Dismissed

Punjab Water Supply and Sewerage Divn. Bhatinda v. Rabinder Kumar Singla and Ors.

Punjab & Haryana HC15 Oct 2010RSA/3365/2010

Case brief

AI extract

What is this about?

In this second appeal, the High Court dismissed the suggestion by the Board that the rule regarding interest calculation was not applicable when funds were withheld due to negligence. The court held that the respondent is entitled to interest for the delay period and that the cause of action was recurring, making the limitation plea inapplicable.

What did the court decide?

Appellant's appeal dismissed. No substantial question of law arose.

Punjab Water Supply and Sewerage… — Pension and Retirement Benefits | Punjab & Haryana HC (2010)

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RSA No.3365 of 2010(O & M)

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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RSA No.3365 of 2010(O & M) Date of Decision:15.10.2010

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Punjab Water Supply and Sewerage Board & anr.

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.... appellants

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Versus

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Rabinder Kumar Singla & ors.

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.....respondents

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CORAM: HON'BLE MR.JUSTICE RAKESH KUMAR GARG

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1.Whether Reporters of local papers may be allowed to see the judgement?

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2. To be referred to the Reporters or not?

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3. Whether the judgment should be reported in the Digest?

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Present: Mr.Vijay Kaushal,Advocate for the appellants

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RAKESH KUMAR GARG J.

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CM No.12061-C of 2010

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Civil Misc.application is allowed subject to just exceptions and the affidavit is taken on record. After going through the averments made in the application and the affidavit which is supported by an affidavit, delay of 179 days in re-filing the appeal is condoned.

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CM disposed of.

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RSA No.3365 of 2010(O & M)

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This is defendants second appeal challenging the judgement of the Lower Appellate Court, whereby while accepting the appeal filed by the plaintiff-respondent, judgement and decree of the trial Court was set aside and suit filed by the plaintiff-respondent was decreed and the appellants were directed to make the payment of interest on the amount of the Contributory Provident Fund for the delayed period of payment along with future interest on the said amount till its actual

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RSA No.3365 of 2010(O & M)

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payment.

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As per the facts stated in the plaint, the plaintiff-respondent remained employee of the appellant-Board from 14.03.1980 to 31.03.1999. Thereafter, he was transferred to the Local Bodies Department of the State of Punjab and was permanently absorbed in the said department and since then he is working as such. As per further averments, the appellant-Board was deducting contribution amount from the plaintiff-respondent under the provisions of Employees Provident Fund Act from his salary and the appellants were also duty bound to deposit the amount of their own contribution in a specific Head of the Contributory Provident Fund. Due to absorption of plaintiff in Local Bodies department, he became entitled to get payment of amount of CPF payable to the plaintiff by the appellants through the department of Local Bodies. A sum of 2,32,501/-was due to the plaintiff as on 31.03.1999 on this account. There was a delay in making the payment causing loss to the plaintiff. The defendants released part payment of a sum of 1,32,501/- on 05.04.2001 and ` 1 lac on 28.05.2001. Since the plaintiff was entitled to recover the amount of interest on the period of delay at the rate of 18% per annum, he requested the defendants to release the amount but to no effect.

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Hence the present suit.

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Defendant No.4 was proceeded ex parte. Defendants No.1 and 2 filed their written statements submitting that the deduction on account of contributory fund was made from the salary of the plaintiff and the amount was deposited. Plaintiff was absorbed by employee by Local Bodies department and was entitled to get the payment of dues till the date of his absorption in the local government department. The payment of the amount was made to the plaintiff-appellant after receiving the approval from Head office of Punjab Water Supply and Sewerage Board and as per availability of funds by the Drawing and Disbursing Officer. It was further

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RSA No.3365 of 2010(O & M)

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stated that as on 31.03.1999 an amount of 2,32,501/- was at the credit of the plaintiff and the said amount had been paid to the plaintiff by the Municipal Committee, Bathinda. The said amount was paid as per deduction made from the salary of plaintiff and as per the contributions made by the department and interest accrued thereon. A sum of 1,32,501/-, was paid on 05.04.2001 and ` 1 lac was paid on 28.05.2001.

