K.L. Kohli vs Shri Prakash, The General Manager Northern Railway

Madan B. Lokur, J.—The Petitioner is aggrieved by an order dated 7th May, 2008 passed by the Central Administrative Tribunal, Principal Bench in CP No. 12/2008 arising out of OA No. 1147/2001.

The Petitioner retired in 1977 and is today said to be about 92 years of age. He was placed under suspension on 23rd April, 1976 as a result of certain complaints made by the Respondent. While he was still under suspension, he superannuated on 31st March, 1977. On the basis of the complaint made against the Petitioner, a criminal prosecution was lodged. On 15th February, 1995 the Petitioner was acquitted of the charges. The order of acquittal has been accepted by the Respondent and we are told that no appeal was filed.

The question that then arose was about the arrears of salary that the Petitioner was entitled to for the period that he was under suspension. The Petitioner had also claimed death-cum-retirement gratuity, which was withheld by the Respondent and also pension, which was not paid to him because of the pendency of the criminal case.

Since the payments claimed were not made, the Petitioner approached the Tribunal for relief. Learned Counsel for the parties are agreed that the following is the principal amount is due under each of these three heads:

(1) Arrears of Salary - Rs. 4,366/- (until 31st March, 1977)

(2) Death-cum-Retirement Gratuity - Rs. 21,450/- (until 17th November, 1997)

(3) Pension - Rs. 1,108/- (until 31st December, 1995)

While allowing the above claim of the Petitioner, the Tribunal awarded 12% interest. It was not made clear by the Tribunal whether the interest was 12% compounded or 12% simple.

The order passed by the Tribunal was challenged by the Respondent before this Court and the challenge was rejected by an order dated 30th August, 2007 in WP (C) No. 2207/2003. Unfortunately, this Court also overlooked the nature of the interest, whether simple or compound.

The Petitioner thereafter filed a contempt petition before the Tribunal in which he claimed that he was entitled to interest @ 12% per annum compounded and this was not paid to him. The Tribunal was of the view that in the absence of anything indicating whether the interest was simple or compound, the payment made by the Respondent at 12% simple interest was justified and, therefore, no contempt was made out.

Feeling aggrieved by the order of the Tribunal passed in the contempt petition, the Petitioner has now come up before us.

In our view, the Petitioner is entitled to 12% interest compounded annually.

We may note that there is some dispute about the applicability of a Circular dated 1st November, 1994 issued by the Ministry of Railways. Without going into the applicability of the Circular, we are of the opinion that the principle laid down therein is quite clear and generally applicable. The principle is that an employee would be entitled to 12% interest compounded annually in case there is delay in payment of death-cum-retirement gratuity on account of an administrative lapse or for reasons beyond the control of the railway servant concerned.

In the case that we are dealing with, there is no dispute that delay has not occurred on account of any administrative lapse. The Respondent held back the amount due to the Petitioner because of the pendency of the criminal prosecution and it appears that they were justified in doing so. However, without going into this issue or expressing any opinion in this regard, we are of the opinion that the amount was certainly withheld by the Respondent for reasons beyond the control of the railway servant concerned, that is, the Petitioner in this case.

The Petitioner had no control over the complaint that was made against him by the Respondent nor had he any control over the criminal prosecution that was lodged against him. There is no dispute about the fact that the criminal prosecution of the Petitioner led to an acquittal which would suggest that the complaint made against the Petitioner was either not substantiated or was baseless. In any case, a complaint having been made against the Petitioner and the matter pending in a criminal court, the Petitioner has no control over the situation. Therefore, the principle laid down in the Circular dated 1st November, 1994 is applicable to this case.

If the amount in dispute had been released to the Petitioner in time, he could surely have utilized the amount gainfully. The Respondents could also have protected the interest of the Petitioner by keeping the amount in a fixed deposit where the Petitioner could have earned interest on a compounded basis. The Petitioner has been deprived of gainful utilization of the amount and the Respondents have also not been of much help to the Petitioner by not depositing the amount in a fixed deposit with any scheduled bank or financial institution. On the other hand, the Petitioner is being made to run around for the interest on the principal amount, which he feels is legitimately due to him.

In our opinion, having considered all these facts, particularly the fact that the dues of the Petitioner were paid after a great delay for reasons which were completely beyond his control, the Petitioner would be entitled to interest @ 12% compounded annually from the date when the amount became due to him till the date when it was released to him, as mentioned above.

Considering the age of the Petitioner, we direct the Respondents to make the necessary calculations within a period of one month from today.

List the matter for compliance on 16th December, 2008 on which date we would expect the Respondent to bring the cheque of the balance interest due to the Petitioner in Court.

A copy of this order be given dasti to learned Counsel for the Respondent under the signature of the Court Master.