Kerala High Court
The Director Of Collegiate Education vs Kerala Lok Ayukta on 24 June, 2022
Author: S. Manikumar
Bench: S.Manikumar, Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
FRIDAY, THE 24TH DAY OF JUNE 2022 / 3RD ASHADHA, 1944
WP(C) NO. 17812 OF 2020
PETITIONER/S:
1 THE DIRECTOR OF COLLEGIATE EDUCATION,
VIKAS BHAVAN, THIRUVANANTHAPURAM-695033.
2 THE DEPUTY DIRECTOR OF COLLEGIATE EDUCATION,
ST. THOMAS SHOPPING COMPLEX, COURT JUNCTION,
KOLLAM-691001.
3 THE PRINCIPAL SECRETARY,
HIGHER EDUCATION DEPARTMENT, GOVERNMENT
SECRETARIAT, THIRUVANANTHAPURAM-695001.
BY SRI. K. P. HARISH, SRI. GOVERNMENT PLEADER
RESPONDENT/S:
1 KERALA LOK AYUKTA,
REPRESENTED BY ITS DEPUTY REGISTRAR, OFFICE OF
THE KERALA LOK AYUKTA LEGISLATURE COMPLEX, VIKAS
BHAVAN P.O., THIRUVANANTHAPURAM-695033.
2 DR. GLORY MATHEW,
ASSOCIATE PROFESSOR IN CHEMISTRY (RTD.)
VAYALPURA, CMC LANE-58, NALANCHIRA P.O.,
THIRUVANANTHAPURAM-695015.
3 THE MANAGER,
CHRISTIAN COLLEGE, KATTAKADA, TRIVANDRUM-695572.
4 THE PRINCIPAL,
CHRISTIAN COLLEGE, KATTAKADA, TRIVANDRUM-695572.
BY ADVS.
SRI.P.A.AHAMMED
SRI.THOUFEEK AHAMED
SRI.M.ABDUL SAMAD
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 24.06.2022, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W. P. (C) No. 17812 of 2020
-2-
JUDGMENT
S. Manikumar, C. J.
Alleging that an amount of Rs. 63,498/- was recovered from the DCRG, on the basis of the Liability Certificate dated 13.05.2015 issued by the Deputy Director of Collegiate Education, Kollam, the 2 nd petitioner, Dr. Glory Mathew, the 2 nd respondent preferred complaint No. 95 of 2017 before the Kerala Lok Ayukta, the 1 st respondent herein, for the following reliefs:-
"1) The 3rd and 4th respondents may be directed to review the liability fixed on the complainant and refund the recovered amount of Rs 63498/- to her with 18% interest from the date of her retirement;
2) The 1st and 2nd respondent may be directed to take urgent steps to submit the surrender bill in the office of the 4 th respondent for endorsement and also the pension revision proposal;
3) The 4th respondent may be directed to counter sign the surrender bill immediately on receipt of the same or at any rate, not later than one month.
4) The 4th respondent may be directed to submit the Pay fixation proposal in the office of the 4th respondent without W. P. (C) No. 17812 of 2020 -3- further delay."
2. After considering the pleadings and material on record, Kerala Lok Ayukta, by order dated 01.10.2019 in complaint No. 95 of 2017, passed the following order:-
"6. We have heard Dr. M. Abdul Samad learned counsel for the complainant and the learned Special Government Pleader, who appeared for respondents 3, 4 and 5. We have also considered the materials placed on record. The only question that arises for consideration is whether the fourth respondent was justified in fixing the liability on the complainant through Ext. P2 liability certificate. There is no case for the respondents that the complainant misused or misappropriated any fund. It is also not disputed that the accumulated funds were utilized for the welfare of the college and the students. The only lapse on the part of the complainant was in utilizing the accumulated fund without obtaining the prior sanction of the Deputy Director of Collegiate Education. Respondents have no case that the Government suffered any loss on account of the utilization of the accumulated fund during the subsequent years.
7. It is not disputed that the provisions contained in the Kerala Financial Code Volume I and particularly Article 303 B are applicable to the Employees of the Private Colleges. Article 303 B(i) of the Kerala Financial Code Volume I reads:
"(i) It should be carefully noted that personal monetary liability would arise only when pecuniary W. P. (C) No. 17812 of 2020 -4- loss is sustained by Government. Irregularities in the maintenance of accounts or in the sanction of expenditure would not involve monetary liability as long as no loss to Government is caused. Distinction should be drawn between objections involving loss-to Government and other objections in an audit report.
The latter will not constitute monetary liability and will call for other forms of disciplinary action wherever justified."
