Central Administrative Tribunal - Delhi
K.C. Uttreja, S/O Late Shri Mangharam vs The State Government Of Nct Of Delhi ... on 21 February, 2008
ORDER Shanker Raju, Member (J)
1. A retired Administrative Officer, through this OA, has assailed respondents' order dated 16.4.2007 and has sought interest on delayed payment of retiral dues, including pension, leave encashment, commutation of pension and gratuity from the date it has become due till actually paid.
2. Applicant, who had to retire on superannuation on 31.8.2003 submitted all his relevant documents and papers before his retirement on 5.6.2003. At the time of retirement as Pay and Accounts Officer applicant was drawing a basic pay of Rs. 9,000/-. The retiral dues were released to applicant on 17.12.2003 but on a basic pay of Rs. 7,000/-, whereas he was drawing a basic pay of Rs. 9,000/-. A representation preferred for interest on retiral dues and on approaching the Public Grievances Commission, Govt. of NCT of Delhi on 31.8.2004, differential amount as to calculation of retiral benefits, treating the basic pay as Rs. 9,000/- was released. Further representation preferred, when not complied with, led to filing of OA-1323/2006 before this Tribunal, wherein the following direction has been issued to respondents on 11.1.2007:
4. In view of the above position, this application is disposed of by directing the respondents to consider the prayer of the applicant for grant of interest with regard to those retiral dues on which interest is admissible as per rules keeping in view the law in this regard as well as rules governing the same and pass appropriate orders on the claim of interest within a period of two months from the date of receipt of a copy of this order. The interest found to be due and admissible be released to him also within the same period. In case decision taken is otherwise the applicant be informed by a reasoned and speaking order who shall have the liberty to seek redressal in accordance with law. No costs.
3. In compliance thereof, respondents passed an order on 16.4.2007, where interest has been paid to applicant on gratuity alone, but denied on other heads of retiral dues, taking resort to OM dated 5.10.1999 issued by Govt. of India, Department of Pension and Pensioners' Welfare, giving rise to the present OA.
4. Learned counsel of applicant has relied upon the following decisions to contend that interest on delayed payment of pension, commutation of pension and other heads of retiral dues, which are to be paid immediately after retirement and maximum three months from the date of retirement having been paid to applicant belatedly entails interest:
i) Harendra Nath v. State of Bihar and Ors. 1987 (Supp.) SCC 56;
ii) S.R. Bhanrale v. Union of India ;
iii) Vijay L. Mehrotra v. State of U.P. AIR 2000 SC 3513;
iv) Dr. Uma Agrawal v. State of U.P. ;
v) Gorakhpur University v. Shitla Prasad Nagendra ; and
vi) Bal Kishore Mody v. Arun Kumar Singh and Ors. .
It is stated that no provision for grant of interest on pension and other heads of retiral dues, not being incorporated in the CCS (Pension) Rules, 1972, but provided by the ratio decidendi declared by the Apex Court would hold the field. It is stated that the object of the OM dated 5.10.1999 ibid is to recommend payment of interest on delayed retiral dues and once it prescribes immediate payment of retiral dues, respondents having not paid retiral dues to applicant on the basic pay of Rs. 9,000/- drawing from last 10 months before the date of retirement and wrongly computed it on the basic pay of Rs. 7,000/- without any fault attributed to applicant, entails interest.
5. Having allowed interest on gratuity, there is an admission of the respondents as to the delayed payment of retiral dues, which would mutatis mutandis apply to the other heads of retiral dues like pension, commutation of pension, leave salary etc.
6. On the other hand, learned counsel of respondents has vehemently denied the contentions and stated that applicant who was holding the post of AAO was eligible for fixation of pay in the revised pay scale w.e.f. 1.1.1996, which was rightly fixed. As applicant retired on 31.8.2003 and during the last 10 months of his service was having the effect of upgraded pay scales it was not clear as to how the average emoluments as per Rule 34 of the CCS (Pension) Rules, 1972 would be computed and during the process this issue was pending clarification, applicant himself by his request on 5.12.2003 sought release of the retiral dues on minimum of the basic pay scale, is now estopped from claiming the relief, as he acquiesced to the action of the respondents thereafter.
