Sham Lal vs State Of Punjab And Others

Harsimran Singh Sethi, J

In the present writ petition, the grievance which is being raised by the petitioner is that retiral benefits of the petitioner for which he became entitled

for after his retirement on 31.12.2014, were not being released without any valid justification and the prayer has been made for issuance of a direction

to the respondents to release the pensionary benefits alongwith interest.

As per the facts mentioned in the writ petition, petitioner was appointed as a Pump Driver in Municipal Council (now Municipal Corporation),

Pathankot on 25.07.1985. He kept on working as such when he attained the age of superannuation and retired on 31.12.2014. It is the case of the

petitioner that there was no impediment in the release of the pensionary benefits of the petitioner after he retired as there were no proceedings which

were pending against him which would have entitled the respondents to withhold the pensionary benefits.

Upon notice of motion, the respondents have filed the reply. In the reply, the claim of the petitioner that there was no impediment in the release of the

pensionary benefits has been admitted and it has only been stated that petitioner had filed a CWP No.26602 of 2014 seeking extension in service and

therefore, the benefits were not released so as to await the outcome of the said writ petition. Further, it has been stated that all the benefits for which

the petitioner was entitled for have already been released after the filing of the present writ petition and therefore, the writ petition has been rendered

infructuous. The relevant paragraph of the reply is as under: -

“That in reply to para No.3 of the writ petition it is submitted that the petitioner had earlier filed CWP No.26602 of 2014 seeking one year

extension in service before the Hon’ble Punjab and Haryana High Court Chandigarh. The prayer for extension was not considered by this

Hon’ble Court, petitioner thereafter withdrew the abovesaid writ petition on 14.12.2015. After the retirement of petitioner on 31.12.2014 he was

entitled for retiral dues of Rs. 4,41,120/- on account of leave encashment, Rs. 5,86,025/- on account of gratuity i.e. total amount of Rs. 10,27,145/- and

Rs. 5,11,481/- on account of provident fund. The Municipal Corporation Pathankot has already paid Rs. 5,11,485/- on account of provident fund to the

petitioner vide Ch. No.838220 dated 06.12.2015 and thereafter when the petitioner withdrew his writ petition on 14.12.2015, the Municipal Corporation

Pathankot released the part payment of Rs. 1,00,000/- vide Ch. No.210308 dated 17.02.2016 and later on Rs. 1,00,000/- vide Ch. No.212965 dated

17.03.2016 to the petitioner from the total amount of Rs. 10,27,145/-. The remaining amount of Rs. 8,27,145/- on account of retiral dues has also been

paid to the petitioner vide Ch. No.213011 dated 03.06.2016. Since the petitioner had filed earlier CWP No.26602 of 2014 for extension in service,

therefore, the retiral dues could not be granted to the petitioner. All the amount on account of retiral dues like Rs. 5,11,481/-on account of provident

fund and Rs. 10,27,145/- on account of leave encashment gratuity has been paid to the petitioner as explained above. No retiral amount is due towards

the petitioner.â€​

Counsel for the petitioner argues that the benefits for which the petitioner was entitled for in January, 2015 have been released in June, 2016,

therefore, he is entitled for interest on the said detailed release of the pensionary benefits.

Counsel for the respondents reiterated the stand that release of the benefits was delayed only due to the act of the petitioner, wherein he had filed a

writ petition seeking extension in service and the respondents in order to await the decision of the said writ petition, did not release these benefits.

I have heard learned counsel for the parties and have gone through the record with their able assistance.

It is an admitted case that on 31.12.2014 when the petitioner retired there was no impediment in the release of the pensionary benefits of the

petitioner. The action of the respondents in withholding the said benefits due to the pendency of the writ petition, which the petitioner had filed for

seeking extension in service, has no connection with the release of the pensionary benefits. Once, the respondents had retired the petitioner from

service, it is incumbent upon the respondents to release the pensionary benefits to the petitioner within a reasonable time.

As per the settled principle of law settled by a Full Bench of this Court in A.S. Randhawa Vs. State of Punjab and others, 1997(3) SCT 468, the

amount which has been retained by the respondents and that too without any justifiable reason, the employee will be entitled to interest. The relevant

paragraph of the said judgment is as under: -

“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.â€​

In the case of J.S. Cheema Vs. State of Haryana, 2014(13) RCR (Civil) 355, a Co-ordinate Bench of this Court had held that an employee will be

entitled for the interest on an amount which has been retained by the respondents without any valid justification. The relevant paragraph of J.S.

Cheema's case (supra) is as under: -

“The jurisprudential basis for grant of interest is the fact that one person's money has been used by somebody else. It is in that sense rent for the

usage of money. If the user is compounded by any negligence on the part of the person with whom the money is lying it may result in higher rate

because then it can also include the component of damages (in the form of interest). In the circumstances, even if there is no negligence on the part of

the State it cannot be denied that money which rightly belonged to the petitioner was in the custody of the State and was being used by it.â€​

The case of the petitioner is squarely covered by the abovesaid decisions. It has been admitted by the respondents that petitioner was entitled for a

sum of Rs. 10,27,145/- on account of leave encashment and gratuity and further, a sum of Rs. 5,11,485/- on account of provident fund. The said

amount were only released from December, 2016 onwards. The petitioner was paid a sum of Rs. 1,00,000/- on 17.02.2016 and thereafter a sum of

Rs. 1,00,000/- on 17.03.2016. The remaining amount out of Rs. 10,27,145 i.e. Rs. 8,27,145/- was paid to the petitioner on 03.06.2016. The amount of

provident fund was released to the petitioner on 06.12.2015 and therefore, it can be proved that there is a delay of more than one year in making the

payment to the petitioner on account of his retiral benefits. The justification which has been given by the respondents is not at all correct and cannot

be treated as a valid justification for retaining the amount of retiral benefits once the petitioner had retired.

In view of the above, the writ petition is allowed. The claim of the petitioner for the grant of interest is allowed and the petitioner will be held entitled

for the interest @ 9% per annum from the date the amount became due till the same was released by the respondents.

Let the calculation of the amount of interest be done within a period of two months from the date of receipt of a certified copy of this order and the

actual amount, so calculated, shall be released to the petitioner within one month thereafter.

Present writ petition stands disposed of in the above terms.