IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN WEDNESDAY, THE 25TH JUNE 2008 / 4TH ASHADHA 1930 WA.No. 1075 of 2008() --------------------- AGAINST THE JUDGEMENT/ORDER IN WPC.7130/2008 Dated 13/03/2008 .................... APPELLANT: PETITIONER: ---------------------------------------- B.RAVEENDRAN, KARTHIKA, CONVENT ROAD, PRAVACHAMBALAM, NEMOM P.O., THIRUVANANTHAPURAM-20. BY ADV. SRI.L.MOHANAN SMT.LIGEY ANTONY RESPONDENTS: RESPONDENTS: -------------------------------------------------- 1. KERALA STATE ELECTRICITY BOARD, REPRESENTED BY ITS SECRETARY, VIDYUTHI BHAVANAM, PATTOM P.O., THIRUVANANTHAPURAM. 2. CHIEF ENGINEER (HRM), VIDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. 3. ACCOUNT OFFICER (PENSION SPECIAL), VIDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM. BY SRI. ASOK M.CHERIAN, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 25/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss J.B.KOSHY & P.N.RAVINDRAN, JJ. ------------------------------- W.A.NO.1075 OF 2008 () ----------------------------------- Dated this the 25th day of June, 2008 J U D G M E N T KOSHY,J. Heard both sides. Appellant retired as a Deputy Chief Engineer on 31.10.2003. By Ext.P1, Non liability certificate was issued stating that there is no liability. By Ext.P2, retiral benefits had been sanctioned in his favour and except D.C.R.G, other benefits were disbursed also. D.C.R.G was withheld for want of vigilance clearance. Since there was a delay in the disbursal of the D.C.R.G, he approached Lok Ayuktha seeking directions to disburse the pensionery benefits. After hearing both sides, the Upa Lok Ayuktha passed Ext.P3 order which is as follows: “Para.3: It has to be noted that the complainant retired from service on 31.10.2003, and more than a year lapsed thereafter. Even according t the respondents the proceedings initiated against the complainant are not finalised and the alleged W.A.1075/08 2 liability due from the complainant is not so far fixed. Under such circumstances, in view of Rules 3 and 116 of Part III K.S.R. The respondents cannot retain the retiral benefits due to the complainant any longer. Therefore, the respondents are directed to disburse the retiral benefits due to the complainant within 2 months from this date for their non compliance of Rules 3 and 116 of Part III of K.S.R and G.O.(P).185/02/Fin dtd.27.03.2002. Para.4: This order will not affect the rights of respondents to recover any amount legally due from the complainant to the respondents in accordance with law.” The above is not challenged. But, despite the above order, amount of D.C.R.G was not disbursed to him. No charge sheet was issued against the appellant when he was in service. No disciplinary action was taken and liability was also not fixed within three years of his retirement. Even if there is any loss caused due to the act of the appellant, that amount can be recovered from D.C.R.G only if liability is finalised within three years of retirement. Since D.C.R.G was not distributed as directed in Ext.P3, a suo motu action for contempt was taken by the Upa Lok Ayuktha in complaint No.512/2004, whereby Upa Lok Ayukta decided to charge sheet the respondent Electricity Board for not obeying Ext.P3 order. W.A.1075/08 3 Writ petition filed against the same was also dismissed by this Court by judgment dated 14.12.2005 in W.P.(C).13592/2005. Thereafter, a notice was issued for fixing an amount of Rs.9,53,568/- as the liability. It was in the nature of a show cause notice. The learned Single Judge in the impugned judgment found that it can be treated as a tentative fixation of the alleged loss but liability was not finally fixed as per Rule 3 Part III of Kerala Service Rules. Again the appellant approached the Lok Ayuktha and Lok Ayuktha noticed that the tentative fixation was incorrect and mala fide. At paragraph 14 it was observed as follows: “14. Before issuing Ext.P2 fixing the liability of the petitioner, the Chairman has not even cared to follow the principles of natural justice. After fixing the liability of Rs.9,53,568/- he calls for a reply from the petitioner. This action of the Chairman is not supported by any service Rules. As stated earlier petitioner retired from service on 31.10.2003. Ext.P2 notice dated 14.1.2005 was issued after learned Upa Lok Ayuktha passed order dated 25.11.2004 directing the respondents in Complaint No.512/04 to disburse the retiral benefits due to the complainant within two months from the date of receipt of a copy of that order. The timing of this notice speaks volumes regarding the arbitrary attitude resorted to by the Chairman. It appears to be the outcome of mala-fide exercise of power.” W.A.1075/08 4 The Lok Ayuktha went into the facts of the case also. We are not going into the above. In the above circumstances, the entire amount of D.C.R.G to the petitioner was directed to be paid with 12% simple interest per annum. Lok Ayuktha observed in paragraph 26 of Ext.P11 as follows: “26. Law laid down by the