7. Learned counsel of respondents would also state that pending clarification, it was decided to revise the basic pay of applicant to Rs. 9,000/- and difference of commutation value of pension and additional amount of gratuity was paid in July, 2004 and, as the clarification has come-forth, the fixation of pension was made with payment of other heads of the retiral dues.
8. Learned counsel would contend that earlier the Tribunal has directed respondents to consider grant of interest on retiral dues to applicant, as admissible under the rules and pass appropriate orders.
9. Defending the order passed on 16.4.2007, learned counsel of respondents would contend that as per Rule 68 of the CCS (Pension) Rules, 1972 seniority is payable after three months from the date of retirement and as such on revision of pay scale interest has been paid till it is revised with arrears thereof and as per the OM dated 5.10.1999 ibid, as there is no provision under the CCS (Pension) Rules to allow interest on delayed payment of pension etc., the same is not admissible and what is to be paramount are the directions where payment of interest is only as per the rules.
10. I have carefully considered the rival contentions of the parties and perused the material on record.
11. The Tribunal in its earlier order (supra) while disposing of the claim of applicant for grant of interest directed respondents to consider payment of retiral dues with interest as admissible as per the rules but also keeping in view the law declared in this regard. Accordingly a decision when taken, liberty was given to assail it in accordance with law.
12. It is trite that an administrative instruction issued by the Govt. though supplements the rules if rules are silent on an aspect of the matter. However, when the rules do not stipulate as to the methodology in the present case of interest on commuted value of pension, insurance and leave encashment, the law declared by the Apex Court, which holds the field, overrides any administrative instructions and in law does not allow through an administrative order to overturn the judicial decision or its effect except by a due process of law, i.e., framing of the rules, as held by the Full Bench of this Tribunal at Mumbai Bench in of this Tribunal in R. Jambukeswaran and Ors. v. Union of India and Ors. 2004 (2) ATJ CAT 1.
13. A Division Bench of the Chandigarh Bench of this Tribunal in Unreserved Employees Association v. Union of India 2005 (1) ATJ 1 ruled that a judicial pronouncement cannot be overturned by issuing an administrative order. Moreover, in Govt. of Andhra Pradesh v. G.V.S.K. Girls High School 2002 (1) SC SLJ 224, the Apex Court ruled that legislation cannot overrule a judgment, unless it removes the basis of the legal right upon which the judgment is based. The aforesaid has also been re-iterated by the Apex Court in State of Haryana v. Ram Kumar JT 2000 Suppl. 1 SC 294. In the above backdrop of the matter the Apex Court from time to time in several pronouncements held the right of interest on delayed retiral dues in Union of India v. M.S. Abdulla 2006 SCC (L&S) 1410, and interest was allowed on account of delayed payment of retiral dues, including pension and revision of the pay scale as per the recommendations of the Central Pay Commission by granting 12% interest. The Apex Court also in U.P. Raghhavendra Acharya and Ors. v. State of Karnataka and Ors. 2006 SCC (L&S) 1948, in so far as pension is concerned, held pension not to be a bounty but a deferred salary akin to the right to property.
14. In Dr. Uma Aggarwal (supra) a three-Judge Bench of the Apex Court ruled as to interest of retiral dues, including pension in the light of the decision of the Apex Court in State of Kerala v. M. Padmanabhan Nair , with the following observation:
5. We have referred in sufficient detail to the Rules and instructions which prescribe the time-schedule for the various steps to be taken in regard to the payment of pension and other retiral benefits. This we have done to remind the various governmental departments of their duties in initiating various steps at least two years in advance of the date of retirement. If the rules/instructions are followed strictly much of the litigation can be avoided and retired Government servants will not feel harassed because after all, grant of pension is not a bounty but a right of the Government servant. Government is obliged to follow the Rules mentioned in the earlier part of this order in letter and in spirit. Delay in settlement of retiral benefits is frustrating and must be avoided at all costs. Such delays are occuring even in regard to family pensions for which too there is a prescribed procedure. This is indeed unfortunate. In cases where a retired Government servant claims interest for delayed payment, the Court can certainly keep in mind the time-schedule prescribed in the rules/instructions apart from other relevant factors applicable to each case.
