Kerala High Court
Secretary To Government vs C.Vijayan on 23 March, 2020
Author: Shaji P. Chaly
Bench: S.Manikumar, Shaji P.Chaly
'CR'
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942
WP(C).No.31811 OF 2011(B)
PETITIONER/S:
1 SECRETARY TO GOVERNMENT, HEALTH & FAMILY
WELFARE DEPARTMENT, GOVERNMENT SECRETARIAT,,
THIRUVANANTHAPURAM.
2 THE DIRECTOR OF HEALTH SERVICES
DIRECTORATE OF HEALTH SERVICES,, THIRUVANANTHAPURAM.
3 THE DISTRICT MEDICAL OFFICER OF HEALTH,
CIVIL STATION, KOZHIKODE
4 THE SUPERINTENDENT,
MEDICAL COLLEGE HOSPITAL, KOZHIKODE.
5 THE SUPERINTENDENT
GOVERNMENT WOMEN & CHILD HOSPITAL,, KOZHIKODE
BY SRI. TEK CHAND, SR. GOVERNMENT PLEADER
RESPONDENT/S:
1 C.VIJAYAN, SIVAPRIYA,
KIZHEKKECHALILPARAMBA,, MEDICAL COLLEGE P.O.,
KOZHIKODE-673 008
2 THE LOK AYUKTA
THIRUVANANTHAPURAM-695 001,
REPRESENTED BY THE REGISTRAR.
R1 BY ADV. SRI.K.D.BABU
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23.03.2020,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No. 31811 of 2011 :2:
JUDGMENT
SHAJI P. CHALY, J This writ petition is filed by the Secretary to Government, Health and Family Welfare Department and other officials challenging Exhibit P1 order passed by the Kerala Lok Ayukta in complaint No. 1137 of 2008 dated 23.12.2018, whereby the petitioners are directed to pay interest at the rate of 9% for Rs.3,22,460/- from 30.04.2017, which was allegedly due to the first respondent namely one C. Vijayan,towards gratuity, less an amount of Rs.6,755/-.
2. The paramount contention advanced by the petitioners in the writ petition is that Lok Ayukta is not vested with powers under the Kerala Lok Ayukta Act, 1999 to order interest to any amount due towards DCRG or for that matter any other service Rules. It is also submitted that the delay occurred in the release of DCRG was only normal which was taken for completing the administrative procedures prior to the release of DCRG. That apart, it is submitted that as per notes (ii) and (iii) of Rule 3, Part III W.P.(C) No. 31811 of 2011 :3: Kerala Service Rules, the Government is vested with powers to take action against the retired Government servant for recovering the death-cum retirement gratuity, if any amounts are due to the State Government. That apart, it is submitted that the Government employee has to submit a proposal for his retirement benefits prior to one year of his retirement i.e., in the case of respondent on 30.04.2006. However, the respondent submitted the proposal for retirement benefits only on 18.10.2006 i.e., after a lapse of 6 months which also delayed the release of non-liability certificate and the consequent payment of DCRG to the first respondent.
3. On the other hand, the first respondent has filed a detailed counter affidavit and has contended that Lok Ayukta is vested with ample powers to direct interest to be paid and therefore, the petitioners have not made out any case for interference exercising discretionary jurisdiction conferred on this Court under Article 226 of the Constitution of India.
4. We have heard learned Senior Government Pleader, Shri. Tek Chand appearing for the petitioners and W.P.(C) No. 31811 of 2011 :4: the counsel appearing for the first respondent, and perused the pleadings and documents on record.
