Dismissed

The Kerala State Electricity Board,Rep.by Its Secretary,Vydhyuthi Bhavan,Pattom,Thiruvananthapuram v. N.Sreekumaran NAIR,TC.41/1895

Kerala HC18 Jun 2012RSA/725/2012

Case brief

AI extract

What is this about?

This second appeal concerns a retired employee's claim for interest on delayed pension benefits. The trial court dismissed the suit due to financial stringency, but the first appellate court held the employer liable under the Payment of Gratuity Act and ordered recovery. This court upheld the lower court's finding, dismissing the appeal and affirming liability for delay damages.

What did the court decide?

The second appeal is dismissed; the first appellate court's decree for recovery of damages by way of interest on the delayed payment of pensionary benefits is upheld.

The Kerala State Electricity Board,Rep.by Its… — Pension and Retirement Benefits | Kerala HC (2012)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT:

¶3

THE HONOURABLE MR.JUSTICE THOMAS P.JOSEPH

¶4

MONDAY, THE 18TH DAY OF JUNE 2012/28ND JYAISHTA 1934

¶5

RSA.No. 725 of 2012 ()

¶6

AS.79/2006 of PRL.SUB COURT,TRIVANDRUM OS.1847/2003 of II ADDL.MUNSIFF COURT,TRIVANDRUM

¶7

APPELLANT(S)/RESPONDENTS NO.1 AND 2/DEFENDANTS A AND 2

¶8

1. THE KERALA STATE ELECTRICITY BOARD,

¶9

REP.BY ITS SECRETARY,VYDHYUTHI BHAVAN, PATTOM,THIRUVANANTHAPURAM .

¶10

2. THE CHIEF ACCOUNTS OFFICER

¶11

KSE BOARD, VYDHUTHI BHAVAN, PATTOM

¶12

THIRUVANANTHAPURAM.

¶13

BY ADVS.SRI.P.SANTHALINGAM (SR.) SRI.S.SHARAN,SC,K.S.E.BOARD

¶14

RESPONDENT(S)/APPELLANT/PLAINTIFF:

¶15

N.SREEKUMARAN NAIR,TC.41/1895 GANDHI ILLAM, KADIYAPATTANAM LANE, MANACAUD P.O. THIRUVANANTHAPURAM-686 019.

¶16

THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 18-06-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶17

tss.

¶18

THOMAS P. JOSEPH, J.

¶19

-------------------------------------R.S.A. No.725 of 2012

¶20

-------------------------------------Dated this the 18^th day of June, 2012.

¶21

JUDGMENT

¶22

This second appeal arises from the judgment and decree in A.S.

¶23

No. 79 of 2006 of the court of learned Principal Sub Judge,

¶24

Trivandrum reversing the judgment and decree of the learned

¶25

II Additional Munsiff, Trivandrum in O.S. No. 1847 of 2003.

¶26

Respondent, it is not disputed was an employee of the first

¶27

petitioner and retired as a Sub Engineer on 30.04.2002. His retiral

¶28

benefits fell due on 01.05.2002. Respondent had submitted all the

¶29

necessary papers regarding his pensionary claim sufficiently in advance but the benefits like DCRG, commuted value of PF and value

¶30

of leave surrender were not disbursed on time as prescribed by the

¶31

Rules. Respondent approached the Lok Ayuktha with a complaint.

¶32

The Lok Ayuktha directed the appellants to pay the benefits within

¶33

one month. The benefits excluding Rs.43,371/- was paid to the

¶34

R.S.A. No.725 of 2012 -: 2 :-

¶35

respondent after a laps of 8 months and 15 days. The sum of Rs.43,371/- has not been paid to the respondent. Hence respondent

¶36

claimed damages by way of interest at the rate of 12% per annum from 01.05.2002 on the delayed payment and also recovery of Rs.

¶37

43,371/-.

¶38

Appellants contended that all benefits excluding Rs. 43,371/-

¶39

was paid to the respondent and hence the claim for damages by way

¶40

of interest cannot be entertained. The pensionary benefits could not

¶41

be disbursed due to financial crisis of the first appellant. This court

¶42

issued a general direction to the first appellant to set apart 10% of

¶43

the revenue for disbursement of pensionary benefits. Later a Division

¶44

Bench of this court in W.A. No. 398 of 2002 fixed the same at Rs. 15

¶45

Crores per month. This court did not direct payment of interest on delayed payment of the pensionary benefits. It was also contended

¶46

that the Government of Kerala as part of its economy measures

¶47

R.S.A. No.725 of 2012 -: 3 :-

¶48

ordered vide G.O.(P) NO.56/02 to enhance the discount rate of

¶49

pension to 8.75% and for restoration of period of computation of

¶50

pension from 12 years to 15 years. Later, the Government as per G.O.

¶51

(P) No. 254/02 reduced the discount rate of pension from 8.75% to 5.31% and published a revised table of commuted value. It is

¶52

contended that there was no delay on the part of the appellants in

¶53

payment of the pensionary benefits to the respondent and that delay

¶54

was occasioned due to financial stringency.

¶55

The Trial court accepted the case of the appellants and

¶56

dismissed the suit. Trial court was of the view that the delay was due

¶57

to financial stringency of the appellants and hence respondent is not

¶58

entitled to get any interest from the appellants.

¶59

The first appellate court took a different view of the matter.

¶60

It held that financial stringency of the first appellant is not a ground

¶61

for withholding the retiral benefits. First appellate court was of the

¶62

R.S.A. No.725 of 2012 -: 4 :-

¶63

view that the first appellant is governed by the provisions of the

¶64

Payment of Gratuity Act, 1972 and hence was bound to disburse the

¶65

gratuity within the specified time as held by the Supreme Court in

¶66

Municipal Corportion of Delhi V. Dharam Prakash Sharma and

¶67

another (1998)7 SCC 221 and State of Punjab V. Labour Court,

¶68

Jullundur and others ((1980) 1 SCC 4). First appellate court also

¶69

held that, appellants cannot take shelter under the decisions of this

¶70

court in the writ petition and appeal referred above and consequently

¶71

held that respondent is entitled to get damages by way of interest on

¶72

the delayed payment of pensionary benefits. Accordingly, respondent

¶73

was given a decree for recovery of Rs.92,939/-.

¶74

The dispute in this case is concerning the liability of the first

¶75

appellant to pay damages for the delay in payment of pensionary

¶76

benefits. According to the appellants it was because of financial

¶77

stringency. True, that this court issued certain directions in O.P.

¶78

R.S.A. No.725 of 2012 -: 5 :-

¶79

No.34188 of 2001 and the appeal arising from the judgment in that

¶80

case. But that does not absolve first appellant of its liability to ensure

¶81

payment of pensionary benefits without delay. There is no case or

¶82

evidence that the delay was occasioned due to any act of the respondent. In other words, may be on account of financial stringency appellants have pleaded, payment of pensionary benefits

¶83

to the respondent was delayed. He has suffered loss due to the

¶84

delayed payment.

¶85