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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 12.03.2018 passed by the learned Single Judge in Civil Writ Petition No.1521 of 2014.

2. Respondent No.1-Mohinder Kumar Sharma, who was working as a Process Server, filed a writ petition seeking issuance of a writ in the nature of mandamus directing the appellant to pay interest @ 18% per annum on the delayed payment of Gratuity with effect from 31.05.2007 i.e. the date of his retirement, till 29.10.2013, when the aforesaid benefit was paid to him.

3. The learned Single Judge allowed the said writ petition vide judgment dated 12.03.2018 and directed the appellant to pay interest @ 9% per annum to respondent No.1 for the period from 01.09.2007 to 09.02.2012 on account of belated settlement of retiral benefits.

4. Learned counsel for the appellant submitted that respondent No.1, who was working as a Process Server, was facing disciplinary proceedings prior to his retirement and therefore, at the time of his retirement on 31.05.2007, his Death-cum-Retirement Gratuity (DCRG) was 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 exonerated in the disciplinary proceedings on 16.04.2011. Thereafter, the Death-cum-Retirement Gratuity (DCRG) of respondent No.1 was finally settled on 09.02.2012 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 been exonerated in the disciplinary proceedings and the learned Single Judge allowed the said petition by awarding interest @ 9% per annum.

5. Mr. Kapila submitted that once the aforesaid Death-cum Retirement Gratuity (DCRG) was 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 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.

6. On the other hand, Mr. Prateek Pandit, learned counsel for respondent No.1 submitted that at the time when respondent No.1 retired on attaining the age of superannuation on 31.05.2007, although he was facing disciplinary proceedings but since later on he has already been 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 only the former part which has been granted by the learned Single Judge and not the latter part and therefore, the present appeal is liable to be dismissed.

7. Learned counsel for respondent No.1 referred to the judgment passed by a Coordinate Bench of this Court in The Financial Commissioner and Principal Secretary to Govt. Haryana, Irrigation Department, Civil Secretariat, Chandigarh versus Hasan Singh Kanwar, 2010 (1) SLR 788 to contend that even if there was any justification on account of pendency of proceedings, the employee cannot be deprived of interest which may have accrued on the amount. It was held that com