8. In the Circular No.Pen A2/51270/96/Coll.Edn. dated 23.02.1999 issued by the Director of Collegiate Education, it is stated thus in para 4.2:
"4.2 In several cases, it is seen that each and every amount referred to in audit reports is treated as liability of the officer concerned, it is not correct. It may be noted that irregularities in maintenance of accounts or in the sanction of expenditure would not involve monetary liability as long as no loss is caused to Government."
9. As already mentioned, the only lapse on the part of the complainant was in utilizing the accumulated fund without obtaining the prior sanction of the Deputy Director of Collegiate Education. The funds were used only for the welfare of the college and students. There is no allegation that the complainant misappropriated or misused any part of the funds. The Government have not suffered any pecuniary loss on account of the utilization of the accumulated funds by the complainant for the college and the students. Therefore, in the light of Article 303 B of the Kerala Financial Code Volume I and Circular No.Pen. A2/51270/96/Coll. Edn. dated 23.02 1999 issued by the Director of Collegiate Education, there was no justification for issuing Ext. P2 Liability Certificate and recovering the amount of W. P. (C) No. 17812 of 2020 -5- Rs.63,498/- from the DCRG of the complainant. Injustice was done and hardship was caused to the complainant and it is liable to be redressed. We declare that the complainant is entitled to be paid the recovered amount of Rs.63,498/- with 8% interest per annum for the period from the date of recovery till the date of payment. We recommend to the competent authority, ie., The Principal Higher Education Department, Government Secretariat, Thiruvananthapuram to ensure that the recovered amount of Rs.63,498/- is paid to the complainant along with interest @ 8% per annum within a period of two months from the date of receipt of a copy of this order."
3. Being aggrieved, respondents 3 to 5 in complaint No. 95 of 2017 before the Kerala Lok Ayukta have preferred the instant writ petition for the following reliefs:-
"i) issue a writ of certiorari or any other appropriate writ, direction or order to call for records and to set aside Exhibit P3 order passed by the 1st respondent;
ii) declare that Exhibit P1 complaint filed by the 2 nd respondent before the Lok Ayukta is not maintainable in accordance with the provisions of Kerala Lok Ayukta Act."
4. Short facts leading to the filing of the writ petition are as hereunder:-
W. P. (C) No. 17812 of 2020 -6-According to the petitioners, they are aggrieved by the positive direction issued by the Kerala Lok Ayukta, the 1st respondent, on a complaint filed by Dr. Glory Mathew, the 2 nd respondent, directing payment of DCRG, in spite of the fact that there is no finding of maladministration on the part of the petitioners, and there was no jurisdiction to decide the legality or otherwise of recovery of DCRG from the 2nd respondent, which is against the principles laid by this Court in various judgments.
5. Heard Mr. K. P. Harish, learned Senior Government Pleader, who made submissions on the grounds raised and perused the material on record.
6. The Deputy Director of Collegiate Education, Kollam, the 2 nd petitioner, has filed a statement in complaint No. 95 of 2017 before the Kerala Lok Ayukta, wherein it is stated that based on the audit report for the period of the complainant's tenure as Principal, the Deputy Director of Collegiate Education, Kollam, the 2 nd petitioner, fixed the liability of Rs. 63,498/-, and ordered to recover the same from the DCRG of the complainant, as per the liability certificate No. E4/7373/14 dated 13.05.2015.
W. P. (C) No. 17812 of 2020 -7-7. It is also stated therein that the complainant later submitted a representation before the Director of Collegiate Education, the 1 st petitioner, on 07.07.2015, requesting to regularize the expenditure. The same was made final by the 1st petitioner as per letter No. 3/31186/14 dated 07.10.2015, without giving notice to the complainant.
8. From the material on record, it could be deduced that there is no misuse of fund. The sole allegation is that the complainant has utilized the unused fund, without securing prior sanction. There is also no allegation of liability to the Government.
9. Even though there is an audit report indicating lapses on the part of the respondent in not obtaining prior sanction for utilization of the funds, still, she is entitled to an opportunity to defend the said allegation.
10. It is also to be noted that either before or after the retirement of the respondent, within a period provided therefrom, under the pension rules, no disciplinary proceedings have been initiated fixing liability .
11. On the facts and circumstances of the case, let us consider a W. P. (C) No. 17812 of 2020 -8- few decisions of the Hon'ble Supreme Court:-
(I) In State of Kerala and others v. M. Padmanabhan Nair [(1985) 1 SCC 429], the Hon'ble Supreme Court held as under:
"Prompt payment of retirement benefits is the duty of the Government and any failure in that direction will entail the Government liable to pay penal interest to the Government Servant. It was further held that gratuity should be paid on the date of retirement or on the following day and pension should be paid at the expiry of the following month. In that case, the Supreme Court, finding that there was delay in disbursement of the terminal benefits, directed the respondents therein to disburse the pensionary benefits with interest at the rate of 6% per annum.
