Kerala High Court
University Of Kerala vs Dr.V.Sobha on 7 February, 2020
Author: S.Manikumar
Bench: S.Manikumar, Anil K.Narendran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
FRIDAY, THE 07TH DAY OF FEBRUARY 2020 / 18TH MAGHA, 1941
WP(C).No.22735 OF 2016(N)
PETITIONER:
UNIVERSITY OF KERALA
REPRESENTED BY ITS REGISTRAR,
THIRUVANANTHAPURAM-695034.
BY ADVS.
SRI.PAUL JACOB (P)
SRI.THOMAS ABRAHAM, SC, UNIVERSITY OF KERALA
RESPONDENTS:
1 DR.V.SOBHA
SREEMANGALAM, GGRA PS,
VV ROAD, PETTAH,
THIRUVANANTHAPURAM-695024.
2 THE KERALA LOK AYUKTA
REPRESENTED BY ITS REGISTRAR,
THIRUVANANTHAPURAM-695033.
R1 BY ADV. SRI.NAVEEN.T
R1 BY ADV. SRI.S.RAMESH
R2 BY SMT.RENU. D.P., SC, LOK AYUKTA
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
07-02-2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C) No.22735/16
-:2:-
"CR"
JUDGMENT
Dated this the 7th day of February, 2020 S.Manikumar, C.J.
Challenge in this writ petition is to an order passed in Complaint No.2198 of 2012 A dated 10.05.2016, by which, after considering the rival submissions, Lok Ayukta, at paragraphs 8, 9 and 10, ordered thus:
"8. With regard to the alleged liability of Rs.90,000/- it is pointed out by the complainant that the Additional Subordinate Judge's Court, Thiruvananthapuram had ordered attachment of Rs.10,000/- per month from her salary for 24 months at the Instance of a private party. The attachment had continued till the date of her retirement and therefore the respondents cannot withhold any amount from her DCRG on the basis of the above order passed by the said court. There is considerable force in the above contention.
9. It has been noticed already that the complainant retired from service on superannuation on April 30, 2011. Admittedly, no judicial or departmental proceedings were pending against her at the time of her retirement. No notice of any alleged liability due from the complainant was ever served on her before retirement. It is the admitted position that a liability certificate was issued to the complainant about one year after her retirement. But later it was conceded by the respondent himself that the said liability certificate was not in conformity with Rule 3 Note 2 of Part III KSR. A proper notice intimating the liability was issued to her only on March 12, 2014 as is seen admitted by the respondent himself in the additional statement. It is seen contended by the respondent in the additional statement that decision regarding payment of W.P.(C) No.22735/16 -:3:- DCRG will be taken only when a reply is received to the notice dated March 12, 2014 issued to the complainant regarding the liability. Though a reply was sent by the complainant to the notice on May 10, 2014 with specific reference to each and every liability, no action whatsoever was taken. It is true that the respondent has thereafter released the other retiral benefits except the DCRG, of course, in obedience to the interim order passed by this Forum in September, 2014. The complainant is yet to receive her DCRG even though nearly five years have elapsed after her retirement. It cannot be believed that the audit department in the University could not find time to scrutinize and verify the accounts and finalise the case of the complainant in the light of her reply.
10. Keeping in view the entire facts and circumstances referred to above, I am satisfied that the respondent has to be directed to release the DCRG amount of Rs.7 lakhs to the complainant forthwith with 9% interest thereon with effect from August 1, 2011 till the date of payment. Ordered accordingly. This shall be done within one month from the date of receipt of a copy of this order."
2. Assailing the said order, University of Kerala, has filed this writ petition mainly on the ground inter alia that Lok Ayukta has no jurisdiction to pass orders, which is adjudicatory in nature, and that Lok Ayukta has no jurisdiction to issue positive direction. Reliance has been placed on the decisions of this Court in State of Kerala v. Bernard [2002 (3) KLT 254], Sunayana v. Tahsildar, Tvm. and Others [2013 (1) KHC 836] and University of Kerala v. Parvathy Krishna [2014 (2) KLT 233]. University of Kerala has further contended that respondent No.1 is liable to pay Rs.31,87,701/-.
W.P.(C) No.22735/16 -:4:-3. A detailed counter affidavit has been filed by the 1 st respondent contending, inter alia, that she retired from service on 30.04.2011. According to her, Ext.P1 is incorrect and the same cannot be accepted, in view of the provisions contained in Rule 3 Part III of the Kerala Service Rules, which contemplates that Government can recover from pension the whole or part of any pecuniary loss caused to Government in a departmental or judicial proceedings. Reliance has been placed on Shamsudeen v. Secretary to Government [2008 (4) KLT 133].