5. In fact, a review petition was filed by the petitioners against the order dated 23.12.2008, however, the same was also dismissed. The prime contention advanced by the learned Government Pleader is that Lok Ayukta is not vested with powers to order interest to the amount due, which argument is apparently based on the judgment rendered by a Division Bench of this Court in State of Kerala v. Bernad [2002 (3) KLT 254], wherein this Court held that as per the provisions of the Lok Ayukta Act, 1999, there is no power vested with the said authority to grant interest. It was further held that the powers conferred under Section 34 of the Code of Civil Procedure cannot be invoked for granting interest, since Lok Ayukta is not a civil court in contemplation of law. So far as the said contention is concerned, we are of the view that going by the scheme of Act, 1999 and the proposition of law laid down by the Division Bench of this Court in Bernad (supra), Lok Ayukta is not vested with powers to order interest. However, this Court in Bernard itself has held that the Lok W.P.(C) No. 31811 of 2011 :5: Ayukta is vested with powers to order compensation, while on adjudication it is found that there is delay and laches on the part of the officials in releasing the pensionary benefits. So also, learned Senior Government Pleader contended that by virtue of notes 2 and 3 to Rule 3 of Part III KSR, Government is vested with powers to initiate action to recover the amounts, if any, due to the Government from a pensioner and invited our attention to Rule 3 and its allied provisions, which read thus:
"3. The Government reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period, and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re- employment after retirement:
Provided that --
a) such departmental proceedings, if instituted while the employee was in service, whether before his retirement or during his re-
employment, shall after the final retirement of the employee, be deemed to be a proceeding under this rule and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service;
b) such departmental proceeding, if not instituted while the W.P.(C) No. 31811 of 2011 :6: employee was in service, whether before his retirement or during his re-employment,--
(i)shall not be instituted save with the sanction of the Government;
(ii) shall not be in respect of any event which took place more than four years before such institution; and
(iii) shall be conducted by such authority and in such place as the Government may direct and in accordance with the procedure applicable to departmental proceedings in which an order of dismissal from service could be made in relation to the employee during his service;
c) no such judicial proceedings, if not instituted while the employee was in service whether before his retirement or during his re- employment, shall be instituted, save with the sanction of the Government, in respect of a cause of action which arose or an event which took place more than four years before such institution; and
d) the Public Service Commission shall be consulted before final orders are passed.
Explanation: For the purpose of this rule --
a) a departmental proceeding shall be deemed to be instituted on the date on which the statement of charges is issued to the employee or pensioner or if the employee has been placed under suspension from an earlier date, on such date; and
b) a judicial proceeding shall be deemed to be instituted -
(i) in the case of a criminal proceeding, on the date on which the complaint or report of police officer on which the Magistrate takes cognizance is made; and .
(ii) in the case of a civil proceeding, on the date of presentation of the plaint in the Court.
W.P.(C) No. 31811 of 2011 :7:Note 1.- As soon as proceedings of the nature referred to in this rule are instituted the authority which institutes such proceedings should without delay intimate the fact to the Audit Officer. The amount of pension withheld under this rule should not ordinarily exceed one- third of the pension originally sanctioned. In fixing the amount of pension to be so withheld, regard should be had to the consideration whether the amount of the pension left to the pensioner in any case would be adequate for his maintenance.
Note 2.- The word 'pension' used in this rule does not death-cum- retirement gratuity. Liabilities fixed against an employee or pensioner can be recovered from the death- cum- retirement gratuity payable to him without the departmental/judicial proceedings referred to in this rule, but after giving the employee or pensioner concerned a reasonable opportunity to explain. Note 3.- The liabilities of an employee should be quantified either before or after retirement and intimated to him before retirement if possible or after retirement within a period of three years on becoming pensioner. The liabilities of a pensioner should be quantified and intimated to him."
Ruling No.1 Amount due from a Government employee or pensioner to Government Companies, Local Bodies, Co-operative Societies etc., though not treated as Government dues may be recovered from the death-cum-retirement gratuity payable to him with his consent in writing.
