Allahabad High Court
Bhairon Prasad Verma vs State Of U.P. And 4 Ors. on 25 September, 2019
Author: Piyush Agrawal
Bench: Piyush Agrawal
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 90 Case :- WRIT - A No. - 52441 of 2016 Petitioner :- Bhairon Prasad Verma Respondent :- State Of U.P. And 4 Ors. Counsel for Petitioner :- Ram Bahadur Singh Counsel for Respondent :- C.S.C. Hon'ble Piyush Agrawal,J.
By means of the present writ petition, the petitioner is challenging the order dated 05.03.2016 passed by the respondent no. 5, i.e., the Chief Medical Officer, Aligarh, by which the claim of the petitioner for interest on the delayed payment from 15.09.1995 to 28.08.1997 has been rejected.
The petitioner was appointed on the post of non-Medical Assistant in the year 1969 and superannuated in the year 2006 after performing 37 years of service. After retirement when the retiral dues were not paid, the petitioner approached this Court by filing Writ A No. 41311 of 2010, which was disposed of on 26.11.2015 with the following direction:-
"The Court finds that the only prayer made and carried on this petition is for release of the retiral benefits along with interest. The petitioner, who entered in the employment of the respondents in 1969 is said to have retired in 2006. He thereafter, is stated to have made various representations but till date no pensionary benefits or retiral dues have been released in his favour. In the opinion of this court, the end of justice would be met if this petition is disposed of with a direction calling upon the fifth respondent to consider the claim of the petitioner of retiral benefits and to pass appropriate orders thereon in accordance with law.
Accordingly, this petition shall stand disposed of with the direction calling upon the fifth respondent to consider the claim of the petitioner for grant of retiral benefits and to pass appropriate orders upon the said claim expeditiously and preferably within two months from the date of production of a certified copy of this order. "
In pursuance thereof, the petitioner made a detailed representation and the impugned order dated 05.03.2016 has been passed rejecting the claim of interest on the delayed payment by stating that there was no direction in the order of this Court dated 16.11.2015 for payment of interest. Hence, the present writ petition has been filed.
Learned counsel for the petitioner submits that the petitioner has claimed the interest on the delayed payment of his salary from 15.09.1995 to 28.08.1997 as the payment of retirement dues were withheld without any fault of him.
Learned standing counsel has rebutted the contention of the petitioner and justified the impugned order and further submits that the petitioner is not entitled for any interest on the delayed payment.
Heard learned counsel for the petitioner and learned standing counsel and perused the material available on record.
The petitioner has also annexed a copy of the letter of CMO, Aligarh; wherein, in paragraph no. 16, it is specifically mentioned that due to non-availability of budget, the payment has been delayed. More precisely, it is specifically mentioned that the payment for the period from 15.09.1995 to 28.08.1997 has been made on 31.03.2009.
The said fact has not been disputed by the learned standing counsel. In paragraph no. 14 of the counter affidavit, filed on behalf of the State, it has been accepted that the payment for the said period was made through Cheque No. 635123 dated 31.03.2009 for a sum of Rs. 1,19,190/-.
Admittedly, the payment of retiral dues to the petitioner has been delayed. The delay in payment of retiral benefits of an employee entitles him for interest on the delayed payment. The Supreme Court in numerous cases has taken the said view. Reference may be made to the judgment of the Supreme Court in the case of State of Kerala v. M. Padmanabhan Nair, (1985) 1 SCC 429, which has been consistently followed by the Supreme Court, and D.D. Tewari v. Uttar Haryana Bijli Vitran Nigam Ltd., (2014) 8 SCC 894.
A Division Bench of this Court in the case of Shiv Shankar Mishra v. State of U.P. and others, 2015(3) ADJ 302 (DB) has awarded 9% per annum from the date on which the pensionary dues became due. The Court has culled out the following proposition of law:
"7. In the case of State of Kerala Vs M Padmanabhan Nair and Som Prakash, (1985) 1 SCC 429, the Supreme Court held as follows:
"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 visited with the penalty of payment of interest at the current market rate till actual payment."