Applying the ratio laid down by the Honourable Supreme Court in the above cases to the facts of this case, there is a delay of around 16 years in settling the terminal benefits payable to the petitioner. Such a delay is not attributable on the part of the respondents. It is contended by the respondents that the delay has occurred due to an audit objection. Such a contention on the part of the respondents cannot be countenanced. This Court is of the view that the delay on the part of the respondents in settling the withheld portion of the DCRG and pension payable to the petitioner for about 16 years purportedly due to audit objection cannot be accepted. Further, Rule 45A of the Tamil Nadu Pension Rules as amended from 20th February 1995 provides for granting interest at the rate of 12% per annum if the terminal benefits are delayed. Therefore, I am of the view that the petitioner is entitled W. P. (C) No. 17812 of 2020 -9- for payment of interest for the belated disbursement of the terminal benefits at the rate of 12% per annum.
In the result, the writ petition is allowed and a Mandamus is issued to the respondents directing them to pay interest at the rate of 12% per annum for the belated disbursement of 25% of DCRG and Pension payable to the petitioner from the date of his retirement till 17-11-2014, the date on which the amount thereof have been disbursed to the petitioner. No costs. Having regard to the fact that the petitioner is aged 75 years, the respondents are directed to pay the interest as indicated above to the petitioner within a period of two months from me date of receipt of a copy of this order."
(II) In Dr. Uma Agarwal v. State of U.P. and Another [(1999) 3 SCC 438], the Hon'ble Apex Court observed that, when there is delay in disbursement of pensionary benefits, the department is liable to pay interest thereof. In Para Nos. 5 to 7 of the said case, it was held as under:
"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 W. P. (C) No. 17812 of 2020 -10- 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. The 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 occurring 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.
6. The case before us is a clear example of departmental delay which is not excusable. The petitioner retired on 30-4-1993 and it was only after 12-2-1996 when an interim order was passed in this writ petition that the respondents woke up and started work by sending a special messenger to various places where the petitioner had worked. Such an exercise should have started at least in 1991, two years before retirement. The amounts due to the petitioner were computed and the payments were made only during 1997-98. The petitioner was a cancer patient and was indeed put to great hardship. Even assuming that some letters were sent to the petitioner after her retirement on 30-3-1993 seeking information from her, an allegation which is denied by the petitioner, that cannot be an excuse for the lethargy of the Department inasmuch as the Rules and instructions require these actions to be taken long before retirement. The exercise which W. P. (C) No. 17812 of 2020 -11- was to be completed long before retirement was in fact started long after the petitioner's retirement.
7. Therefore, this is a fit case for awarding interest to the petitioner. We do not think that for the purpose of the computation of interest, the matter should go back. Instead, on the facts of this case, we quantify the interest payable at Rs 1 lakh and direct that the same shall be paid to the petitioner within two months from today."
(III) In Vijay L. Mehrotra v. State of U.P. and others [(2000) 2 S.L.R. 686], the Hon'ble Apex Court held under:
"The appellant therein retired from service on 31st August, 1997. The retiral benefits, such as, GPF, GIS, Encashment of Leave, Arrears of pay, Gratuity and Commuted value of Pension, were paid long after she retired. Observing that in case of an employee, retiring after having rendered service, it is expected that all the payments of the retiral benefits should be paid, on the date of retirement or soon thereafter, if for some unforeseen circumstances, the payments could not be made on the date of retirement, the Hon'ble Supreme Court directed the respondent therein to pay to the retired employee, interest at me rate of 18% on the belated payment from the date of retirement, till the actual payment was made."
(IV) In Gorakhpur University and others v. Dr. Shitla Prasad Nagendra and others [(2001) 6 SCC 591], the Hon'ble Supreme W. P. (C) No. 17812 of 2020 -12- Court held as under:
"The retiral benefits of the respondent therein were withhold to adjust certain disputed amounts from a Professor for overstaying in the University, during his appointment as Vice- chancellor in another University. After completion of his tenure as Vice-chancellor, he assumed his original post, i.e., as Professor in the University, in which, he had worked earlier and continued to service till 11-1-90, the date, on which he attained the age of superannuation. During his overstay, nominal rent was accepted from him and no legal action was taken to recover possession of the quarters. No notice was issued, fixing his liability for payment of penal rent. When disbursement of retiral benefits, including fixation and disbursement of pension, was delayed, a writ petition was filed before the Allahabad High Court and that the same was opposed by Gorakhpur University, the appellant before the Apex Court. It was the contention of the appellant that the professor had not vacated the quarters held by him, when he retired and within the permissible extended period and therefore, he was liable for payment of penal rent in respect of such accommodation and as a matter of fact, the Finance Controller, Officer of Directorate of Higher Education, U.P., who examined his pension papers, ordered on the recommendation of the university-authorities, adjustment of ' 3,20,638.04 from the amounts due, towards the retiral benefits. Applying the principles of Some Prakash v. Union of India reported in [1981 (1) LLJ 79 (SC)] and R. Kapur v. Director of Inspector (Painting and Publication) Income Tax and another reported in [(1995) I LLJ W. P. (C) No. 17812 of 2020 -13- 884 (SC)], the High Court overruled the objections of the University, holding that the pension and other retiral benefits cannot be withheld or adjusted or appropriated for the satisfaction of any other dues outstanding against the retired employee. It was further held that the action of the university authorities was illegal and while allowing the claim of the first respondent-Professor, a direction was also issued to pay the entire pension and Provident Fund etc., due to him, with penal interest @ 18% within two months from the date of the order.
