In a decision that underscores the tension between compassion and accountability in public service, the Kerala High Court has dismissed the appeal of Usha Devi P.T., a retired senior assistant of the Kerala State Co-operative Bank, who sought provisional pension while facing charges of financial misconduct. The Division Bench comprising Justice Sushrut Arvind Dharmadhikari and Justice P.V. Balakrishnan delivered the judgment on October 25, 2025, reaffirming that rules preventing pension during pending disciplinary or criminal proceedings prevail over earlier pension schemes.
Background
Usha Devi, 59, had served as a senior assistant at the Kozhikode main branch of the Kerala State Co-operative Bank. In November 2021, she was suspended on allegations of misappropriation of ₹20 lakh. Despite retiring on May 31, 2022, the departmental inquiry and a criminal case against her remained unresolved.
Struggling financially after retirement, she submitted a representation in August 2024, requesting the release of provisional pension under Clause 11(2) of the 2005 Pension Scheme for co-operative bank employees. That clause allowed payment of up to two-thirds of the pension amount even when disciplinary or judicial proceedings were pending. However, the authorities did not respond, pushing her to approach the High Court.
Her writ petition was dismissed by a Single Judge earlier in April 2025, prompting this intra-court appeal.
Court's Observations
The Bench carefully weighed both legal arguments and humanitarian concerns. Counsel for Usha Devi argued that the 2005 Pension Scheme clearly entitled her to provisional pension and cited the Supreme Court ruling in Maya Mathew v. State of Kerala (2010) to support her claim.
"The Scheme was specifically designed to provide relief to employees deprived of monetary benefits during inquiry," he contended.
However, the State and the bank’s counsel countered that Rule 198(7) of the Kerala Co-operative Societies Rules, inserted in 2010, categorically prohibits granting retirement benefits to any employee facing charges of grave misconduct, corruption, or moral turpitude. The rule also makes sanctioning authorities personally liable for any financial loss resulting from unauthorized payment of benefits.
Justice Balakrishnan, writing for the Bench, observed:
"It is clear that Clause 11(2) of the Scheme cannot survive after the insertion of Rule 198(7). The Rule, being subsequent and mandatory, overrides the earlier provision of the Scheme."
The Court emphasized that legal provisions must evolve to maintain integrity within public financial institutions.
"If an employee is facing allegations of serious financial irregularities, sanctioning pension during pendency of proceedings would defeat the purpose of the Rule," the Bench noted.
The judges also found the reliance on Maya Mathew misplaced, clarifying that the cited case dealt with a different legal context where no overriding rule existed. Here, the 2010 amendment explicitly interdicts pensionary benefits during ongoing proceedings.
Decision
After an anxious consideration of all submissions, the Bench concluded that Usha Devi’s appeal lacked merit. The judges dismissed the writ appeal, upholding the earlier order that denied her provisional pension.
The verdict effectively means that she will not receive any pensionary benefit until the completion of the departmental inquiry and criminal trial.
In closing, the Bench remarked that rules are meant not only to regulate service conditions but also to preserve public confidence in cooperative banking institutions that handle people's money.
"Ergo, considering all the afore facts, we are of the view that there is no merit in this writ appeal and the same is accordingly dismissed," the order stated.
With this ruling, the Kerala High Court reinforced the principle that procedural safeguards in cooperative institutions cannot be compromised, even when individual hardship is involved.
Case Title: Usha Devi P. T. vs State of Kerala & Others
Case Number: Writ Appeal No. 1869 of 2025
Date of Judgment: 25 October 2025