Hon. K.N. Pandey, J.
We have heard Shri Vipin Kumar Saxena, learned counsel for the appellant. Learned Standing Counsel appears for respondent Nos.1 to 3. Shri Madhur Prakash appears for respondent Nos.4 and 5.
Shri Shripati Tripathi, the petitioner-appellant died during the pendency of the writ petition. He has been substituted with his heirs and legal representatives vide order dated 16.3.2010 on an application. The substitution has been carried out in the array of parties on 18.3.2010.
The appellants are aggrieved by the judgment of learned Single Judge dated 8.3.2006 in Writ Petition No.31355 of 2004 by which the writ petition claiming interest on the arrears of salary from 6.1.1978 to 31.12.1992, and other retrial benefits was dismissed.
Learned Single Judge observed, that the petitioner serving as Cashier in Nagar Palika, Basti, was placed under suspension on 6.1.1978, on the charges of embezzlement of a part of the salary of the employees, to be deposited in recurring deposit scheme. The Writ Petition No.23306 of 1989 filed by him was disposed of vide order dated 7.1.1993 directing the department to complete the departmental enquiry, and in case of failure, he was to be reinstated. The enquiry was concluded in the year 1998, after a period of 11 years, on the directions issued by the Court. Learned Judge found that when the matter was taken up on 21.12.2005, a detailed order was passed asking the officers to be present in Court. They appeared on various dates and handed over the demand drafts totalling the arrears of pay and pension to the petitioner. A supplementary affidavit was filed stating that remaining outstanding of Rs.1,30,709.90 was also paid through bankers cheque. He found that since the amount has been paid, the Court should refrain from passing any order for payment of interest. If the petitioner feels aggrieved, he may approach the appropriate forum, for award of interest.
Learned counsel for the petitioner has relied upon the judgments of the Supreme Court in State of Kerala & Ors. Vs. M. Padmanabhan Nair, AIR 1985 SC 356; O.P. Gupta Vs. Union of India & Ors., 1987 UPLBEC 583 (SC); R. Kapur Vs. Director of Inspection (Painting and Publication) Income Tax and Anr., (1995) 1 UPLBEC 89; S.R. Bhanrale Vs. Union of India and ors., AIR 1997 SC 27; Dr. Uma Agrawal Vs. State of U.P. & Anr., (1999) 2 UPLBEC 1006 (SC); S.K. Dua Vs. State of Haryana & Anr., (2008) 1 UPLBEC 301 and the judgments of Punjab and Haryana High Court in A.S. Randhawa Vs. State of Punjab & Ors., 1998 (1) ESC 735 (P&H); the Division Bench judgment of this Court dated 11.8.2008 in Writ Petition No.5667 of 2001, Smt. Kavita Kumar Vs. State of U.P. & Ors. in support of the submission that the High Court under Art.226 of the Constitution of India, has ample powers to be exercised in appropriate and deserving cases to award interest, is cases of inordinate delay, attributable wholly to the employer in settling the retrial dues.
In order to appreciate the submissions made by learned counsel for the petitioner- appellant, it will be appropriate to refer to the facts of the case.
The petitioner was serving as Cashier in Nagar Palika, Basti and was due to retire on 31.12.1992. In the year 1977 a first information report was lodged against the petitioner, Executive Engineer Girija Shankar Singh and Accountant Shri Vishwa Nath Prasad Srivastava for misappropriating a part the amount of the salary of the employee to be deposited in recurring deposit scheme. The police submitted a chargesheet under Section 409 IPC resulting in registration of Criminal Case No.1699 of 1990 against him. He was placed under suspension on 6.1.1978. It is admitted that no disciplinary enquiry was initiated against the petitioner and no chargesheet was served upon him for more than 11 years on which he filed Writ Petition No.23306 of 1989, Shripati Tripathi & Anr. Vs. State of U.P., in which the Court by its judgment dated 17.1.1993 disposed of the writ petition with directions to the Executive Officer, Nagar Palika, Basti to conclude the departmental proceedings.