While testing the correctness of the order, the Hon'ble Supreme Court, at Paragraph 5, held as follows:
"5. We have carefully considered the submissions on behalf of the respective parties before us. The earlier decision pertaining to this very university reported in S.N. Mathur is that of a Division Bench rendered after considering the principles laid down and also placing reliance upon the decisions of this R. Kapur which, in turn, relied upon earlier decisions in State of Kerala v. M. Padmanabhan Nair and Som Prakash. This Court has been repeatedly emphasizing the position that pension and gratuity are no longer matters of any bounty to be distributed by Government but are valuable rights acquired and property in their hands and any delay in settlement and disbursement whereof should be viewed seriously and dealt with severely by imposing penalty in the form of payment of interest. Withholding of quarters allotted, while in service, even after retirement without vacating the same has been viewed to be not a valid ground to withhold the disbursement of the terminal benefits. Such is the position with reference to amounts due towards Provident fund, which is rendered immune from attachment and deduction or adjustment as against any other dues from the employee. In the context of this, mere reliance on behalf of the appellant W. P. (C) No. 17812 of 2020 -14- upon yet another decision of a different Division Bench of the very High Court rendered without taking note of any of the earlier decisions of this Court but merely proceeding to decide the issue upon equitable considerations of balancing conflicting claims of respective parties before it does not improve the case of the appellant any further. Reliance placed for the appellant university on the decision reported in Wazir Chand does not also sound well on the facts and circumstances of this case. It is not clear from the facts relating to the said decision as to whether the person concerned was allowed to remain in occupation on receipt of the normal rent as in the present case. As noticed earlier, the case of the contesting respondent in this case is that the university authorities regularly accepted the rent at normal rates every month from the petitioner till the quarters was vacated and that in spite of request made for the allotment of the said quarters in favour of the son of the respondent, who is in the service of the university, no decision seems to have been taken and communicated though it is now claimed in the Court proceedings that he is not entitled to this type of accommodation. Further, the facts disclosed such as the resolutions of the university resolving to waive penal rent from all Teachers as well as that of the Executive Council dated 18- 7-1994 and the actual such waiver made in the case of several others cannot be easily ignored. The lethargy shown by the authorities in not taking any action according to law to enforce their right to recover possession of the quarters from the respondents or fix liability or determine the so-called penal rent after giving prior show-cause notice or any opportunity to him before ever even proceeding to recover the same from the respondents renders the claims for penal rent not only a seriously disputed or contested claim but the university cannot be allowed to recover summarily the alleged dues according to its whims in a vindictive manner by adopting different and discriminatory standards. The facts disclosed also show that it is almost one year after the vacation of the quarter and that too on the basis of W. P. (C) No. 17812 of 2020 -15- certain subsequent orders increasing the rates of penal rent, the applicability of which to the respondent itself was again seriously disputed and to some extent justifiably too, the appellant cannot be held to be entitled to recover by way of adjustment such disputed sums or claims against the pension, gratuity and provident fund amounts indisputably due and unquestionably payable to the respondent before us. The claims of the university cannot be said to be in respect of an admitted or conceded claim or sum due. Therefore, we are of the view that no infirmity or illegality could be said to be vitiated the order, under challenge in this appeal, to call for our interference, apart from the further reason that the disbursements have already been said to have been made in this case as per the decision of the High Court."
