Allowed

K.J. Hareendra Nath v. the Kerala State Electricity Board

Kerala HC18 Mar 2016RSA/781/2014

Case brief

AI extract

What is this about?

In a second appeal, this Court held that a retired Accounts Officer of the Kerala State Electricity Board is entitled to interest on delayed terminal benefits. Relying on constitutional principles and precedents, the Court ruled that pension and gratuity are valuable property rights. The appeal was allowed, and the lower courts' judgments were set aside.

What did the court decide?

Notice issued against respondents to pay interest on delayed terminal benefits (Gratuity, Provident Fund, Pension, Leave dues) at 9% p.a. (6% p.a. after decree date).

K.J. Hareendra Nath Vs the Kerala State… — Municipal and Town Planning | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

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FRIDAY, THE 18TH DAY OF MARCH 2016/28TH PHALGUNA, 1937

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RSA.No. 781 of 2014 ()

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AGAINST THE JUDGMENT IN AS. NO.238/2012 OF ADDL. DISTRICT COURT-III, THIRUVANANTHAPURAM DATED 04-01-2014. AGAINST THE JUDGMENT IN OS. NO.603/2003 OF II ADDITIONAL MUNSIFF COURT, THIRUVANANTHAPURAM DATED 15-09-2012.

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APPELLANT/APPELLANT/PLAINTIFF:

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K.J. HAREENDRA NATH, AGED 66 YEARS, "HARISREE", KRA-110, BANK ROAD, ANAYARA P.O., THIRUVANANTHAPURAM-695 029.

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BY ADV. SRI.M.R.JAYALATHA.

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RESPONDENTS/RESPONDENTS/DEFENDANTS:

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1. THE KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VAIDHYUTHI BHAVAN, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004.

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2. THE CHIEF ENGINEER (HRM), KERALA STATE ELECTRICITY BOARD, VAIDHYUTHI BHAVAN, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004.

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BY ADV. SRI.K.M.SATHYANATHA MENON, SC.

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THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 18-03-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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rs.

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P.B.SURESH KUMAR, J.

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R.S.A.No.781 of 2014

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Dated this the 18^th day of March, 2016

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JUDGMENT

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The plaintiff in a suit for realisation of money is the appellant in this second appeal.

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The plaintiff was an Accounts Officer in the service of the Kerala State Electricity Board, hereinafter referred to `the

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Board' for short. He retired from service on 31.1.2002. Though the plaintiff retired from service on 31.1.2002, the proceeds of his General Provident Fund account amounting to Rs.1,40,750/was disbursed to him only on 25.9.2002. Likewise, the Death Cum Retirement Gratuity payable to the plaintiff on his superannuation amounting to Rs.2,80,000/- was disbursed to him only on 11.12.2002. Similarly, the commuted value of the pension of the plaintiff amounting to Rs.3,24,411/- and the leave surrender dues of the plaintiff amounting to Rs.1,02,398/- were

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R.S.A.No.781 of 2014

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disbursed to him only on 17.12.2002. According to the plaintiff, he should have been disbursed the aforesaid amounts on the date of his retirement itself and that therefore he is entitled to interest for the delayed payment of the said amounts. It is the case of the plaintiff that though he had called upon the Board to pay interest for the delayed payment of his terminal benefits as per Ext.A3 notice, the same was not responded to by the Board and hence the suit for realisation of Rs.56,195/- towards interest for the amounts referred to above for the period from the date of retirement till the respective dates of disbursement.

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The defendants resisted the suit contending that

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the rules governing payment of the terminal benefits, except the rules relating to the payment of the Provident Fund, do not provide for payment of interest for delayed payment of the benefits and that therefore the plaintiff is not entitled to claim interest for delayed payment of the terminal benefits. As far as the proceeds of the provident fund is concerned, according to the Board, the plaintiff is entitled to interest for delayed payment and

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R.S.A.No.781 of 2014 3

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a sum of Rs.7,507/- has already been disbursed to him on that head.

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The trial court though found that the plaintiff is entitled to claim interest for delayed payment of his terminal benefits as per the provisions of the Interest Act, dismissed the suit holding that the plaintiff has not mentioned the date from which he is claiming interest in Ext.A3 notice sent to the Board prior to the institution the suit. The plaintiff took up the matter in appeal. The appellate court, though reversed the finding on the basis of which the trial court declined relief to the plaintiff, confirmed the decision of the trial court holding that since the terminal benefits of the plaintiff has been disbursed prior to the institution of the suit, he is not entitled to interest for the said amounts in view of the proviso to Section 3(1) of the Interest Act, 1978. The plaintiff is aggrieved by the said decision of the appellate court and hence the second appeal.

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Heard the learned counsel for the appellant as also the Standing Counsel for the Kerala State Electricity Board.

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R.S.A.No.781 of 2014

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It is beyond dispute that the terminal benefits due

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to the plaintiff were not disbursed to him at the time of his retirement. It is now settled that Pension and gratuity are no longer a payment by way of compassion or gratis, but valuable rights, and property, in the hands of the pensioner and that therefore if the said benefits are not disbursed on time, the victim is entitled to interest at the rate of 12 percent per annum for the delayed payment. ( See State of Kerala v. Padmanabhan Nair [1984 KLT 542]). In S.K.Dua v. State of Haryana and another (AIR 2008 SC 1077), the Apex Court held that even in the absence of any 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 of India. It is also settled that the liability of the employer to pay interest for the terminal benefits commences on the expiry of 2 months from the date of retirement [See Krishnan Namboothiri v. Travancore Devaswom Board (2015(1) KLT SN 100)]. The plaintiff, in the circumstances, is entitled to a

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R.S.A.No.781 of 2014

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decree for realisation of interest for the terminal benefits disbursed to him from 1.4.2002 less the amount already disbursed in him towards interest namely, Rs.7,507/-. Since it is found that the plaintiff is entitled to interest dehors the provisions of the Interest Act, I am not examining the correctness of the findings rendered by the courts below as to the entitlement of the plaintiff under the said Act.

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In the result, the second appeal is allowed, the impugned judgments are set aside and the suit is decreed permitting the plaintiff to recover from the Board interest for the Death Cum Retirement Gratuity disbursed to the plaintiff for the period from 1.4.2002 to 10.12.2002. The plaintiff will also be entitled to interest for the proceeds of his Provident Fund for the period from 1.4.2002 to 24.9.2002, less Rs.7507/- paid to him by way of interest. Likewise, the plaintiff will be entitled to interest for the commuted value of his pension and the leave surrender dues disbursed to him for the period from 1.4.2002 to 16.12.2002. The interest shall be paid to the plaintiff at the rate

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R.S.A.No.781 of 2014

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of 9% per annum. The plaintiff will also be entitled to interest at the rate of 6% per annum for the aforesaid amounts from the date of the decree of the trial court till realisation. All the interlocutory applications in the appeal are closed.

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P.B.SURESH KUMAR, JUDGE.

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smm

K.J. Hareendra Nath v. the Kerala State Electricity Board

Case brief

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K.J. Hareendra Nath v. the Kerala State Electricity Board

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