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IN THE HIGH COURT OF KERALA AT ERNAKULAM
K.BABU
Rajendran V. S/o Velappan Nair – Appellant
Versus
Tahasildar Thiruvananthapuram – Respondent
| Table of Content |
|---|
| 1. challenge of loan recovery from dcrg and pension. (Para 1 , 2 , 3) |
| 2. arguments regarding the legality of recovery. (Para 6 , 7 , 8) |
| 3. interpretation of statutory provisions. (Para 10 , 12 , 13 , 18) |
| 4. consent cannot override public policy. (Para 20 , 21) |
| 5. writ referred to a larger bench for clarification. (Para 24 , 26) |
ORDER :
1. The petitioner challenges a requisition notice dated 31.5.2024 (Ext.P6) issued by respondent No.4 Co-operative Society to the Tahsildar (respondent No.1) for the recovery of loan dues by deducting them from the Death-Cum-Retirement-Gratuity (DCRG) amount as well as pension amount of the petitioner. Ext.P6 notice is stated to be issued under Section 37 of the Kerala Co-operative Societies Act, 1969 (for short 'the Act') read with Rule 52 of the Co-operative Societies Rules, 1969 (for short 'the Rules').
Brief facts of the case
2. The petitioner was working as an Upper Division Clerk in the Revenue Department. He had stood as a surety for respondent No.5 for the purpose of availing a loan of Rs.1,50,000/- from respondent No.4-Co-operative Society. In the loan agreement, the petitioner as guarantor had agreed in favour of the Society providin
Consent to recover dues from retirement benefits cannot override statutory protections against such recovery under public policy.
Amended regulations on deductions from retirement gratuity do not apply retroactively to loans granted before their enactment, preserving previously established employee consents.
Even consent given to creditor organisation like K.S.F.E. or Bank unconditionally agreeing for recovery from his retirement benefits will be sufficient compliance of Ruling 1 of R. 3 Part III K.S.R.,....
The lack of a tripartite agreement precludes the Central Government from deducting dues from DCRG payable to absorbed employees.
Once full amount of gratuity becomes payable to the employee due to the consequences of law, then the right to get statutory interest in terms of Section 7(3A) of the Payment of Gratuity Act, cannot ....
The impugned clause No.v was illegal as it contravened Section 34 of the Act of 1959, and the employer cannot issue a circular that renders Section 34 otiose for a class of a Co-operative Society.
The court emphasized the importance of timely grant of terminal benefits and the unjustifiability of recovering alleged liabilities from the DCRG without proper compliance with statutory procedures.
Retired employees are entitled to gratuity and provident fund unless disciplinary proceedings are initiated against them, and provisions of the Payment of Gratuity Act prevail over state laws.
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