8. In a more recent decision in D D Tewari Vs Uttar Haryana Bijli Vitran Nigam Ltd., (2014) 8 SCC 894, the Supreme Court observed that any culpable delay in settlement and disbursement thereof is to be visited with penalty of payment of interest. Hence, interest @ 9% on delayed payment was awarded to be paid within six weeks failing which interest @ 18% p.a. would need to be paid. An erroneous withholding of gratuity amount to which the employee is legally entitled, entails penalty on the delayed payment.
9. We, therefore, have come to the conclusion that the learned Single Judge was not justified in declining the prayer for the payment of interest. Insofar as the payment which was made to the appellant on 18 March 2014 is concerned, the appellant was clearly entitled to the payment of interest from the date of the filing of the writ petition in 2010 (Writ -A No. 47141 of 2010). The appellant would also be entitled to the payment of interest on the pensionary payment which was unlawfully withheld from March 2014 until actual payment is made. We direct that interest shall be admissible to the appellant at the rate of 9% per annum from the date on which the respective payments on account of arrears of salary, or as the case may be, towards pensionary dues became due and payable as directed earlier. Interest shall be computed in terms of the aforesaid directions within a period of three months from the date of receipt of a certified copy of this order. The order of the learned Single Judge declining interest shall to that extent stand set aside and be substituted by the aforesaid directions."
The Hon'ble Supreme Court in the case of Union of India Vs. Justice S.S. Sandhawalia (Retd.) & Others, (1994) 2 SCC 240 has observed thus:-
"4.From the foregoing discussion it becomes clear that the Union of India contested the writ petition in the High Court only in regard to the entitlement of the cash equivalent of the allowances including the benefit conferred by Section 22-B of the 1954 Act and the cash benefit claimed for failure of the State of Bihar to provide the original petitioner with a staff car. The Union Government had conceded the demand for the grant of rupees one lakh by way of death-cum-retirement gratuity and had paid the balance of Rs 51,000 to the original petitioner. Since this payment was delayed by a year or so, the original petitioner claimed interest on the balance amount at 12% per annum, which has been rightly allowed by the High Court. Once it is established that an amount legally due to a party was not paid to it, the party responsible for withholding the same must pay interest at a rate considered reasonable by the Court. Therefore, we do not see any reason to interfere with the High Court's order directing payment of interest at 12% per annum on the balance of the death-cum-retirement gratuity which was delayed by almost a year. We uphold this part of the High Court's order."
This Court, in the case of Yogendra Singh and others v. State of U.P. and others, 2017 (1) ALJ 121 has considered the judgments of the Supreme Court as well as this Court and culled out the following principles:
"49. As a sequel to the above, broad principles that can be culled out from the various decisions and statuary rules can be summarized thus:
i) Pension and other retiral benefits of all Government employees must be sanctioned / paid in terms of the Rules, 1995 on the eve of their retirement, if there is no legal impediment.
ii) If there is any delay in the payment of retiral benefits and pension, the employee shall be entitled for the interest at the current market rate with effect from the date of his/her retirement till the date of actual payment. The interest on delayed payment shall be paid by the State Government. It will be open to the State Government to recover it from the officer/officials who are found to be guilty for negligence in payment of the pension. If such official is retired, the amount of the interest shall be recovered from his/her post retiral benefits/pension after furnishing him/her opportunity.
iii) It will be open to the State Government to initiate proceedings against such official for taking action for misconduct in terms of the Rules, 1995, if he is in service."
This Court in the case of Smt. Phoola Rani Vs. State of U.P. & 3 Others (Writ A No. 37679 of 2017, decided on 22.08.2017), allowing the claim of the petitioner for interest @ 9% per annum, has passed the following order:-
"In view of the above, the writ petition is disposed of by issuing a direction upon the respondent no. 3 to pass an appropriate order for the payment of interest on delayed payment. The interest shall be paid by the State Government within three months. It will be open to the State Government to recover the amount from the officials who are found to be guilty for taking decision."