It is stated that the departmental proceedings were not concluded within the three months' time granted to the respondents, on which he was to be reinstated in terms of the judgment of the Court. In the meantime, on 23.7.1997 the petitioner was acquitted by the Chief Judicial Magistrate, Basti in the criminal case on the ground that there was no evidence brought on record that the appellant had any role to play in the alleged embezzlement. No appeal was preferred against the judgment of acquittal by the criminal court.
The petitioner was not paid the arrears of salary from 6.1.1978 to 31.12.1992, as also the bonus, leave encashment, gratuity, life insurance and other retiral benefits. He filed a Writ Petition No.6992 of 1998, which was disposed of on 30.1.2001 to decide his representation. The respondents did not comply with the order and thus the petitioner filed a third Writ Petition No.31355 of 2004 in which an interim mandamus was issued. A counter affidavit was filed giving details of the arrears of salary only of Rs.88,808.04. After several dates were fixed in the matter, the Executive Officer, Nagar Palika, Basti appeared in person and produced a draft of Rs.1,04,437.82. On 8.3.2006 the remaining amount of Rs.1,30,709.90 was paid in Court. No order was passed awarding interest, relegating petitioner to the appropriate forum.
Shri Vipin Kumar Saxena submits that in the aforesaid facts and circumstances the High Court, should not have relegated the petitioner to approach appropriate forum namely the U.P. State Public Services Tribunal, or the civil court, and that it was an appropriate case in which the Court should have granted interest to the petitioners for the delay of nonpayment of salary and retiral dues, which was wholly attributable to the respondents. He would submit that since no disciplinary enquiry was initiated against the petitioner before he retired and even thereafter and that the petitioner was acquitted in the criminal case, there was no good reason to withhold the salary and the retiral dues nor any such reason was brought on record.
We have gone through the judgments cited by the counsel for the petitioner. In State of Kerala & Ors. Vs. M. Padmanabhan Nair (Supra) the Supreme Court held that pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment. The necessity for prompt payment of the retirement dues to a Government servant immediately after his retirement cannot be overemphasized. It would not be unreasonable to direct the payment of penal interest on such dues at current market rate at the expiry of two months from the date of retirement. In O.P. Gupta Vs. Union of India and Ors. (Supra) the Supreme Court found that even after revocation of suspension and in reinstatement the appellant was not given full pay and allowance for the period of suspension. It was only after the High Court's direction that the same was paid to him, and subsequently he was compulsorily retired. The facts demonstrated that the appellant was deprived form justice and put to endless harassment. The Court in para 24 said; "Normally, this court as a settled practice, has been making direction for payment of interest at 12% on delayed payment of pension. There is no reason for us to depart from that practice in the facts of the present case."
In R. Kapur (Supra) non payment of gratuity to the retired government officer because of non receipt of ''no demand certificate' was not found to be justified. The Supreme Court held that gratuity cannot be withheld on the ground that damages for occupation of official residence are not paid. It reiterated that pension and gratuity are no longer any bounty to be distributed by the Government and awarded 18% interest since the right to gratuity was not depending upon the appellant vacating the official accommodation.
In S.R. Bhanrale (Supra) the Supreme Court awarded 12% interest per annum on Rs.2 lacs towards interest, compensation and litigation expenses for wrongfully withholding the general provident fund amount, which admittedly was payable to him. In this case the order of pension was issued but that the Union of India failed to discharge statutory obligation and the claims remains unsettled from from 31st July, 1984, when the petitioner superannuated upto 21st April, 1986. It was conceded that the petitioner was entitled to the arrears for having crossed efficiency bar and proforma promotion arrears.
In Dr. Uma Agrawal (Supra) the Supreme Court once again emphasized the necessity for prompt payment of retiral dues to the government servant and observed, that it will not be unreasonable to direct 12% interest per annum to be paid for delayed payments of retiral dues. The Supreme Court observed that steps for settlement of retiral dues should be taken atleast two years in advance. If the rules and instructions are followed strictly, much of the litigation can be avoided for payment of retiral dues. In this case the petitioner working as Medical Officer in Government of U.P. had retired on 30.4.1993. She filed a Writ Petition on 4.12.1995 for retiral benefits namely gratuity, provident fund, pension etc. The provisional pension was paid to her after the directions of the Court in December, 1996 and February, 1997 and arrears were paid on 17.3.1997. The GIS was sent to her on 17.12.1997; 90% GPF on 20.1.1998 and balance on 25.4.1998, gratuity and leave encashment amount was paid on 25.6.1997. The Court relied upon State of Mysore Vs. C.R. Sheshadri & Ors., 1974 (4) SCC 308 and State of Kerala & Ors. Vs. M. Padmanabhan Nair (Supra) to hold that she is entitled to interest and quantified it at Rs.1 lac.
