Dismissed

State of Kerala v. Abraham Thomas

Kerala HC26 Jun 2018WA/487/2018

Case brief

AI extract

What is this about?

This writ appeal challenges a judgment granting interest on delayed arrears of pensionary benefits. The appellants argued interest should start from authorization date only. The High Court upheld the lower court's finding that delays on the State side warrant compensation from an earlier date, dismissing the appeal.

What did the court decide?

The writ appeal is dismissed. The appellants were directed to compute and pay the interest payable to the respondent within three months.

State of Kerala Vs Abraham Thomas — Pension and Retirement Benefits | Kerala HC (2018)

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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.R.RAMACHANDRA MENON & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI

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TUESDAY, THE 26TH DAY OF JUNE 2018 / 5TH ASHADHA, 1940

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WA.No. 487 of 2018 IN WPC. 26590/2010 (AGAINST THE JUDGMENT IN WP(C) 26590/2010 OF HIGH COURT OF KERALA DATED 31-01-2017)

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APPELLANTS/RESPONDENTS 1 TO 3 IN W.P.(C):

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1 STATE OF KERALA, HIGHER EDUCATION DEPARTMENT, THIRUVANANTHAPURAM-695 001.

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2 THE DIRECTOR OF COLLEGIATE EDUCATION, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 001.

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3 THE ACCOUNTANT GENERAL,

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OFFICE OF THE ACCOUNTANT GENERAL (A & G),

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THIRUVANANTHAPURAM-695 001.

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BY SRI. E.S.ASHRAF, GOVERNMENT PLEADER

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RESPONDENT/PETITIONER IN W.P.(C):

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ABRAHAM THOMAS ILLATHU PUTHENVEEDU, THURUTHICAD P.O., THIRUVALLA-689 597.

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BY ADVS. SRI.SANTHOSH MATHEW SRI.ARUN THOMAS SRI.JENNIS STEPHEN SRI.VIJAY V. PAUL SMT.MARIA ROY SMT.VEENA RAVEENDRAN

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 26-06-2018, THE COURT ON THE SAME DAY

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DELIVERED THE FOLLOWING:

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P.R. RAMACHANDRA MENON &

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R. NARAYANA PISHARADI, JJ.

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W.A. No.487 of 2018

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Dated this the 26^th day of June, 2018

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JUDGMENT

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R. Narayana Pisharadi, J

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A retired government official is sensitive to delay in drawing monetary benefits. Posthumous satisfaction of the pecuniary expectation of the superannuated public servant shall always be avoided (State of Mysore v. C.R.Sehadri :AIR 1974 SC 460).

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The appeal arises from the judgment dated 31.01.2017 passed by a learned Single Judge of this Court in W.P.(C) No.26590 of 2010.

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The appellants are the the State of Kerala and others who are the respondents in the writ petition. The respondent in the appeal is the writ petitioner. He had retired from service on 30.6.1997 as Head of the Department of Chemistry from a private college. The Government issued Ext.P1 order dated 25.11.1998, revising the pensionary benefits of the State Service Pensioners. As per Clause 23 of Ext.P1, the order has been made applicable to college teachers who come under the UGC scales of pay also. Clause 18 of Ext.P1 order provided for

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payment of arrears of pensionary benefits in instalments and it also provided that interest as applicable to General Provident Fund shall be paid on the arrears from the date of authorisation of revised DCRG and commutation. Pursuant to Ext.P1 order, arrears of DCRG and commuted pension were paid to the respondent on 25.9.2002 and the arrears of revised pension were paid to him on 8.10.2002 but no interest was paid. The respondent made Ext.P2 representation dated 28.9.2002 to the Accountant General for sanctioning interest on the arrears of gratuity and pension commutation. He filed O.P.No.34351/2002 before this Court for issuing a direction to the Government to pay him the interest on the arrears. As per Ext.P3 judgment dated 26.3.2008 in O.P.No.34351/2002, this Court directed the Accountant General to consider Ext.P2 representation submitted by the respondent in terms of Clause 18 of Ext.P1 order and to pass appropriate orders. The Accountant General sent Ext.P4 letter dated 16.02.2009 to the Government stating that he is not competent to disburse the interest and action may be taken by the Government on the basis of the judgment of this Court. The Accountant General

