Retirement benefits can be withheld under Kerala Co-operative Societies Rules when disciplinary proceedings are pending against an employee.

JUDGMENT Sushrut Arvind Dharmadhikari, J The present intra-court appeal under Section 5 of the Kerala High Court Act , 1958, assails the judgment dated 07.11.2022 passed in W.P.(C) No. 20166 of 2022, whereby the learned Single Judge allowed the writ petition and directed the appellants herein to disburse all retiral benefits within a period of four months from the date of receipt of a copy of the judgment, while reserving liberty to them to avail remedies in accordance with law.

2. The brief facts of the case are that the respondent retired from service on 31.05.2022. However, her retiral benefits were withheld solely on account of two charge sheets having been issued against her. Aggrieved thereby, the respondent approached this Court by filing a writ petition seeking a direction to the appellants to release the retiral benefits along with interest within a stipulated time frame. The learned Single Judge allowed the writ petition on the ground that, since the liability was yet to be adjudicated, the retiral benefits could not be withheld, and accordingly directed the appellants to disburse the retiral dues within four months. Aggrieved by the said judgment, the appellants have preferred the present writ appeal.

3. The learned counsel for the appellant-Society submitted that, as per Rule 198(7) of the Kerala Co-operative Societies Rules , 1969, in the event of pendency of disciplinary proceedings against any employee of a Co-operative Society or Co-operative Institution pursuant to any charge of grave misconduct, irregularity, corruption, or any other charge involving moral turpitude, no retirement benefits shall be sanctioned to such employee or retired employee. It was further submitted that, if any retirement benefits are sanctioned to such employee or retired employee, the name and designation of the sanctioning authority, together with the reasons for such sanction, shall be recorded by the authority itself, and such authority shall be held responsible for any loss caused to the Society if it is found that the sanction was unwarranted.

3.1 Invoking the said provision, the retiral benefits to the extent of the amounts specified in Exhibits P5 and P6 under the head “leave surrender pay” have been withheld. Therefore, such withholding is in accordance with law. The learned Judge erred in not considering the aforesaid provision and in directing release of the said amount, which could not have been ordered.

Per contra

4. , the learned Counsel for the respondent opposed the prayer and submitted that the law is well settled that quantification of liability cannot be undertaken unilaterally by the appellants.

5. Heard the learned Counsel for the parties and perused the records.

6. On perusal of Rule 198(7) of the Kerala Co-operative Societies Rules , 1969, referred to above, we find that the appellants have the power to withhold retiral benefits to the extent of the loss that may be caused to the appellant-Society. Therefore, we are of the considered opinion that the findings rendered by the learned Single Judge cannot be countenanced. Accordingly, the order passed by the learned Single Judge is hereby set aside.

7. However, considering the fact that the disciplinary proceedings in respect of the first charge sheet dated 03.05.2021 are on the verge of completion, as the enquiry report dated 10.05.2022 is already on record, the appellants are directed to conclude the proceedings arising from the said charge sheet within a period of one month, in accordance with law.

7.1 As regards the second charge sheet dated 03.03.2022, it has been submitted that the proceedings are still at a preliminary stage. The appellants are directed to conclude t