Smt.Kasturi Das Vs Ouat

IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P (C) No. 16290 of 2012

An application under Sections 226 and 227 of the Constitution of India)

--------------Smt. Kasturi Das ... Petitioner -VersusOrissa University of ... Opp. Parties Agriculture & Technology and Others

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Advocate(s) appeared in this case :- _______________________________________________________ For Petitioner : Mr.K.K. Jena, Advocate For Opp. Parties : Mr. S.N. Patanaik [Additional Government Advocate] A. Mishra & S.C. Rath, Advocates (for O.P. Nos. 1 and 2) _______________________________________________________ CORAM:

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JUSTICE SASHIKANTA MISHRA

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JUDGMENT 9^th May, 2024

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SASHIKANTA MISHRA, J.

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The petitioner in the present writ application seeks

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a direction to the Opposite Party-Authorities to pay the

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balance amount towards Death-Cum-Retirement Gratuity along with statutory interest.

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The facts, relevant only for deciding the lis are as follows:-

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2.1. The petitioner joined as Lecturer in Chemistry in the College of Basic Science and Humanities of Orissa University of Agriculture and Technology (OUAT) on 07.11.1969.

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2.2 She was promoted to the post of Reader/Associate Professor on 12.11.1986 in which capacity she continued till her voluntary retirement on 31.07.2007. By then, she had rendered 38 years of service and as such was eligible for payment of gratuity under Clause 16(1) of the OUAT Employees’ (Conditions of Service) Statute, 1989 (for short, “Statute, 1989”).

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2.3. She submitted an application on 10.7.2007 to the Registrar of the University for Payment of gratuity at an early date, which had not been paid. She was however paid unutilized leave salary and total provident funds dues under the contributory provident fund scheme.

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2.4 Challenging the inaction of the authorities in paying her gratuity, she approached this Court in W.P.(C) No.11093 of 2010 for appropriate direction. During pendency of the said writ petition, the authorities disbursed a sum of Rs.2.50 lakhs towards retirement gratuity without paying interest.

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2.5 The petitioner claims that she is entitled to enhanced gratuity of Rs.7.5 lakhs as per resolution dated 02.04.2011 of the government in Finance Department read with the proviso to Section 40(2) of the Statute, 1989. As per the said government Resolution, employees who retired between 01.01.2006 to 30.11.2008 are entitled to Death-cum-Retirement Gratuity upto a maximum of Rs.7.50 lakhs. Since she was paid only Rs.2.50 lakhs on 01.09.2010, she is entitled to receive balance amount of Rs.5 lakhs.

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2.6 During pendency of the present writ petition, OUAT, by order dated 28.09.2013 disbursed the differential gratuity amounting to Rs.5 lakhs in favour of the petitioner. Accordingly, the amount was credited to the account of the petitioner. The basic relief claimed in

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the writ petition having thus been granted, the petitioner only claims statutory interest on the gratuity amount for its delayed payment.

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Counter affidavit has been filed by the University wherein all the relevant facts have been admitted. It is further stated that the petitioner is entitled to enhanced gratuity as per the government Resolution, but the University being an aided institution of the State Government, the differential amount would be paid after receipt of funds for the purpose. The petitioner’s basic gratuity of Rs.2.50 lakhs was paid after complying with the objections and official formalities. It is further admitted that the University follows all rules, regulations of the State Government relating to pension/grant of pensionary benefits mutatis mutandis. As such, as per the government Resolution, the petitioner is entitled to receive enhanced gratuity for which concurrence of the Finance Department was sought for by the University.

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Heard Mr. Karunakar Jena, learned counsel for

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the petitioner, Mr. S.C Rath, learned counsel for the OUAT

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and Mr. S.N. Patanaik, learned Addl. Government Advocate for the State.

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Mr. Jena would argue that though the gratuity, including the enhanced gratuity, was paid to the petitioner, yet the same was after inordinate delay. The provision of the Orissa Civil Services (Pension) Rules, 1992 mandates that gratuity must be paid within a year, failing which interest shall be payable on the said amount. In the instant case, the petitioner admittedly retired on 31.07.2007 and therefore, gratuity including the enhanced gratuity ought to have been disbursed in her favour latest by 31.07.2008. However, gratuity amounting to Rs.2.50 lakhs was released only on 01.09.2010 and the balance amounting of Rs.5 lakhs was released on 26.11.2013. Such delay is only on account of administrative lapses and therefore, the authorities are liable to pay interest. Mr. Jena has relied upon a judgment of the Supreme Court in the case of State of

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Kerala and others v. M. Padmanabhan Nair¹ in

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support of his contention.

