1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2039 OF 1994 Varthakavi Kalyanram .. Petitioner Versus The Trustees, State Bank of Travancore and Anr. .. Respondents Mr.Umesh Shetty i/b. Umesh Shetty & Co. for petitioner None for respondents. CORAM : J.N.PATEL, Actg.C.J. & S.C.DHARMADHIKARI, J. DATE : 7th June 2010. P.C.: 1] By this petition under Article 226 of the Constitution of India, the petitioner prays for a writ of mandamus or any other writ, order or direction directing respondent No.1 to pay to the petitioner a sum of Rs. 50,383.25 standing to his credit in the provident fund account with interest thereon at 12% p.a. from 1st October 1989 till payment and/or realisation. 2] Petitioner states that he was an employee of State Bank of Travancvore. He joined the services of this bank on 15th December 1979. He tendered his resignation dated 1st March 1988 which was to be effective from 1st June 1988. However, on 8th April, 1988, he received a 2 memo dated 21st March 1988 stating therein that during petitioner’s term as “Field Officer”, at M.G.Road, Mumbai branch he had committed certain irregularities in the grant of credit facility sanctioned to one M/s.Pragati Chemicals and, therefore, he is liable to be proceeded with, Under chapter X of the State Bank of Travancore (Officers) Service Regulations 1971. The petitioner was called upon to submit his written statement within fifteen days from the date of receipt of the memo. 3] He forwarded his reply dated 29th April 1988 denying that the sanction of Pragati Chemicals was on 29th February 1982, the limit was enhanced in September 1982 which is much prior to his posting at the said branch. Petitioner was posted thereat from 23rd November 1983. It was pointed out by him that an investigation in the matter of the said credit facility was initiated two years prior to the issuance of memo to the petitioner and although explanations were called for from several officers, the petitioner was not issued any such memo. Petitioner was working under the supervision of Branch Manager and Divisional Manager. 4] In such circumstances, by a letter dated 19th May 1988, the petitioner withdrew his resignation and decided to continue in the services of the bank till disciplinary proceedings, initiated against him, are finalised so as to clear his name. 5] The case of the petitioner is that from May 1998 till September 1989, no action was taken by the bank in pursuance of the memo and ultimately, petitioner tendered his resignation dated 30th September 1989. 3 He proceeded to hand over charge but he was shocked and surprised to receive a memo dated 27th November 1989 wherein it was stated that a lenient view is taken and he is issued a warning that lapse committed should not be repeated again. However, petitioner’s grievance is that there is no acknowledgement of his resignation. Thereafter, the petitioner came to be promoted to middle management grade scale II, with effect from 1st August 1989. The petitioner was informed on 6th March 1990 that the bank has decided to accept his resignation with effect from 30th September 1989 and he would be relieved from duties subject to his paying three months salary to the bank in lieu of notice period. Petitioner requested the Managing Director of the bank to waive this condition of payment of three months salary. 6] It appears that on 9th February 1991, the bank addressed a letter through its Manager to the petitioner informing him that if he consents for adjustment of three months’s salary payable in lieu of notice from the terminal benefits payable to him and if such a consent is given in writing, the bank would arrange to release his terminal dues / benefits. 7] Petitioner pointed out that such a letter cannot be given because it would be contrary to the provident fund law and, therefore, he requested for release of his terminal benefits immediately. The petitioner repeatedly made such requests and the amount specified above having not been released, he sought assistance of the P.F.Authorities as well. Eventually, he knocked the doors of this Court. It is also pertinent to note that the first respondent are Trustees of the Employees’ Provident Fund 4 constituted by the State Bank of Travancore. They are sued in their capacity as Trustees of the P.F.Contributions which are statutorily deducted from the salaries of the bank employees. Further, Bank’s contribution to the P.F. Is also paid to this Trust. Therefore, the petitioner requested that his as well as his employers contribution be released. 8] The dispute appears to be as to whether the petitioner has incurred any liability so as to invite deductions from his terminal dues. All this, because the petitioner did not agree to the adjustment of three months’ salary in lieu of notice period. 