4. Placing reliance on a decision in State of Kerala and Others v. K.Ramakrishnan Nambiar [ILR 2007 (1) Kerala 566], contention has been made that while interpreting Rule 3 Part III of the Kerala Service Rules, a Hon'ble Division Bench of this Court has held that no proceedings can be taken against an employee regarding an event, which took place beyond four years of such incident. In the case on hand, the 1 st respondent has retired from service on 30.04.2011. Contention has been raised that the alleged liability is for the period from 1996 to 2009 and since no disciplinary proceedings were initiated against the 1st respondent, in terms of Rule 3 Part III of the Kerala Service Rules, no liability can be fastened.
W.P.(C) No.22735/16 -:5:-5. Reliance is also placed on a Hon'ble Full Bench decision of this Court in Raveendran Nair v. State of Kerala [2007 (1) KLT 605], wherein, this Court held that no recovery can be made from an employee, unless the liability has been fixed by way of disciplinary proceedings.
6. Reliance is also made to Rule 3 Part III of the Kerala Service Rules, which states that even without any pecuniary loss caused to the Government, on account of misconduct proved against a pensioner, Government have right to withhold or withdraw pension or any part of it, whether permanently or for a specified period. Rule 3 Part III of KSR reads 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."
7. In the case on hand, there is no such event. For the above said reasons, the 1st respondent has prayed for dismissal of the writ petition.
8. University of Kerala has filed an additional affidavit dated 14.01.2020. According to the University, a sum of W.P.(C) No.22735/16 -:6:- Rs.43,80,126/- was fixed as liability of the 1 st respondent and as such, Ext.P1 liability certificate was issued. The 1 st respondent has not submitted vouchers of the verification works, purchase of books etc., as detailed in the additional affidavit. That apart, reiterating the grounds stated supra, Mr. Thomas Abraham, learned Standing Counsel for the University, submitted that Lok Ayukta has no jurisdiction to issue positive directions.
9. Heard learned counsel for the parties and perused the materials on record.
10. The fact that the amounts mentioned in the additional affidavit under various heads were withdrawn between 1996 and 2001, as contended by respondent No.1, has not been disputed by the University. Chapter 10 of the Kerala University First Statutes, 1977 deals with applicability of certain Rules to University Teachers and the same reads thus:
"10. Applicability of certain Rules to University Teachers.-Subject to the provisions of the Kerala University Act, 1974 and the Statues' issued thereunder, the Kerala Service Rules, the Kerala State and Subordinate Services Rules and the Kerala Government Servants Conduct Rules for the time being in force as amended from time to time shall mutatis mutandis apply to the teachers of the University, with such modifications as the context may require and the expression "Government" in those Rules shall be construed as a reference to the "University":W.P.(C) No.22735/16 -:7:-
Provided that the age of retirement of teachers of the University shall be 60 years and that the teachers of the University who complete the age of 60 years during the course of an academic year and whose date of birth is second July or thereafter shall continue in service till the last day of the month in which the academic year ends and subject to the other conditions under Rule 60 (c) part I Kerala Service Rules."
11. From the above, it is clear that the Kerala Service Rules, Kerala State and Subordinate Service Rules and Kerala Government Servants Conduct Rules are applicable to teachers of University of Kerala.
12. Chapter-I, Part III of the Kerala Service Rules deals with pension. Rules 2 and 3 of the above said rules relied on by learned counsel for the 1st respondent are extracted hereunder:
"2. (a) Future good conduct shall be an implied condition of every grant of a pension.-The Government may, by order in writing, withhold or withdraw a pension or part thereof whether permanently or for a specified period, if the pensioner is convicted of a serious crime or is found guilty of grave misconduct.
(b) Where a pensioner is convicted of a serious crime by a Court of Law action under clause (a) shall be taken in the light of the judgment of the court relating to such conviction.
(c) In a case not falling under clause (b), if the Government under clause (a) considers that the pensioner is prima facie guilty of grave misconduct it shall, before passing an order under clause (a),
(i) serve upon the pensioner a notice specifying the action proposed to be taken against him and the ground on which it is proposed to be taken and calling upon him to submit within fifteen days of the notice or W.P.(C) No.22735/16 -:8:- such further time not exceeding fifteen days as may be allowed, his explanation for such misconduct.
(ii) take the explanation, if any, submitted by the pensioner under sub-clause (i) into consideration.
(d) The Public Service Commission shall be consulted before final orders are passed."
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 proceeding, 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 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;W.P.(C) No.22735/16 -:9:-
(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 This amendment takes effect from 14th November 1966.
