IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Regular Second Appeal No.2572 of 2010 (O&M) Date of decision: 9th August, 2011 Punjab Agricultural University, Ludhiana … Appellant Versus Dr. Pirthi Singh Sarowa … Respondent CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA Present: Mr. D.P.S. Kahlon, Advocate for the appellant. Mr. Ashish Grover, Advocate for the respondent. KANWALJIT SINGH AHLUWALIA, J. (ORAL) Present regular second appeal has been filed by Punjab Agricultural University, Ludhiana (hereinafter referred to as, ‘the University’) defendant to the suit. The respondent-plaintiff filed a suit for declaration to the effect that he is entitled to his retiral benefits such as pension, gratuity, leave encashment, GPF and commuted pension along with interest @ 18 percent per annum. It was pleaded in the suit that the respondent-plaintiff retired on 31st October, 2002 from Bathinda. The retiral benefits were not being paid to him on the ground that he along with one N.S.Tomer stood surety of Dr.Santokh Singh Brar, who had undertaken PHD Program. Dr.Santokh Singh Brar had left the University without paying dues. It was pleaded in the suit that withholding of the retiral benefits was not justified as services of Dr.Santokh Singh Brar were terminated on 25th November, 1995 by the appellant-defendant Regular Second Appeal No.2572 of 2010 (O&M) University without informing the respondent-plaintiff. The University had issued a notice to the sureties i.e. the respondent-plaintiff and N.S.Tomer for recovery of Rs.2,48,500/-. This amount included pay of Rs.1,80,306/-, CPF Rs.16,777/- and penalty of Rs.10,000/-. It was further pleaded in the suit that the above said amount of Rs.2,48,500/- was deposited by Dr.Santokh Singh Brar. A grievance was made that the respondent-plaintiff had suffered a great loss as due to non-payment of retiral benefits his son could not get admission in Flinders University Australia in February, 2005. Upon notice, the appellant-defendant University filed reply. On merits it admitted that the pension, gratuity, commuted pension and GPF are not released to the plaintiff as he had not become eligible for the same because he had not submitted the No Due Certificate. It was further admitted that Dr.Santokh Singh Brar was an employee of the University and respondent-plaintiff had furnished an indemnity bond along with one N.S.Tomer. The terms and conditions of the indemnity bond were read out to the plaintiff and thereafter having accepted the terms and conditions he had agreed to abide by them. As per the terms and conditions of the bond, Dr.Santokh Singh Brar was bound to serve the appellant-University for a period of five years, which was relaxed to three years. Services of Dr.Santokh Singh Brar were terminated as he remained absent with effect from 25th November, 1994. A further objection was raised which reads as under: “That Santokh Singh Brar personally came in the office of defendant on 25.1.2002 and the amount worth of Rs.2,48,500/- was paid in the office of Regional Station, Bathinda. But the rate of interest (10%) was changed to the rate applicable on GPF/CPF prior to the date of payment of 2 Regular Second Appeal No.2572 of 2010 (O&M) Rs.2,48,500/- to the defendant. The whole interest was calculated @ applicable on GPF/CPF on the instructions of the higher authorities. This amendment of calculation of interest on the rate applied on GPF/CPF was made on the basis of condition No.IX of the agreement bond as under:- ‘That all rules applicable to the study leave as may be amended from time to time shall be duly bind upon the party hitherto including sureties’.” Thereafter, replication was filed in which contents of the plaint were reiterated and that of the written statement were denied. After completion of the pleadings, the trial Court had formulated following issues: “1. Whether the plaintiff is entitled for declaration as prayed for? OPP 2. Whether plaintiff has no locus-standi to file the present suit? OPD 3. Whether the suit of the plaintiff is not maintainable in the present form? OPD 4. Whether the plaintiff has concealed material facts from the Court? OPD 5. Whether the suit is not properly valued? OPD 6. Whether the suit is bad for non-joinder of necessary parties? OPD 7. Relief.” The plaintiff himself appeared as PW-1 whereas Dr.G.S. Butter, Director Regional Station, Bathinda appeared as DW-1. The trial Court considered numerous documents brought on the file and came to a conclusion that the