Supreme Court is binding on all authorities in India as per the provision contained in Article 141 of the Constitution. It is to be treated as the law of the land. In the instant case it is crystal clear that the petitioner was not subjected to any departmental or judicial proceedings for causing any loss to the Board while he was in service or upto the date on which the Board was directed to pay the retiral benefits to the complainant in C.No.512/04. Thereafter Ext.P2 notice issued by the 1st respondent herein on 14.1.2005 can be treated as mala fide and arbitrary exercise of his power. It brings out the maladministration resorted to by the 1st respondent. We are clear in our mind that this action of the 1st respondent in issuing Ext.P2 has delayed payment of DCRG and other retiral benefits to the petitioner. Entire amount by way of pension, DCRG and other retiral benefits which have been withheld by the Board should carry interest @ 12% per annum simple interest. This rate of 12% cannot be considered to be high because 1st respondent claims 18% interest from the 1st respondent on the money alleged to have been lost to the Board.” W.A.1075/08 5 There was also a direction that the 1st respondent Chairman of the Board should pay the interest personally in view of the persistent disobeyance of the orders. The above order was challenged by the Electricity Board. It is the contention of the appellant that even after all these orders, D.C.R.G was not paid. Therefore, he approached this Court. All the connected writ petitions were heard together. The learned Judge found that D.C.R.G is payable as ordered by the Upa Lok Ayuktha in the order dated 25.11.2004. But with regard to payment of interest, it was directed that the appellant should approach the Civil Court. It is further directed that if he is found guilty in the vigilance enquiry, loss caused by him can be recovered only through Civil Court. According to the learned Single Judge, interest cannot be ordered by the Lok Ayuktha. It is contended that the order of the Lok Ayktha to personally realise the interest at 12% is also beyond the powers of the Lok Ayuktha. It is submitted that after the impugned judgment, the D.C.R.G was finally paid. But interest was not paid. The main question to be considered in this case is whether appellant should move before the Civil court for claiming the interest. It has been repeatedly held by the Apex Court in various decisions that W.A.1075/08 6 gratuity is not a bounty but it is a statutory right. In this case, despite the order dated 25.11.2004 of the Upa Lok Ayuktha to pay the retiral benefits of DCRG, the amount was not paid. It is true that appellant retired from service on 31.10.2003. Order of the Upa Lok Ayuktha was passed on 25.11.2004 and as per the above order, retirment benefits due to the complaint should be disbursed within two months, that is, before 25.1.2005. Since the above Upa Lok Ayuktha's order was unchallenged, there is no justification to the Board to withhold the payment of gratuity beyond that date. Even two decades ago, in State of Kerala and others v. M.Padmanabhan Nair (AIR 1985 SC 356), Honourable Apex Court held that for delayed payment of gratuity or retirement benefits, claimants can be awarded interest by the court. Matter was considered by the Supreme Court recently also in U.P.State Sugar Corporation Ltd. and others v. Kamal Swaroop Tondon ((2008) 3 SCC 41). In view of the consistent and deliberate non payment of gratuity in time in spite of Ext.P3 order, we are of the opinion that direction to pay interest atleast from the order 25.1.2005 by the Lok Ayuktha is fully justifiable. Considering the facts and circumstances of the case, Chairman need not personally pay W.A.1075/08 7 the same but Electricity Board should pay the interest on the D.C.R.G amount due to the appellant from 25.1.2005 till the date of disbursal with 12% interest and the above should be paid within one month. With regard to recovery of loss from retiral benefits, after three years, liability cannot be fixed. Direction of the learned Single Judge is that recovery can be made through civil court if loss is suffered to the Board on account of appellant's action. We make it clear that respondent can approach the Civil court only if such a suit is maintainable under law. If the Government files suit for realising any amounts, petitioner can resist the same on all points including maintainability, time bar etc. apart from merits. The learned Single Judge only stated that parties can proceed the Civil court according to the law and by the judgment, the Electricity Board will not get any additional rights. This appeal is allowed to the above extent. J.B.KOSHY, JUDGE P.N.RAVINDRAN, JUDGE prp W.A.1075/08 8 J.B.KOSHY & P.N.RAVINDRAN, JJ. -------------------------------------------------------- M.F.A.NO. OF 2006 () --------------------------------------------------------- J U D G M E N T --------------------------------------------------------- 26th May, 2008