(V) In H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Limited [(2003) 3 SCC 40], at paragraph 7, 8 and 10, the Hon'ble Supreme Court held as under:
"7. It is evident from Section 7(2) that as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity. Under Section 7(3), the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. Under sub-section 3(A) of Section 7, if the amount of gratuity is not paid by the employer within the period specified in sub-section (3), he shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate not exceeding the rate notified W. P. (C) No. 17812 of 2020 -16- by the Central Government from time to time for repayment of long term deposits; provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. From the provisions made in Section 7, a clear command can be seen mandating the employer to pay the gratuity within the specified time and to pay interest on the delayed payment of gratuity. No discretion is available to exempt or relieve the employer from payment of gratuity with or without interest as the case may be. However, under the proviso to Section 7(3A), no interest shall be payable if delay in payment of gratuity is due to the fault of the employee and further condition that the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. Under Section 8, provision is made for recovery of gratuity payable under the Act, if not paid by the employer within the prescribed time. The Collector shall recover the amount of gratuity with compound interest thereon as arrears of land revenue and pay the same to the person entitled. A penal provision is also made in Section 9 for non-payment of gratuity. Payment of gratuity with or without interest as the case may be does not lie in the domain of discretion but it is a statutory compulsion. Specific benefits expressly given in a social beneficial legislation cannot be ordinarily denied. Employees on retirement have valuable rights to get gratuity and any culpable delay in payment of gratuity must be visited with the penalty of payment of interest was the view taken in State of Kerala & Ors. v. M. Padmanabhan W. P. (C) No. 17812 of 2020 -17- Nayyar [1985 (50) FLR 145]. Earlier there was no provision for payment of interest on the delayed payment of gratuity. Sub- section (3A) was added to Section 7 by an amendment, which came into force with effect from 1 st October, 1987. In the case of Charan Singh v. M/s. Birla Textiles and another [1988 (57) FLR 543 SC], this aspect was noticed in the following words:
'There was no provision in the Act for payment of interest when the same was quantified by the Controlling Authority and before the Collector was approached for its realization. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of sub-section 3(A) in Section 7. That provision has prospective application.'
8. In the background of this legal position, now we turn to the facts of the present case. The appellant was under suspension from 15-3-1999 to 21-5-1999. On attaining the age of superannuation, he retired from services of the respondent-
Corporation on 1-1-2000. The learned Single Judge, after considering the rival contentions, disposed of the writ petition issuing directions to the respondent-Corporation to settle the full salary and allowances for the period of suspension, gratuity, cash equivalent to leave salary, deferred leave, concession amount etc. As regards the claim of interest on gratuity, the learned Single Judge held as under:
'Since there was a doubt as to whether the petitioner is entitled to the gratuity, cash equivalent of leave salary etc., in view of the divergent opinion of the Courts during the pendency of an enquiry proceeding of a retired employee, in my view, the petitioner is not entitled to the relief of interest for the belated payment of gratuity and other amounts.' W. P. (C) No. 17812 of 2020 -18-
10. In the light of what is stated above, the learned Single Judge could not refuse the grant of interest exercising discretion as against the mandatory provisions contained in Section 7 of the Act. The Division Bench, in our opinion, committed an error in assuming that the learned Single Judge could exercise the discretion in the matter of awarding interest and that such a discretion exercised was not arbitrary. In the light of the facts stated and for the reasons aforementioned, the impugned order cannot be sustained. Consequently, it is set aside. The respondent is directed to pay interest @ 10% on the amount of gratuity to which the appellant is entitled from the date it became payable till the date of payment of the gratuity amount. The appeal is allowed accordingly with cost quantified at Rs.10,000."
(VI) In S.K. Dua v. State of Haryana and Another [(2008) 3 S.C.C. 44], the Hon'ble Supreme Court held as under:
"13. 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 undisputed 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 W. P. (C) No. 17812 of 2020 -19- taken at the instance of Mr. Quraishi against whom serious allegations of malpractices and misconduct 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 chargesheets 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.
14. 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."
(VII) In Kerala State Cashew Development Corporation Ltd.
W. P. (C) No. 17812 of 2020 -20-& Another v. N. Asokan [(2009) 16 SCC 758], the Hon'ble Supreme Court held as under:
"3. Section 7 of the Payment of Gratuity Act, 1972 (in short, 'the Act') deals with determination of the payment of gratuity. Since the gratuity amount has already been paid, Section 7(3A), which deals with payment of interest for delayed payment of gratuity, would be necessary only to be dealt with in this appeal and to consider whether interest on delayed payment of gratuity can be directed to be paid by the appellant to the respondent in compliance with Section 7 (3A) of the Act.
4. For this reason, we like to reproduce Section 7(3A) of the Act, which runs as under:
"7. (3-A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:
Provided that no such interest shall be payable if the the employer has obtained permission in writing from the controlling authority for the delay payment on this ground."
On a plain reading of this provision, as noted hereinabove, it is absolutely clear that if any amount of gratuity, which is payable under Section 7 is not paid by the employer within the period specified in sub-section (3), the employer is liable to pay interest from the date on which the gratuity becomes W. P. (C) No. 17812 of 2020 -21- payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, but on those delayed payments, where the employer has obtained permission in writing from the controlling authority for delayed payment, in that case, no such interest shall be payable to the employee. So far as the present case is concerned, no such permission was obtained by the employer in writing from the controlling authority and, therefore, sub-section (3-A) and its term would be squarely applicable in the facts of this case.
