Allowed

The Municipal Council, Bhandara Thr. C.O. Bhandara and Anr. v. Mrs. Bhagubai Shamrao Gonnade Thr. Her Lrs. Ku. Barsibai Shamrao Gonnade and Anr.

Bombay HC27 Jul 2009LPA/66/2009

Case brief

AI extract

What is this about?

The High Court Bench at Nagpur decided Letters Patent Appeals concerning interest on pension arrears. The court held that under Maharashtra Civil Services (Pension) Rules 1982, interest is payable but reduced to 5% during the period of government delay in post sanction, escalating to 10% thereafter.

What did the court decide?

Municipal Council directed to pay interest at 5% for three months from post-sanction date and 10% thereafter on pension arrears.

The Municipal Council, Bhandara Thr. C.O… — Pension and Retirement Benefits | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR

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LPA NO. 66 OF 2009 IN WRIT PETITION NO. 921 OF 2008

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(Municipal Council, Bhandara & Anr. vs. Mrs. Bhagubai Shamrao Bonnade & Anr.) AND

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LPA NO. 247 OF 2009 IN WRIT PETITION NO. 788 OF 2008

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(Mrs. Vimal Ishwardas Wadhibhasme vs. Municipal Council, Bhandara & Anr.)

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AND

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CAZ NO. 212/2009 IN LPA ST. NO. 2976 OF 2009 IN WP NO. 986 OF 2008 (Mrs. Kaushalyabai Pundlik Meshram vs. Municipal Council, Bhandara & Anr.) AND

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CAZ NO. 230/2009 IN LPA ST. NO. 2980 OF 2009 IN WP NO. 2461 OF 2008 (Mrs. Devkabai Motisingh Chauhan vs. Municipal Council, Bhandara & Anr.) WITH

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CAZ NO. 239/2009 IN LPA ST. NO. 2957 OF 2009 IN WP NO. 790 OF 2008 (Mrs. Yashodha Kisan Barapatre vs. Municipal Council, Bhandara & Anr.)

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Office Notes, Office Memoranda of Coram, appearances, Court's orders or directions and Registrar's orders.

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Court's or Judge's orders

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CORAM : B.P. DHARMADHIKARI &

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F.M. REIS, JJ. JULY 27, 2009.

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Heard Shri Jaiswal, learned counsel for the employees and Shri Dhatrak, learned counsel for the Municipal Council.

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In all these matters, the employees are claiming interest at 10% per annum on pension arrears and in LPA No. 66 of 2009, Municipal Council is in appeal before us contending that grant of interest at 9% to employee therein is unjustified.

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Shri Dhatrak, learned counsel has contended that though there was order of Industrial Court to regularise the services of the employee Mrs. Bhagubai Shamrao Bonnade, the government sanctioned the post

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on 17.12.2008 and hence till then there was no question of Municipal Council paying any pension or arrears to her. He contends that therefore grant of interest at 9% in the said matter is unjustified.

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In the said matter and in other LPAs Shri Jaiswal, learned counsel for the employees contends that the service conditions of the employees are regulated by the provisions of Maharashtra Civil Services (Pension) Rules, 1982 and Rule 129A and 129B require the employer to pay interest on the amount of gratuity and pension, if the release thereof is delayed.

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Shri Jaiswal, learned counsel has contended that in fact the employees had demanded only 10% interest but as per the amendment in the said rules, later on rate of interest has been increased to 12%.

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Shri Dhatrak, learned counsel for the respondent – Municipal Council has contended that in those matters also the posts are either sanctioned belatedly or proposal for sanction are still being considered by the State Government. He states that the moment posts are sanctioned, the interest amount can be released.

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The perusal of records of LPA No. 66 of 2009 clearly show that the employee Bhagubai had filed ULP Complaint No. 440 of 1997 under Scheduled IV, item 9 under Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, claiming regularization and that relief was given to her by the

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Industrial Court on 27.1.1992. She had joined the services on 21.12.1976 and after adjudication in her favour, she was regularized on 21.7.1987. She retired on 31.05.1998 after rendering about 22 years of service. She also expired on 12.12.2007.

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As being pointed out by the Municipal Council, post for her has been sanctioned on 17.12.2008. Thus, though there was direction by the Industrial Court to regularize her, the Municipal Council could not pay pension as government did not or could not sanction the post for her employment. The post has been sanctioned on 17.12.2008 and this sanction order is not in challenge before us. The learned Single Judge has rightly found that the employee was, therefore, entitled to interest. However, grant of interest at 10% will put in a heavy burden on the public exchequer because until and unless the post was created, the pension could not have been sanctioned.

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Hence, we direct the Municipal Council to pay interest to legal heirs of the deceased Bhagubai @ 5% from 1.6.1998 till the expiry of period of three months after the post is sanctioned to the Municipal Council by the State Government. After the said period of three months, for belated payment of pension, the heirs of the deceased Bhagubai shall be entitled to interest @ 10% as already awarded.

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Letters Patent Appeal No. 66 of 2009 is allowed accordingly. The interest amount of pension

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shall be deposited in the Industrial Court in ULP Complaint No. 214 of 2004 by 31^st December 2009.

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Letters Patent Appeal No. 247 of 2009

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In Letters Patent Appeal No. 247 of 2009, for the reasons already disclosed above, we find that the learned Single Judge was not right in holding that the delay in payment of arrears ought to have been explained by the employees. The provisions of Rule 129A and 129B of the Maharashtra Civil Services (Pension) Rules, 1982, entitle the employees to grant of interest immediately upon their retirement if the pension is not paid.

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Here, as already observed above, the Municipal Council could not and is not in a position to pay the interest for want of sanction from the State Government, hence, till expiry of period of three months from the date on which Municipal Council receives the sanction of post of respective employees, the Municipal Council shall pay interest @ 5% on pension arrears and thereafter shall pay interest @ 10% till the actual payment to the employee. The amount of interest becoming due to such employee shall be deposited in his respective ULP Complaint before the Industrial Court by 31^st December 2009 or within a period of three months after the post is sanctioned to Municipal Council, whichever is later.

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Letters Patent Appeal Stamp No. 2976/2009, 2980/2009 and 2957 of 2009

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In these LPAs there is a prayer for condonation of delay. The poverty is stated to be the reason for inability to move the Court in time.

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The learned counsel for the Municipal council is opposing the prayer for condonation of delay. However, in view of the order passed in LPA No. 66 of 2009 as also in LPA No. 247 of 2009, as the matter pertains to interest on pension arrears, delay is condoned in these three matters. Civil Applications No. 212/2009, 230/2009 and 239 of 2009 are disposed of accordingly. LPAs be registered.

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The issue involved is already adjudicated upon by us in LPA No. 247 of 2009. Hence, these LPA Stamps No. 2976/2009, 2980/2009 and 2957 of 2009 are also disposed of in terms of order dated 27.7.2009 in LPA No. 247 of 2009. The appellants are thus given same benefits.

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JUDGE JUDGE

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*GS.

The Municipal Council, Bhandara Thr. C.O. Bhandara and Anr. v. Mrs. Bhagubai Shamrao Gonnade Thr. Her Lrs. Ku. Barsibai Shamrao Gonnade and Anr.

Case brief

What is this about?

What did the court decide?

The Municipal Council, Bhandara Thr. C.O. Bhandara and Anr. v. Mrs. Bhagubai Shamrao Gonnade Thr. Her Lrs. Ku. Barsibai Shamrao Gonnade and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

Coram

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