Ghelo Ram vs H.P. State Electricity Board and Others

P.D. Desai, C.J.—The Secretary of the Respondent-Board has filed two affidavits, one dated March 10, 1986 and the other dated May 6, 1986, reporting compliance of the interim order made on January 1, 1986. In the course of the first affidavit, the deponent has stated that cases for the grant of terminal gratuity to the four out of the twenty-seven retirees have been decided and finalised before January 31, 1986, that is, on or before the date fixed by the Court. Annexed to the affidavit as Annexures R-l to R-5 are the orders issued by the Senior Accounts Officer (Pension) authorising the payment of various sums by way of terminal gratuity to the four employees, namely, Kartar Singh (Foreman) (Respondent No. 12), Rasila Ram (Pump Driver) (Respondent No. 19), Marchu Ram (Security Supervisor) (Respondent No. 26), and Sohan Singh (Assistant Store Keeper) (Respondent No. 29), after making recoveries, if any, pending against them. The deponent has further stated that the res pondent-Board has decided to create twenty-seven supernumerary posts to provide pensionary benefits to an equal number of retirees (Respondents No. 4 to 30) and that those posts will be actually created within a period of four weeks and the payment of pensionary benefits to them will be processed and finalised as early as possible. In the course of the second affidavit, the deponent has stated that these posts have been created� in the respective pay scales vide office order dated March 27, 1986 (Annexure R-I) and that the cases for the payment of pensionary benefits are being processed vigorously.

The Court places on record its sense of warm appreciation for the prompt action taken by the Respondent-Board in compliance of the interim order. The Respondent-Board has shown by its aforesaid action that it is alive to its constitutional obligations and that it is willing to play the role of a model public sector employer. The Court expects that in the same strain the pensionary benefits will be finalised and the payments due to the employees concerned and to the heirs of those employees who have died will be made latest within a period of three months from today. The order creating the supernumerary posts does not in terms state that the concerned employees have been duly appointed and confirmed in those supernumerary posts. Orders in that regard, if necessary, will also be passed meanwhile.

The authorisation, Annexure R-5, mentions that a sum of Rs. 6624.71 should be recovered/adjusted out of the sum of Rs. 6286/- payable to Sohan Singh (Respondent No. 29) as and by way of terminal gratuity �on account of shortage of store material�. In other words, the recovery ordered from him exceeds the amount due and payable to him as and by way of terminal gratuity. Sohan Singh, who is present in the Court, states that he has received a sum of 00.29 Paise only pursuant to the authorisation for payment of the terminal gratuity issued in his favour. All the concerned employees, who have been paid terminal gratuity under the Court�s interim order, are not present and it is, therefore, not possible to ascertain whether any amount has been recovered/adjusted out of the sum authorised to be paid to them on that account.

The Respondent-Board must bear in mind that the right to pension was regarded as �property� and, therefore, a fundamental right within the meaning of sub-cause (f) of clause (1) of Article 19 and of Article 31 (See: Deokinandan Prasad Vs. The State of Bihar and Others, , With the deletion of sub-clause (f) of clause (1) of Article 19 and Article 31 on one hand and the simultaneous enactmnet of Article 300-A on the Ors. , the right to property has ceased to be a fundamental right but it still retains the charactor of a constitutionally recognised legal right. Since the right to receive pension was held to be �property� under Article 19(1)(f) and Article 31(1), it must be regarded as falling within the coverage of Article 300-A which provides that no person shall be deprived of his �property� save �by authority of law�. Article 300-A thus safeguards the right to receive pension against executive interference which is not supported by law and �law� here means �enacted law� or �State law�. Besides, such law must be a valid and binding law under the provisions of the Constitution having regard to the competence of. the legislature and the subject it relates to and should not infringe on any of the fundamental rights which the Constitution provides for. It is apparent, therefore, that the substantative or procedural provisions of such law or the executive action supported by such law cannot be arbitrary, unfair, unjust, oppressive or unreason-able so as to violate Articles 14 and 16 (See: A.K. Gopalan Vs. The State of Madras, and Mrs. Maneka Gandhi Vs. Union of India (UOI) and Another, wherein the word �law� occurring in Article 21 has been given similar meaning and has been held to be subject to similar limitations).

