2003 Supreme(Cal) 589
High Court Of Calcutta
Pratap Kumar Ray
ATUL CHANDRA MAHATA - Appellant
Versus
STATE OF WEST BENGAL - Respondent
W. P. 10925w Of 2003
Decided On : 11/27/2003
BHUDEV BHATTACHARYA, BIMAL KR.MAITRA, CHITTARANJAN PANDA, DIPTI BHATTACHARYA, HARE KRISHNA HAIDER
Gratuity and retirement benefits are not bounty or charity but deferred payments and required to be paid immediately on death or retirement. Withholding of such benefits invites penal consequences, including payment of interest and other damages and compensation.
Headnote:
GRATUITY - RELEASE - TEACHING AND NON-TEACHING STAFF - NON-GOVERNMENT AIDED EDUCATIONAL INSTITUTIONS - CIRCULAR LETTERS ISSUED BY JOINT SECRETARY FINANCE DEPARTMENT, GOVERNMENT OF WEST BENGAL DATED 25TH JUNE, 2002 AND 11TH AUGUST, 2003 - QUASHED - INTEREST @ 18% PER ANNUM ON GRATUITY AMOUNT AND @ 12% PER ANNUM ON COMMUTED VALUE OF PENSION - AWARDED.
Fact of the Case:
Petitioner, a retired teacher from a non-government aided educational institution, challenged the non-release of his gratuity and commuted value of pension despite the issuance of a pension payment order. The Treasury Officer relied on circular letters issued by the Joint Secretary Finance Department, Government of West Bengal dated 25th June, 2002 and 11th August, 2003, which directed a phased release of gratuity and commuted value of pension.
Finding of the Court:
The Court held that the circular letters were contrary to the law settled by the Apex Court, which had held that gratuity and retirement benefits are not bounty or charity but deferred payments and required to be paid immediately on death or retirement. The Court further held that withholding of such benefits invites penal consequences, including payment of interest and other damages and compensation.
Issues: 1. Whether the circular letters issued by the Joint Secretary Finance Department, Government of West Bengal dated 25th June, 2002 and 11th August, 2003, were legally sustainable. 2. Whether the petitioner was entitled to interest on the delayed payment of his gratuity and commuted value of pension.
Ratio Decidendi: 1. The circular letters were quashed as they were contrary to the law settled by the Apex Court, which had held that gratuity and retirement benefits are not bounty or charity but deferred payments and required to be paid immediately on death or retirement. 2. The petitioner was entitled to interest on the delayed payment of his gratuity and commuted value of pension as withholding of such benefits invites penal consequences, including payment of interest and other damages and compensation.
Final Decision: The Court allowed the writ petition, quashed the circular letters, and directed the respondents to release the petitioner's gratuity and commuted value of pension along with interest @ 18% per annum on the gratuity amount and @ 12% per annum on the commuted value of pension. The Court also directed the State Government to pay the petitioner Rs. 5,000/- as costs.
( 1 ) HEARD the learned Advocates appeaing for the parties.
( 2 ) IN the instant case, it is the grievance of the petitioner that gratuity and commuted value of the pension though already sanctioned by the pension payment order, as yet has not been released. The petitioner has retired long back on 1st March, 2001. The Treasury Officer concerned was directed to file an affidavit as to why the amount as sanctioned was not released. An affidavit by the said Treasury Officer has been filed taking a point that in view of the Circular letter issued by the Joint Secretary Finance department, Government of West Bengal dated 25th June, 2002 and 11th august, 2003 gratuity and commuted value of pension were not released. The said circular letters since have been applied as Shield by the respondent to deny the petitioner's gratuity and commuted value of pension which is neither bounty nor charity now is required to be dealt with though the petitioner has not challenged the same. The circular letter dated 25th june, 2002 of Finance Department reads thus :"the issue of disbursement of pension (including arrears of pension) and other retirement benefits namely, commuted value of pension and gratuity to the teaching and non-teaching employees of non-Govt. aided educational institutions (Primary, Secondary, Jr. High Schools and Madrasahs) in respect of whom, Pension Payment order has been/will be issued, has been under consideration of the govt. The undersigned is directed to say that the Governor has been pleased to decided that: (1) The current pension as well as appears of pension of the teaching and non-teaching staff of the aforementioned educational institutions may be disbursed as usual. (2) The Gratuity and the commuted value of pension in respect of those staff will be disbursed in phases even a maximum period of three years. Order detailing modalities of such payment will be issued shortly. (3) Full pension will be paid to the aforesaid teachers and non-teching staff upto the month in which CVP is disbursed. (4) The commuted value of pension, which has already been fixed by the Director of Pension, Provident Fund and Group insurance, West Bengal, with reference to the date of retirement will, however, remain unchanged. (5) Gratuity, commuted value of pension of the teaching and non-teaching staff of aforesaid institutions, who requires money for the treatment of critical illness of himself, herself or members of his/herfamily orfordaughter'smarriage may, however, be released in exceptional circumstances. But in such cases, the incumbent has to apply to the Director of Treasuries and Accounts, West Bengal, through the Director of School Education, West Bengal with necessary supporting documents. Necessary amendment to the West Bengal Service (Commutation of Pension) Rules, 1983 will be made in due course. "
( 3 ) THE Circular dated 11th August, 2003, issued by the Joint Secretary to the Finance Department, Government of West Bengal reads thus :-"in Finance Department Memorandum No. 6536-F dated 25. 6. 2002 it was declared that Gratuity and Commuted Value of pension in respect of the teaching and the non-teaching staff of the above mentioned Educational Institutions would be disbursed in phases. The undersigned is now directed to say that the Governor is pleased to decide that Gratuity and Commuted Value of Pension of the teachers and non-teaching employees of Non-Government aided educational Institutions (Primary, Secondary, Junior High School and madrasahs) who retired on or before 31. 12. 1998 may be disbursed now provided the P,p. O. in respect of them is issued by the competent authority. Other conditions in the aforesaid memorandum remain unchanged. "
( 4 ) RELEASE of Gratuity and Commuted Value of Pension is controlled and guided by Death-cum-Retirement Benefit Scheme, 1981, issued by the order of the Hon'ble Governor of the State of West Bengal in pursuance of the recommendation of the Second Pay Commissio