SCA/15082/2004 1/13 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 15082 of 2004 For Approval and Signature: HONOURABLE MR.JUSTICE ANANT S. DAVE ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= MM EASOW - Petitioner(s) Versus DIRECTOR OF ACCOUNTS AND TREASURIES & 1 - Respondent(s) ========================================================= Appearance : MR CL SONI for Petitioner(s) : 1, MS ASMITA PATEL ASST. GOVERNMENT PLEADER for Respondent(s) : 1 - 2. ========================================================= CORAM : HONOURABLE MR.JUSTICE ANANT S. DAVE Date : 28/03/2008 ORAL JUDGMENT 1. This petition under Article 226 of the Constitution of India is the culmination of the agony of the petitioner-employee who came to be retired in SCA/15082/2004 2/13 JUDGMENT the year 1997 and paid his retiral dues by the respondent later on. 2. The case of the petitioner is, as early as, in the year 1996 by order dated 24.4.1996 passed in Special Civil Application No.9560/1995, learned Single Judge of this Court allowed the writ petition and in paragraph 4 held as under: “In the result the writ petition is allowed. It is declared that the petitioner is entitled to the benefits of higher pay scale on the basis of Government circular dated 5.7.1991 with effect from 1.6.87. The respondents are directed to pass necessary order for giving the benefits of higher pay scale to the petitioner from 1.6.1987 within a period of two months from the date of receipt of certified copy of this order. The arrears of benefits payable to the petitioner shall be determined and paid to the petitioner within two months thereafter. As the petitioner has been deprived of the benefits of higher pay scale the respondent are directed to pay to the petitioner interest at the rate of 12% per annum of the arrears from the due date till the date of payment. As the petitioner has been unnecessarily harassed, the respondents are directed to pay to him Rs.2,000/- by way of costs of this litigation. Rule made absolute accordingly.” 3. The above order was challenged by filing Letters Patent Appeal No.600/1996 by Director of Accounts and Treasury, State of Gujarat before the Division Bench of this Court and in the operative part of the order, SCA/15082/2004 3/13 JUDGMENT Hon'ble the Division Bench consisting of the then Chief Justice and Justice H.K.Rathod passed the following directions. “Therefore, we do not find any force in this appeal and the same is rejected. The respondent is entitled to the first Higher Grade benefits from 1.6.1987 and the second Higher Grade benefits from 1.6.1995. The respondent shall also be entitled to increments with second Higher Grade benefits till the date of his retirement. His retiral benefits be calculated and paid on the basis of this decision. This being an old matter, the respondent having retired from service in 1997, we direct that this Judgment and the order of the learned Single Judge be implemented within three months. There shall be no order as to costs.” 3.1. Not contended with the direction of the Division Bench of this Court, the Director of Accounts and Treasury challenged the above order dated 10.3.2004 passed in Letters Patent Appeal No.600/1996 before the Apex Court and SLP also came to be dismissed. 4. It is to be noted that during pending of this proceedings, the respondent No.1 herein was not precluded from carrying out the order of the learned Single Judge dated 24.4.1996 passed in Special Civil Application No.9560/1995, whereby directions was given to pay benefits of higher pay scale to the petitioner from 1.6.1987 within two months with 12% interest and Rs.2000/- cost. Once again, even the Division Bench of this Court in Letters Patent Appeal SCA/15082/2004 4/13 JUDGMENT No.600/1996 as per the decision dated 10.3.2004 prescribed three months of time limit to carry out the direction contained in the order of learned Single Judge which also remained non-complied with, till the petitioner initiated proceedings under the Contempt of Court Act before this Court. 5. In the above backdrop of the facts, Shri C.L.Soni, learned advocate appearing for the petitioner has prayed for following relief in para 12(B) of the petition. “Be pleased to hold and declare that the petitioner is entitled to the interest at the rate of 12% per annum of Rs,.28,261/- on the amount of gratuity which is additionally paid to the petitioner of Rs.21,389/- an amount of interest of Rs.41,022/- on the amount of commuted pension of Rs.31,046/- paid to the petitioner; an amount of interest of Rs.8,847/- on the amount of leave encashment paid to the petitioner and an amount of interest of Rs.34,176/- on the amount of difference of pension of Rs.56,949/- paid to the petitioner, by issuing suitable directions to the respondents under Article 226 of the Constitution of India.” 6. In support of the above prayer Shri C.L.Soni, learned advocate for the petitioner has relied on the order passed by the learned Single Judge as confirmed by the Division Bench of this Court again upheld by the Apex Court and submitted that the petitioner was paid difference of pay and allowance, interest on SCA/15082/2004 5/13 JUDGMENT difference of pay and allowance, cost and difference on leave encashment as per satisfaction of the petitioner, while no interest is paid on the difference of gratuity, difference on commuted value of pension and difference of pension (from 1.4.1997 to 31.8.2004) and also on the amount permissible for leave encashment. 6.1. Learned advocate for the petitioner relies on the decisions of the Apex Court (1) Dr. Uma Agrawal v. State of U.P. & Anr. reported in 1999(2) SLR 22 (2) S.K.Dua v. State of Haryana & Anr. reported in 2008 AIR SCW 689 for claim of 12% interest on the additional amount which was paid belatedly after a period of seven years from the date of retirement. Since, no interest is paid on the above dues on the ground as mentioned in the affidavit-in-reply. 