Ruling No.2 According to proviso (a) under this rule, departmental proceedings, if instituted while the employee was in service, W.P.(C) No. 31811 of 2011 :8: whether before his retirement or during his re-employment, shall after the final retirement of the employee be deemed to be a proceeding under this rule and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service. A doubt was raised as to whether in the case of an employee whose case falls within the purview of the proviso and proceedings against whom were instituted by an authority subordinate to Government, order for withdrawal/withholding of pension can be passed by the subordinate authority on the conclusion of the proceedings. The function of the Disciplinary Authority is only to reach a finding on the charge and to submit a report recording its findings to the Government. Government will then consider the findings and take a final decision. In case Government decide to take further action under Rule 3 the Government will serve the person concerned with a show cause notice specifying the action proposed to be taken under this rule and the person concerned will be required to submit his reply to the show-cause notice within such time as may be specified by the Government. The Government will consider the reply in consultation with the Public Service Commission and pass necessary orders in the name of the Governor.
The above procedure in regard to the issue of show-cause notice will also apply to a case where the Governor functions as the Disciplinary Authority.
[G.O.(P) 523/67/Fin. dated 5th December, 1967] Ruling No.3 The Note 2 above does not mean that the employee's or pensioner's consent should be obtained for recovering the liabilities W.P.(C) No. 31811 of 2011 :9: from the death-cum-retirement gratuity payable to him. What is contemplated is only a communication of such liabilities to him so as to enable him to submit his explanation before the recovery is effected. It should be specifically stated in the communication that if no reply is received within 30 days of its issue, it will be presumed that the employee or pensioner has no explanation to offer and that further action will be taken on that basis."
6. Therefore, on a reading of Rule 3, it is quite clear and evident that the Government reserves its right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period, and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re- employment after retirement, subject to the conditions contemplated thereunder. Therefore, it is clear that Rule 3 contemplates the proceedings to be initiated against a pensioner for withdrawing the pension or part of it. However, note 2 deals with the liability of a pensioner and its recovery from the DCRG. It is clear from note 2 that W.P.(C) No. 31811 of 2011 : 10 : the word 'pension' used in Rule 3 does not include DCRG. It further emphasizes that the liabilities fixed against an employee or pensioner can be recovered from the DCRG payable to an employee without any departmental or judicial proceedings referred to in Rule 3, but after giving the employee or pensioner concerned a reasonable opportunity to explain. Ruling No.3 quoted above makes it further clear that note 2 does not mean that the employee's or pensioner's consent should be obtained for recovering the liabilities from the DCRG payable to him and for that purpose only a communication of such liabilities to him is issued in that regard and secured his explanation before recovery is effected. This was the question exactly considered by a Division Bench of this Court in State of Kerala v. Muraleedharan Nair [2015(3) KLT 755]. After discussing the provisions of Rule 3, it was held in paragraphs 19 to 22 thus:
"19. Rule 3 apparently relates to right of the Government to withdraw or withhold pension and the right of ordering recovery from pension, the whole or part of any pecuniary loss caused to the Government, if in a departmental or judicial proceedings, he is found guilty of grave misconduct or negligence during the period W.P.(C) No. 31811 of 2011 : 11 : of his service. Explanation (a) indicates that the departmental proceeding is deemed to be instituted on the date on which statement of charges is issued to the employee or when he is placed under suspension on such date. Note 2 of Rule 3 indicates that pension under the Rule does not include DCRG and further states that liabilities fixed can be recovered from DCRG without the departmental/judicial proceedings referred to in the Rule (Rule 3), but after giving the employee or pensioner a reasonable opportunity to explain. Note 3 of Rule 3 further indicates that the liabilities of an employee should be quantified either before or after retirement and if it is after retirement, within a period of three years on becoming pensioner. Note 2 and Note 3 were added as per SRO dated 31/3/1986.