(d) the Public Service Commission shall be consulted before final orders are passed."
13. As rightly contended by learned counsel for the 1 st respondent, that for any reason departmental proceedings were not initiated while the 1st respondent was in service of the aforesaid University or during her re-employment, the same can only be with the sanction of the Government and that it shall not be in respect of any event which happened more than four years before retirement. Note 3 to the explanation, as provided under Rule 2, is also relevant for the purpose of this case. Note 3 reads as follows:
"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."
14. Admittedly the liability now fastened by the University is for a period between 1996 and 2000. Respondent No.1 has retired from service on 30.4.2011. No disciplinary proceedings have been initiated while she was in service and that no charge W.P.(C) No.22735/16 -:10:- memo has been issued. It is trite law that disciplinary proceedings are said to have been commenced, only when a charge memo is issued. Reference can be made to a few decisions of the Hon'ble Supreme Court.
"(I). In Union of India and Others v. K.V. Jankiraman and Others reported in (1991) 4 SCC 109, the Hon'ble Supreme Court held that :
"the disciplinary proceedings commence only when a charge sheet is issued. In UCO Bank v. Rajinder Lal Capoor reported in (2007) 6 SCC 694, the Hon'ble Apex Court reiterated the same."
(II). In Coal India Limited & Ors. v. Saroj Kumar Mishra reported in AIR 2007 SC 1706, the Hon'ble Apex Court, at Paragraph 22, held that :
"a departmental proceeding is ordinarily said to be initiated only when a charge-sheet is issued."
(III). In Chairman-cum-Managing Director, Coal India Limited and Others vs. Ananta Saha and Others reported in (2011) 5 SCC 142, the Hon'ble Supreme Court held as under:
"27. There can be no quarrel with the settled legal proposition that the disciplinary proceedings commence only when a charge-sheet is issued to the delinquent employee."
(IV). In Union of India and Others v. Anil Kumar Sarkar reported in (2013) 4 SCC 161, the Hon'ble Apex Court, while considering three questions, viz., (1) What is the date from which it can be said that disciplinary/criminal proceedings are pending against an employee? (2) What is the course to be adopted when the W.P.(C) No.22735/16 -:11:- employee is held guilty in such proceedings if the guilt merits punishment other than that of dismissal? and (3) To what benefits an employee who is completely or partially exonerated is entitled to and from which date? and after considering the decision in Union of India v. K.V. Jankiraman [(1991) 4 SCC 109], held as follows:
"Among the three questions, we are concerned about question No.1. As per the rules applicable, the "sealed cover procedure" is adopted when an employee is due for promotion, increment etc. but disciplinary/criminal proceedings are pending against him at the relevant time and hence, the findings of his entitlement to the benefit are kept in a sealed cover to be opened after the proceedings in question are over. Inasmuch as we are concerned about the first question, the dictum laid down by this Court relating to the said issue is as follows:-
"16. On the first question, viz., as to when for the purposes of the sealed cover procedure the disciplinary/criminal proceedings can be said to have commenced, the Full Bench of the Tribunal has held that it is only when a charge-memo in a disciplinary proceedings or a charge-sheet in a criminal prosecution is issued to the employee that it can be said that the departmental proceedings/criminal prosecution is initiated against the employee. The sealed cover procedure is to be resorted to only after the charge-memo/charge-sheet is issued. The pendency of preliminary investigation prior to that stage will not be sufficient to enable the authorities to adopt the sealed cover procedure. We are in agreement with the Tribunal on this point. The contention advanced by the learned counsel for the appellant-authorities that when there are serious allegations and it takes time to collect necessary evidence to 18 prepare and issue charge- memo/charge- sheet, it would not be in the interest of the purity of administration to reward the employee with a promotion, increment etc. does not impress us. The acceptance of this contention would result in injustice to the employees in many cases. As has been the experience so far, the preliminary investigations take an inordinately long time and particularly when they are initiated at the instance of the interested persons, they are kept pending deliberately. Many times they never result in the W.P.(C) No.22735/16 -:12:- issue of any charge-memo/chargesheet. If the allegations are serious and the authorities are keen in investigating them, ordinarily it should not take much time to collect the relevant evidence and finalise the charges. What is further, if the charges are that serious, the authorities have the power to suspend the employee under the relevant rules, and the suspension by itself permits a resort to the sealed cover procedure. The authorities thus are not without a remedy.
In para 17, this Court further held:
17. The conclusion No. 1 should be read to mean that the promotion etc. cannot be withheld merely because some disciplinary/criminal proceedings are pending against the employee. To deny the said benefit, they must be at the relevant time pending at the stage when charge-memo/charge-sheet has already been issued to the employee."