plaintiff himself admitted in the cross-examination that Rs.4,34,861/- were due towards Dr.Santokh Singh Brar and he had 3 Regular Second Appeal No.2572 of 2010 (O&M) only paid Rs.2,48,500/-. Thus, the trial Court held that the retiral benefits of the respondent-plaintiff cannot be withheld by the appellants- defendants indefinitely, and therefore, they were directed to calculate the amount on account of the surety bond and pay the retirement dues of the respondent-plaintiff which were not paid to him after deducting the amount due from him. Thus, the suit was partly decreed. Aggrieved against the same, the respondent-plaintiff filed an appeal. The lower appellate Court held that the trial Court had erred in not making any observation as to whether any amount of interest is recoverable from the respondent-plaintiff under the surety bond. The surety bond was proved on the record as Ex.P43. The Court held that as per show cause notice Ex.P5, the amount due from the respondent- plaintiff was Rs.2,48,000/- and the same was paid to University. This amount included interest @ 10 percent per annum for a period of two years i.e. Rs.41,416/-. It further held that the University has failed to justify as to how after payment of Rs.2,48,000/- the amount of Rs.4,34,861/- was due from Dr.Santokh Singh Brar. Furthermore, the University had issued a No Due Certificate to Dr.Santokh Singh Brar on 13th December, 1991 Ex.P25. Thus, it was held that before issuance of the show cause notice Ex.P5, the No Due Certificate has been issued to Dr.Santokh Singh Brar. The lower appellate Court further held that because of deposit of Rs.2,48,000/- by Dr.Santokh Singh Brar, the retiral benefits of respondent-plaintiff cannot be withheld. Therefore, it modified the decree of the trial Court and held that nothing is due or recoverable from the respondent-plaintiff on account of the surety bond and he was held entitled to release of his retiral benefits within two months with 4 Regular Second Appeal No.2572 of 2010 (O&M) interest @ 9 percent per annum to be calculated with effect from 25th January, 2002. Record of the courts below was requisitioned. The same has been perused with the help of counsel for the parties. A Coordinate Bench, while issuing notice of motion had noticed the contention that the rate of interest awarded is excessive and Dr.Santokh Singh Brar had not paid the interest for which the respondent-plaintiff had stood surety. It is not denied by the appellant- University that they had issued No Due Certificate to Dr.Santokh Singh Brar. It is also not disputed that Dr.Santokh Singh Brar had deposited Rs.2,48,000/- which were due from him because he had left the job before expiry of the period of bond. Therefore, the respondent-plaintiff cannot be fastened with an amount more than what was due from Dr.Santokh Singh Brar. To this extent the findings of the lower appellate Court suffer from no infirmity. However, Mr.D.P.S. Kahlon, Advocate appearing on behalf of the appellant-defendant-University, has stated that the lower appellate Court had awarded interest @ 9 percent per annum which is excessive. Furthermore, he prayed that the respondent-plaintiff will be entitled to interest only from the date he retired and not earlier thereto. I find considerable force in this submission made by counsel for the appellant-defendant. Mr. Ashish Grover, Advocate appearing for the respondent- plaintiff, has stated that while issuing notice of motion, Coordinate Bench of this Court had observed that the retiral benefits be released to the respondent-plaintiff with interest @ 8 percent per annum with effect from 1st February, 2003 i.e. three months after his retirement. Counsel has 5 Regular Second Appeal No.2572 of 2010 (O&M) stated that since along with the amount, decretal amount has been paid, therefore, the interim stay cannot be vacated and the decree be modified in terms of the order issuing notice of motion. After hearing counsel for the parties, I am of the opinion that the submission made by Mr.Grover has a merit. At this stage, it will be unjust to seek refund of the amount paid to the respondent-plaintiff. Hence, the decree passed by the Court below is modified to the extent that respondent-plaintiff will be entitled to his retiral benefits with interest @ 8 percent per annum with effect from 1st February, 2003 i.e. three months after his retirement. With the above modifications, present appeal is disposed of. [KANWALJIT SINGH AHLUWALIA] JUDGE August 9, 2011 rps 6