6.2. Therefore, according to Shri C.L.Soni, learned advocate for the petitioner the denial of interest on the amount of difference on various heads of retiral dues by the respondent is unjust, unreasonable and arbitrary and violative of article 14 of the Constitution of India and deserves to be set right by this Court. 7. In response to the notice issued by this Court, the respondent No.1 has filed affidavit-in-reply and contended that the petitioner has no fundamental or SCA/15082/2004 6/13 JUDGMENT legal right and present petition is not maintainable and the claim of the petitioner cannot be accepted with the interest as claimed in the prayer clause. At the same time, the fact about orders passed by this Court in Special Civil Application, Letters Patent Appeal and by the Apex Court in favour of the petitioner is not denied. 7.1. According to respondent No.1 the petitioner was paid all his legal dues towards retirement which is shown in the affidavit-in-reply as under: SR. NO. DETAILS AMOUNT DATE OF PAYMENT (1) Difference of Pay & Allowances 19,575/- 06-09-2004 (2) Interest on Difference of Pay & Allowances 23,552/- 08-09-2004 (3) Cost 2,000/- 08-09-2004 (4) Difference of leave Encashment 6,696/- 09-09-2004 The statement showing the details of payment of pension gratuity and CVP difference SR. NO. DETAILS AMOUNT DATE OF PAYMENT (1) Difference of Gratuity 21,384/- 13-09-2004 2) Difference of Commuted Value of Pension 31,046/- 13-09-2004 (3) Difference of Pension (From 01-04-1997 to 31- 08-2004) 53,824/-/- 01-10-2004 7.2. It is also submitted that since Contempt SCA/15082/2004 7/13 JUDGMENT petition was dismissed by this Court, no grievance can be made at this stage and no interest is payable to the petitioner. 8. Learned AGP Ms. Asmita Patel, appearing for the respondent has in addition to the above affidavit-in- reply relied on Government Resolution dated 20.12. 2002 and 25.8.2004 issued by the Department of Finance, State of Gujarat with regard to criteria laid down for payment of interest in case of Death cum Retirement Gratuity (DCRG) and submitted that the petitioner is not entitled for any interest on the difference of various heads of retiral dues and at the most claim for interest on gratuity at the rate of 6% can be looked into. According to learned AGP since no rate of interest is prescribed on any other amount, it will not be open for this Court to direct the respondent authority to pay interest at the rate higher than what is prescribed, so far as, payment of DCRG is concerned in no case the amount of interest can be awarded as claimed by the petitioner in prayer clause 12(B) of this petition. 9. Having heard learned advocates appearing for the parties, perusal of the record including the affidavit-in-reply filed by Shri S.A.Khambhati, Dy. Director, Directorate of Accounts and Treasuries, Gandhinagar, this Court finds no better case then to exercise extra-ordinary jurisdiction under Article 226 of the Constitution of India. The affidavit-in- reply and contentions raised therein reflect callous SCA/15082/2004 8/13 JUDGMENT and pathetic approach of the officers of the Directorate of Accounts and Treasuries in, as much as, learned Single Judge of this Court allowed the writ petition of the petitioner for grant of higher pay scale as early as on 24.4.1996 with a direction to pay such difference within two months with 12% interest and with Rs.2000/- cost which came to be confirmed by decision dated 10.3.2004 in Letters Patent Appeal No.600/1996 with a direction again to carry out the order of learned Single Judge within three months. 10. That, the above orders came to be confirmed by the Apex Court since SLP preferred by the State came to be rejected in limine. Thus, what transpires from the record is the order passed by the learned Single Judge to pay the difference of salary to the petitioner at the rate of 12% interest remained undisturbed. It is also an admitted position and in fact the respondent No.1 has paid the difference of pay and allowance, interest on difference of the above heads of retiral dues with cost of Rs.2000/- and difference of leave encashment with interest on 9.9.2004. Therefore, contention that the petitioner is not entitled for any interest on the difference of gratuity, difference of commuted value of pension, difference of pension (i.e. from the date of retirement namely 1.4.1997 to 31.8.2004) and the amount of leave encashment cannot be accepted, in view of the fact that had there been immediate compliance of the order of the learned Single Judge SCA/15082/2004 9/13 JUDGMENT passed on 24.4.1996 in Special Civil Application No.9560/1995 i.e the order prior to the date of superannuation of the petitioner in March 1997 and had there been correct calculation of pay scale of the petitioner, the amount which was paid in the year 2004 was required to be paid in the year 1997. The fact remains that after exhausting all the attempts when SLP came to be rejected and contempt petition was filed, the amount is paid to the petitioner in the month of September and October 2004 which was grossly delayed by 7 years. 11. Since the request of the petitioner remain unheeded, once again the petitioner had to knock the door of this Court by filing this petition being Special Civil Application No.15082/2004 which came to be admitted after initial issuance of notice by order dated 27.6.2005 and so the date of final hearing for effective adjudication of issue. Thus, about 11 years have been passed for claiming the legitimate and permissible retiral dues as adjudicated by this Court and confirmed by the Apex Court. 