Dilip Kumar Mehta Vs the Punjab State Federation of Cooperative Sugar Mills Ltd. and Ors.

The petitioner has filed the instant petition under Articles 226/227 of the Constitution of India, seeking issuance of a writ of certiorari for quashing/setting aside the reply dated 26.03.2019 (Annexure P-8) to the legal notice served by the petitioner. Further, seeking issuance of a writ of mandamus directing the respondents to pay the petitioner his last pay by 132% DA; DA on revised retirement benefits; leave encashment for 240 days under the rules along with interest @ 18% per annum on the delayed amount of retiral benefits and other dues.

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Brief facts of the case, as have been pleaded in the petition, are that initially, the petitioner was appointed as Manufacturing Chemist in Punjab Khand Udyog Ltd. w.e.f. 07.11.1984 and his services were confirmed/regularized w.e.f. 07.11.1985. Subsequently, he was promoted to the post of Deputy Chief Chemist w.e.f. 01.08.2001 and

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was further promoted to the post of Chief Chemist w.e.f. 05.09.2016. Thereafter, he retired from the said post, on attaining the age of superannuation on 30.11.2016, while working with respondent No.3. However, gratuity amount of Rs.10,00,000/- was released to the petitioner on 23.06.2017 and leave encashment amount of Rs.7,64,793/was released on 09.02.2018. Since there was a considerable delay in releasing the said retiral benefits, the petitioner served a legal notice dated 07.05.2018 (Annexure P-2) upon the respondents for claiming the following benefits :-

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(i) ACP after completion of 14 years of service w.e.f. 01.08.2015.

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(ii) DA arrears for the period from July 2015 to December 2015; January 2016 to October 2016; and July 2016 to November 2016.

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(iii) Revised retirement benefits after granting arrears of ACP and DA.

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(iv) Interest @ 18% per annum on the delayed payments of retiral benefits and other dues.

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2(i). The said legal notice was replied by respondent No.1, vide letter dated 25.05.2018 (Annexure P-3), to the effect that the case of the petitioner regarding the release of 14 years benefit under ACP Scheme has been considered and vetted by the audit and the same is pending for want of approval of the Managing Director. Consequently, the petitioner was granted the benefit under ACP Scheme in the month of July, 2018. Thereafter, the petitioner had approached this Court by filing CWP No.28361 of 2018 (Dilip Kumar Mehta Vs. The Punjab State Federation of Cooperative Sugar Mills Limited and others) , seeking issuance of directions to the respondents to pay the petitioner his last pay along with DA, arrears of DA, revised retiral benefits and leave

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encashment for 240 days along with interest @ 18% per annum on the delayed payment of retiral dues, which was disposed of by this Court, vide order dated 02.11.2018 (Annexure P-4), with the directions to the respondents to look into legal notice dated 07.05.2018 and take the required decision thereon, expeditiously and preferably within a period of one month from the date of receipt of a certified copy of the order. Pursuant to the said order, respondent No.1 passed order dated 31.12.2018 (Annexure P-6), wherein it was stated that the benefit of 14 years of ACP with consequential difference of leave encashment on enhanced pay has already been released to the petitioner; qua arrears of DA it was stated that no direction has been issued by the Punjab Government for releasing the arrears of DA; and further claim of the petitioner for grant of interest on the delayed amount of retiral benefits was also rejected. Thereafter, the petitioner again served a legal notice dated 05.03.2019 (Annexure P-7) upon the respondents for grant of remaining benefits which was replied by the respondents, vide letter dated 26.03.2019 (Annexure P-8), which is impugned by the petitioner in the instant petition.

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Written statement on behalf of respondent No.1 has been

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filed, wherein it has been stated as under :-

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“xx xx xx xx xx

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8. That the contents of Para 8 are wrong and vehemently denied on the following grounds:

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(a) The Petitioner has already been paid all the benefits due to him under the ACP scheme, as detailed above.

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(b) The decision regarding payment of DA arrears is yet to be taken by the State Government and the same is to be thereafter be considered and

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adopted by the Answering-Respondent. As a matter of fact, no employee of the Answering-Respondent has been paid any DA arrears for the said period. (c) The Petitioner has already been granted the retiral benefits. As regards the payment of arrears of DA, the position has already been explained above. (d) No interest is payable to the Petitioner, as there has been no undue delay on the part of the Answering-Respondent.”