Against the aforesaid background, it is apparent that any order directing the recovery/adjustment of any sum to be made out of the terminal gratuity payable to an employee can be passed only in conformity with the constitutional provisions and on the strength of the statutory provisions, if any, authorising such recovery out of the pensionary benefits and in due compliance with the rules of natural justice. In the very nature of things, before ordering any such recovery, it will be necessary to determine whether there is any statutory authority to make such recovery and whether it is recoverable out of the pensionary benefits in accordance with law. Besides, the competent authority will have to gather all the material particulars in order to satisfy himself whether the sum is legally and factually due from the employee. Several questions of fact and law may arise in the process of such determination especially if the employee disputes his liability and in order to determine these questions the competent authority will have to hold some sort of an inquiry suitable to the occasion and appropriate in the circumstances of the case. The association of the employee concerned with such an inquiry is inevitable in order to ascertain whether he admits or denies the liability, wholly or partially, and if he denies the liability, so as to gather facts and/or to seek clarification on issues of fact and law and to give him an opportunity to correct or controvert the material sought to be relied against him and to put forward his own version concerning the points in dispute. The process of ascertainment of such dues cannot but be regarded as quasi-judicial in nature, since, the ultimate decision may result in the recovery of such dues from the amount of terminal gratuity, which is property, and may thus involve civil consequences for the concerned employee. A reasonable opportunity of hearing coupled with the duty to act judicially and to arrive at a just and fair decision pursuant to an inquiry held inaccor-ance with law must, therefore, be regarded as implicit in the material provisions of the relevant Rules, if any, authorising such recovery and a sine qua non to the exercise of the power of ascertainment and assessment of such sum. The adoption of such a procedure is inevitable on the part of the competent authority in order to arrive at a just, proper and legal decision enforceable in accordance with law.

In view of the foregoing, the Respondent-Board is directed to review its decision, if any, in regard to the recovery/ adjustment of any sum out of the terminal gratuity payable to the concerned employees and to arrive at a fresh decision in that regard in accordance with law and in light of the observations made hereinabove within a period of eight weeks from the date of the delivery of a certified copy of this order. These directions must be regarded as applying not only to the four employees in whose cases specific orders for the payment of terminal gratuity were made by the Court on the earlier occasion but also in respect of all employees from whom such recovery/adjustment is sought to be made from the terminal gratuity or other pensionary benefits.

One more direction requires to be given and that pertains to the payment of interest. There is no doubt that there has been a culpable delay in the finalisation of the claim for terminal gratuity in respect of the Petitioner and Respondents No. 12,19, 26 and 29. The following table gives the relevant particulars having a bearing on this aspect:

S. No. Name of Petitioner/ Date of Date of authorisation

Respondent retirement

of terminal

gratuity

1 2 3 4

Ghelo Ram Petitioner 28-2-1979 21-12-1981

Kartar Singh Respondent No. 12 31-7-1982 24-1-1986

Rasila Ram Respondent No. 19 30-4-1982 8-1-1986

Marchu Ram Respondent No. 26 28-2-1985 13-1-1986

Sohan Singh Respondent No. 29 31-3-1981 24-1-1986

No reasons are discernible from the material on record to justify such an inordinate delay in the authorisation of the payment of terminal gratuity to these persons. In State of Kerala and Others Vs. M. Padmanabhan Nair, and in several decisions rendered by this Court it has been held that any culpable delay in the settlement and disbursement of pensionary benefits must be visited with the penalty of payment of interest at the current market rate. Under the circumstances, the Respondent-Board is directed to pay to the Petitioner and Respondents No. 12, 19, 26 and 29, interest at the rate of 12 per cent per annum on the amount of terminal gratuity from the expiry of the period of two months from the respective dates of retirement of each employee till the date of actual payment to each of them. There is no material on record to show as to whether there was similar delay in the payment of terminal gratuity to the other Respondents. If so, they too shall be entitled to interest at the same rate and for the same period. The additional sum becoming due and payable on this account will be paid to the concerned employees within a period of eight weeks from the date of delivery of a certified copy of this order.

In light of the foregoing directions, the writ petition stands disposed of.

Dasti copy on usual terms.

October 30, 1985

Notice, pending admission returnable on November 5, 1985. Mr. P.A. Sharma waives service of the notice on behalf of the Respondents.

