MALAPPURAM DISTRICT CO OPERATIVE BANK LTD Vs. MALAPPURAM DISTRICT CO OPERATIVE BANK EMPLOYEES WELFARE FUND COMMITTEE

JUDGEMENT

(1.) These Writ Appeals are filed against the common judgment delivered by KOSHY, J. and the judgments which have followed the same judgment. Appeals have been filed by the Kerala State Co-operative Bank Employees Welfare Fund Committee, Kerala State Co- operative Bank Ltd., Pathanamthitta District Co-operative Bank Ltd., Kozhikode DistrictCo-operativeBankEmployees Wel fare Fund Committee, The Kozhikode District Co-operative Bank Ltd., The Malappuram District Co-operative Bank Ltd., Malappuram DistrictCo-operativeBankEmployees Welfare Fund, the Committee of Management of the ErnakulamDistrictCo-operativeBank Welfare Fund. O.P. No. 483/2000 is filed by certain persons challenging the non-payment of benefits under the welfare fund scheme.

(2.) The Government framed what is called "Rules for the Kerala State Co-operative Bank Employees Welfare Scheme and District Co- operative Bank Employees Welfare Scheme" (hereinafter referred to as the "Scheme"). This was approved on March 21, 1991 by the Government. As per the Scheme, when a contribution is made by an employee to the welfare fund, an equal contribution is made by the Bank also. The employee has to deposit 2% of the salary and the bank has to deposit 30% of what the employee has deposited. Then all the co-operative banks are to deposit Rs. 50,000/- as their initial share. The amount under the Fund is used for treatment of diseases, expenses for the funeral ceremonies, higher education, marriage, retirement benefits, family welfare etc. Under the retirement benefit, it is stated that, when a person retires from the bank or leaves the service of the bank after 28 years, or leaves the bank due to certain contingencies mentioned in the rule, he will be entitled to a minimum amount of Rs. 35,000.00. The maximum amount is calculated on the basis of the following formula. A/2 x B/4 x C/2 "A" is the length of service; "B" is the last salary drawn,, and "C" is the number of years after the fund is introduced. The fund, is to be managed by a committee which is to consist of President of the Bank, Vice President of the Bank, General Manager of the Bank, a person elected from the grade of Branch Managers, a person elected from the clerks cadre and a person elected below the cadre of clerks. The Scheme deals with the rules of the Committee etc. Clause 14 enables the Government to amend the rules. It seems there were existing similar welfare fund or, rules in the banks. But after the coming into force of the present rule, the old rules ceased to exist and the persons who were members of the earlier welfare fund were asked to join the present welfare fund. After the scheme came into existence, as per the rules the amounts were deposited and some of the banks paid retirement benefits also. But then, many of the banks faced a difficulty and found that the retirement benefits that was envisaged under 1 the rules was a larger amount than what was contributed by the employer and the employee. In the result, representations were made to the Government from both sides, one side stating that they were not getting the benefits from the fund, and the other side stating that if the scheme under the welfare fund is allowed to function, it may lead to bankruptcy. When this was the position, the Registrar of Co-operative Societies issued a letter dated June 10, 1997 stating that payment of the Employees Welfare Fund Scheme to the employees of the bank shall be kept in abeyance until further orders. Thereafter, the Government appointed a Committee to go into the working and to review the Welfare Fund Scheme of the employees. That committee was constituted as per Government Order dated May 28, 1997. The Committee filed its report on March 28, 1998. The committee recom1 mended changes in the Welfare Fund Scheme and on the recommendations of the Committee, the Government amended the Welfare Fund Rules. They were introduced by G.O. (MS) No. L33/98/Co-op.TVM. dated August 24, 1998. The following amendments were made: (1) Clause 7(2) of the Rules was amended. The amount to be deposited by the bank was increased to 50% of the amount deposited by the employee. (2) Clause 8(5) was amended. As per the rules, a person who retires on superannuation or who ceases to be in service on the basis of the serious disease like paralysis etc., then the employee is entitled to an amount which is equal to the amount deposited by the employee and the amount contributed by the Bank plus 11 percent compound interest on that amount. The minimum amount was fixed at Rs. 75,000.00. It was also stated that if a person dies while in service, 'he will be entitled to the same amount as stated in amended clause 8(5) of the Rules. By order dated October 8, 1998, it was stated that amended rules will come into effect from June 10, 1997. The original petitions were filed when orders were issued suspending payment by the Registrar, as well as when the amendment was made retrospectively from June 10, 1997.

(3.) The contentions urged by the appellants/petitioners are many. One set of contentions urged was that the amendment cannot affect even those who are in service since they have already contributed on the basis of the original rules. Hence, according to them, they are entitled for the benefits as per the original rule. The other set of contentions were by those who were retired when the amendment was made. According to them, the amendment cannot affect who retired prior to October 8, 1998. Hence, they challenged the Government Order by which the amendment was brought into force from June 10, 1997. The Government filed a counter affidavit in all these cases. The Government submitted that the original rules could not be carried out because it caused great financial constraints to the Banks and it was necessary to amend the rules. If it was not amended, no employee will get any benefit under the Fund. Particular reference was made to the working of unamended rules of the Welfare Fund Scheme. Counter affidavit was filed in O.P. No. 11104/98 and along with that Ext. R2(b) was produced. It showed the amounts contributed by the employees and the amounts disbursed to them at the time of retirement. A perusal of these two columns will show that there was no proportion between the amounts contributed and the amounts disbursed. Particular attention was made to S1. No. 28, General Manager. He contributed Rs. 22,351.00 to the fund, and the amount disbursed was Rs. 3,28,404.00. Such anomalies were found in various District Banks and it was to rectify this, that a Committee was constituted by the Government Order dated May 26, 1997. A report was filed by the Committee on March 28, 1998. In the meanwhile, it was found that if the original welfare fund rules were allowed to function, it would create great financialproblems. So, the Registrar issued an order suspending payment from June 10, 1997. After the amendment was made, it was brought into force from June 10, 1997. It was submitted on behalf of the State that the Welfare Fund has no statutory background. It was formed by the participation of the employees and the employer. The Government only helped them by framing the rules. The rules itself give power to the Government to amend the rules. Hence, it cannot be said that always the rules should remain the same, whatever may be the repercussions. It is stated that nobody can be said to have vested right for the amount that are due to them under the rules that it is actually only a contract among the employees and the employer and that does not give right for the petitioner under Article 226 of the Constitution of India. Further submission is that in any event, Government has to see that no financial burden is created by disbursing amounts which had no relevance considering the amount deposited by the employer and the employee. The learned single Judge considered the contentions of the parties and the Government. Learned single Judge held that with regard to payment of benefits payable to an employee before June 10, 1997, who became members as per Ext. R2(a) rules they are entitled to get retirement benefit as per the unamended rules. There cannot be any dispute over this proposition because, the bank accepted the scheme and paid their contribution. Employees also joined the scheme and paid their share of contribution. The Fund was bound to pay the amount. Even if they have no fund, they have to get money by way of loans from bankers and pay the amount. Thus the learned single Judge found that those who have retired prior to June 10, 1997 are entitled to get the retirement benefits as per the original Rules. The learned single Judge did not accept the contentions that the amended rules are invalid. Learned single Judge referred to the power of the Government to amend the Rules and after referring to certain decisions of the Supreme Court held that, it is applicable to those who are continuing in service. Learned single Judge held that the employees who retired upto August 24, 1998 are entitled to get the benefit of Ext. R2(a) scheme and retrospective operation of the amended rules is invalid. With regard to the existing employees, it is held that amendment applies to them. It is against the above judgment the appeals are filed.