Decision To Treat Employees Quitting Service Due To Disability Differently From Those Retiring On Superannuation Is A Policy Matter: Kerala High Court

Background

P.K. Jayan, a 62-year-old goods auto driver, was diagnosed with Non-Hodgkin Lymphoma Stage III, forcing him to retire early from his occupation. He had been a member of the Kerala Motor Transport Workers Welfare Fund Scheme from 2006 to 2016, completing over 10 years of service. Upon retirement, Jayan was granted a disability pension of ₹1,600 under paragraph 46B(2) of the Scheme, which states that “A member of the Fund on becoming completely disabled to do his work as a motor transport worker shall be entitled to a minimum pension of Rs.500/- irrespective of the length of service, if not otherwise entitled for pension under subparagraph (1) above.” However, he contended that he should be eligible for the minimum pension of ₹3,500 under paragraph 46A, which applies to members with at least 10 years of service retiring on superannuation.

Arguments

The petitioner argued that the non-enhancement of his pension was illegal and arbitrary. He contended that as per paragraph 46A of the Scheme, which states “A member of the Fund who is having not less than ten years of completed service on superannuation shall be eligible for pension under this Chapter,” workers with not less than 10 years of service are entitled to receive pension. Jayan emphasized that he was forced to exit the Welfare Fund Scheme due to his treatment, and therefore, denying him the full pension was unjust. On the other hand, respondents 2 to 4 (the Kerala Motor Transport Workers Welfare Fund Board and its officers) resisted the petition. They argued that the petitioner does not fall within the ambit of paragraph 46A of the Scheme as he took voluntary retirement before reaching the age of superannuation. Therefore, he is only eligible for benefits under paragraph 46B.

Court's Reasoning

Firstly, the court noted that paragraph 46A clearly states that a member will be entitled to pension only if they have “not less than 10 years of completed service on superannuation”, and the petitioner's right to receive pension is solely based on the provisions of the Scheme. Secondly, the court addressed the apparent discrimination between employees who retire before superannuation and those who retire on superannuation, both having served for more than ten years. It explained that welfare fund schemes are framed based on empirical data and are designed to provide defined benefits to specific categories of persons. These schemes rely on limited contributions and subscriptions from employers and employees, often without significant financial support from the government. Thus, liberal departures from the scheme's provisions, ignoring the stability of the corpus, could lead to the collapse of the entire scheme.

Furthermore, the court highlighted that the decision to treat employees quitting service due to disability differently from those retiring on superannuation is a policy matter. Such decisions cannot be made without considering the financial viability of the scheme. The court cautioned against unmindful interference by courts in the provisions of such schemes, stating that it could have “disastrous consequences.” It also noted that the Kerala Motor Transport Workers Welfare Fund Board Scheme ensures a higher pension to employees who retire on superannuation and a lesser amount to those who leave service due to disability. This distinction, according to the court, is part of the scheme's design to maintain its financial sustainability.

Lastly, Justice Nagaresh concluded that the pension payable to persons becoming disabled to work as a Motor Transport Worker can only be computed as per paragraph 46B(2) of the Scheme. The court found that the petitioner was already being paid pension in accordance with this provision, which provides for a minimum pension of ₹500 per month for members who become completely disabled, irrespective of their length of service. As per the current provisions of the Scheme, the petitioner has no legal right to claim pension under paragraph 46A, which is specifically for those retiring on superannuation. In light of these considerations, the High Court dismissed the writ petition, upholding the existing pension arrangement for the petitioner under the Kerala Motor Transport Workers Welfare Fund Board Scheme.

Case Title: P.K. Jayan Vs State Of Kerala

Citation: 2024 LiveLaw (Ker) 633

Counsel for the Petitioner: Mr. V. Madhusudhanan

Counsel for the Respondents: Mr. P. Ramakrishnan, Smt. Sheeja C.S., Sr. Government Pleader

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