Debabrata Ray vs Union Of India And Others

Krishna S. Dixit, J

Petitioner, a retired employee, is knocking at the doors of Writ Court for assailing the Cuttack Central Administrative Tribunal's order in O.A. No.398 of 2020 disposed off on 24.02.2026 to the extent it denies interest on the delayed payment of terminal benefits and cost of the litigation, which he was compelled to fight for years albeit successfully.

Learned counsel appearing for the Petitioner vehemently argues that pension is not a bounty vide D.S. Nakara v. Union of India, AIR 1983 SC 130 and whenever there is unjustifiable delay in settling the terminal benefits, the employer has to pay interest vide State of Kerala v. Padmanabhan Nair, AIR 1985 SC 356.; that having not been adverted to by the Tribunal, there is a manifest error on the face of impugned order warranting interference of this Court. He also takes us through certain other proceedings, which Petitioner launched earlier successfully for the quashment of unfounded disciplinary proceedings.

Learned Senior Panel Counsel-Mr. Rayaguru appearing for the OP No.1 and learned AGA-Mrs. Pattanaik representing OP Nos.2 to 4, resists the petition mentioning certain facts that related to framing of charges in a disciplinary proceeding, which at a later point of time culminated into quashment by the Tribunal, challenge to the same before a Co-ordinate Bench of this Court having ended in vain. Learned Panel Counsel very fairly concedes before the Court that some interest is payable in law and we appreciate the same.

Having heard this matter at the admission stage with the consent of counsel for the Parties and having perused the petition papers, we are inclined to grant indulgence as under and for the following reasons:

4.1. It hardly needs to be stated that an employee, who retires from service, has to be paid the terminal benefits including the pension within a reasonable time and that cannot be beyond three months in any circumstance not attributable to his guilt. Petitioner retired from service on 30.04.2015 and the terminal benefits have been settled only on 12.05.2022. There is a delay of more than seven years and therefore, the same is liable to carry interest at a reasonable rate, in view of Padmanabhan Nair supra.

4.2. The vehement submission of learned Panel Counsel & AGA is that Petitioner was served with a Charge Memo on 25.11.2011, which he had challenged in O.A. No.191 of 2013 and the Tribunal vide order dated 12.09.2019 quashed the Charge Memo and relieved him of all the allegations. This was challenged by the OPs in W.P.(C) No.13191 of 2020 and a Co-ordinate Bench of this Court vide order dated 11.06.2021 dismissed the same thereby granting imprimatur to the order of Tribunal. That being the position still OPs took eleven months to settle the terminal benefits, i.e., only on 12.05.2022, that too without paying any interest. When charge memo is quashed, the question of arguable dropping of the disciplinary proceedings, argued by learned AGA, makes no legal sense. The Apex Court in Shree Chamundi Mopeds Ltd. v. Church or South India Trust Assn CSI, AIR 1992 SC 1439 has observed about the effect of quashment of proceedings by the competent Court. Once such proceedings are quashed, nothing remains on record ab initio. Therefore, the pendency of disciplinary proceedings, which came to be quashed by the Tribunal and Tribunal's order came to be affirmed by the Co-ordinate Bench, would not constitute any justification for denying the interest on the delayed settlement of terminal benefits and also the cost of litigation.

4.3. In the light of above discussion, now, we have to decide what should be the rate of interest, the delayed payment of terminal benefits should carry. Pension is no longer a bounty, but a constitutional guarantee; pension is defined under Article 366(17) of the Constitution of India, as a consideration for the past services rendered by the employee. Further, the terminal benefits constitute property of the retiree and therefore, are protected under Article 300A of the Constitution of India, in the light of wider interpretation placed in K.T. Plantation Pvt. Ltd v. State of Karnataka, AIR 2011 SC 3430. Petitioner has rightly sought for the payment of interest at the rate of 12% per annum. He has suffered a lot to hold his body and soul together without pension. Post retirement benefits cannot be denied; in a welfare State, the employees who retire from service peaceably sans any blemish have to be treated with soft gloves, said the Karnataka High Court in Smt. M. Rekha v. Union of India, 2024 INSC 44625-DB,. In our considered view, levy of interest at the rate of 12% per annum from the date of retirement be paid on the delayed settlement of the terminal benefits, i.e., 12.05.2022, he having retired on 30.04.2015 would do justice.

4.4. All the above aspects of the matter have not been properly discussed by the Tribunal and thus there is a gross error apparent on its approach to the matter which eventually culminated into a wrong order, now put in challenge at our hands.

In the above circumstances, this petition succeeds; the impugned order of the Tribunal is modified to the effect that on the delayed payment of terminal benefits, OP Nos.2 to 4 shall pay interest to the Petitioner at the rate of per 1% per mensem within two months, failing which that interest rate shall stand enhanced to 1.5% right from the day one for the first three months and 2% for the period next following. Petitioner is also entitled to a cost of Rs.50,000/-(Rupees Fifty Thousand) only towards the legal battles, which he was avoidably made to fight albeit successfully. Interest component may be recovered from the erring officials of the department.

Web copy of judgment to be acted upon by all concerned.