20. Rule 3 only suggests the right of Government to recover any amount from the pension which does not include DCRG. Note 2 gives an added power to the Government to recover any amount from DCRG even without departmental/judicial proceedings. But in such an event, the employee/pensioner should be given a reasonable opportunity to explain. Therefore, as per Note 2, recovery can be made from DCRG even if no departmental or judicial proceedings has been taken against the employee/ pensioner. However, such recovery could be made only after giving the employee or pensioner a reasonable opportunity to explain. Note 3 is apparently a continuation of Note 2 which indicates that the liabilities of the employee should be quantified before or after retirement, if possible, and, if it is after retirement, within a period of three years on becoming pensioner. Therefore, fixation of liability in terms of Note 3 is with reference to Note 2 where specific provision is made W.P.(C) No. 31811 of 2011 : 12 : to recover the liability, even in the absence of departmental or judicial proceedings.
21. Rule 3A(a) takes care of a different eventuality where any departmental or judicial proceeding is instituted in terms of Rule 3 and continues against an employee who has retired. The rule permits grant of provisional pension from the date of his retirement to the date on which final orders are passed in such proceedings. Rule further indicates that during the pendency of any such proceedings, no gratuity or DCRG shall be paid to him until the conclusion of such proceedings.
22. A bare reading of the aforesaid statutory provisions clearly indicates that it operates in two different fields. Rule 3 is clearly concerned with recovery of amount from pension after departmental or judicial proceedings, whereas Rule 3A contemplates a situation of payment of provisional pension during pendency of departmental or judicial proceedings against a pensioner. Further, Note 2 of Rule 3 permits the employer to recover any amount from the DCRG of an employee/pensioner even in the absence of a departmental or judicial proceeding, after giving the employee or pensioner a reasonable opportunity to explain, whereas Rule 3A takes care of a situation where a departmental/judicial proceeding is pending against the pensioner, during which time DCRG is not payable. This apparent difference in the statutory provision though taken note of by the learned Single Judge in Aravindaksha Panicker's case (supra), proceeded on the basis that if the liability is not quantified within a period of three years in terms of Note 3 to Rule 3, the DCRG payable to the pensioner could not be withheld even if departmental or judicial W.P.(C) No. 31811 of 2011 : 13 : proceeding is pending. However, it is stated that the Government can quantify the liability even after a period of three years by taking recourse to proceedings before a Civil Court. It is found that beyond the period of three years from the date of retirement, DCRG payable to the pensioner becomes inaccessible to the Government for the purpose of recovery or adjustment. Hence, it was found that the last portion of Rule 3A (a) will have to be suitably read down and restricted to cases where the Government is in a position to exercise the right of adjustment of liability of a Government servant from the DCRG payable to him. It is clarified that the interdiction against payment of DCRG as contemplated by Rule 3A(a) will apply only for a period of three years from the date on which the Government servant becomes a pensioner as contemplated under Note 3 of Rule 3. This finding of the learned Single Judge with due respect cannot be accepted as good law on account of the discussion that follows:"
7. But, at the same time, the issue with respect to the delayed payment of DCRG, taking into account the provisions of Rule 3 read with Ruling No.5 of Rule 116 of the Kerala Service Rules, was considered by a Division Bench of this Court in Sugathan v. Cochin Devaswom Board [2005 (1) KLT 46]. Ruling No.5 of Rule 116 read thus:
"5. In all cases where the liabilities could not be assessed and fixed before retirement of the Government employees, efforts W.P.(C) No. 31811 of 2011 : 14 : should be made to assess and adjust the recoverable dues within a period of one year from the date of retirement of the Government employee concerned. If in any case, the liability could not be assessed and adjusted within one year, the amount withheld from the death-cum-retirement gratuity or the surety bond or cash deposit accepted under paragraph (1) or (3) above will be released. Disciplinary action shall be taken against the employees responsible for the failure to assess and adjust the liabilities within the prescribed period."