After finding so, in the light of the fact that no charge sheet was served on the respondent- employee when the DPC met to consider his promotion, yet the sealed cover procedure was adopted. In such circumstances, this Court held that "the Tribunal has rightly directed the authorities to open the sealed cover and if the respondent was found fit for promotion by the DPC, to give him the promotion from the date of his immediate junior Shri M. Raja Rao was promoted pursuant to the order dated April 30, 1986. The Tribunal has also directed the authorities to grant to the respondent all the consequential benefits. We see no reason to interfere with this order. The appeal, therefore, stands dismissed." The principles laid down with reference to similar office memorandum are applicable to the case on hand and the contrary argument raised by the appellant-Union of India is liable to be rejected."
(V) In Union of India and Others v. Anil Kumar Sarkar [(2013) 4 SCC 161], the Hon'ble Supreme Court at paragraphs 19 to 21 held as follows:
"19) In Coal India Limited & Ors. vs. Saroj Kumar Mishra, AIR 2007 SC 1706, this Court, in para 22, has held that a departmental proceeding is ordinarily said to be initiated W.P.(C) No.22735/16 -:13:- only when a charge-sheet is issued.
20) In Chairman-cum-Managing Director, Coal India Limited and Others vs. Ananta Saha and Others, (2011) 5 SCC 142, this Court held as under:
"27. There can be no quarrel with the settled legal proposition that the disciplinary proceedings commence only when a charge-sheet is issued to the delinquent employee. (Vide Union of India v. K.V. Jankiraman, (1991) 4 SCC 109 and UCO Bank v. Rajinder Lal Capoor, (2007) 6 SCC 694)"
21) We also reiterate that the disciplinary proceedings commence only when a charge sheet is issued. Departmental proceeding is normally said to be initiated only when a charge sheet is issued."
(VI) In Coal India Ltd. and Others v. Saroj Kumar Mishra (AIR 2007 SC 1706), the Hon'ble Supreme Court at paragraph 22 held as follows:
"21) See State of Kerala and Another v N.M. Thomas and Others [AIR 1976 SC 490], E.V. Chinnaiah v State of Andhra Pradesh & Ors [(2005) 1 SCC 394], Bhagwandas Tiwari and Ors. v Dewas Shajapur Kshetriya Gramin Bank and Ors. [2006 (11) SCALE 593], B.V. Sivaiah and Ors. v K. Addanki Babu and Ors. etc. [(1998) 6 SCC 720].
22) A departmental proceeding is ordinarily said to be initiated only when a chargesheet is issued."
15. Decisions relied on by the learned counsel for the 1 st respondent squarely applies to the case on hand. The only contention raised by the learned Standing Counsel for the University is that no positive direction can be issued by the Lok W.P.(C) No.22735/16 -:14:- Ayukta for payment of the outstanding DCRG with interest. In the case on hand, the petitioner retired from service on 30.04.2011. Pension and DCRG are not bounty and the same have to be paid as soon as the employee retires. DCRG of the 1 st respondent has been withheld on the premise that the 1 st respondent is liable to pay Rs.31,87,701/-, even without initiating any disciplinary proceedings. On the facts and circumstances of the case, by exercising the powers under Article 226 of the Constitution of India, we construe the direction issued by Lok Ayukta as recommendatory in nature and accordingly, rule out the objections.
16. A perusal of the order of Lok Ayukta in complaint No.2198 of 2012 A dated 10.05.2016 impugned in this writ petition shows that Lok Ayukta has considered as to whether the 1st respondent is entitled to the disbursement of DCRG benefits, as claimed. Kerala Lok Ayukta Act, 1999 is an Act to make provision for the appointment and functions of certain authorities for making enquiries into any action (including any omission and commission in connection with or arising out of such action) relatable to matters specified in List II or List III of the Seventh Schedule to the Constitution of India, taken by or on behalf of W.P.(C) No.22735/16 -:15:- the Government of Kerala or certain public authorities in the State of Kerala in certain cases and for matters connected therewith or ancillary thereto.
