Municipalities are legally obligated to disburse retirement benefits, and disputes between administrative authorities do not absolve them from this duty.

JUDGMENT

In these two writ petitions, the petitioners are retired employees of the Municipal Common Service, who have opted for receiving retirement benefits through the Aluva Municipality. The petitioners' grievance is that the retirement benefits due to the petitioners have not been released yet. The stand of the Municipality is that, although the entitlement of the petitioners for receiving the retirement benefits is not disputed, the money for the same should come from the Director of Urban Affairs, who is the other respondent in the writ petitions. They particularly rely on Rules 9, 10 and 11 of the Kerala Municipality (Employees Death-Cum-Retirement Benefit) Rules, 1996, in support of their contention. They submit that, as per those Rules, the Director of Urban Affairs has to forward the DDs for payment of retirement benefits due to the petitioners and the duty of the Municipality is only to disburse the same. According to the Municipality, they W.P.(C)No.14605 /12& Con.case 2 are yet to receive the DDs in respect of the petitioners and that is why the Municipality could not pay the amount.

2. The stand of the Director of Urban Affairs in the matter is that, for payment of retirement benefits due to the retired members of the Municipal Common Service, the Government is maintaining a fund called 'Central Pension Fund'. All Municipalities in the State are expected to pay contributions deducted from the salary of the particular employee to the Government. The retirement benefits due to the retired employees can be paid only from that fund. According to the learned Government Pleader, most of the Municipalities do not pay the contributions in time. According to them, as and when funds are available in the Central Pension Fund, the same would be disbursed to the Municipality. The submission of the learned Government Pleader is that, at present, the amount available in the Central Pension Fund is only Rs.1,06,744/- as on 31.7.2012. Therefore, the Municipality has to pay the amount from their own funds, is the contention raised by the learned Government Pleader.

W.P.(C)No.14605 /12& Con.case 3

3. I have considered the rival contentions in detail.

4. Rule 7 of the Kerala Municipality (Employees Death - Cum - Retirement Benefit) Rules, 1996 reads thus:

“7. Liability of the Municipality- (1) The Municipalities shall meet the financial liability arising out of the implementation of the pension schemes under these rules.

(2) Fifteen per cent of the total minority emoluments of each employee shall be remitted to the Central Pension Fund as pension contribution.”

But, at the same time, Rule 9, 10 and 11 stipulate thus:

“9. Procedure, for sanctioning pension.- (1) The Secretary shall prepare the pension papers one year before the retirement of an employee in accordance with the provisions in Part III of the Kerala Service Rules, 1959 and in the specified form and send the same to the Local Fund Audit Director with relevant documents. The employee shall, in the application for pension indicate the Municipality from which he desires to draw pension and gratuity. The Local Fund Audit Director shall, after verifying the eligibility under Part III of the Kerala Service Rules, 1959, forward the pension papers together with the verification report regarding the amount that may be sanctioned under items pension and gratuity to the Director for sanctioning the pension.

(2) The Director shall, immediately on receipt of the pension papers together with the verification report of the Local Fund Audit Director under sub-rule (1), issue orders sanctioning pension benefits admissible and at the same time prepare pension payment order in duplicate and send one copy of the same to the pensioner and the other to the Secretary of the Municipality from where the pensioner desires to draw the pension benefits.

(3) The Director shall, on passing orders sanctioning pension under sub-rule (2), withdraw from the Central Pension Fund, the total amount required for the pay