12. The contention of learned AGP about in- permissibility of grant of interest on the retiral dues other than the DCRG is devoid of merit in, as much as, pension is a right akin to a right to property as held by the Apex Court in various decisions. If the delayed payment of pension can entail interest difference paid on pension due to indecisiveness on the part of the authority also SCA/15082/2004 10/13 JUDGMENT carry interest and denial amounts violation of legal right of the petitioner-employee. Therefore, in the case of S.K.Dua (supra), the Apex Court considered the above aspect and held that even in absence of Rule, employee can claim interest relying on Article 14, 19 and 21 of the Constitution of India. 12.1. That in the case of Commissioner, karnataka Housing Board vs. C.Muddaiah reported in (2007) 7 SCC 689, the Apex Court in para 11 held as under: “We are of the considered opinion that once a direction is issued by a competent court, it has to be obeyed and implemented without any reservation. If an order passed by a court of law is not complied with or is ignored, there will be an end of the rule of law. If a party against whom such order is made has grievance, the only remedy available to him is to challenge the order by taking appropriate proceedings known to law. But it cannot be made ineffective by not complying with the directions on a specious plea that no such directions could have been issued by the Court. In our judgment, upholding of such argument would result in chaos and confusion and would seriously affect and impair administration of justice. The argument of the Board, therefore, has not force and must be rejected.” 12.2. In 1999 (2) SLR 22 in the case of Dr. Uma Agrwal vs. State of U.P. & Anr., wherein the interest of 12% on delayed retiral benefits was awarded. In para 2 the Apex Court considered earlier decisions SCA/15082/2004 11/13 JUDGMENT and noted as under: “Now-a-days, several writ petitions are being filed in tis Court and various High Courts seeking relief for disbursement of retiral benefits, because of inordinate delays in payment of these benefits. As Krishna Iyer, J. stated in State of Mysore vs. C.R. Sheshadri 7 Others [1974 (4) SCC 308] : [1974 (1) SLR 407 (SC)], ' a retired government official is sensitive to delay in drawing monetary benefits. And to avoid posthumous satisfaction of the pecuniary expectation of the superannuated public servant not unusual in government', it is becoming necessary to issue directions, in several cases, for early payment of these dues. In yet another case in State of Kerala & Oythers vs. M.Padmanabhan Nair [1985 (1) SCC 429] : [1985 (1) SLR 750 (SC)], this Court had occasion to point out that 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 the documents pertain to matters, records whereof would be with the concerned government departments. It was observed that inasmuch as the date of retirement of every government servant was very much known in advance, it was difficult to appreciate why the process of collecting the requisite information and issuance of the abovesaid two documents should not be completed well before the date of retirement so that the payment of gratuity amount could be made on the date of retirement or on the following day and the pension, at he expiry of the following month. This Court stated that the necessity for SCA/15082/2004 12/13 JUDGMENT prompt payment of the retirement dues to a government servant immediately after his retirement could not be over- emphasized and it would not be unreasonable to direct that there would be a liability to pay penal interest on these retirement benefits. In several case, decided by tis Court, interest at the rate of 12% per annum has been directed to be paid by the State.” 12.3. Therefore, law on the subject of grant of payment of interest on retiral dues of Government servant who is entitled and eligible to receive such dues upon completion of qualified service under the Rules is no more res integra. 13. As discussed earlier herein above, in preceding paragraphs on admitted facts of passing different orders of learned Single Judge, the Division Bench and the Apex Court upholding the legal entitlement of the petitioner to receive higher pay scale and determination of retiral dues on the decision of the above declaration and belated payment on various heads of retiral dues only in the month of September and October, 2002 by the respondent has reflected in affidavit-in-reply, clearly reveal that the petitioner is denied the benefits of interest on four different heads of retiral dues and they are difference of gratuity, difference of commuted value of pension, difference of pension and on amount of difference of leave encashment, since the petitioner retired on 31.3.1997 what was paid to the petitioner on the eve of retirement was the determination of SCA/15082/2004 13/13 JUDGMENT gratuity, CVP and pension as per the pay scale received by the petitioner without grant of higher pay scale benefit and plea that no direction was given by this Court to pay interest on the difference of higher pay scale cannot be sustained. 14. It is, therefore, held that the petitioner is entitled for the relief claimed in paragraph 12(B) on different heads of retiral dues as claimed in the above paragraph with 8% simple interest from the date when the petitioner became eligible for receiving such benefits that is the date of retirement namely 30.1.1997 till such amount is paid by the respondent. A calculation of the amount of interest at the rate of 8% on the above basis to be carried out forth with and the amounts so determined to be released to the petitioner within two months from the receipt of the order of this Court. 15. With the aforesaid direction this petition is allowed. Rule is made absolute with no order as to costs. [ANANT S. DAVE, J.] //smita//