15. In Kerala State Road Transport Corporation v. K.O. Verghese and Ors. 2005 SCC (L&S) 138, as regards pension, made the following observations:
15. Let us, therefore, examine; as was done by this Court in D. S. Nakara v. Union of India as to what are the goals that any pension scheme seeks to subserve. A pension scheme consistent with available resources must provide that the pensioner would be able to live: (i) free from want with decency, independence and self-respect, and (ii) at a standard equivalent at the pre-retirement level. This approach may merit the criticism that if a developing country like India cannot provide an employee while rendering service a living wage, how can one be assured of it in retirement? This can be aptly illustrated by a small illustration. A man with a broken arm asked his doctor whether he will be able to play the piano after the cast is removed. When assured that he will, the patient replied, "that is funny, I could not before". It appears that in determining the minimum amount required for living decently is difficult, selecting the percentage representing the proper ratio between earnings and the retirement income is harder. But it is imperative to note that as self-sufficiency declines the need for his attendance or institutional care grows. Many are literally surviving now than the past. We owe it is to them and ourselves that they live, not merely exist. The philosophy prevailing in a given society at various stages of its development profoundly influences its social objectives. The law is one of the chief instruments whereby the social policies are implemented and pension is paid according to rules which can be said to provide social security law by which it is meant those legal mechanisms primarily concerned to ensure the provision for the individual or a cash income adequate, when taken along with the benefit in kind provided by other social services (such as free medical aid) to ensure for him a culturally acceptable minimum standard of living when the normal means of doing so failed. See Social Security Law of Prof. Harry Calvert, p. 1) 1983 Lab IC 1
16. Viewed in the light of the present day notions pension is a term applied to periodic money payments to a person who retires at a certain age considered age of disability; payments usually continue for the rest of the natural life of the recipient. The reasons underlying the grant of pension very from country to country and from scheme to scheme. But broadly stated they are : (i) as compensation to former members of the armed forces or their dependants for old age, disability, or death (usually from service causes), (ii) as old age retirement or disability benefits for civilian employees, and (iii) as social security payments for the aged, disabled or deceased citizens made in accordance with the rules governing social service programmes of the country. Pensions under the first head are of great antiquity. Under the second head they have been in force in one form or another in some countries for over a century but those coming under the third head are relatively of recent origin, though they are of the greatest magnitude. There are other views about pensions such as charity, paternalism, deferred pay, reward for service rendered, or as a means of promoting general welfare (See Encyclopaedia Britannica Vol. 17, p. 575). But these views have become otiose.
17. Pension to civil employees of the Government and the defence personnel as administered in India appear to be a compensation for service rendered in the past. However, as held in Dodge v. Board of Education 1937 (302) US 74 : 82 Law Edn. 58 a pension is closely akin to wages in that it consists of payment provided by an employer, is paid in consideration of past service and the purpose of helping the recipient meet the expenses of living. This appears to be the nearest to our approach to pension with the added qualification that it should ordinarily ensure freedom from undeserved want.
18. Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the foil of life when physical and mental powers start ebbing corresponding to aging progress and, therefore, one is required to fall back on savings. One such saving in kind is when you gave your best in the heyday of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to an employee is earned by rendering long and sufficient service and. therefore, can be said to be a deferred portion of the compensation for service rendered. In one sentence one can say that the most practical raison de'etre for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and pecuniary if there is nothing to fall back upon.