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Defendant No. 3 filed separate written statement, wherein it was stated that appellant-Board is not covered under the Employee's Provident Funds and Miscellaneous Provisions Act, 1952 and the dues were to be claimed from defendant No.1.

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From the pleadings of the parties, the following issues were

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framed:

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Whether the plaintiff is entitled to the relief of declaration as prayed for? OPP

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Whether the plaintiff is entitled to the relief of mandatory injunction as prayed for?OPP

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Relief.

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After hearing learned counsel for the parties and perusing the evidence on record, the trial Court dismissed the suit.

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Plaintiff-respondent challenged the aforesaid judgement and decree of the trial Court by filing an appeal before the Lower Appellate Court which was accepted vide impugned judgement and decree.

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While accepting the appeal, the Lower Appellate Court observed as under:

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“The controversy is not big. The admitted facts are that plaintiff previously worked with defendant No. 1 from 14.3.1980 to 31.3.1999. Then he was transferred to Local Bodies Department where he was permanently absorbed. Plaintiff was member of Contributory Provident

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RSA No.3365 of 2010(O & M)

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Fund. As a rule, the fund should have been transferred immediately on 31.3.1999. However, it comes out that the fund was transferred by defendant No. 1 subsequently 1,32,501 were paid on 5.4.2001 and 1,00,000/- was paid on 28.5.2001. However, the interest for the period from 31.3.1999 till the date of payment to the new department was not paid. The amount, above noted, was directly transferred to Municipal Corporation, Bathinda, where the plaintiff was transferred. The plea of defendant No.1 is that the payment was to be made after approval from the Head Office and as per the funds available with the then DDO. Now the question as to whether defendant No. 1 is liable to pay the interest payable on the Contributory Provident Fund from 31.3.1999 till the date the fund was actually transferred to Municipal Corporation, Bathinda. I find the reply in affirmative. The Contributory Provident Fund carries interest as fixed from time to time and the payment is to be made with upto date interest. If defendant No. 1 retained the fund for some time, the interest upto date was to be paid. However, defendant No. 1 took a clerical view of the fact by paying the interest only upto 31.3.1999, the date till the plaintiff remained with defendant No. 1. The perusal of documents on file clearly shows that the funds were available with defendant No. 1 and that in fact there was negligence on the part of the officials of defendant No. 1 in transferring the amount. The perusal of letter EX. P.11 dated 23.9.2004 shows that responsibility was sought to

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RSA No.3365 of 2010(O & M)

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be fixed for late payment, despite the fact that the funds were available. In letter EX. P.12, it was found that the amount of interest from 1.4.1999 to 28.5.2001 comes to ` 1,45,708/- and as per the Bank balance certificate, the funds were available. Therefore, the responsibility was ordered to be fixed and action was ordered to be taken against the responsible employee. The responsible employee was held to be Shri P.S. Mohil, then Executive Engineer of defendant No. 1. Further letter EXS. P.19, P.20, P.22 to P.24, P.26, P.29 and P.31 to P.34 shows that the amount was retained from the arrears paid to Shri P.S. Mohil and that Shri P.S. Mohil has been demanding the release of the amount due to him. It was conceded in the letters that the amount of interest should have been paid. It is surprising that despite effecting the recovery from Shri P.S. Mohil, the then Executive Engineer, who was held to be responsible for the delayed payment, the payment of interest was not released and the Department decided to waste the time of the Court by contesting the suit. Therefore, it is clear that plaintiff is entitled to interest for the said period i.e. from 1.4.1999 till the payment was actually deposited with Municipal Corporation, Bathinda. The rate of interest is to be paid, as fixed from time to time by defendant No. 1 and paid to the other employees.

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Learned counsel for defendants No. 1 and 2 has vehemently argued that the suit is time barred and that Section 10 of the Limitation Act is not applicable, as the amount is not a Trust money. I find that the liability to

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RSA No.3365 of 2010(O & M)

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pay the interest of Contributory Provident Fund is continuous one and is a recurring cause of action till the entire payment is made. Therefore, it being the continuing cause of action, the plaintiff could file the suit at any time when the payment of interest is not made. Plaintiff is still in service and he is entitled the amount of his Contributory Provident Fund on retirement along with interest. As such, the plea of limitation is also not available to defendants No. 1 and 2. “

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Still not satisfied, the appellant-Board has filed the instant appeal challenging the impugned judgement and decree submitting that the following substantial questions of law arise in this appeal:

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Whether interest could be paid to respondent No.1 over and above the Punjab Water Supply & Sewerage Board (Provident Fund) Rules 1982?