5. In the present case, eight years had passed after the retirement of the respondent but gratuity amount was not paid and, therefore, there was a delay of eight years in payment of gratuity amount, which is payable with interest at the rate specified in Section 7(3A) of the Act. The Corporation sought to explain the delay of eight years before the Court saying that its financial condition was such that it was not in a position to pay gratuity amount to the respondent. However, considering the aforesaid mandatory provision of Section 7(3A) of the Act and considering the fact that more than eight years have elapsed since the retirement of the respondent, we are of the view that the High Court was perfectly justified in dismissing the appeal and affirming the judgment of the learned Single Judge, which also directed payment of interest to the respondent."
(VIII) In P. Nagarathna Pandian v. The Managing Director, Tamil Nadu Housing Board [2010 (7) MLJ 577], the High Court of W. P. (C) No. 17812 of 2020 -22- Madras held as under:
"The issue which came up for consideration before this Court was whether the Government servant is entitled to interest for belated payment of retirement benefits, after he was permitted to retire by dropping the charges. The reason stated by the respondents therein was that only due to the pendency of the charge against the petitioner therein, payment of terminal benefits was delayed. There was a delay of six years in disbursement of the retiral benefits. In the above reported case, when the petitioner therein was holding the post of General Manager (Technical) in Tamil Nadu Adi Dravidar Housing Development Corporation on deputation, a charge memo was issued on 18-11-1998, alleging that he had rejected a tender submitted by the Government of India, during the process of pre- qualification bid. The petitioner therein submitted his explanation to the same. Enquiry was conducted and that a report was also submitted, holding that the charge levelled against him as not proved. The Housing Board accepted the Enquiry Officer's report and passed a resolution on 27-11-2003 to drop the charge framed against him and also resolved to allow him to retire from service with effect from 30-11-1998. The Board resolution was sent to the Government for its approval. After nearly six years, the Government granted approval through G.O.(ID) No. 164 Housing and Urban Development Department, dated 14-4-2004. Thereafter, by proceedings, dated 25-5-2004, the Board passed final orders, allowing the petitioner to retire from service, with effect from 30-11-1998 and also ordered that the period of W. P. (C) No. 17812 of 2020 -23- suspension would be treated as duty period. Subsequently, DCRG, Commutation of Pension, Spl. Provident Fund, Provident Fund and Surrender of Earned Leave, were disbursed to the petitioner, even though the same were due from 30-11-1998, the date on which, he attained the superannuation. The request for sanction of interest for belated payment of Provident Fund was rejected and hence, the petitioner therein preferred a writ petition. The opposition of the respondent therein was that since the charge was dropped only on 25-5-2004, the petitioner's request for payment of interest for the belated retiral benefits, is not maintainable. After considering GO.Ms. No. 510, Finance Department, dated 27-6-1995 and the following decisions, viz., Vijay L. Mehrotra v. State of U.P., reported in [2000 (2) SLR 686], Gorakhpur University v. Dr. Shitla Prasad Nagendra reported in [(2001) 6 SCC 591], Government of A.P., v. C. Purushotham reported in [2002 (7) SLR 760 (DB)], H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd., reported in [2003 (H) LLJ 1119], Union of India v. M.S. Abdulla reported in 2006 (6) SCC 455, R. Lakshmikanthan v. Government of Tamil Nadu reported in 2006 (III) LLJ 523, S.K. Dua v. State of Haryana reported in [(2008) 3 SCC 44 and Govt., of T.N., v. M. Deivasigamani reported in 2009 (3) MLJ 1, a learned Single Judge, at Paragraphs 11 and 12, held as follows:
"11. The reason stated by the respondents that only due to the pendency of the charge against the petitioner payment of terminal benefits was delayed, cannot be accepted as the charge, which was found not proved was ultimately dropped. The delay in W. P. (C) No. 17812 of 2020 -24- completing the disciplinary proceeding has already caused mental agony to the petitioner after reaching the age of superannuation. The retirement benefits payable as on 30-11- 1998 was delayed for about six years for which the petitioner cannot be blamed. It is not the case of the respondents that the disciplinary proceeding was delayed at the instance of the petitioner. From the perusal of the typed set of papers filed, it is evident that the enquiry officer submitted his report stating that the charge was not proved. The said Enquiry Officer's report was submitted as early as on 31-8-1999. Even assuming that the pendency of the charge was not the reason for not paying the terminal benefits, there was unreasonable delay in dropping the charge, though the delay is explained in the counter-affidavit. For no fault on the part of the petitioner, petitioner cannot be penalised by denying interest for the belated payment of retirement benefits.
