IMPORTANT POINTS
To create constructive trust under the first limb of Section 88 of the Indian Trust Act, 1882, the parties should be in a fiduciary character by which one of them is bound to protect the interests of another. Existence of a fiduciary character by which one of them would bound himself to protect the interests of another is the essential requirement so as to bring up a relationship within the sweep of first limb of Section 88 of the Indian Trust Act, 1882

JUDGMENT :

P. SOMARAJAN, J.

1. These are the two appeals by the plaintiff, a retired school teacher of an aided school, against the reversal of the decree of trial court granting compensation on account of the delayed payment of the pensionary benefits. She retired from service on 31.3.1990. Pensionary benefits were disbursed on 20.6.2000 after the lapse of more than one year and two months. The delay occasioned mainly on the default committed by the then Headmaster in sending the pensionary papers to the first defendant-Treasury Officer. The trial court decreed the suit awarding compensation at the tune of Rs. 66,899/- being the interest @ 12% per annum for a period of one year to the pensionary amount of Rs. 3,51,199/-. But in appeal, it was reversed and the suit was dismissed on the ground that no negligence can be proved without the person who committed it, the then Headmaster.

2. The following questions came up for consideration:

(1) Whether it is permissible to fasten vicarious liability on the Principal without the juncture of wrong doer?

(2) What would be the legal position regarding failure to release pensionary benefits within the permissible time? Whether the retired employee can maintain an action for compensation on account of vicarious liability as against the principal when there is involvement of a wrong doer?

3. The plaintiff relied on the decision rendered by the Apex Court in State of Kerala and Others vs. M. Padmanabhan Nair, (1985) 1 SCC 429 and Dr. Uma Agrawal vs. State of U.P. and Another, AIR 1999 SC 1212 in support of her argument that the employer is duty bound to disburse pensionary benefits and as such the employee who committed the wrong need not be in the party array of the proceedings. In order to fasten vicarious liability, which would arise from the wrong committed, the wrong doer should be in the party array of the proceedings since the liability is joint and several. The principle behind it, is that in proper cases, the employer will have the right to recover some or all the damages paid under the vicarious liability from the wrong doer servant on account of the servant's tort, but being the employer, the initial liability to compensate the victim is on the Principal. That does not mean that the wrong doer need not be in the party array of the proceedings. All tort-feasors should be in the party array of the proceedings so as to maintain an action under the vicarious liability. The legal position would be different when the wrong or delay committed by the concerned department. It is not at all necessary to implead the department as such in the party array of the suit in order to fasten liability against the employer. A department under the State Government has no separate entity apart from the state Government/employer. But it is the specific case of the plaintiff that the delay was occasioned due to the fault committed by the then Headmaster. Then the person who committed the wrong (the wrong doer) would step into the shoes of a tort-feasor who is primarily responsible for the wrong done and as such he should be in the party array of the proceedings so as to extend vicarious liability against the principal. But when the wrong is committed by an employee, he should be in the party array of the action for getting compensation on account of the wrong done. In M. Padmanabhan's case (supra), the question of non-impleadment of tort-feasors or its legal impact not came up for consideration and no legal proposition was laid down on the question of non-impleadment of wrong doer. What is considered by the three Judge Bench of the Apex Court in Dr. Uma Agrawal's case (supra) is with respect to the failure on the part of the department in disbursing retiral benefits, wherein the question of constructive liability and its requirement not came up for consideration. So the legal position can be summarised that when there is a wrong committed by an employee, the wrong doer should be in the party array of the proc