17. Sections 7 and 8 of the said Act deal with matters which may be investigated by the Lok Ayukta. Sections 7 and 8 of the Act are extracted below:
"7. Matters which may be investigated by the Lok Ayukta and the Upa-Lok Ayuktas.- (1) Subject to the provisions of this Act, the Lok Ayukta and one of the Upa Lok Ayuktas, as may be nominated by the Lok Ayukta for the purpose, may investigate any action which is taken by or with the general or specific approval of-
(i) the Chief Minister; or
(ii) a Minister; or
(iii) a Member of the State legislature; or
(iv) a Secretary; or
(v) an office bearer of a political party at the state level; or
(vi) an officer referred to in sub-clause (iii) of clause (d) of Section 2.
in any case where a complaint involving a grievance or an allegation is made in respect of such action and where there is difference of opinion between the Lok Ayukta and the Upa Lok Ayukta as so nominated, the action shall be investigated by the Lok Ayukta and both the Upa-Lok Ayuktas together and the decision of the majority therein shall prevail.
(2) Subject to the provisions of this Act, an Upa-Lok Ayukta may investigate any action which is taken by, or with the general or specific approval of, any public servant not being the Chief Minister or a Minister or a Member of the State Legislature or a Secretary of an office bearer of a political party at State level or an officer referred to in sub-clause (iii) of clause (d) of Section 2, in W.P.(C) No.22735/16 -:16:- any case where a complaint involving a grievance or an allegation is made in respect of such actions or such action can be or could have been in the opinion of the Upa-Lok Ayukta, the subject of a grievance or an allegation.
(3) Notwithstanding anything contained in sub- sections (1) and (2), the Lok Ayukta or an Upa-Lok Ayukta may investigate any action taken by, or with the general or specific approval of a public servant, if it is referred to him by the Government.
(4) The Lok Ayukta may, by general or special order, assign to each of the Upa-Lok Ayuktas the matters which may be investigated by them under this Act.
(5) Notwithstanding anything contained in sub- sections (1) to (4), when an Upa-Lok Ayukta is unable to discharge his functions owing to absence, illness or any other cause, his functions may be discharged by the other Upa-Lok Ayukta, and in the absence of both, by the Lok Ayukta, (6) Notwithstanding anything contained in any other provisions of this Act, no investigation made by an Upa-Lok Ayukta under this Act and no action taken or things done by him in respect of such investigation shall be open to question on the ground only that such investigation relates to a matter which is not assigned to him by such order.
(7) For the removal of doubts, it is hereby clarified that the term 'Lok Ayukla' wherever it is used in this Act, in relation to any of the persons referred to in sub- section (1), shall mean the Lok Ayukta and, as the case may be, one or both of the Upa-Lok Ayuktas as provided in that sub-section."
"8. Matters not subject to investigation.- (1) Except as hereinafter provided, the Lok Ayukta or an Upa-Lok Ayukta shall not conduct any investigation under this Act, in the case of a complaint involving a grievance in respect of any action, if such action relates to any matter specified in the Second Schedule.
(2) The Lok Ayukta or an Upa-Lok Ayukta shall not investigate,-W.P.(C) No.22735/16 -:17:-
(a) any action in respect of which a formal and public inquiry has been ordered with the prior concurrence of the Lok Ayukta or an Upa-Lok Ayukta, as the case may be;
(b) any action in respect of a matter which has been referred to inquiry under the Commissions of Inquiry Act, 1952 (Central Act 60 of 1952);
(c) Any complaint involving an allegation made after the expiry of five years from the date on which the action complained against is alleged to have taken place:
Provided that a complaint referred to in clause (c) may be entertained by the Lok Ayukta or an Upa-Lok Ayukta, as the case may be, after the expiry of the period referred to in the said clause, if the complainant satisfies that he had sufficient cause for not making the complaint within the period specified in that clause. (3) in the case of any complaint involving a grievance, nothing in this Act shall be construed as empowering the Lok Ayukta or an Upa-Lok Ayukta to question any administrative action involving the exercise of a discretion, except where he is satisfied that the elements involved in the exercise of the discretion are absent to such an extent that the discretion can prima-facie be regarded as having been improperly exercised."
18. Second Schedule to Section 8(1)(a) of the Lok Ayukta Act reads thus:
SECOND SCHEDULE [See Section 8(i)(a)] "(a) Action taken for the purpose of investigating crime relating to the security of the State.
(b) Action taken in the exercise of powers in relation to determining whether a matter shall go to a Court or not.
(c) Administrative action taken in matters which arise out of the terms of a contract governing purely commercial relations of the administration with customers or suppliers W.P.(C) No.22735/16 -:18:- except where the complainant alleges harassment or gross delay in meeting contractual obligation.
(d) Action taken in respect of appointment, removal, pay, discipline, superannuation or other matters relating to conditions of service of public servants but, not including actions relating to claims for pension, gratuity, provident fund or to any claims which arises on retirement, removal or termination of service.
