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Judgment
Sandeep Moudgil, J
Prayer
Instant petition has been filed by the petitioner under Articles 226/227 of the Constitution of India seeking a writ in the nature of Certiorari for quashing the action of the respondents vide which interest on delayed payment of gratuity has been withheld by the respondent. Further, a writ of Mandamus has been sought for directing the respondents to release the interest on delayed payments of death-cum-gratuity. Further prayer has been made that the petitioner be held entitled to special costs due to the impugned action of the respondents.
Brief Facts
The petitioner retired as a Revenue Patwari on attaining the age of superannuation on 30.04.2015. His pension case had been processed before retirement and respondent No.3—Accountant General (A&E), Punjab—authorized pension, gratuity and commutation on 26.03.2015. On revision of Dearness Allowance, his gratuity was subsequently revised to ₹7,96,043/-. Payment of DCRG was, however, withheld on account of criminal proceedings against the petitioner. After his acquittal, the Deputy Commissioner-cum-Collector, Ludhiana, passed an order dated 12.12.2019 for release of his pensionary benefits.
Consequently, the Tehsildar, Jagraon, vide communication dated 27.12.2019, requested the Accountant General to revalidate the certificate/report so that gratuity could be released. As the gratuity was still not released, the petitioner earlier approached this Court in CWP No.25167 of 2021. The said writ petition was disposed of on 13.12.2021, requiring the respondents to consider and decide his claim and, if he was found entitled and there was no impediment, to grant the relief without delay. The petitioner thereafter submitted a representation dated 17.12.2021, specifically claiming DCRG along with interest.
Non-compliance led the petitioner to institute COCP No.628 of 2022. During those proceedings, payment was stated to have been made, though ₹48,593/- remained outstanding. The contempt petition was disposed of with a direction to release that amount within two months. Accordingly an amount of ₹48,593/- was ultimately released on 01.08.2024, but no interest for delayed payment was paid.
Hence, the present writ petition.
Contentions
On behalf of the petitioner
Learned counsel for the petitioner submits that once the criminal proceedings had culminated in acquittal and the competent authority itself ordered release of all pensionary benefits on 12.12.2019, there remained no justification for continuing to withhold the gratuity. Indeed, the Tehsildar had approached respondent No.3 as early as 27.12.2019 for revalidation of the necessary certificate.
It is contended that the petitioner cannot be made to suffer for inter-departmental correspondence or administrative delay. Despite repeated requests, the amount remained unpaid, compelling him first to institute CWP No.25167 of 2021 and thereafter contempt proceedings. Even after such litigation, part of the amount, namely ₹48,593/-, remained unpaid and was ultimately released only in 2024.
Reliance is placed upon Rule 9.13 of the Punjab Civil Services Rules, Volume II, to contend that delayed payment of gratuity carries an obligation upon the competent authority to consider payment of interest. The petitioner pleaded that the delay was attributable to administrative lapse and not to any fault on his part.
On behalf of respondent-State
Learned State counsel, while opposing the petition, relies particularly upon the short reply filed by respondent No.3.
Respondent No.3 submits that the office of the Accountant General is merely a pension-authorizing authority. Upon receipt of a complete pension case from the parent department, it authorizes pensionary benefits on the basis of the sanction/recommendation of the pension-sanctioning authority and forwards the authorization to the concerned Treasury for actual payment. According to respondent No.3, its role ends upon authorization and it exercises no control over the pension funds or the disbursing authorities.
It is further pleaded that the pension sanction relating to the petitioner was received from respondent No.4 on 10.02.2015, whereupon pension, commutation and gratuity were authorized on 26.03.2015. Revised authorities on account of Dearness Allowance were subsequently issued. Upon receipt of sanction for revalidation of DCRG, respondent No.3 states that it took the requisite action and forwarded the revalidated authority to the District Treasury Officer, Ludhiana, for disbursement.
Significantly, respondent No.3 itself relies upon Rule 9.13(2) of the Punjab CSR, Volume II, stating that every case of delayed payment of gratuity is to be considered suo motu by the Administrative Department/Department concerned. Its stand, therefore, is not that interest can never be paid, but that the decision regarding interest falls within the domain of the petitioner's Administrative Department rather than the Accountant General.
Respondent No.3 has further disclosed that, after taking cognizance of the present writ petition, it issued a communication dated 29.04.2026 to respondent No.4 requesting the latter to take necessary action regarding payment of interest on the delayed DCRG
Analysis
Having heard learned counsel for the parties and having perused the record, this Court finds merit in the petition.
There is no serious dispute that gratuity was payable to the petitioner. Equally, there is no dispute that after the competent authority passed the order dated 12.12.2019 permitting release of the pensionary benefits, the Tehsildar addressed respondent No.3 on 27.12.2019 for revalidation so that the gratuity could actually be disbursed.
Thereafter, the petitioner was required to repeatedly pursue the authorities and even invoke the writ jurisdiction of this Court. The proceedings did not end there; non-compliance compelled him to institute contempt proceedings as well. Even then, ₹48,593/- remained outstanding and, according to the pleadings, came to be released only on 01.08.2024.
The stand of respondent No.3 regarding the limited nature of its statutory role may be relevant for determining which department is ultimately responsible for payment, but it cannot extinguish the petitioner's substantive claim to interest. An employee cannot be deprived of compensation for delayed release of an admitted retiral benefit merely because different governmental authorities perform different stages of processing, authorization and disbursement.
In fact, the respondent No.3 through its reply filed in Court materially supports the petitioner's case on the governing principle. It expressly acknowledges that under Rule 9.13(2) every case of delayed payment of gratuity is required to be considered suo motu by the Administrative Department or Department concerned. The obligation to deal with the consequences of delayed payment thus cannot be avoided merely on the ground that the Accountant General was not the actual custodian of the State pension funds.
Once the impediment to payment had ceased and an order for release had been passed, the authorities were required to process and disburse the amount within a reasonable period. The material placed on record does not disclose any fault attributable to the petitioner which could justify the prolonged delay thereafter. Administrative movement of the case from one authority to another cannot operate to the financial prejudice of a retired employee.
A full Bench of this Court in “A.S. Randhwa Supdg Engineer vs.State of Punjab and others,” (1997) 117 PLR 6 dealing with a question of entitlement to interest on delayed payment of retiral benefits held as under:
9.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 front 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. Again, as to what should be the rate of interest, it should, in our view, be generally 12% unless the circumstances of a particular case warrant the payment of a higher rate which may extend to even 18%.
Consequently, the present writ petition is allowed.
The respondents are directed to calculate and pay to the petitioner simple interest @ 6% per annum on the delayed payment of DCRG/gratuity, from the date the respective amount became due and payable after removal of the impediment to its release, till the date of its actual payment. While carrying out the calculation, the respondents shall take into consideration the dates on which different components/parts of the gratuity were actually released, so that interest is payable only upon the amount which remained outstanding during the relevant period.
The necessary calculation shall be made by the competent Administrative Department in terms of Rule 9.13 of the Punjab Civil Services Rules, Volume II, and the amount so determined shall be released to the petitioner within a period of eight weeks from the date of receipt of a certified copy of this order.