16. Recently, the Apex Court in S.K. Dua v. State of Haryana , in so far as interest on pensionary benefits is concerned, the following observations have been made:
11. Having heard the learned counsel for the parties, in our opinion, the appeal deserves to be partly allowed. It is not in dispute by and between the parties that the appellant retired from service on June 30, 1998. It is also un-disputed that at the time of retirement from service, the appellant had completed more than three decades in Government Service. Obviously, therefore, he was entitled to retiral benefits in accordance with law. True it is that certain charge-sheets/ show cause notices were issued against him and the appellant was called upon to show cause why disciplinary proceedings should not be initiated against him. It is, however, the case of the appellant that all those actions had been taken at the instance of Mr. Quraishi against whom serious allegations of mal-practices and mis-conduct had been levelled by the appellant which resulted in removal of Mr. Quraishi from the post of Secretary, Irrigation. The said Mr. Quraishi then became Principal Secretary to the Chief Minister. Immediately thereafter charge-sheets were issued to the appellant and proceedings were initiated against him. The fact remains that proceedings were finally dropped and all retiral benefits were extended to the appellant. But it also cannot be denied that those benefits were given to the appellant after four years. In the circumstances, prima facie, we are of the view that the grievance voiced by the appellant appears to be well-founded that he would be entitled to interest on such benefits. If there are Statutory Rules occupying the field, the appellant could claim payment of interest relying on such Rules. If there are Administrative Instructions, Guidelines or Norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence Statutory Rules, Administrative Instructions or Guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. The submission of the learned counsel for the appellant, that retiral benefits are not in the nature of 'bounty' is, in our opinion, well-founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in limine even without issuing notice to the respondents.
17. If one has regard to the above, though the question of non-existence of rules was considered, yet when it is observed that interest can be claimed on the basis of Articles 14, 19 and 21 of the Constitution of India being a Fundamental right, the same holds field and for want of any provision under the Pension Rules the OM of Department of Pension and Pensioners' Welfare dated 5.10.1999, which is in direct conflict with the pronouncements of the Apex Court, including the decision in Gorakhpur Univeristy (supra), where the interest was allowed to be disbursed, the instructions cannot override the judicial pronouncements. It is trite that once an arena is covered by judicial pronouncements, the administrative instructions, unless transformed into a valid legislation, cannot be allowed to infiltrate the said arena.
18. In the light of the above, though the Pension Rules do not contain any provision of interest on other heads of retiral dues, other than gratuity, yet the judicial pronouncements estoppes the right of Govt. servant if the retiral dues are delayed.
19. Non-fixation of basic pay of applicant when he was drawing Rs. 9,000/- and clarification sought by the respondents is certainly a delay caused by the Govt. without any fault attributable to applicant. Merely because applicant has written that on the minimum of the pay scale, his retiral dues may be accorded would not amount to any estoppel or acquiescence, as no estoppel functions against a fundamental right to be granted pension and other retiral dues. The applicant with a view to get whatever is readily payable to him has done this but this does not extinguish his right to claim interest. The fault to correctly re-fix the pay and thereafter pension is squarely lies on the respondents but despite applicant has submitted his papers before time could not have been anticipated and redressed his grievance. Moreover, Government cannot approbate and reprobate simultaneously. Once DCRG of applicant on account of delayed payment has been revised with interest and arrears thereof, the same holds good mutatis mutandis for other heads of retiral dues, including commutation of pension, leave encashment, insurance etc.
20. It is pertinent to note that in Vijay L. Mehrotra (supra) the Apex Court not only accorded interest on GIS but also on encashment of leave, gratuity, commuted pension etc., which would on all fours be a binding precedent and would apply to the instant case.
21. In the result, for the foregoing reasons, OA is partly allowed. Impugned order is set aside insofar as it denies interest to applicant on his delayed payment of commuted value of pension, leave encashment and UTGEIS. Respondents are directed to accord interest to applicant on all the above heads from the date of expiry of three months from the date of retiral benefits till it is actually paid @12% p.a. with arrears thereof, within a period of two months from the date of receipt of a copy of this order. No costs.