N.V. Trivedi vs State of Gujarat

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C.L. Soni, J.—This appeal under Clause 15 of the Letters Patent is directed against the order dated 7.9.2012 passed by the learned Single Judge whereby the petition preferred by the appellant-original petitioner claiming interest on the delayed payment of pension benefits is dismissed. The petitioner retired from service on 28.2.2007 on reaching the age of superannuation but the pension was sanctioned only in the month of June, 2010. He, therefore, filed the above said petition seeking interest at the rate of 12% on the delayed payment of pension for the period from 28.2.2007 to 23.4.2010.

Learned Single Judge dismissed the petition observing that it is a disputed question of fact whether the so called delay was caused at the ends of the respondents or the authority concerned dealing with pension papers. It is further observed that the payment of interest requires detailed examination of facts, which is not possible in the present proceedings since the writ is not maintainable for a claim of interest.

We have heard the learned advocates for the parties. Learned Advocate Mr. Y.J. Patel appearing for the petitioner submitted that in fact, no departmental inquiry was pending against the petitioner and there was no justification not to finalize the pension of the petitioner. Mr. Patel submitted that it was only on account of recovery of some loan taken by the petitioner, the pension of the petitioner was withheld. Mr. Patel submitted that the respondents could have withheld the amount recoverable from the petitioner and released the remaining amount towards the pension benefits. However, no such action was taken. Mr. Patel submitted that only after the petitioner filed the special civil application No. 1724 of 2010, the pension of the petitioner was finalized. Mr. Patel submitted that except the above reason, there was no other reason nor any disputed question was arising in the petition to decide the claim of the petitioner for interest on delayed payment of pension to the petitioner. Mr. Patel thus, urged to allow the appeal.

Learned A.G.P. Mr. Rutvij Oza appearing for the respondents submitted that it was on account of pending dues against the petitioner, the pension of the petitioner could not be finalized. Mr. Oza submitted that ultimately recovery of Rs. 2,52,060.00 could be made from the gratuity payable to the petitioner and thereafter, the pension of the petitioner was finalized. Mr. Oza submitted that the delay in payment of pension was for the above said reason and, therefore, it cannot be said that the respondents were responsible for such delay. He, therefore, submitted that the learned Single Judge has committed no error in not entertaining the claim of the petitioner for interest on the ground that such claim being disputed claim, could not be decided in a writ petition.

Having heard the learned advocates for the parties, what is not in dispute is that there was no departmental inquiry pending against the petitioner. In fact, as per annexure A to the petition, it was certified that no any departmental inquiry was pending against the petitioner. In order dated 21.8.2007 at annexure B to the petition, while retiring the petitioner on reaching the age of superannuation, it is stated that if short term advance or any Government dues have remained unpaid by the petitioner, same shall be required to be recovered from the pension and gratuity of the petitioner. Therefore, as per the above said order dated 21.8.2007, if any amount was to be recovered from the petitioner, same could have been recovered immediately either from the pension or gratuity amount available to the petitioner or such amount could have been tentatively withheld and the remaining amount towards the pension benefits was required to be released but no such action was taken.

There was no dispute as to the entitlement of the petitioner to pension benefits. It appears that only after the order dated 23.4.2010 passed in Special Civil Application No. 1724 of 2010 preferred by the petitioner seeking direction against the concerned respondents to finalize his pension and other retiral benefits, it was decided by the respondents to take undertaking from the petitioner to deduct the recoverable amount from his gratuity for finalizing the pension papers. Such decision was taken only after the petitioner preferred the above said writ petition but before that period of three years had passed and no initiative was taken by the respondents for recovery of the loan amount from the pension and retiral benefits of the petitioner. For such inaction on the part of the respondents, pension benefits of the petitioner were delayed. When it was possible to recover the amount from the pension or gratuity benefits available to the petitioner, which was done after the petitioner filed the above said petition in the year 2010, there was no reason to take such action at the time when the petitioner retired and the pension benefits became payable to him.

It is required to be noted that as stated in the communication dated 8.11.2011, the petitioner was paid provisional pension vide order dated 18.10.2007 on the ground that there was delay in making calculation as regards dues against the petitioner. Finalization of calculation as regards dues against the petitioner could not have been a ground to delay the payment of final pension to the petitioner. Such calculation could have been kept ready much before the retirement of the petitioner.

However, except the above reason, we do not find any other reason for not finalizing and releasing the pension benefit to the petitioner when the petitioner retired. There are no other disputed questions of fact involved in the petition to decide the claim of the petitioner for interest on delayed payment of pension.