The case, prima-facie, discloses gross apathy in the matter of grant of pensionary benefits to an employee who retired as far back as January 31, 1979. The annexure to the petition shows that the matter is being pursued by the Executive Engineer, Electrjcal Division, HPSEB, Palampur, with the Senior Accounts Officer (Pension), HPSEB, Shimla, but no concrete steps appear to have been taken by the latter in the direction of grant of pensionary benefits to the petitioner. The annexure further shows that the Petitioner has since become blind due to old age and is under great financial stress. The Senior Accounts Officer (Pension), HPSEB, will attend the Court along with the relevant record on November 5, 1985 and 10 a.m. and will meanwhile finalise the pension case so that pensionary benefits can be released to the Petitioner with the utmost expedition.

Let an ordinary copy of this order, duly authenti cated by the Deputy Registrar (Judicial), be supplied to Mr. P.A. Sharma during the course of the day today.

November 5, 1985

The petitioner�s allegation that he has rendered 30 years of service has not been specifically controverted in the affidavit-in-reply filed on behalf of the repondent-Board. The original service book of the Petitioner was produced for the perusal of the Court. The service book shows that the Petitioner was working as Store Attendant in the Electrical Sub-Division, Palampur, in the pay scale of Rs. 30-1-37 and that he was promoted and transferred vide office order dated January 3, 1964, passed by the Executive Engineer, Electrical Division, Dharamsala. In calculating the qualifying service of the petitioner, the Respondents have taken into consideration only his service on and from January 3, 1964. The previous service has not been taken into account. The pension of the Petitioner is thus not shown to have been fixed after properly verifying the qualifying service of the petitioner. The Respondents will make an endeavour to verify the service rendered by the Petitioner prior to January 3, 1964 and place on record on or before December 3, 1985, the revised pension admissible to the Petitioner upon such verification. Meanwhile, the pension as determined to be payable to the Petitioner under Annexure R-3 will be paid and continued to be paid to the petitioner.

The Petitioner will be directed by the Registry to place on record of this case evidence, if any, in his possession showing that he was in employment of the Respondent-Board or its predecessor (s) for a period of about 30 years. In the absence of any evidence, the Petitioner will file an affidavit setting out the particulars of service rendered by him for a period of 30 years, as alleged by him. The material to be produced and affidavit to be filed by the Petitioner on or before November 26, 1985. The Petitioner will attend the Court on December 3,1985.

The case discloses that:

(i) while determining pension of the employees of the lowest category, adequate care is not taken by the competent authority to ascertain the qualifying period of service with the result that the lowliest amongst the lowly paid employees suffer financially in their days of retirement;

(ii) the employees who have rendered service over a length of time are not confirmed with the result that they suffer on accountof loss of the pensionary benefits.

The Respondent-Board will issue appropriate instructions to the third Respondent to ensure that the pension cases are thoroughly examined before the pensionary bedefits are determined.

The Secretary of the Respondent-Board will place on record the following information on or before December 3, 1985:

(1) How many employees of different categories have retired on superannuation since the Respondent- Board was constituted after rendering service for a period of ten years and above without being confirmed ?

(2) Whether such employees could have been confirmed before the retirement on superannuation against the existing vacancies, if any? If so, why they were not confirmed ?

The information will cover all the Divisions of the Respondent-Board and be placed on record after proper vari-fication.

Adjourned to December 3, 1985.

Dasti copy on usual terms.

January 1, 1986

The supplementary affidavit dated December 27, 1985, filed by the Secretary of the Respondent-Board pursuant to the interim order made on November 5, 1985, discloses a very sorry state of affairs. As many as twenty-seven employees of different categories are stated to have retired on superannua tion since the Respondent-Board was constituted after rendering ten years of service or more but without being confirmed. The particulars of the period of service rendered by each one of those employees, as set out in Annexure P-l to the affidavit, show that as many as twelve out of those employees had put in more than fifteen years of service and that out of those twelve as many as five had put in between eighteen and twenty years of service by the time they retired. All but four out of those twenty-seven employees have received only terminal gratuity. The terminal gratuity has still not been determined and paid to those four employees, although one has retired in 1981 and two in 1982, because the cases are stated to be under correspondence with the field units and under active consideration. Most of these employees belong to Class IV category (Peons, T-Mates, Carpenters, Constables, Drivers etc.) and the rest to Class III category. No other pensionary benefits are a dmissible to all these employees because they were not confirmed before their retirement for want of sanctioned permanent posts.