(e) Grant of honours and awards. "
19. A conjoint reading of the statutory provisions with the Second Schedule makes it clear that Lok Ayukta has jurisdiction to conduct any investigation under this Act in respect of the action taken in relation to claims for pension, gratuity, provident fund or to any claims which arises on retirement, removal or termination of service. Clause (d) of the Schedule makes it clear that the Lok Ayukta has jurisdiction to conduct investigation.
20. A perusal of the order in Complaint No.2198 of 2012 A dated 10.5.2016 of the Lok Ayukta shows that though the 1 st respondent retired on 30.04.2011, DCRG was not paid, and the Lok Ayukta has conducted an investigation.
21. The only question to be answered is, whether Lok Ayukta has jurisdiction to award interest on belated payment of DCRG benefits. Though the University of Kerala, in order to substantiate the above legal contention, has placed reliance on W.P.(C) No.22735/16 -:19:- the statutory provision, it is well settled by the Hon'ble Supreme Court of India that pension or retiral benefits is not a bounty and the same has to be paid, no sooner the employee retires. The 1st respondent has retired from service on 30.04.2011. Till date, DCRG benefits have not been disbursed. Delay is attributable only to the action of the University in delaying payment of pension, DCRG benefits on the erroneous premise of liability, without any disciplinary proceedings and findings thereon, when the 1st respondent was in service, or even after retirement, within the permissible period. The contention regarding liability is rejected in view of the statutory provisions and the decisions cited supra.
22. The next question to be decided is whether this Court in exercise of powers under Article 226 of the Constitution of India can award interest on the belated payment of DCRG benefits. On the said aspect, let us consider a few decisions.
(I) In the case of State of Kerala and others v. M. Padmanabhan Nair [(1985) 1 SCC 429], it was held that:
"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 W.P.(C) No.22735/16 -:20:- 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 45-A 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 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 the date of receipt of a copy of this order."
(II) The Hon'ble Supreme Court in O.P.Gupta v. Union of India and Others [(1987) 4 SCC 328], after taking note of the 20 years of protracted departmental enquiry, in paragraph 15, held as follows, "... It is clear principle of natural justice that the delinquent officer when placed under suspension is entitled to represent that the departmental proceedings should be concluded with reasonable diligence and within a reasonable period of time. If such a principle were not to be recognised, it would W.P.(C) No.22735/16 -:21:- imply that the executive is being vested with a totally arbitrary and unfettered power of placing its officers under disability and distress for an indefinite duration." In the said case, the Supreme Court awarded 12% interest in favour of the appellant for the delayed payment of pension."
(III) The Hon'ble Apex Court in the case of Dr. Uma Agarwal v. State of U.P. and Another [(1999) 3 SCC 438], held 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 follows:-
"5. If rules/instructions which prescribe time schedule for settling of retirement dues, are followed strictly, much of litigation can be avoided and retired government servants would not feel harassed. Pension is not a bounty but right of a government servant. Government is obliged to follow rules. Delay in settling 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 indeed is unfortunate. In cases where a retired government servant claims interest for delayed payment, the Court can certainly keep in mind time schedule prescribed in the rules/instructions, apart from other relevant factors applicable to a case.
6. The present case is a clear example of inexcusable department delay. Respondents contend that letters were sent to the petitioner after her retirement seeking some information for settling her retirement dues but this is denied by the petitioner. Even if it is assumed that such letters were sent, this cannot be an excuse for lethargy of the department because rules/instructions provide for initiation of process much before retirement. The exercise which was to be completed much before retirement was in fact started long after petitioner's retirement.
7. This is a fit case for awarding interest to the petitioner. It is however not necessary that the matter should go back to the Government for computation of interest. Instead, on the facts of this case, interest is quantified at Rs.1 lakh. The same shall be paid to the petitioner within two months."
(IV) In Dr.Uma Agarwal v. State of U.P., reported in (1999) 3 SCC 438, the Hon'ble Supreme Court held that:
W.P.(C) No.22735/16 -:22:-"....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."
(V) In Vijay L. Mehrotra v. State of U.P. and Others, [2000 (2) SLR 686], the Hon'ble Apex Court held that:
"the appellant therein retired from service on 31 st 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 the rate of 18% on the belated payment from the date of retirement, till the actual payment was made."
(VI) In Gorakhpur University and Others v. Dr.Shitla Prasad Nagendra and Others reported in [(2001) 6 SCC 591], the Hon'ble Supreme Court held that:
"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, ie., 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, W.P.(C) No.22735/16 -:23:- fixing his liability for payment of penal rent. When disbursement of retiral benefits, including fixation and disbursment 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 Rs.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 (I) LLJ 79 (SC) and R.Kapur v. Director of Inspector (Painting and Publication) Income Tax and Another reported in (1995) I LLJ 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 Nari 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 W.P.(C) No.22735/16 -:24:- 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 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 W.P.(C) No.22735/16 -:25:- 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 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."