In Vijay L. Mehrotra Vs. State of U.P. & Ors., (2000) 2 UPLBEC 1599 the State could not give any explanation for the delay in payment of retiral benefits between 27.11.1997 to 5.11.1999 and was thus required to pay 18% interest per annum within 12 weeks.
In S.K. Dua (Supra) withholding of retirement benefits without sufficient reason was disapproved by the Supreme Court. Justice C.K. Thakker, J. speaking for the Court found that though the appellant retired on June 30th, 1998 after completing 30 years of service and that charge sheets were issued after Shri Quraishi, who had complained against him became Principal Secretary to the Chief Minister, proceedings were finally dropped and all retiral benefits were extended to the appellant. Learned Judge, thereafter, observed:-
"11. Having heard the learned counsel for the parties, in our opinion, the appeal deserves to be partly allowed. It is not in dispute by and between the parties that the appellant retired from service on June 30, 1998. It is also un-disputed that at the time of retirement from service, the appellant had completed more than three decades in Government Service. Obviously, therefore, he was entitled to retiral benefits in accordance with law. True it is that certain charge-sheets/ show cause notices were issued against him and the appellant was called upon to show cause why disciplinary proceedings should not be initiated against him. It is, however, the case of the appellant that all those actions had been taken at the instance of Mr. Quraishi against whom serious allegations of mal-practices and mis-conduct had been levelled by the appellant which resulted in removal of Mr. Quraishi from the post of Secretary, Irrigation. The said Mr. Quraishi then became Principal Secretary to the Chief Minister. Immediately thereafter charge-sheets were issued to the appellant and proceedings were initiated against him. The fact remains that proceedings were finally dropped and all retiral benefits were extended to the appellant. But it also cannot be denied that those benefits were given to the appellant after four years. In the circumstances, prima facie, we are of the view that the grievance voiced by the appellant appears to be well-founded that he would be entitled to interest on such benefits. If there are Statutory Rules occupying the field, the appellant could claim payment of interest relying on such Rules. If there are Administrative Instructions, Guidelines or Norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence Statutory Rules, Administrative Instructions or Guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. The submission of the learned counsel for the appellant, that retiral benefits are not in the nature of bounty is, in our opinion, well-founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in limine even without issuing notice to the respondents.".
The Punjab and Haryana High Court and this Court have followed the aforesaid judgments.
The principles, which can be culled out from the aforesaid judgments are that where State employer is not able to justify delay in payment of arrears of salary; settlement of retiral dues or terminal benefits, and it is found by the Court that the delay is wholly attributable to the State employer, the interest on such arrears of pay, pension and other retiral dues payable under the statutory rules, or even if they are not covered by statutory rules, must be paid to such employee. The reasonable period has been fixed by the Supreme Court of two months. If all the required documents duly completed have been submitted and that the State has delayed the amount of arrears of retiral dues or terminal benefits, the State employer is liable to pay interest on such delay, ordinarily at the rate of 12% simple interest per annum, unless the interest is quantified by the statutory rules. This interest paid is as penalty not only for mitigating the hardships sufferred in depriving the employee of his right to receive the amount due to him within reasonable period of time and also on the right to life, guaranteed under Art.21 of the Constitution of India.
We may add here that after serving the qualifying period of service, the employee does not ordinarily have any other means of livelihood, when he needs them most, other than his dues. It is extremely unjust and harsh to allow a retired employee to wait to receive the dues, and to depend upon his friends, relatives and children. The right to receive retiral dues/ terminal dues is closely linked to his right of self-respect, and human dignity, which is included in right to life guaranteed by Art.21 of the Constitution of India.