Back
2022 Supreme(Mad) 1063
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.M. SUBRAMANIAM, J.
S.A. Antony - Petitioner
Versus
The Secretary to Government, Handloom, Handicrafts, Textiles and Khadhi Department & Ors. - Respondents
W.P. No. 31626 of 2017
Decided On : 01-11-2022
For the Petitioner: Mr. S. Sivakumar.
For the Respondents:Mr. M. Muthusamy, Government Advocate, Ms. V. Yamuna Devi, Special Government Pleader.
The entitlement to interest for belated settlement of terminal benefits is applicable only in cases of administrative delay, not when the delay is due to the pendency of departmental disciplinary proceedings and the subsequent imposition of a penalty.
Headnote:
Interest - Retirement Benefits - Tamil Nadu Pension Rules, 1978 - G.O.Ms.No.70, Handloom, Handicrafts, Textiles and Khadhi Department, dated 30.06.2009 - G.O.Ms.No.13, Handloom, Handicrafts, Textiles and Khadhi Department, dated 24.03.2016 - G.O.No.527, Finance (Pension) Department, dated 15.06.1987 - The court discussed the entitlement of an employee to terminal and pensionary benefits, the concept of interest for belated settlement of terminal benefits, and the impact of departmental disciplinary proceedings on the eligibility for interest. The court referred to the judgment of the Hon’ble Supreme Court of India in the case of State of Jharkhand and Others vs. Jitendra Kumar Srivastava and Another [(2013) 12 SCC 210] to emphasize that gratuity and pension are earned benefits and not bounties, and that the right to receive pension is a property right protected under Article 300-A of the Constitution of India. The court also considered the provisions of G.O.No.527, Finance (Pension) Department, dated 15.06.1987, which stated that no interest shall be payable in cases where the delay in the payment of Death cum Retirement Gratuity is due to the institution of departmental or judicial proceedings against the Government Servant concerned unless a specific determination is made that the Government Servant is not guilty of the charges preferred against him in the proceedings. The court held that the petitioner was not entitled to claim interest for the belated settlement of his terminal benefits due to the pendency of the departmental disciplinary proceedings and the subsequent imposition of a penalty.
Fact of the Case:
The petitioner, a Deputy Director of Sericulture, sought compound interest for the belated payment of retirement benefits after being allowed to retire from service without prejudice to departmental disciplinary proceedings. The departmental disciplinary proceedings were initiated against the petitioner while he was in service, and the final orders imposing a penalty were issued after the settlement of Death-cum-Retirement Gratuity (DCRG). The petitioner claimed interest for the entire belated payment of settlement from the date of his retirement.
Finding of the Court:
The court dismissed the writ petition, stating that the petitioner was not entitled to claim interest for the belated settlement of his terminal benefits due to the pendency of the departmental disciplinary proceedings and the subsequent imposition of a penalty.
Issues: Entitlement to interest for belated settlement of terminal benefits, impact of departmental disciplinary proceedings on eligibility for interest.
Ratio Decidendi: The entitlement to interest for belated settlement of terminal benefits is applicable only in cases of administrative delay, not when the delay is due to the pendency of departmental disciplinary proceedings and the subsequent imposition of a penalty. The court also emphasized that gratuity and pension are earned benefits and not bounties, and that the right to receive pension is a property right protected under Article 300-A of the Constitution of India.
Final Decision: The writ petition was dismissed, and no costs were awarded to either party.
ORDER :
The relief sought for in the present writ petition is for a direction to the respondents to pay compound interest @ 12% per annum for the belated payment of retirement benefits namely DCRG and commutation of pension and encashment of earned leave due to the petitioner.
2. The petitioner holding the post of Deputy Director of Sericulture and retired from service on 30.06.2009 and the order passed in G.O.Ms.No.70, Handloom, Handicrafts, Textiles and Khadhi Department, dated 30.06.2009, states that the petitioner was permitted to retire from service on attaining the age of superannuation on 30.06.2009 A.N., without prejudice to the departmental disciplinary proceedings pending against him.
3. It is not in dispute that the departmental disciplinary proceedings were initiated against the writ petitioner, while he was in service on the date of retirement. The said departmental disciplinary proceedings were pending against the writ petitioner and consequently, he was allowed to retire from service without prejudice to the departmental disciplinary proceedings.
4. The petitioner in the year 2014 filed WP No.19520 of 2014 and this Court passed final orders on 12.08.2014, directing the respondents to settle the Gratuity payable to the writ petitioner, within a period of eight weeks from the date of receipt of a copy of that order. Pursuant to the directions issued by this Court, the DCRG, as applicable, was settled in favour of the writ petitioner even during the pendency of the departmental disciplinary proceedings. Thereafter, the departmental disciplinary proceedings were disposed of and final orders were issued in the year 2016 and the punishment of cut in pension was imposed on the writ petitioner.
5. The final order in the departmental disciplinary proceedings were issued in G.O.Ms.No.13, Handloom, Handicrafts, Textiles and Khadhi Department, dated 24.03.2016, the punishment of cut in pension of a sum of Rs.500/- for 36 months from his pension was imposed and accordingly, the departmental disciplinary proceedings ended with an order of punishment under Rule 9 of the Tamil Nadu Pension Rules, 1978.
6. The learned counsel for the petitioner states that the petitioner was allowed to retire from service without prejudice to the departmental disciplinary proceedings. Once an employee was allowed to retire from service then, he is entitled for the terminal and pensionary benefits and therefore, such benefits ought to have been settled in the year 2009 itself. However, the DCRG was settled pursuant to the orders of this Court passed in the year 2014 and other benefits were only after the disposal of the departmental disciplinary proceedings. Therefore, the petitioner is entitled to claim interest for the entire belated payment of settlement from the date of his retirement.
7. In this regard, the learned counsel for the petitioner relied on the judgment of the Hon’ble Supreme Court of India in the case of State of Jharkhand and Others vs. Jitendra Kumar Srivastava and Another [(2013) 12 SCC 210] wherein in paragraph 8 of the judgment, it has been held as follows:-
“8. It is an accepted position that gratuity and pension are not bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. Conceptually it is so lucidly described in D.S. Nakara v. Union of India [(1983) 1 SCC 305 : 1983 SCC (L&S) 145] by D.A. Desai, J. who spoke for the Bench, in his inimitable style, in the following words : (SCC pp. 319-20, paras 18-20)
“18. The approach of the respondents raises a vital and none too easy of answer, question as to why pension is paid. And why was it required to be liberalised? Is the employer, which expression will include even the State, bound to pay pension? Is there any obligation on the employer to provide for the erstwhile employee even after the contract of employment has come to an end and the employee has ceased to render service?
19. What is a pension? What are the goals of pension? W