12. In view of the above findings and decisions of the Supreme Court and of this Court, the writ petition is allowed and the impugned order is set aside. The second respondent is directed to pay the statutory interest for the gratuity amount, provident fund, special provident fund. For commutation of pension and surrender of earned leave, the second respondent is bound to pay interest for the belated payment as per the Government Order referred above. The second respondent is directed to comply with this order within a period of six weeks from the date of receipt of copy of this order. No costs. Connected miscellaneous petition is closed."
(IX) In D.D. Tewari (dead) through legal representatives v.
Uttar Haryana Bijli Vitran Nigam Limited and others [(2014) 8 SCC 894], the Hon'ble Apex Court, at Paragraphs 5 to 8, held as under:
W. P. (C) No. 17812 of 2020 -25-"5. The said legal principle laid down by this Court still holds good in so far as awarding the interest on the delayed payments to the appellant is concerned. This aspect of the matter was adverted to in the judgment of the learned Single Judge without assigning any reason for not awarding the interest as claimed by the appellant. That is why that portion of the judgment of the learned Single Judge was aggrieved of by the appellant and he had filed L.P.A. before Division Bench of the High Court. The Division Bench of the High Court has passed a cryptic order which is impugned in this appeal. It has adverted to the fact that there is no order passed by the learned Single Judge with regard to the payment of interest and the appellant has not raised any plea which was rejected by him, therefore, the Division Bench did not find fault with the judgment of the learned Single Judge in the appeal and the Letters Patent Appeal was dismissed. The correctness of the order is under challenge in this appeal before this Court urging various legal grounds.
6. It is an undisputed fact that the appellant retired from service on attaining the age of superannuation on 31-10-2006 and the order of the learned Single Judge after adverting to the relevant facts and the legal position has given a direction to the employer-respondent to pay the erroneously withheld pensionary benefits and the gratuity amount to the legal representatives of the deceased employee without awarding interest for which the appellant is legally entitled, therefore, this Court has to exercise its appellate jurisdiction as there is a miscarriage of justice in denying the interest to be paid or payable by the employer from W. P. (C) No. 17812 of 2020 -26- the date of the entitlement of the deceased employee till the date of payment as per the aforesaid legal principle laid down by this Court in the judgment referred to supra. We have to award interest at the rate of 9% per annum both on the amount of pension due and the gratuity amount which are to be paid by the respondent.
7. It is needless to mention that the respondents have erroneously withheld payment of gratuity amount for which the appellants herein are entitled in law for payment of penal amount on the delayed payment of gratuity under the provisions of the Payment of Gratuity Act, 1972. Having regard to the facts and circumstances of the case, we do not propose to do that in the case in hand.
8. For the reasons stated above, we award interest at the rate of 9% on the delayed payment of pension and gratuity amount from the date of entitlement till the date of the actual payment. If this amount is not paid within six weeks from the date of receipt of a copy of this order, the same shall carry interest at the rate of 18% per annum from the date the amount falls due to the deceased employee. With the above directions, this appeal is allowed. "
(X) In M.R. Kokan v. The Secretary to the Government of Tamil Nadu, Health and Family Welfare Department and others [2017 (2) W.L.R. 392], a Hon'ble Division Bench of the Madras High Court, at Paragraphs 13, 14, 18 and 19 held as follows:
W. P. (C) No. 17812 of 2020 -27-"13. Then the question with regard to contribution to be made for the period of five years was examined by the Office of the Accountant General. As per Rule 115(a) of the Fundamental Rules, while a Government servant is in foreign service, contribution towards the cost of his pension must be paid to consolidated fund on his behalf, while Clause (b) thereof sets out that if the foreign service is in India, contribution must be paid on account of the cost of the leave salary also and Clause (c) sets out that contributions due under Clause (a) and (b) above were required to be paid by the Government servant himself unless the foreign employer consents to pay the same. Rule 116 of the Fundamental Rules prescribes the rate of contributions payable on account of pension and leave salary and furnishes the data in a tabulated form. The data has worked out separate percentages for Group 'A', Group 'B', Group 'C and Group 'D' Officers. For Group 'A' Officers, for a period of four to five years, 9% has been prescribed as the rate of contribution in Rule 116 of the Fundamental Rules. Therefore, in effect, the writ petitioner/appellant before us, could have calculated, on his own, the contributions payable by him for the period of five years, for the period he was absent from the service of the State, but he has not made any such contributions on his own. The contributions were admittedly paid by him, as was noticed by the learned Single Judge, only on 22-9-1998' and that was the reason why the learned Single Judge ordered for payment of interest on delayed pension for the period beyond thereafter.