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also sent Ext.P5 reminder dated 31.07.2009 to the Government. As per Ext.P6 letter dated 19.12.2009, the Director of Collegiate Education sent two demand drafts, one for Rs.850/- and other for Rs.2062/-, to the respondent towards payment of the amount of interest. Challenging Ext.P6, the respondent filed W.P.(C) No.26590 of 2010 before this Court seeking the following reliefs:

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“i) to issue a writ of certiorari or any other writ, order or direction quashing Ext.P6 and the order GO (Rt) No.1205/2009/H.Edn. dated 4.8.2009 issued from Higher Education Secretary.

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ii) to issue a writ of mandamus or any other writ, order or direction directing the respondents to pay the petitioner an amount of Rs.3,78,197/- from the respondents and further interest at the rate of 6.5% to the above amount from the date of this Writ Petition till the payment of the same to the petitioner.

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iii) to grant such other reliefs required under the circumstances of the case”.

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The Director of Collegiate Education, the second

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respondent in the writ petition, filed counter affidavit in the writ petition contending that interest was paid to the respondent from the date of authorisation of the revised

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pension and commutation of pension till the date of payment. The second respondent in the writ petition also contended that the authorisation by the Accountant General was issued on 09.09.2002 only and therefore, the petitioner will be entitled to get interest on arrears of gratuity and commutation of pension from 09.09.2002 to 25.9.2002 and on arrears of revised pension from 09.09.2002 to 08.10.2002.

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The Accountant General, the third respondent in the writ petition, filed a separate counter affidavit stating that the proposal for sanction of revised pensionary benefits forwarded by the Director of Collegiate Education was received in his office only on 21.05.2002. The Accountant General also stated that after scrutiny and verification of the proposal, revised pensionary benefits were authorised on 09.09.2002. The Accountant General further contended that there was no delay occurred on the part of his office in authorising payment of the revised pensionary benefits.

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As per the impugned judgment, the learned single Judge held that there was delay in sanctioning and authorising the arrears of DCRG and commutation of pension to the

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respondent and that the respondent is entitled to get interest on the amount of arrears of revised pensionary benefits from 01.05.1999 onwards at the rate applicable for the General Provident Fund as on the relevant date. The first and the second respondents in the writ petition were directed to compute the interest payable and disburse the same to the writ petitioner. Aggrieved by the judgment of the learned single Judge, the State of Kerala and the other respondents in the writ petition have filed this appeal.

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We have heard the learned Government Pleader and also the learned counsel for the respondent and perused the pleadings and other records.

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The claim for interest on the arrears of DCRG and commuted value of pension is made by the respondent based on Clause 18 of Ext.P1 Government Order which reads as follows:

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“PAYMENT OF ARREARS

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18. The arrears on account of revision of pension/family pension shall be disbursed in two instalments- first in December, 1998 and second in March, 1999. Arrears of Commutation and DCRG of those who retired between 01.03.1997 and the date of

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this order shall be disbursed to them in 8 half yearly instalments over a period of four years from 01.12.1998. Interest as applicable for General Provident Fund will be paid on these arrears along with each instalment. The interest will accrue from the date of authorisation of revised DCRG and Commutation”.

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As per Clause 18 of Ext.P1 Government Order, the

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arrears on account of revision of pension had to be disbursed in two instalments, first in December, 1998 and second in March, 1999. The arrears of commutation of pension and DCRG of the persons who retired between 1.3.1997 and the date of the order had to be disbursed to them in eight half yearly instalments over a period of four years from 1.12.1998. The respondent is a person who retired from service on 30.06.1997, that is, between 1.3.1997 and the date of Ext.P1 order. Admittedly, arrears of DCRG and commuted pension were paid to him only on 25.9.2002 and the arrears of revised pension were paid to him only on 8.10.2002. Clause 18 of Ext.P1 provides for payment of interest on arrears of instalments from the date of authorisation of revised DCRG and commutation. In the instant case, the arrears were paid not in instalments as stipulated in Ext.P1. Admittedly, there

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was no fault on the part of the respondent causing delay in sanctioning and disbursing the arrears.

