Central Administrative Tribunal - Cuttack
Pradeep Kumar Sahu vs M/O Railways on 11 April, 2025
1 O.A.No. 260/00337 of 2020
CENTRAL ADMINISTRATIVE TRIBUNAL
CUTTACK BENCH, CUTTACK
O.A.No. 260/00337 of 2020
Reserved on 07.04.2025 Pronounced on 11.04.2025
CORAM:
HON'BLE SHRI PRAMOD KUMAR DAS, MEMBER (A)
Pradeep Kumar Sahu, S/o Late Maheswar Sahu,
aged about 61 years At/Po- Balia, Dist.-Balasore,
Odisha PIN- 756056.
..... Applicant
For the Applicant : Mr. C.Jena, Counsel
-Versus-
1. Union of India, through the General Manager,
South Eastern Railway, Graden Reach Kolkata -43.
2. The Divisional Railway Manager, S.E. Railway,
At/Po- Kharagpur. Dist. Paschim Medinipur, West
Bengal, Pin-721301.
3. The Divisional Railway Manager (P) S.E. Railway,
At/Po-Kharagpur, District. Paschim Medinipur,
West Bengal. 721301.
4 The Divisional Accounts Officer, S.E. Railway, At-
/Po-Kharagpur, District. Paschim Medinipur, West
Bengal. PIN-721301.
.....Respondents
For the Respondents: Mr. B.Samantaray, Counsel
2 O.A.No. 260/00337 of 2020
ORDER
Pramod Kumar Das, Member (A):
Tersely, as submitted by Ld. Counsel for the applicant, the case of the applicant is that while working as SS/BLS he retired on reaching the age of superannuation on 31.05.2019. Upon his retirement, he was paid all settlement dues except the DCRG amounting to Rs. 13,32,408/- although the same was also sanctioned to be released. Vide letter dated 30.06.2020 (A/5), he was informed that an amount of Rs. 90,834/- was assessed as overpayment arising out of refixation of his pay w.e.f. 01.01.1998 and the same will be recovered from his DCRG. Subsequently, Rs. 12,41,774/- was released on 24.07.2020. After non- consideration of his representations, being aggrieved, applicant filed this OA praying as under:
"i) do issue an order quashing the letter No. SER/P-
KGP/Optg/PKS/Ex-SM dated 30.06.2020 issued by the Assistant Personnel Officer, Kharagpur, S.E.Railway:
i) do issue direction to the respondents to make payment of interest @ 12% on entire withholding DCRG amount from the date of retirement to the date of payment of DCRG amount and refund of deducted amount of Rs 90,834/- with interest @ 12% from date of illegal deduction to till the date of payment.3 O.A.No. 260/00337 of 2020
(iii) any other order (s) as the Hon'ble Tribunal deem proper in this case.
2. Respondents by filing counter opposed the prayer of the applicant inter alia stating that at the time of review of service records of the applicant before his retirement, the accounts department found that pay of the applicant on his promotion to SM was wrongly fixed at Rs. 5600/- instead of Rs. 5450/- w.e.f. 01.01.1998 and, hence, as per sub-clause (b) of claus (i) of sub-rule(4) of Rule 15 of Railway Services (Pension) Rules, 1993, his pay was recast and amount of Rs. 90,384/- was assessed as overpayment made to him and the same was recovered from his total DCRG amount of Rs. 13,32,408/-. However, subsequently, in the light of the direction of the Hon'ble Apex Court in the case of State of Punjab & Ors. Vs Rafiq Masih (White Washer) etc in CA No. 11527 of 2014 (Arising out of SLP(C No. 11684 of 2012, followed by DoPT's Memorandum dated 02.03.2016 and Railway Board's Circular vide RBE No. 72/2016, the recovered amount of Rs. 90,384/- has already been refunded to the applicant vide CO7 No. 07020922700391 dated 02.02.2023. Hence, Ld. Counsel for the respondents submits that this OA has rendered infructuous and should be dismissed accordingly.
4 O.A.No. 260/00337 of 2020
3. Ld. Counsel for the applicant, on the other hand, submits that for no fault of the applicant, respondents withheld his entire DCRG amount of Rs. 13,32,408/- till 24.07.2020; when Rs. 12,41,774/- was released after recovering of Rs. 90,384/-, which was subsequently refunded to him on 02.02.2023. Hence, the respondents are duty bound to pay interest on the entire delayed payment of DCRG amount.
4. I have heard Ld. Counsel for both the parties and gone through the record.
5. Pension and pensionary benefits, including Gratuity, are no longer any bounty to be distributed by the Government to its employees on their retirement but are valuable rights and property in their hands is law of the land. In State of Kerala Vs. Padmanabhan Nair, AIR 1985 SC 356, the Hon'ble Apex Court has observed that any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.