A Division Bench of this Court in Bansh Narain Singh Vs. State of U.P. & Others (Writ Petition (SB) No. 145 of 2014, decided on 20.06.2018), has made following observations:
"11. It has been argued that the the petitioner is not only entitled for payment of such arrear of salary which is legally due but is also entitled for interest on account of delayed payment. It is submitted that petitioner is lawfully entitled for payment of regular pension, gratuity, arrears of salary alongwith interest thereon, however due to highhandedness and arbitrariness of the University, the same is stuck up in red tape.
17. In the case of Gorakhpur University vs. Dr. Shitla Prasad Nagendra and others, reported in 2001 (92) SCSLJ 247, the post-retiral dues of the Professor of the University had been withheld on the ground that the Professor has retained the University's accommodation after his retirement. The Apex Court has held that pension and gratuity are no longer matters of any bounty to be distributed by the 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. The Apex Court has held as follows:
"We have carefully considered the submission 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 Court reported in R. Kapur which in turn, relied upon earlier decisions in State of Kerala Vs. M. Padmanabhan Nair and Som Prakash. This Court has been repeatedly emphasizing the position that pension and gratuity are not longer matters of any bounty to be distributed by the Government bur are valuable rights acquired and property in their hands and any delay in settlement and disbursement whereof should be waived seriously and dealt with severely by imposing penalty in the form of payment of interest. Withholding to withhold 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."
18. In the case of State of Kerala Vs. M. Padmanabhan Nair and Som Prakash, reported in (1985) 1 SCC 429, the Apex Court observed 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. 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.
19. In the matter of State of Jharkhand v. Jitendra Kumar Shrivastava and another;(2013) 12 SCC 210 , it has been held by their Lordships of the Supreme Court that gratuity and pension are not bounty and it is thus a hard earned benefit which accrues to an employee and is in the nature of property. This right to property cannot be taken away without the due process of law as per the provisions of Article 300-A of the Constitution of India.
22. 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 8 years in settling the terminal benefits payable to the petitioner. Such a delay is attributable on the part of the respondents. The audit objection was raised way back in the year 2002, which was communicated to the petitioner vide letter dated 14.1.2003 to which petitioner had already tendered reply. The petitioner attained the age of superannuation way back in the year 2009 and since then eight long years have elapsed but still it is said that the terminal benefits and pension could not be paid due to pendency of audit objection. 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 terminal benefit and pension payable to the petitioner for about 9 years purportedly due to audit objection cannot be accepted that too when the excess amount has already been recovered from the dues of the petitioner.
24. Considering the facts in its entirety, the University authorities are directed to get the audit objection corrected/redressed within a period of six weeks from the date of production of certified copy of the said order. It is further provided that the petitioner shall be paid all his admissible dues/retiral benefits including arrears of salary and pension, leave encashment etcetra within a period of three months. The petitioner shall be entitled for 9% interest on account of delay in payment of admissible dues."
From the material available on record, it is clear that there is a delay in payment of retiral benefits to the petitioner and as such, he is entitled for interest till the date of actual payment.
In view of the law laid down by the Hon'ble Supreme Court as well as this Court,the order dated 05.03.2016 passed by the respondent no. 5, i.e., the Chief Medical Officer, Aligarh, cannot be sustained and it is, accordingly, quashed.
The writ petition succeeds and is allowed. The respondent no. 5, i.e., the Chief Medical Officer, Aligarh, shall pass an appropriate order, in accordance with law, for the payment of interest @ 9% per annum on delayed payment to the petitioner within a period of one month from the date of production of certified copy of this order.
Thereafter, the interest shall be paid by the State Government within a period of one month from the date of decision of the respondent no. 5. It will be open to the State Government to recover the amount from the Officer(s) concerned, who are found guilty and responsible for the delayed payment to the petitioner.
Order Date :- 25.9.2019 Amit Mishra