In the case of State of Kerala and Others Vs. M. Padmanabhan Nair, , Hon''ble Supreme Court held and observed in para 1 to 3 as under:

"1. Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.

Usually the delay occurs by reason of non-production of the L.P.C. (Last Pay Certificate) and the N.L.C. (No Liability Certificate) from the concerned Departments but both these documents pertain to matters, records whereof would be with the concerned Government Departments. Since the date of retirement of every Government servant is very much known in advance we fail to appreciate why the process of collecting the requisite information and issuance of these two documents should not be completed at least a week before the date of retirement so that the payment of gratuity amount could be made to the Government servant on the date he retires or on the following day and pension at the expiry of the following month The necessity for prompt payment of the retirement dues to a Government servant immediately after his retirement cannot be over emphasised and it would not be unreasonable to direct that the liability to pay penal interest on these dues at the current market rate should commence at the expiry of two months from the date of retirement.

The instant case is a glaring instance of such culpable delay in the settlement of pension and gratuity claims due to the respondent who retired on 19-5-1973. His pension and gratuity were ultimately paid to him on 14-8-1975, i.e. more than two years and 3 months after his retirement and hence after serving lawyer''s notice he filed a suit mainly to recover interest by way of liquidated damages for delayed payment. The appellants put the blame on the respondent for delayed payment on the ground that he had not produced the requisite L.P.C. (Last Pay Certificate) from the Treasury Officer under Rule 185 of the Treasury Code. But on a plain reading of Rule 186, the High Court held and in our view rightly that a duty was cast on the Treasury Officer to grant to every retiring Government servant the last pay certificate which in this case had been delayed by the concerned officer for which neither any justification nor explanation had been given. The claim for interest was, therefore, rightly, decreed in respondent''s favour."

In the case of Dr. Uma Agrawal Vs. State of U.P. and Another, , Hon''ble Supreme Court held and observed in para 5 and 6 as under:

"5. We have referred in sufficient detail to the Rules and instructions which prescribe the time-schedule for the various steps to be taken in regard to the payment of pension and other retiral benefits. This we have done to remind the various governmental departments of their duties in initiating various steps at least two years in advance of the date of retirement. If the rules/instructions are followed strictly much of the litigation can be avoided and retired Government servants will not feel harassed because after all, grant of pension is not a bounty but a right of the Government servant. Government is obliged to follow the Rules mentioned in the earlier part of this order in letter and in spirit. Delay in settlement of retiral benefits is frustrating and must be avoided at all costs. Such delays are occurring even in regard to family pensions for which too there is a prescribed procedure. This is indeed unfortunate. In cases where a retired Government servant claims interest for delayed payment, the Court can certainly keep in mind the time-schedule prescribed in the rules/instructions apart from other relevant factors applicable to each case.

The case before us is a clear example of departmental delay which is not excusable. The petitioner retired on 30-4-1993 and it was only after 12-2-1996 when an interim order was passed in this writ petition that the respondents woke up and started work by sending a special messenger to various places where the petitioner had worked. Such an exercise should have started at least in 1991, two years before retirement. The amounts due to the petitioner were computed and the payments were made only during 1997-98. The petitioner was a cancer patient and was indeed put to great hardship. Even assuming that some letters were sent to the petitioner after her retirement on 30-3-1993 seeking information from her, an allegation which is denied by the petitioner, that cannot be an excuse for the lethargy of the department inasmuch as the rules and instructions require these actions to be taken long before retirement. The exercise which was to be completed long before retirement was in fact started long after the petitioner''s retirement."

In light of the above principles of law settled by Hon''ble the Supreme Court on the aspect of delay in releasing the pension benefits, we find that the learned Single Judge ought not to have dismissed the petition on the ground of disputed questions of facts. As observed above, no detailed examination of facts was required for deciding the claim of interest made in the petition. However, the interest claimed at the rate of 12% per annum on delayed payment of pension benefits cannot be granted. In the facts of the case, we find that the grant of interest at the rate of 8% per annum would sub-serve the interest of justice.

For the reasons stated above, the appeal is allowed. The impugned order dated 7.9.2012 passed by the learned Single Judge is quashed and set aside. Consequently, the petition stands partly allowed. The petitioner is held entitled to interest at the rate of 8% p.a. on delayed payment of pension and other retiral benefits for the period from 28.2.2007 to 23.4.2010. The respondents shall calculate and pay the amount of such interest to the petitioner within a period of two months from the date of receipt of this order. D.S.