9] The petition was placed before a Division Bench of this Court and while issuing Rule, this Court recorded the statement of respondents that the amount excluding salary of three months will be paid within one week. The petitioner received a letter from the Advocates of respondents dated 5th October 1994, enclosing therewith a cheque for Rs.37,392.85, which according to the petitioner, is the principal sum. The petitioner, therefore, moved a notice of motion being Notice of Motion No.753 of 1994 praying for interest on this sum at 12% p.a. from 1st October 1989 till payment and/or realisation. It appears that a reply affidavit was filed to this motion in which the respondents relied upon clause 16 of the State Bank of Travancore Employees P.F. Regulations and contended that they are liable to pay interest only for a period of six months from the date petitioner ceased to be a member. Therefore, they stated that they have complied with their obligation and nothing is due and payable to the petitioner. The Bank deposited the aforesaid sum in this Court. 5 10] The petition, thereafter, has been placed for final hearing. The petitioner has withdrawn the sum of Rs.37,392.85 deposited in this Court without prejudice to his rights and contentions regarding the claim of Interest. 11] We had the benefit of the submissions of only petitioner’s counsel. Mr.Umesh Shetty appearing for petitioner stated that the petitioner does not wish to pursue the issue of deductions from the computation of terminal benefits. However, the Petitioner claims interest on the principal sum with effect from 1st October 1989 at 12% p.a. Mr.Shetty invited our attention to the regulations and particularly Regulation Nos. 12 and 16 and urged that the interest claimed at 12% p.a. by the petitioner is on the basis of these regulations and particularly the fact that petitioner’s P.F. Dues have been withheld by the respondent No.1. 12] As we have observed above, we did not have the benefit of any argument on this aspect by the first respondent. 13] The question is only with regard to award of interest on the sum which has been received by the petitioner. There is no doubt about the quantum inasmuch as the petitioner states that the sum of Rs.37,392.85 constitutes the principal amount. However, interest is claimed on the basis that though this amount could have been released immediately upon the resignation being accepted and the petitioner being relieved from the duties, the same has been wrongfully withheld and released only after this 6 Court admitted the petition. Relying upon the principles laid down in the Supreme Court decision and particularly in the case of O.P.Gupta Vs. Union of India, reported in A.I.R. 1987 S.C. 2257, interest is claimed at 12% p.a. 14] Having given our anxious consideration to the submissions of Mr.Shetty, we are of the opinion that any larger controversy or issue need not be decided. It is not necessary to interpret the regulations and particularly those relied upon by Mr.Shetty. In our opinion, when the petitioner’s resignation was accepted with effect from 30th September 1989 and he was relieved from duties, then, the bank should have offered the petitioner his terminal dues, including P.F. Amount. The issue as to whether the bank can withhold three months salary in lieu of notice may have been raised by the petitioner but at no stage the bank offered him the P.F. Dues deducting such salary. Offer to pay the amount came only after this court admitted the petition. Further the cheque of Rs.37,392.85 was forwarded to petitioner’s Advocate only on 5th October 1994. In such circumstances, we are of the view that there is no justification in delaying the payment of P.F. Dues. We are also of the opinion that the bank has failed to point out any reason for withholding this sum. It could have deducted three months salary and immediately released the outstanding amount. Having failed to do so the bank is liable to pay interest. Having given our anxious consideration to the submissions on the rate of interest we are of the opinion that interest of justice could be served if we award interest at 9% p.a. from 1st October 1989 till 5th October 1994. 7 15] The amount was already computed and since it was released only in 1994, we are of the opinion that interest for this period should be paid. The equities would be adjusted and balanced if the interest is awarded at 9% p.a. That would be just and fair to both sides. Accordingly, the petition is allowed. Since the petitioner has already received the principal amount, it is directed that the respondents should pay interest at 9% p.a. from 1st October 1989 till 5th October 1994. The interest should be paid on the principal amount of Rs.37,392.85. Respondents to make payment of the said amount within a period of six weeks from the date of receipt of copy of this order. Rule is made absolute accordingly. No costs. ( Actg. CHIEF JUSTICE ) (S.C.DHARMADHIKARI, J)