14. Though in principle, we are in agreement with the W. P. (C) No. 17812 of 2020 -28- view taken by the learned Single Judge, but however, we are left wondering as to why, for the delay that was caused in forwarding the pension papers by the Office of the Dean, Government Mohan Kumaramangalam Medical College, Salem, one should not be awarded compensatory costs in the matter. While it may be true that the orders passed by the State Government contained in their G.O.Ms. No. 517, Finance (Pension) Department, dated 12-6-1987 talk of payment of interest on delayed payment of Gratuity only and consequently, does not cover the event of any delayed payment of pension, but none-the-less, some amount ought to have been awarded as compensatory cost for the delay in settling the provisional pension, to begin with till July, 2000.........
18. Payment of pension is no act of grace or bounty on the part of anyone. That is a right earned by the Government servant, in recognition of his past services. That is the reason why payment of pension to the Government servants has come to be recognized as a event of deferred payment for the quality of services rendered by such men. After all, the State Government promises certain services to its citizens and secures delivery of such services to the citizens by employing Government servants. Therefore, in recognition of such services rendered to the citizens, the State undertakes to pay monthly pension to such retired Government servants, also as a measure of social security. Any delay in settling such terminal benefits has to be viewed seriously.
19. The maximum period of six months is considered as a W. P. (C) No. 17812 of 2020 -29- reasonable outer limit for sanction of pension and other terminal benefits. At any rate settling the pensionary benefits beyond a period of one year can never be appreciated and it must necessarily result in some kind of compensation. Since the State Government has taken a Policy decision to award interest on delayed settlement of Gratuity-which in fact is in consonance with the provisions contained in Section 7(3-A) of Payment of Gratuity Act, 1978-but at the same time, the State Government, as a Policy has not authorized any payment of interest on delayed pension. In the absence of any Policy decision on the part of the State Government, we are not denuded to come to the rescue of a hapless and helpless retired servant of the State. We can properly mould the relief and award compensatory cost which are capable of being recovered from the identified/identifiable persons responsible for the malady. The Government servants are accountable for both what they do and don't do."
(XI) In State of U.P. and others v. Dhirendra Pal Singh [(2017) 1 SCC 49], the Hon'ble Supreme Court held as under:
"9. In State of Kerala v. M. Padmanabhan Nair, [(1985) 1 SCC 429 : 1985 SCC (L&S) 278] , this Court has held that pension and gratuity are no longer any bounty to be distributed by the Government to its employees on the retirement but are valuable rights in their hands, and any culpable delay in disbursement thereof must be visited with the penalty of payment of interest. In the said case the Court approved 6% p.a. interest on the amount of pension decreed by the trial court and affirmed W. P. (C) No. 17812 of 2020 -30- by the High Court. As to the rate of interest on amount of gratuity, in Section 7(3-A) of the Payment of Gratuity Act, 1972, it is provided that if the amount of gratuity payable is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may by notification specify. It further provides that no such interest shall be payable if the delay in payment is due to the fault of the employee, and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground. In the present case, there is no plea before us that the appellants had sought any permission in writing from the controlling authority. As to the delay on the part of the employee, it has come on the record that he made representations, whereafter he filed a suit in respect of withheld amount of gratuity and pension. In Y.K. Singla v. Punjab National Bank [(2013) 3 SCC 472 : (2013) 1 SCC (L&S) 640], this Court, after discussing the issue relating to interest payable on the amount of gratuity not paid within time, directed that interest @ 8% p.a. shall be paid on the amount of gratuity."
12. In the light of the above discussion and decisions, we find no infirmity in the order of the Kerala Lok Ayukta, directing payment of Rs. 63,498/- with 8% interest on the belated payment of pension and W. P. (C) No. 17812 of 2020 -31- DCRG. Hence, the same is confirmed.
It is made clear that payment has to be made within the time as ordered by the writ court, and no application for extension would be permitted.
Accordingly, instant writ petition is dismissed.
Sd/-
S. MANIKUMAR CHIEF JUSTICE Sd/-
SHAJI P. CHALY JUDGE Eb ///TRUE COPY/// P. A. TO JUDGE W. P. (C) No. 17812 of 2020 -32- APPENDIX OF WP(C) 17812/2020 PETITIONER EXHIBITS EXHIBIT P1 COMPLAINT NO. 95/2017 B DATED 11/01/2017 FILED BY THE 2ND RESPONDENT BEFORE THE 1ST RESPONDENT.
EXHIBIT P2 TRUE COPY OF THE STATEMENT FILED BY THE 2ND PETITIONER BEFORE THE 1ST RESPONDENT ALONG WITH ITS ENGLISH TRANSLATION.
EXHIBIT P3 TRUE COPY OF THE ORDER OF THE LOK AYUKTA DATED 01/10/2019 IN COMPLAINT NO.95/2017 B. EXHIBIT P4 TRUE COPY OF THE INTERIM ORDER DATED 20/08/2019 IN WPC NO.22631/2019.