(VII) In H.Gangahanume Gowda v. Karnataka Agro Industries Corporation Limited reported in (2003) 3 SCC 40 at paragraph 7, 8 and 10, the Hon'ble Supreme Court held as follows:
"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 subsection 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 by the Central Government from time to time for repayment of long term deposits; provided that no such W.P.(C) No.22735/16 -:26:- 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. vs. M.Padmanabhan 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 1st October, 1987. In the case of Charan Singh vs. 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 W.P.(C) No.22735/16 -:27:- 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."
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/-.
(VIII) In S.K.Dua v. State of Haryana and Another reported in (2008) 3 SCC 44, the Hon'ble Supreme Court held as follows:
"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 W.P.(C) No.22735/16 -:28:- 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 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 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.
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."
(IX) In Kerala State Cashew Development Corporation Ltd and Another v. N.Asokan reported in (2009) 16 SCC
758), the Hon'ble Supreme Court held as follows:
"4. 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. 5. For this reason, we like to reproduce Section 7(3A) of the Act, which runs as under :-
"If the amount of gratuity payable under sub- section (3) is not paid by the employer within W.P.(C) No.22735/16 -:29:- 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 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 delay payment on this ground."
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.
(X) In P.Nagarathna Pandian v. The Managing Director, Tamil Nadu Housing Board, reported in 2010 (7) MLJ 577, it was held that:
"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 W.P.(C) No.22735/16 -:30:- 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.(1D)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 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 25.05.2004, the petitioner's request for payment of interest for the belated retiral benefits, is not maintainable. After considering G.O.Ms.No.510, Finance Department, dated 27.06.1995 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 (II) 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.W.P.(C) No.22735/16 -:31:-
The delay in 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."
(XI) In D.D. Tewari (dead) through legal representatives v. Uttar Haryana Bijli Vitran Nigam Limited and Others reported in (2014) 8 SCC 894, the Hon'ble Apex Court, at Paragraphs 5 to 7, held as follows:
"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.W.P.(C) No.22735/16 -:32:-
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 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."
(XII) Similarly, in the case of D.D. Tewari (dead) through legal representatives v. Uttar Haryana Bijli Vitran Nigam Limited and Others [(2014) 8 SCC 894], the Hon'ble Supreme Court held that :
"Denial of interest from the date of entitlement till the date of actual disbursement would take away the valuable rights of the retired government servant. It was reiterated in that decision that pension and gratuity are not bounty to be distributed by Government to its W.P.(C) No.22735/16 -:33:- employees on their retirement, but are valuable rights and property in its hands and any culpable delay in settlement and disbursement thereof is to be visited with penalty of payment of interest."
(XIII) In M.R.Kokan v. The Secretary to the Government of Tamil Nadu, Health and Family Welfare Department and Others reported in 2017 (2) WLR 392, a Hon'ble Division Bench of the Madras High Court, at Paragraphs 13, 14, 18 and 19 held as follows:
"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 22.09.1998 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 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 W.P.(C) No.22735/16 -:34:- 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 12.06.1987 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 setling 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. Afterall, 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 reasonable outer limit for sanction of pension and other terminal benefits. At any rate setling 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."
(XIV) In State of U.P. and Others v. Dhirendra Pal Singh reported in (2017) 1 SCC 49, the Hon'ble Supreme Court held as follows:
W.P.(C) No.22735/16 -:35:-"In State of Kerala and others v. M. Padmanabhan Nair (1985) 1 SCC 429), 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 said case the Court approved 6% per annum interest on the amount of pension decreed by the trial court and affirmed by the High Court. As to the rate of interest on amount of gratuity Section 7(3-A) of Payment of Gratuity Act, 1972, it is provided that if the amount of gratuity payable is not paid by the employer 1 (1985) 1 SCC 429 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 employee, it has come on the record that he made representations, where-after he filed a suit in respect of withheld amount of gratuity and pension. In Y.K. Singla v. Punjab National Bank and others, this Court, after discussing the issue relating to interest payable on the amount of gratuity not paid within time, directed that interest 2 (2013) 3 SCC 472 at the rate of 8% per annum shall be paid on the amount of gratuity."
