Consent to recover dues from retirement benefits cannot override statutory protections against such recovery under public policy.

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 providing that his employer and pension sanctioning authority shall be competent to deduct the amount from his salary, eligible gratuity and pension benefits. Respondent No.5 later committed default in repaying the loan amount. Consequently, respondent No.4-society filed ARC No.264 of 2022 before respondent No.3/the Assistant Registrar of Co-operative Societies. Respondent No.3 passed Ext.P4 award on 30.03.2022. The petitioner retired on 31.05.2024. On the date of retirement, Ext.P6 requisition notice was issued directing respondent No.1-Tahsildar to recover the amount due as per the loan by deducting it from the DCRG and pension amount of the petitioner.

3. The contention of respondent No.4-society is that as the petitioner had consented in writing for the recovery of the amount due to respondent No.4-society from his eligible gratuity, Ext.P6 notice is lawful. The question that arises for consideration is whether a Co- operative Society is entitled to recover the amount due to it from a retired Government employee from his DCRG amount as well as pension amount in spite of the bar for such recovery under Rule 124 of the Kerala Service Rules, 1959 Part III and Sections 60(1) and 60(1A) of the Code of Civil Procedure (CPC), if the petitioner had executed an agreement consenting to deduct amounts from his DCRG or pension.

4. This Court had appointed Adv.K.M.Firoz as Amicus Curiae.

5. I have heard the learned counsel for the petitioner, the learned counsel for respondent No.4-society and the learned Government Pleader.

6. The learned counsel for the petitioner submitted that as respondent No.4-society has not taken any steps to recover the amount due from the principal borrower, they cannot proceed against the petitioner.

7. The learned counsel for respondent No.4 submitted that, as there was express consent on the part of the petitioner at the time of availing the loan, the Co-operative Society is entitled to recover the amount due to it from his eligible gratuity. It is submitted that Ext.P6 notice is lawful. The learned counsel for respondent No.4 submitted that Section 37 of the Act and the relevant provisions in the Kerala Service Rules permit the Co-operative society to get the amount due to it deducted from the DCRG of the petitioner.

8. The learned Government Pleader, relying on Ruling No.1 under Rule 3 of Part III of Kerala Service Rules, contended that Ruling No.1 contemplates granting of written consent by the Government employee to Co-operative societies to recover dues from the DCRG payable to him and that when consent is given by the Government employee to the Co-operative society, he cannot later contend that he is protected from recovering the amount due from the DCRG.

9. The learned Amicus Curiae has taken me to Section 37 of the Co-operative Societie