THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR CITY CIVIL COURT APPEAL No.228 of 2003 Dated:- 29th August, 2011 Between:- G.A.Sarma …Appellant AND Syndicate Bank and another …Respondent THE HON’BLE SRI JUSTICE B.CHANDRA KUMAR CITY CIVIL COURT APPEAL No.228 of 2003 JUDGMENT:- This appeal is directed against the judgment dated 27.01.2003 passed in O.S.No.440 of 2000 by the IX Additional Chief Judge, City Civil Court (Fast Track Court), Hyderabad. 2. The appellant herein is the plaintiff and the respondents herein are the defendants before the Court below. For the sake of convenience, the parties will be hereinafter referred to as they were arrayed before the Court below. 3. The plaintiff filed the O.S. before the Court below seeking a direction to the defendants to pay him Rs.5,25,920/- towards interest on the back-wages, Rs.92,058/- towards interest on medical and HRA, Rs.43,470/- towards interest on leave encashment and Rs.54,017/- towards interest on gratuity. In total, the plaintiff claimed a total of Rs.7,15,465/- towards interest on the above said components from the defendant - Bank. It is not necessary to refer to the entire history of the case, suffice to say that the plaintiff was serving as a branch manager at Banaganapalli and at Proddutur under the defendants and he was removed from service as a disciplinary measure with effect from 04.01.1986. Aggrieved by the said disciplinary action, the plaintiff filed Writ Petition No.16692 of 1986 before this Court and this Court, by its order dated 07.04.1998, disposed of the Writ Petition and the operative portion of the said order reads as follows:- “For the foregoing reasons, I would allow the writ petition and set aside the impugned order. The second respondent is directed to consider all the aspects of the matter and impose a reasonable punishment for the irregularities committed by the petitioner, insofar as releasing of loan in favour of Laxmi Reddy and five others are concerned. The findings of the enquiry officer that the petitioner acquired properties benami in the name of his nephew is without evidence and, therefore, it is set aside. Likewise, the finding in respect of charge No.2 also is set aside. The second respondent shall, within eight weeks from the date of receipt of this judgment, pass orders reinstating the petitioner into service and also imposing upon him a reasonable punishment.” 4. Aggrieved by the same, the defendant – bank preferred a Writ Appeal in W.A.No.864 of 1988 before this Court and however, this Court, by order dated 26.03.1997, dismissed the writ appeal as infructuous. Then the plaintiff, after dismissal of the above referred Writ Appeal, submitted a representation dated 10.12.1997 to the defendant – Bank requesting the management of the Bank to pay him the wages for the period between 22.01.1986 and 30.05.1988 with interest at the rate of 36% along with other service benefits from 22.01.1986 to 24.11.1990. To this letter, the defendant – Bank, through its General Manager (P), sent a reply dated 15.12.1997 rejecting the claim of the petitioner. Challenging the same, the plaintiff filed Writ Petition No.34808 of 1998 with a prayer which reads as follows:- a) to declare the action of the respondents (defendants herein) in denying the petitioner (plaintiff herein) the benefit of back-wages for the period from 22.01.1986 to 30.05.1988 communicated to the petitioner vide reference No.3799/WP-154-0028- LAD, dated 15.12.1997 as arbitrary, illegal, unjust and unsustainable and violative of Article 14 of the Constitution of India; b) to declare that the petitioner is entitled to the full arrears of salary and allowances for the period from 22.01.1986 to 30.05.1988 and direct the respondents to release the same together with interest at the rate of 24% per annum. 5. This Court, by order dated 01.07.1999, allowed the said writ petition and the operative portion of the said order reads thus:- “In the result, I allow the writ petition and quash the impugned letter issued by the General Manager (P), dated 15.12.1997. A direction shall issue to the respondents to pay the salary and allowances for the period from 22.01.1986 to 30.05.1988 and this payment should be made to the petitioner within a period of two months from the date of receipt of copy of this order. The parties are directed to bear their own costs in this writ petition.” 