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Whether any interest money over and above the rules is trust money?

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In support of the appeal, learned counsel for the appellant has vehemently argued that the rules of the Board do not provide for payment of interest as claimed by the appellant on the Provident Fund amount. Learned counsel for the appellant has relied upon the Rule of Punjab Water Supply and Sewerage Board(Provident Fund) Rules in 1982, which reads as under:

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(i) The Board shall pay to the credit of the subscriber in the Fund an interest at such rates as may be fixed by Punjab Government for the Provident Fund of its own employees,

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(ii)The amount of interest accrued on the balance at the credit of a subscriber shall be calculated at the end of the year, or when the account is closed, to the nearest paise on the lowest balance, excluding

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RSA No.3365 of 2010(O & M)

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fractions of a rupee at the credit of a subscriber between the close of the fifty day and the last day of each month:

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Provided that when the amount standing at the credit of a subscriber has become payable, interest shall thereupon be credited under this rule in respect only of the period from the beginning of the current year or from the date of deposit, as the case may be, upto the date on which the amount standing at the credit of subscriber becomes payable.

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Elaborating further, learned counsel for the appellant has argued that payment of interest which is neither determined nor provided under the rules of Punjab Water Supply Sewerage Board(Provident Fund) Rules, 1982, is not a trust money and there was no agreement or law to pay interest and thus, judgement and decree of the Lower Appellate Court is liable to be set aside.

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I have heard learned counsel for the appellant and perused the impugned judgement and decree.

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The argument raised by the appellant is without any merit. Admittedly, a sum of ` 2,32,501/- was due to the plaintiff-respondent on 31.03.1999 against the appellant-Board. It is not in dispute that on his transfer to the Local Bodies Department, the appellants were liable to transfer the aforesaid amount in the account of the plaintiff through the Local Bodies Department. However, the payment of the aforesaid amount was made only on 05.04.2001 and 28.05.2001. There is no explanation for the delay caused for transferring the aforesaid amount. The only question which arises is as to whether appellant was liable to pay the interest payable on the Contributory Provident Fund from 31.03.1999 till the date the fund was actually transferred to Municipal Corporation, Bathinda. It is not disputed that the Contributory Provident Fund carries interest as fixed from time to time and the payment is to be made with up to date interest. Appellant retained the fund beyond the due date in spite of the fact that the

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RSA No.3365 of 2010(O & M)

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funds were available. Even, it has been established on record that there was negligence on the part of the officials of the appellant in transferring the amount and responsibility was to be fixed for late payment despite the fact that the funds were available. Even the responsibility was fixed and amount was withheld from the account of such officers who were held responsible. In view of the aforesaid, the argument raised by learned counsel for the appellant is without any merit. The Rule relied upon by the appellant has no applicability in the aforesaid situation. The aforesaid rule provides the manner of calculation of interest of an account holder of Provident Fund and does not visualise the situation where the amount has become due and is not paid thereafter.

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Faced with this situation, learned counsel for the appellant raised the argument that the suit was time barred. Again, the aforesaid argument is without any merit. Plaintiff-respondent is still in service and he is entitled to receive the amount of his Contributory Provident Fund on his retirement along with interest and thus there is recurring cause of action till the entire payment is made and plea of limitation is not applicable to the appeal.

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Thus, I find no merit in this appeal.

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No substantial question of law arises.

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Dismissed.

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(RAKESH KUMAR GARG) JUDGE

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neenu

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15.10.2010

Punjab Water Supply and Sewerage Divn. Bhatinda v. Rabinder Kumar Singla and Ors.

Case brief

What is this about?

What did the court decide?

Punjab Water Supply and Sewerage Divn. Bhatinda v. Rabinder Kumar Singla and Ors.

Case brief

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What did the court decide?

What the court decided

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