(XV) 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 held as follows:
"3. The appellant was appointed to the post of Line Superintendent on 30.08.1968 with the Uttar Haryana Bijli Vitran Nigam Ltd. In the year 1990, he was promoted to the post of Junior Engineer-I. During his service, the appellant remained in charge of number of transformers after getting issued them from the stores and deposited a number of damaged transformers in the stores. While depositing the damaged transformers in the stores, some shortage in transformers oil and breakages of the parts of damaged transformers were erroneously debited to the account of the appellant and later on it was held that for the shortages and W.P.(C) No.22735/16 -:36:- breakages there is no negligence on the part of the appellant. On attaining the age of superannuation, he retired from service on 31.10.2006. The retiral benefits of the appellant were withheld by the respondents on the alleged ground that some amount was due to the employer. The disciplinary proceedings were not pending against the appellant on the date of his retirement. Therefore, the appellant approached the High Court seeking for issuance of a direction to the respondents regarding payment of pension and release of the gratuity amount which are retiral benefits with an interest at the rate of 18% on the delayed payments. The learned single Judge has allowed the Writ Petition vide order dated 25.08.2010, after setting aside the action of the respondents in withholding the amount of gratuity and directing the respondents to release the withheld amount of gratuity within three months without awarding interest as claimed by the appellant. The High Court has adverted to the judgments of this Court particularly, in the case of State of Kerala & Ors. v.. M. Padmanabhan Nair, wherein this Court reiterated its earlier view holding that the pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement, but, have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be dealt with the penalty of payment of interest at the current market rate till actual payment to the employees. 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 1 (1985) 1 SCC 429 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.W.P.(C) No.22735/16 -:37:-
4. 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 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.
5. 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.
6. 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 of amount falls due to the deceased employee. With the above directions, this appeal is allowed."
Following the decisions relating to payment of interest on belated disbursement of DCRG, in exercise of the powers under Article 226 of the Constitution of India, we dispose of the writ petition directing the University of Kerala to disburse the DCRG amount of Rs.7,00,000/- with 9% interest to the 1 st respondent from the date of her retirement (30.04.2011), within a period of W.P.(C) No.22735/16 -:38:- one month from the date of receipt of certified copy of this judgment. The petitioner shall make the payment without giving room for further litigation.
Sd/-
S.MANIKUMAR CHIEF JUSTICE Sd/-
ANIL K.NARENDRAN JUDGE vps W.P.(C) No.22735/16 -:39:- APPENDIX PETITIONER'S/S EXHIBITS:
EXHIBITS P1 TRUE COPY OF THE LETTER DTD 31/1/2012 NUMBERED AS AD.AIII/1/2012 EXHIBITS P2 TRUE COPY OF THE QUANTIFIED LIABILITY CERTIFICATE DTD 12/4/2012 ISSUED BY THE PETITIONER.
EXHIBITS P3 TRUE COPY OF THE REPLY BY THE IST RESPONDENT DTD 18/10/2012.
EXHIBITS P4 TRUE COPY OF THE COMPLAINT NO
2198/2012.
EXHIBITS P5 TRUE COPY OF THE ORDER DTD 23/2/2013.
EXHIBITS P6 TRUE COPY OF THE WRITTEN STATEMENT DTD
24/10/2013.
EXHIBITS P6(a) TRUE COPY OF THE ADDITIONAL STATEMENT
DTD 14/03/2014.
EXHIBITS P7 TRUE COPY OF THE REPLY DTD 5/5/2014
EXHIBITS P8 TRUE COPY OF THE ADDITIONAL WRITTEN
STATEMENT DTD 26/6/2014
EXHIBITS P9 TRUE COPY OF THE REPLY DTD 3/8/2014
EXHIBITS P10 TRUE COPY OF THE ORDER DTD 25/3/2014 IN
COMPLAINT NO.2198/2012A
EXHIBITS P11 TRUE COPY OF THE EXPLANATION PRODUCED
BY THE IST RESPONDENT DTD 10/5/2014.
EXHIBITS P12 TRUE COPY OF THE ORDER DTD 2/7/2014 AND
NUMBERED AS U.O.NO.AD.AIII/2/RR/
28499/2014.
EXHIBITS P13 TRUE COPY OF THE LIABILITY CERTIFICATE
DTD 28/2/2015 AND NUMBERED AS
AD.AIII/2/RLC-2/28499/2015.
W.P.(C) No.22735/16
-:40:-
EXHIBITS P14 TRUE COPY OF THE REQUITITION ORDER DTD
8/6/2016 ISSUED U/S.69(2) OF THE
REVENUE RECOVERY ACT.
EXHIBITS P15 TRUE COPY OF THE FINAL ORDER DTD
10/5/2016 IN CO.NO.2198/2012A ISSUED BY THE 2ND RESPONDENT.
RESPONDENT'S/S EXHIBITS:
NIL