6. Subsequently, the plaintiff filed a contempt case alleging that the orders passed by this Court in Writ Petition No.34808 of 1998 were not complied with. Then, the defendants have paid the due amounts to the plaintiff. Then, the plaintiff had sent a letter to his counsel informing him that the defendants have complied with the order of this Court in Writ Petition No.34808 of 1998 and requested him to withdraw the contempt case and, accordingly, upon the request of the counsel for the plaintiff to withdraw the contempt case, the contempt case was closed by this Court under Ex.A.1 on 08.11.1999. It appears that the plaintiff has filed Writ Petition No.892 of 2000 before this Court seeking direction to the defendant – Bank to pay interest at the rate of 13% per annum on back-wages, gratuity and leave encashment amounts but subsequently, he had withdrawn the same seeking permission to pursue the matter in Civil Court. Subsequently, the plaintiff filed the present suit. 7. The defendant – Bank’s main case appears to be that though the plaintiff has claimed interest in Writ Petition No.34808 of 1998 and though the said Writ Petition was allowed directing the defendant – Bank to pay the back-wages, but as far as the claim of interest is concerned, no relief was granted to the plaintiff and, therefore, it is deemed that the claim of the plaintiff pertaining to interest is deemed to have been rejected by this Court. It is also the case of the defendant that since the claim of the petitioner regarding interest is deemed to have been rejected, now he cannot claim the interest, as the same is hit by the principles of res judicata. It is also its case that the plaintiff has filed Writ Petition No.708 of 1995 before High Court of Calcutta seeking payment of gratuity and that as per the directions of the High Court of Calcutta in the said writ petition, the amounts were released. It is also its case that the claim of the plaintiff regarding interest is barred by limitation. 8. Though several contentions have been raised during the arguments, learned counsel for the appellant/plaintiff mainly argued that the finding of the Court below that the claim of the plaintiff is hit by the principles of res judicata or under order II Rule 2 C.P.C. is erroneous. Relying on the judgment in the case between O.P.Gupta Vs. Union of India[1], leaned counsel for the plaintiff submitted that since this Court, in Writ Petition No.34808 of 1998, had not rejected the claim of the petitioner regarding interest, it is deemed to have allowed since Writ Petition No.34808 of 1998 itself has been allowed by this Court. 9. The points that arise for consideration in this appeal are (1) whether the plaintiff is estopped from claiming interest, since he had reported in contempt case that the matter has been settled as he was paid dues; and (2) whether the claims of the plaintiff are barred by limitation or the principles of res judicata. 10. As can be seen from the earlier orders of this Court in W.P. No.34808 of 1998, though a direction was given to the defendants to impose a reasonable punishment, but the defendants did not impose any punishment to the plaintiff. The plaintiff had specifically prayed for back-wages with interest in Writ Petition No.34808 of 1998. Admittedly, this Court directed the defendants to pay back-wages and no orders have been passed with regard to the claim of interest. It has to be seen that though claim of interest was referred, but it was not granted. Therefore, it appears that this Court was not inclined to grant him interest. Moreover, the petitioner did not seek any clarification from this Court on this aspect. Anyhow, subsequently, the plaintiff filed contempt case alleging that he was not paid back-wages as ordered by this Court in Writ Petition No.34808 of 1998 and during the pendency of that contempt case, the defendant – Bank paid the back-wages to the plaintiff and subsequently, the plaintiff addressed a letter to his counsel informing that the defendant – Bank has complied with the orders of this Court in Writ Petition No.34808 of 1998 and paid him the back-wages and requested to withdraw the contempt case. Admittedly, at that time, he did not insist for payment of interest on the back-wages. Moreover, it appears that the plaintiff had addressed a letter to his counsel that his claim has been settled. Since the claim in Writ Petition No.34808 of 1998 is only with regard to the back-wages, the claim so settled can be treated as settlement with regard to the claim of back-wages only. 11. As far as other claims of the plaintiff are concerned, the plaintiff claimed interest on medical and HRA. The bank contended that the plaintiff did not vacate the official quarter after his retirement. It appears from the record that the respondent – Bank’s claimed recovery of Rs.66,000/- towards rent pertaining to the quarter allotted to the plaintiff, but the said claim was rejected by the High Court of Calcutta. It appears that the plaintiff insisted that he would vacate the quarters only on payment of terminal benefits and within a week from the date of payment of terminal benefits to the plaintiff, he had vacated the quarters. Therefore, it cannot be said that the plaintiff is not