8. Paragraphs 6 and 7 of Sugathan (supra) are relevant to the context, which read thus:
"6. The question therefore to be considered is whether the Board has got power to withhold portion of the death-cum- retirement gratuity without initiating any departmental proceedings before the date of retirement. Rule 3 deals with withholding or withdrawing a pension. The word "pension" has been used in Rule 3 so as to exclude death-cum-retirement gratuity. All the same, Note 2 however says, liability fixed against an employee or pensioner can be recovered from the death-cum-retirement gratuity payable to him without departmental/disciplinary proceedings referred to in Rule 3, but after giving the employee or pensioner concerned a reasonable opportunity to explain. Departmental/disciplinary proceeding mentioned in Note 2 is departmental/ disciplinary proceeding referred to in Rule 3. Departmental proceeding could be initiated under Rule 3.(b) even after retirement but only with the sanction of the Government, in this case the Devaswom Board. Further W.P.(C) No. 31811 of 2011 : 15 : condition to be satisfied is that the departmental proceeding shall not be in respect of any event which took place more than four years before such institution. Note 2 used the expression "pensioner" which shows that the departmental proceeding can be initiated against pensioner also under Rule 3(b). Note 2 also says that death-cum-retirement gratuity can also be recovered from the liability fixed against a pensioner, but only after giving the pensioner a reasonable opportunity to explain. Note 3 further stipulates that liabilities of an employee should be quantified either before or after retirement and intimated to him before retirement if possible or after retirement within a period of three years on becoming pensioner. The liabilities of a pensioner should be quantified and intimated to him.
7. We may point out so far as this case is concerned, the liability is yet to be fixed. Therefore Note 2 to Rule 3 would not apply. So also Rule 3(b). The provision that applies to this case is Rule 116(5), which says that where liabilities could not be assessed and fixed before retirement, efforts should be made to assess and adjust the recoverable dues within a period of one year from the date of retirement. On failure, the amount withheld from the death-cum-retirement gratuity will be released. Liability can also be fixed against pensioner and such liability can be recovered from the death-cum- retirement gratuity payable to him without departmental/judicial proceeding but only after giving the employee (pensioner) concerned a reasonable opportunity to explain. Therefore, for withholding or withdrawing death-cum- retirement gratuity no departmental proceeding as contemplated under Rule 3(b) is necessary. Liability can also be fixed against W.P.(C) No. 31811 of 2011 : 16 : the petitioner and amount can be recovered from the death-cum retirement gratuity only subject to the condition that the person concerned should be given a reasonable opportunity to explain. The liability against the pensioner can also be quantified after retirement, but not beyond three years after becoming a pensioner. If the liability could not be assessed and fixed before retirement, it should be assessed and adjusted from the recoverable dues within a period of one year from the date of retirement. If the liability could not assessed and adjusted within one year, the death- cum-retirement gratuity has to be released. We may point out, so far as this case is concerned the employee retired from service on 31.1.2003. The liability could not be assessed and adjusted from the death-cum-retirement gratuity within one year from the date of retirement. Hence the petitioner is entitled to get the entire amount of death-cum-retirement gratuity. The provision also enables the Government to take disciplinary action against the employee who is responsible for the failure to assess and adjust the liability within the prescribed period of one year. On failure to comply with the provision of Sub-rule (5) of Rule 116, statute enables the authority to take action against the pensioner under Rule 3 of Part III to make up the loss by withdrawing, upholding or effecting recoveries from the pension sanctioned. If action under Rule 3 is not possible within the limit prescribed in Rule 3 Part III or due to any other reason, the retired employee can be proceeded against in a Civil Court for the recovery of pecuniary loss caused to Government and in this case the Devaswom Board. Cochin Devaswom Board could not assess and adjust the liability towards the recoverable W.P.(C) No. 31811 of 2011 : 17 : dues within one year from the date of retirement of the petitioner. Hence the Board is bound to release the balance amount. The balance amount due would be paid to the petitioner within a period of two weeks from the date of receipt of a copy of this judgment. The Board is however free to assess the liability and recover the same in accordance with law."
