sector Undertakings on their own volition for taking up appointment in State Government Departments will be allowed to reckon their prior service for all pensionary benefits along with the service in the State Government Departments, subject to certain conditions. Subsequently, this provision has also been incorporated in Note 2 below rule 11 Part 1II, KSRs.
2)In the letter read 3rd above, Accountant General has pointed out that. there are no rules on Central side permitting to share proportionate pension liability between Central Government and Central Public Sector Undertakings and hence the previous service in Public Sector Undertakings is not counted for pensionary benefits along with Central Government service.
3)The State Government have adopted the Central Government rules/orders in this regard as a reciprocal arrangement and inadvertently orders were issued to reckon the prior service in Central Public Sector Undertakings also.
4)Since the orders issued in the Government orders read above and the rules incorporated in Note 2, below Rule 11, Part III KSRs are not in conformity with the Central Government orders/rules, in partial modification of the Government orders read above and the rule mentioned above, Government order that only the prior service in Central Government shall be reckoned as qualifying service for pensionary benefits. This shall have retrospective effect from 12.11.2002. However, cases already settled need not be re-opened and necessary amendments to KSRs will be issued shortly.
Sd/-
(By order of the Governor) L.C. Goyal. Principal Secretary (Finance)”.
Subsequently, by the gazette notification dated 03.12.2010, Note 2 of Rule 11 of Part III of KSR was amended with retrospective effect from 12.11.2002, omitting the word ‘Central Public Sector Undertaking’. Rules 10 and 11 of Part III of KSR as on the date of retirement of the respondent read thus;
“Rule 10. The service of an employee does not qualify for pension unless he is appointed, his duties regulated, and paid by the Government or under conditions determined by the Government.
Rule 11. Notwithstanding the provisions of Rule 10, the Government may,
1.declare that any specified kind of service rendered shall qualify for pension; and
2.in individual cases, and subject to such conditions as they may think fit to impose in each case, allow service rendered by an employee to count for pension.
Note 1:-- Service rendered under Governor's Household prior to 18th September 1963 will qualify for pension in the case of an employee absorbed there from in a post in the Governor's Secretariat, on the certificate of the Secretary, Governor's Household, Raj Bhavan or the Secretary to Governor as the case may be, as to the correctness of such service.
Note 2:-- Temporary employees of the Government of India on deputation to the State Government who are subsequently absorbed in the service of the State Government will be allowed to count for pension the period of their continuous temporary service under the Government of India immediately preceding the service under the State Government (Vide also Rule 61). Employees of State Government departments who left the former service in Central Government on their own volition for taking up appointment in State Government departments will be allowed to reckon their prior service for all pensionary benefits along with the service in State Government departments. In the case of prior service rendered by Central Government employees in State Government and vice versa, the liability of pension including gratuity, will be borne in full by the Central Government/State Government to which the Government servant permanently belongs at the time of retirement and no recovery of proportionate pension will be made from Central Government/State Government under whom he had served.”
Now the only question remains, after the amendment to Note 2 of Rule 11 of Part III KSR is that whether the respondent, by relying on the payment of amount towards pension liability of the period of service in ESI Corporation, can contend that his case was already settled as mentioned in Annexure A14?
It is trite that as far as pension is concerned, the rule that is applicable is that which is existing as on the date of retirement. See: Deokinandan Prasad v. State of Bihar and Others [AIR 1971 SC 1409]. The respondent was admittedly retired on 31.05.2015, on which date the previous service in Central Public Sector Undertakings was not considered for pension in State service in view of the deletion of those words from Note 2 of Rule 11 of Part III KSR. The amount paid towards pension liability of the respondent by the ESI Corporation was kept under other accounts as evident from Annexure A5 and A7 documents. Therefore, we are of the considered opinion that the respondent is not entitled to claim the benefit of the clarification in Annexure A14 that the cases already settled need not be reopened. In such circumstances, we find no illegality in the impugned Annexure A11 and A13 orders. The Tribunal failed to consider these aspects in their proper perspective while passing Ext.P3 order. Therefore, the impugned Ext.P3 order is liable to be set aside.
In the result, the original petition is allowed by setting aside the impugned Ext.P3 order dated 03.03.2017 passed by the Tribunal in O.A.No.119 of 2016 and the original application stands dismissed.