entitled for the interest on HRA and Medical aid. 12. The other claims of the plaintiff are interest on gratuity and leave encashment. The stand of the defendants is that as the Writ Appeal was pending, they did not release gratuity and leave encashment. The main contention of the bank is that the claim of the plaintiff is barred by limitation. Admittedly, the matters were pending before the Court and the plaintiff was filing writ petitions and he filed the writ petition No.892 of 2000 before this Court claiming interest and subsequently he had withdrawn the said writ petition to pursue his remedy by way of a civil suit. Therefore, it cannot be said that the claim of the plaintiff has been barred by limitation, more so, when it is the case of the defendant – Bank that they were withholding the amounts awaiting the result in the Writ Appeal and other proceedings. 13. The defendant – Bank contended that since the claim of the plaintiff was rejected, now the plaintiff is hit by the principles of res judicata. As far as the principles of res judicata are concerned, learned counsel for the plaintiff had relied on the judgments in the cases between Hope Plantations Ltd., Vs. Taluk Land Board, Peermade[2], M/s.Kesho Ram and Co. Vs. Union of India[3] and P.Bharathi Vs. State of A.P.[4], New Victoria Mills Co. Ltd., Vs. Presiding Officer, Labour Court[5], P.Ram Reddy Vs. State of A.P.[6], State of Kerala and others Vs. M.Padmanabhan Nair[7] and Lakshmi Prasad Bhagat Vs. State of Bihar[8]. 14. The settled legal position is that the principles of res judicata would apply only when the matters have been heard and finally decided. Admittedly, in the instant case, though the issue of payment of interest was raised in the earlier proceedings, but it appears that the said issue was not finally decided in the earlier proceedings. Therefore, the facts of the cases 2 to 5 cited supra are not applicable to the facts of the case on hand. 15. The decision of this Court in P.Ram Reddy’s case (6 supra) appears to be not applicable since in that case, the petitioner therein, having received his professional fees as an advocate, subsequently claimed interest. On facts, the same can be distinguished. In State of Kerala’s case (7 supra) which was relied upon by the learned counsel for the plaintiff, the Apex Court observed that wherein a case there is delay in payment of retirement dues, the Government is liable to pay interest at the market rate. I n Lakshmi Prasad Bhagat’s case (8 supra), the Patna High Court observed that when the matters have been left undecided in prior proceedings, the principles of res judicata will not apply. 13. A reading of the entire material on record gives an impression that the defendant – Bank has not paid the dues pertaining to HRA and Medical Aid, gratuity and leave encashment, only on the ground that the Writ Appeal was pending before this Court. Admittedly, even when the Writ Appeal was pending before this Court, neither there was any direction nor was any order of this Court restraining the defendant- Bank from paying gratuity or leave encashment to the plaintiff. The reasons assigned by the defendant – Bank for withholding of the gratuity, leave encashment and HRA and Medical aid of the plaintiff appears to be unreasonable. Thus, I am of the view that the Court below did not consider the fact that HRA and Medical aid, gratuity and leave encashment were not the part of the amounts claimed by the plaintiff in the earlier Writ Petition No.34808 of 1998 and as such, came to an erroneous conclusion. A reading of the entire material gives an impression that the defendants are not justified in withholding HRA and Medical aid, gratuity and leave encashment dues to the plaintiff. Therefore, I hold that the appellant/plaintiff is entitled for interest on those amounts. It is made clear that the plaintiff’s claim of interest on back-wages stands dismissed. 14. Having regard to all the facts and circumstances of this case, the appeal is allowed in part directing the respondent – Bank to pay an amount of Rs. 92,058/- towards interest on HRA and Medical Aid, Rs. 43,470/- towards interest on leave encashment and Rs. 57,017/- towards interest on gratuity, totalling to an amount of Rs.1,89,515/-, to the petitioner at the rate of 9% per annum from the date of filing of the suit before the Court below till the date of decree of the Court below; and 6% interest per annum from the date of decree of the Court below till the date of realisation. There shall be no order as to costs. ___________________________ Justice B.Chandra Kumar 29th August, 2011 Bvv [1] AIR 1987 SC 2257 [2] 1998 (8) Supreme 309 [3] (1989) 3 SCC 151 [4] 1998 (2) ALT 385 [5] AIR 1970 Allahabad 210 (V 57 C 32) [6] AIR 1990 AP 76 [7] AIR 1985 Supreme Court 356 [8] AIR 1979 Patna 169