9. Therefore, on an appreciation of the provisions of law discussed above and the proposition of law laid down by the Division Bench of this court in the judgments discussed above, we are of the considered opinion that the recovery could be effected against a pensioner from the death-cum-retirement gratuity, if any amounts are due to the pensioner, irrespective of the expiry of the period on retirement. However, Ruling No.5 of Rule 116 of the KSR makes it clear that if the liabilities could not be assessed and fixed before the retirement of the Government employees, efforts should be made to assess and adjust the recoverable dues within a period of one year from the date of retirement of the Government employee concerned. Therefore, there is a clear duty cast upon the Government to pay the amount towards DCRG, if the liability is not fixed within one year from the date of retirement of the W.P.(C) No. 31811 of 2011 : 18 : Government employee. It is true, if there is any amount due towards the Government, it could be recovered by resorting to the procedure prescribed under note 2 to Rule 3 Part III KSR. Therefore, on a harmonious reading of the provisions discussed above, it is explicit that the amount due towards the death-cum-retirement gratuity ought to have been paid to the first respondent since the liability was not assessed and fixed either before the retirement or within a period of one year from the date of retirement of the first respondent. It is also clear from Bernard (supra) that if it is found that there is negligence on the part of the Government to pay the amount, compensation can be imposed. That apart, we find that the amount due from the petitioner was only Rs.6,755/-. However, the entire gratuity specified above was detained by the Government which was irrational, unreasonable and arbitrary.
10. On appreciation of the pleadings, we find that the petitioner has retired from service on 30.04.2007. However, the liability was not fixed either before or after the retirement and finally, the order was passed by the Lok Ayukta on 23.12.2008 and DCRG was paid only on W.P.(C) No. 31811 of 2011 : 19 : 12.08.2009. Therefore, it is categoric and clear that there was negligence and lapses on the part of the Government in releasing DCRG in contemplation of Ruling No. 5 of Rule 116 of Part III of KSR. Therefore, we are of the considered opinion that the interest granted by the Lok Ayukta is to be modified as amount fixed towards compensation for the delayed payment of DCRG to the first respondent.
Accordingly, this writ petition is disposed of modifying the order of the Lok Ayukta in respect of the interest awarded at the rate of 9% as compensation towards the negligence occurred on the part of the Government in releasing the DCRG to the first respondent.
sd/-
S. MANIKUMAR, CHIEF JUSTICE.
sd/-
SHAJI P. CHALY, JUDGE.
Rv W.P.(C) No. 31811 of 2011 : 20 : APPENDIX PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE ORDER DATED 23-12-2008 OF THE LOK AYUKTA IN COMPLAINT NO.
1137/2008.
EXHIBIT P2 TRUE COPY OF THE ORDER DATED 22-12-2010 OF LOK AYUKTA IN REVIEW PETITION (IA NO 197/2009) EXHIBIT P3 TRUE COPY OF THE ORDER NO AE3/88318 106/DHS DATED 20-08-2007.
EXHIBIT P4 TRUE COPY OF THE LETTER NO DATED 17-11- 2008.
EXHIBIT P5 TRUE COPY OF THE LETTER NO.B9/2024/07 DATED: 18-11-2008.
EXHIBIT P6 TRUE COPY OF THE LR. NO B9/2024 /07 DATED 15-12-2008.
EXHIBIT P7 TRUE COPY OF THE REPORT FORWARDED TO THE SPECIAL ATTORNEY, LOK AYUKTA NO, AE3/88318/06 DATED 23-01-2009.
EXHIBIT P8 TRUE COPY OF THE LETTER NO
AE3/88318/06/DHS DATED 12-06-2009.
RESPONDENTS' EXHIBITS:
EXHIBIT R1(a): TRUE COPY OF THE ORDER DATED 25.06.2009 OF THE LOK AYUKTA.
EXHIBIT R1(b): TRUE COPY OF THE SUBMISSION PLACED BEFORE THE LOK AYUKTA DATED 29.10.2009.
EXHIBIT R1(c): TRUE COPY OF THE G.O(P) 185/02/FIN. DATED 27.03.2002.
/True Copy/ P S to Judge.
rv W.P.(C) No. 31811 of 2011 : 21 :