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Mr. S.C. Rath, learned counsel appearing for the

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University, submits that the University is an aided institution and therefore, dependent on the State government for funds. In the instant case, the petitioner’s basic gratuity was released after complying with the audit objection and other official formalities vide order dated 16.08.2010, which is within a reasonable time. As regards the enhanced gratuity, the Resolution of the State Government to enhance the gratuity to Rs.7.50 lakhs with effect from 01.01.2006 was placed before the Board of Management of the University for consideration and adoption in case of teaching and non-teaching staff. The Board of Management approved the proposal and resolved to move the Government in Finance Department for its concurrence. Accordingly, the Government in Finance Department was requested vide letter dated 06.08.2011. After receipt of concurrence the enhanced amount was paid. Therefore, according to Mr.Rath it cannot be said

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1 AIR 1985 SC 356

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that there was any delay on the part of the University so as to make it liable to pay interest.

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Mr. S. N. Patanaik, learned Addl. Government Advocate would submit that the University being an aided institution, depends of the government for funds. Under such circumstances, the enhanced gratuity could not have been released without obtaining concurrence of the government.

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The enhanced gratuity amount of Rs.7.50 lakhs as claimed having already been disbursed by the University in favour of the petitioner, the only question that remains to be decided is, whether the petitioner is entitled to interest on delayed payment. In this regard reference may be had to Statute 40(2) of the Odisha University of Agriculture and Technology Employees (Conditions of Service) Statute, 1989, which reads as follows:-

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“ The employees under the Contributory Provident Fund Scheme shall be entitled to Gratuity including Death Gratuity at the same rates and subject to the same maximum on the last pay drawn on completion of 58 years of age or at the time of death before the age of 58 years, as admissible under the Pension Scheme .”

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Admittedly, the OUAT does not have its own pension scheme. It has been mentioned in the counter affidavit on the paragraph-11 that OUAT follows all rules/regulations of State Government relating to sanction/grant of pensionary benefit and gratuity mutatis mutandis. In fact, it is for such reason that the Board of Management of the University resolved to adopt the resolution dated 02.04.2011 of the government revising the gratuity limit from Rs.2.5 lakhs to Rs.7.50 lakhs with effect from 01.01.2006. In this context reference to the provisions of Orissa Civil Services (Pension) Rules, 1992 would be profitable. Rule 49 deals with death/retirement gratuity. Sub-rule 5(a) of Rule 49 reads as follows:-

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“(5)(a). Where the sanction of payment of gratuity is delayed for more than a year from the date it is due under Sub-rules (1) or (2), as the case may be, and such delay is attributable to administrative lapses, interest at the rate of 7 per cent per annum for the period beyond one year shall be payable on the amount of gratuity.

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Provided that where a Departmental or judicial proceeding as the case may be in respect of a pensioner, is continued or initiated under Rule 7, the gratuity shall become payable on the date of finalization of such proceedings and the period of one year shall be reckoned from the date.”

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It is evident that gratuity is to be released within a

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year from the date it is due. If it is not paid within one year from the date it is due, interest @7% per annum would be payable if such delay is attributed to administrative lapses. Admittedly, the petitioner retired on 31.07.2007 and therefore, gratuity ought to have been released with effect from 31.07.2008. The basic gratuity of Rs. 2.50 lakhs was paid by order dated 16.08.2010. It is stated that the same was paid after complying with objections regarding the lien period allowed to the petitioner and completion of all official formalities. This is too vague an explanation to be accepted. That apart, the Resolution of the Finance Department dated 02.04.2011

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was placed before the Board of Management on 02.07.2011 and was adopted. It is stated that thereafter concurrence of the government in Finance Department was sought for. It has not been clarified when such concurrence was received. The balance amount of Rs.5 lakhs was released only on 26.11.2013, i.e., during pendency of the present writ petition. In the case of M.

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Padmanabhan Nair (supra) , the Supreme Court held as

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follows:-

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“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.”

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From the facts narrated hereinbefore, it is more

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than evident that the matter relating to payment of gratuity and revised gratuity was caught up in administrative wrangles in which the petitioner had nothing to do. Simply by passing on the buck to the State Government, on the ruse of obtaining administrative concurrence of the Finance Department, a retired employee cannot be made to suffer. This is more so in case of an employee, who retired after serving the establishment for as long as 38 years. This Court is therefore of the considered view that there was undue delay caused by administrative lapses in payment of full gratuity to the petitioner as admissible in law for which

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the authorities are liable to pay interest on the amount released.

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For the foregoing reasons therefore, the writ petition is allowed in part. The Opposite Party Nos.1 and 2 are directed to pay interest @ 7% calculated from 31.07.2008 till, the date on which the basic gratuity of Rs.2.50 lakhs was paid and further 7% on Rs.5 lakhs from the said date till the date on which the balance amount of Rs.5 lakhs was actually paid to the petitioner. This order shall be carried out without any further delay and in any case, not later than two months from the date of production of certified copy of this order.

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……..…………………..

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Sashikanta Mishra, Judge

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B.C. Tudu

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Signature Not Verified

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Digitally Signed Signed by: BHIGAL CHANDRA TUDU Designation: Senior Stenographer Reason: Authentication Location: Orissa High Court, Cuttack Date: 13-May-2024 09:57:12

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Smt.Kasturi Das v. Ouat

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Smt.Kasturi Das v. Ouat

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