The Respondent-Board, which is an instrumentality of the State, has to have a constitutional goal and commitment to socio-economic justice. This flows invevitably from the Preamble and the Directive Principles of State Policy enshrined in the Constitution. Article 38 enjoins upon the State to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life and, in particular, to strive to minimise the inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people engaged in different vocations. Article 39 requires the State to direct its policy towards securing that the citizens, men and women equally, have an adequate means of livelihood and that there is equal pay for equal work for both men and women. Under Article 41, the State is under an obligation to make effective provisions for securing the right to public assistance in cases of old age, sickness and disablement and in other cases of undeserved want and, under Article 42, to make provision for securing just and humane conditions of work. The mandate of Article 43, inter alia, is that the State shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, a work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure. The Respondent-Board has apparently failed in the present case to carry out these constitutional mandates in so far as these twenty-seven workmen are concerned who have been denied the pensionary benefits, other than the terminal gratuity, although they retired after having put in long years of service.

As held in D.S. Nakara and Others Vs. Union of India (UOI), a political society, which has a goal of setting up of a welfare State, would introduce and has in fact introduced as a welfare measure, wherein the retiral benefit is grounded on considerations of State obligation to its citizens who, having rendered service during the useful span of life, must not be left to penury in their old age. Pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that, it is a measure of socio-economic justice, which inheres economic security in the fall of life, when physical and mental prowess is ebbing corresponding to ageing process and, therefore, one is required to fall back on savings. The Constitution having set up the political society which has a welfare socialistic State as its goal and with the obligation created under Article 39(e), 41 and 43(3) of the Constitution, pension as a retirement benefit is in consonance and in furtherance of the goals of the Constitution. Be it realised that pension is no longer regarded as a bounty, a gratuitous payment depending upon the sweet will or grace of the employer and not claimable as a right. The State, as well as all its agencies and instrumentalities, must, therefore, so regulate their dealings with the employees as to advance the aforesaid purpose and not to defeat it.

It is not in dispute that if these twenty-seven employees had been confirmed prior to their retirement, they would have been entitled to all the pensionary benefits. Non-confirmation in their case was an accident of service, an event over which they had no control and a consequence which is not of their own making. In conformity with the constitutional obligation, it was incumbent on the Respondent-Board to, have taken timely steps to create adequate number of permanent posts so as to ensure the confirmation of these employees before their retirement, especially when the work load justified their continuance in service for a period exceeding a decade and, in case of almost half of them, for a period exceeding a decade and a half. The Respondent-Board still owes a duty to do justice to them by taking ex-post-facto remedial measures in accordance with law.

For the foregoing reasons, it appears expendient in the interest of justice to issue the following directions to the Respondent-Board :

(1) To finalise, on or before January 31, 1986, the cases for the grant of terminal gratuity to the four out of twenty-seven employees whose names are mentioned in Annexure P-l;

(2) To consider, in accordance with law and in conformity with the principles of equity, justice and good conscience and in light of the observations hereinabove made, the creation of supernumerary permanent posts in which the twenty-seven employees whose names are mentioned in Annexure P-l can be confirmed ex-post-facto for the purposes of giving them all the pensionary benefits due and admissible in accordance with the rules governing the grant of such benefits.

The Respondent-Board will arrive at an appropriate decision in the matter on or before March 15, 1986 and place the same on record on or before March 19, 1986.

The Court is concious of the fact that these twenty-seven employees have not sought any relief. However, it is apparent that although they have, prima facie, suffered a legal wrong or a legal injury, they have not been able to approach the Court on account of ignorance or some disability, such as, their economically disadvantaged position or helplessness in the fall of life, since many of them were only Class IV employees having received by way of retlral benefit meagre sums ranging between about Rs. 2500/- to Rs. 6000/- and four of them have not received even that petty retiral benefit. The Court has, therefore, considered it expedient in the interest of justice to issue the aforesaid interim directions suo motu casting aside the technical rules of procedure in exercise of its dispensing power in order to provide them access to justice. However, in order to finally adjudicate upon their cause, it is just and proper to direct the Registry to issue notice of the instant proceeding to those twenty-seven persons so as to enable them to appear or to cause an appearance to be made and to participate in the proceeding by being impleaded as parties. The Respondent-Board will, within a period of seven days from the date of the receipt of a copy of this order, supply to the Registry the address of each one of those twenty-seven persons and, thereupon, the Registry will issue notice in the aforesaid terms to each of them, returnable on March 24, 1986, along-with a copy of this order.

Adjourned to March 24, 1986.