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JASGURPREET SINGH PURI, J. (Oral)

1. The present Letters Patent Appeal has been filed under Clause X of the Letters Patent Act for setting aside the judgment dated 05.07.2017 passed by the learned Single Judge in Civil Writ Petition No.19587 of 2016.

2. Respondent No.1-Pyare Lal, who was working as an Usher, filed a writ petition seeking issuance of a writ in the nature of mandamus directing the appellant to pay compensatory interest @ 12% per annum on the delayed payment of Death-cum-Retirement Gratuity (DCRG) and Leave Encashment for the period from 31.10.2011 i.e. the date of his retirement, till October, 2015, when the aforesaid benefits were paid to him.

3. The learned Single Judge allowed the said writ petition vide judgment dated 05.07.2017 and directed the appellant to pay interest @ 8% per annum to respondent No.1 for the period from October, 2011 to September, 2015 on account of belated settlement of Death-cum-Retirement Gratuity (DCRG) and Leave Encashment.

4. Learned counsel for the appellant submitted that respondent No.1, who was working as an Usher, was facing disciplinary as well as criminal proceedings prior to his retirement and therefore, at the time of his retirement on 31.10.2011, his Death-cum-Retirement Gratuity (DCRG) and Leave Encashment were withheld in terms of Rule 9.14(c) of the Punjab Civil Services Rules (Volume II), which provides that no gratuity shall be paid to the Government employee until the conclusion of the departmental or judicial proceedings and issue of final order thereon. He further submitted that respondent No.1 was acquitted in the criminal proceedings on 10.10.2014 and exonerated in the disciplinary proceedings on 02.05.2014. Thereafter, the Death-cum-Retirement Gratuity (DCRG) as well as Leave Encashment of respondent No.1 was finally settled on 10.11.2015 and was paid to him. Respondent No.1 thereafter filed a writ petition seeking interest from the date of his retirement till the date of payment on the ground that he had not only been acquitted in the criminal proceedings but had also been exonerated in the disciplinary proceedings and the learned Single Judge allowed the said petition by awarding interest @ 8% per annum.

5. Learned counsel for the appellant submitted that so far as the leave encashment is concerned, some amount had been paid to respondent No.1 from time to time and therefore, interest, if at all payable, could not be granted on the entire amount.

6. Mr. Kapila submitted that once the aforesaid Death-cum Retirement Gratuity (DCRG) and Leave Encashment were withheld in exercise of powers under the Rules, no such interest would be payable to respondent No.1, even though he was later on exonerated in the disciplinary proceedings and acquitted in the criminal proceedings because there was no unlawful action on the part of the appellant and therefore, the interest which has been granted by the learned Single Judge while allowing the writ petition filed by respondent No.1 is liable to be set aside.

7. On the other hand, Mr. Munish Jolly, learned counsel for respondent No.1 submitted that at the time when respondent No.1 retired on attaining the age of superannuation on 31.10.2011, although he was facing criminal as well as disciplinary proceedings but since later on he has already been acquitted and exonerated therein, he was not asking for any kind of damages or penal interest but had only asked for the interest which was compensatory in nature, of which the amount was already lying with the appellant and the interest which had accrued on the aforesaid amount was with the appellant and was only required to be restituted and given to respondent No.1 and in case it is not awarded to respondent No.1, then it would otherwise amount to unjust enrichment of the appellant. He further submitted that there is a distinction between the interest which has otherwise accrued on the delayed payment and any kind of penal interest or costs etc. and in the present case, it is