6. From the perusal of the record, it can safely be concluded that the delay in payment of DCRG amount cannot be attributable to the 5 O.A.No. 260/00337 of 2020 applicant. Whether an employee is entitled to interest on the retiral dues where delay is not attributable to him/her is no more re integra and suffice it to place reliance on the decision of the Hon'ble High Court of Orissa in the case of Debendranath Mohanty Vs UOI and Others in W.P (C) No. 23333/2020 disposed of on 26.07.2022 wherein it has been held as under:
"11. In Common Parlance, interest means rate of interest and includes the return to be made over and above what was actually lent, whether the same is charged or sought to be recovered specifically by way of interest or otherwise. In Associated Cement Company Ltd. v. Commercial Tax Officer, (1981) 4 SCC 578, it has been held that an "interest" is ordinarily claimed from an assessee who withheld payment of any tax payable by him and it is always calculated at the prescribed rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. Such interest is compensatory in character and not penal. Therefore, here the interest is compensation to be paid to the Petitioner for withholding the amount, which he is otherwise entitled to get under law".
7. In State of Kerala Vs Padmanabhan Nair, AIR 1985 SC 356, the Hon'ble Apex Court observed that Pension and Gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but are valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.
6 O.A.No. 260/00337 of 2020
8. In S.K. Dua Vs State of Haryana & Anr., 2008 (3) SCC 44, the Hon'ble Apex Court held that if there is no specific rule or order providing for interest for the delayed payment of retirement dues, relief can be claimed on the basis of Article 14, 19 and 21 because retirement benefits are not a bounty. Therefore, interest on the delayed payment of retirement benefits flows from this provision.
9. In the case of Gorakhpur University and Others Vs. Dr. Shitla Prasad Nagendra and Others, AIR 2001 SC 2433, the Hon'ble Supreme Court had reiterated that pension and gratuity being valuable rights acquired by an employee, any delay in settlement and disbursement of the same should be viewed seriously and dealt with severely by imposing penalty in the form of payment of interest. Further, the Hon'ble Apex Court in the case of Gangahanume Gowda Vs. Karnataka Agro Industries Corporation Ltd, (2003) 3 SCC 40, has held that interest on delayed payment of gratuity is mandatory and not discretionary. When it was not the case of the respondent that the delay in the payment of gratuity was due to the fault of the employee and that it had obtained permission in writing from the controlling authority for the delayed payment on that ground, the respondent had 7 O.A.No. 260/00337 of 2020 been directed to pay interest on the amount of gratuity to which the appellant was entitled from the date it became payable till the date of payment of the gratuity amount.
10. Thus, the irresistible conclusion from the discussions made above is that the withholding of Gratuity of the applicant cannot be countenanced in law. No explanation has also been put forth by the respondents as to what prompted them to withhold the entire DCRG amount of Rs. 13,32,408/- when the alleged overpayment was of Rs. 90,384/-. The contention of the respondents is that as per Railway Board's Circular vide RBE No. 72/2016 dated 22.06.2016, the recovered amount of Rs. 90,384/- has already been refunded to the applicant vide CO7 No. 07020922700391 dated 02.02.2023 and hence, they are not liable to pay interest. This Tribunal is not convinced with such explanation since the said RBE No. 72/2016 was issued on 22.06.2016 but applicant's recovered amount was released on 02.02.2023. However, since the DCRG amount, to which the applicant is entitled to, has already been paid to him meanwhile, in view of the facts and law stated above, the applicant is entitled to interest on his delayed payment of DCRG amount. The DoP&T OM dated 29.04.2002, in this 8 O.A.No. 260/00337 of 2020 regard, specifically lays down that "President is now pleased to decide that where the payment of DCRG has been delayed beyond three months from the date of retirement, an interest at the rate applicable to GPF deposits determined from time to time by the Govt. of India will be paid to retired/dependants of deceased Govt. servants".
11. We find from the letter dated 30.06.2020 that even though the demand was for overpayment of Rs. 90,834/-, respondents withheld the entire DCRG amount of Rs. 13,32,408/-, i.e. Rs. 12,41,774/- more than Rs. 90,834/-, which action of the respondents can never be justified. Accordingly, respondents are directed to pay the applicant interest on the amount of Rs. 12,41,774/- after three months' of his retirement till it was actually paid on 24.07.2020 at the GPF rates of interest applicable at the relevant points of time.
12. Further, when it was decided by the authorities vide Railway Board's Circular (RBE No. 72/2016) dated 22.06.2016 that in certain situations recovery from the employees would be impermissible in law and based on the said circular recovered amount of Rs. 90,384/- was refunded to the applicant vide CO7 No. 07020922700391 dated 02.02.2023, this Tribunal is at a loss to understand as to why recovery 9 O.A.No. 260/00337 of 2020 of Rs. 90,384/- was made from the applicant as per letter dated 30.06.2020 when the prevention was already there as per RBE No. 72/2016 since June, 2016. Hence, we have no hesitation to hold that the applicant shall be entitled to interest on the amount of Rs. 90,384/- after three months' of his retirement till it was actually paid on 02.02.2023 at the GPF rates of interest applicable at the relevant points of time. Accordingly, respondents are directed to calculate the same and pay to the applicant within a period of 60 days from the date of receipt of a copy of this order.
13. In the result, the OA stands allowed. No costs.
(PRAMOD KUMAR DAS) MEMBER(A) RK/PS