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xx xx xx xx xx”

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In view of the stand taken by respondent No.1 in its written statement qua the arrears of DA, learned counsel for the petitioner restricts his claim qua grant of interest on the delayed payments of retiral benefits. He submits that the respondents-department had unnecessarily withheld gratuity and leave encashment of the petitioner for about 06 to 14 months after his retirement. He further submits that since there is a considerable delay in releasing the retiral benefits, therefore, the petitioner is entitled for interest on the delayed payments of the said benefits.

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Per contra, learned counsel for respondent No.1, while referring to the averments made in the written statement filed on behalf of respondents No.1 submits that the delay in releasing the retiral benefits of the petitioner is not intentional and purely procedural. Therefore, the petitioner is not entitled for any interest.

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I have heard learned counsel for the parties and have gone through the relevant documents.

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Admittedly, the petitioner retired from service, on attaining the age of superannuation, on 30.11.2016 and no departmental/criminal proceedings were pending against him before or after his retirement,

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therefore, he was entitled for the release of his retiral benefits immediately after his retirement and there was no legal impediment for denying the same. However, the gratuity amount of Rs.10,00,000/- was released to the petitioner only on 23.06.2017, i.e., after a delay of more than 06 months and leave encashment amount of Rs.7,64,793/- has been released on 09.02.2018, i.e., after a delay of 01 year and 02 months from the date of retirement of the petitioner. Since there is a considerable delay in releasing the said benefits, therefore, the petitioner is entitled for interest on the delayed payment of the said benefits.

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A Full Bench of this Court in A.S. Randhawa Vs. State of Punjab : 1997(3) S.C.T. 468 has held that where there is an inordinate delay in releasing benefits and the delay is not justifiable, employee will be entitled for interest. The relevant paragraph of the said judgment is as under:-

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“8. Since a government employee on his retirement becomes immediately entitled to pension and other benefits in terms of the Pension Rules, a duty is simultaneously cast on the State to ensure the disbursement of pension and other benefits to the retirer in proper time. As to what is proper time will depend on the facts and circumstances of each case but normally it would not exceed two months from the date of retirement which time limit has been laid down by the Apex Court in M. Padmanabhan Nair's case (supra). If the State commits any default in the performance of its duty thereby denying to the retiree the benefit of the immediate use of his money, there is no gainsaying the fact that he gets a right to be compensated and, in our opinion, the only way to compensate him is to pay him interest for the period of delay on the amount as was due to him on the date of his retirement. xx xx xx xx”

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Apart from this, in J.S. Cheema Vs . State of Haryana and

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others : 2014(13) RCR (Civil) 355 , this Court has held that an employee

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will be entitled for the interest on an amount which has been retained by the respondents without any valid justification. The relevant paragraph of the said judgment is as under: -

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“5. xx xx xx xx The jurisprudential basis for grant of interest is the fact that one person's money has been used by somebody else. It is in that sense rent for the usage of money. If the user is compounded by any negligence on the part of the person with whom the money is laying it may result in higher rate because then it can also include the component of damages (in the form of interest). In the circumstances, even if there is no negligence on the part of the State it cannot be denied that money which rightly belonged to the petitioner was in the custody of the State and was being used by it.”

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In view of the above factual position and settled principles of law, the present petition is disposed of with a direction to the respondents to pay interest @ 7% per annum on the delayed payments of gratuity and leave encashment of the petitioner w.e.f. 01.02.2017 (i.e. after two months from the date of retirement of the petitioner) till the actual date of payment(s), within a period of 02 months from the date of receipt of certified copy of this order.

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15.07.2026		(NAMIT KUMAR)
kothiyal		JUDGE
	Whether speaking/reasoned:	Yes/No
	Whether Reportable:	Yes/No

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Dilip Kumar Mehta v. the Punjab State Federation of Cooperative Sugar Mills Ltd. and Ors.

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Dilip Kumar Mehta v. the Punjab State Federation of Cooperative Sugar Mills Ltd. and Ors.

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