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The appellants have mainly raised two pleas. The first plea is that as per Clause 18 of Ext.P1, interest on arrears will accrue only from the date of authorisation of the revised DCRG and commutation. The authorisation for payment of arrears was issued by the Accountant General on 09.09.2002. Therefore, the respondent is entitled to get interest on arrears of pensionary benefits only from the date 09.09.2002. This plea cannot be accepted. This plea is made by the appellants conveniently forgetting the fact that there was delay on the part of the Director of Collegiate Education in forwarding the proposal for sanctioning revised pensionary benefits to the Accountant General. The proposal in that regard submitted by the Director of Collegiate Education was received in the office of the Accountant General only on 21.05.2002. No reason is shown or explanation is made by the Director of Collegiate Education for the delay occurred in submitting the necessary proposal to the Accountant General for payment of the revised pensionary benefits due to the respondent. The stipulation in

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Clause 18 of Ext.P1 that “interest will accrue from the date of authorisation of revised DCRG and Commutation” cannot be read in isolation from the other stipulations provided therein. All other stipulations contained in Clause 18 of Ext.P1 were not complied with. It is to be noted that Clause 18 of Ext.P1 also provided that “interest as applicable for General Provident Fund will be paid on these arrears along with each instalment”. When the obligation regarding payment of arrears in instalments within a time frame as stipulated in Clause 18 of Ext.P1 was not honoured, the appellants cannot be heard to say that the other stipulation in the order regarding the date of accrual of interest shall be honoured in letter and spirit. The stipulations in Clause 18 of Ext.P1 have to be read as a whole.

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The second plea raised by the appellants is that Ext.P1 Government Order is not applicable to the respondent. In support of this plea, Annexure-A1 document is produced in the writ appeal. It is a copy of the Government Order dated 04.07.2000 approving a ready reckoner for fixation of pay in accordance with the revision of pay scales which was granted as per Government Order dated 21.12.1999. Annexure A1 has

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nothing to do with Ext.P1. Moreover, the appellants had not raised any plea in the writ petition that Ext.P1 is not applicable to the respondent. Further, Clause 23 of Ext.P1 Government Order specifically states that the order is applicable to college teachers who come under the UGC scales of pay. Clause 23 of Ext.P1 reads as follows:

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“23. The orders will be applicable to College Teachers who come under U.G.C/ A.I.C.T.E/ Medical Education Scheme Scales of pay”

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If Ext.P1 order is not applicable to the respondent, who was a college teacher under the UGC scale of pay and who is a pensioner, it is not explained by the appellants what is the effect of Clause 23 in it and what is the purpose of incorporating that clause in it. Moreover, it is to be noted that it was on the basis of Ext.P1 order the appellants paid the arrears of pensionary benefits to the respondent.

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Pension and gratuity are not bounty to be distributed by the Government to its employees on their retirement. 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 (See State of Kerala v.

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Padmanabhan Nair : AIR 1985 SC 356). This principle applies

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in case of delay in payment of arrears of pensionary benefits also.

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Even in the absence of any stipulation in Ext.P1 for payment of interest on arrears, the respondent is entitled to claim interest on the arrears paid belatedly. Even in the absence of Statutory Rules, Administrative Instructions or Guidelines, an employee can claim such interest under Part III of the Constitution of India, relying on Articles 14, 19 and 21 of the Constitution (See S.K.Dua v. State of Haryana : AIR 2008 SC 1077).

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The learned Single Judge has held that six months from the date when the first instalment became due under Clause 18 of Ext.P1 order can be taken as reasonable time for sanctioning and authorising revised DCRG and commutation

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and therefore, the petitioner is entitled to interest on the revised pensionary benefits from 01.05.1999 onwards and directed the first and the second respondents in the writ petition to compute the interest payable to the writ petitioner and disburse the same to him. We see no sufficient ground to

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interfere with the impugned judgment. The writ appeal is liable to be dismissed.

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Consequently, we dismiss the writ appeal. The amount of interest payable to the respondent shall be computed and paid to him within a period of three months from the date of this

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judgment.

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Sd/-

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P.R. Ramachandra Menon, Judge

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Sd/- R.Narayana Pisharadi, Judge

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//True Copy//

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P.A to Judge