Retrials benefits like gratuity and pension cannot be withheld by the employer and if done so, interest is payable. Such payments are no longer bounty.
Pension and gratuity are no longer any bounty to be distributed by the employer/Government as already held by the Supreme Court of India in the case of State of Kerala & Ors. vs. M. Padmanabhan Nair, (1985) 1 SCC 429 that pension and gratuity have become valuable right of the employee and any culpable delay in the settlement of the pension and gratuity must be dealt with the penalty of interest at the current market rate from the due date of payment till the date of payment to the employee.
Pension and gratuity are no longer any bounty to be distributed by the employer/Government as already held by the Supreme Court of India in the case of State of Kerala & Ors. vs. M. Padmanabhan Nair, (1985) 1 SCC 429 that pension and gratuity have become valuable right of the employee and any culpable delay in the settlement of the pension and gratuity must be dealt with the penalty of interest at the current market rate from the due date of payment till the date of payment to the employee.
NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7113
OF 2014
(Arising out of SLP (C) No. 25015 of 2011)
D.D. TEWARI(D) THR. LRS.
......APPELLANTS
VERSUS
UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS.
Citation;2014 ALLSCR3023
The
Heard learned counsel on behalf of the parties.
appellant
impugned
Court of
order
(since
dated
Punjab
deceased)
14.03.2011
is
aggrieved
passed
by
and Haryana at Chandigarh
by
the
the
High
in LPA
Page 1
C.A. @ SLP©No.25015 of 2011
No.
1818
of
2010
2
in
affirming
the
judgment
of
the
learned single Judge passed in C.W.P. No. 1048 of 2010
wherein he was not awarded interest for the delayed
payment
of
pension
and
gratuity
he was legally entitled to.
amount,
for
Therefore, the
which
appellant
approached this Court for grant of interest on the
delayed payment on the retiral benefits of pension and
gratuity payable to him by the respondents.
3.
The appellant was appointed to the post of Line
Superintendent
on
30.08.1968
Bijli Vitran Nigam Ltd.
with
the
Uttar
Haryana
In the year 1990, he was
promoted to the post of Junior Engineer-I. During his
service, the appellant remained in charge of number of
transformers after getting issued them from the stores
and deposited a number of damaged transformers in the
stores.
the
While depositing the damaged transformers in
stores,
some
shortage
in
transformers
oil
and
breakages of the parts of damaged transformers were
erroneously debited to the account of the appellant and
later
on
it
was
held
3
that
for
the
shortages
and
breakages there is no negligence on the part of the
appellant.
retired
benefits
On attaining the age of superannuation, he
from
of
service
the
on
31.10.2006.
appellant
were
The
withheld
retiral
by
the
respondents on the alleged ground that some amount was
due to the employer. The disciplinary proceedings were
not pending against the appellant on the date of his
retirement.
Therefore,
the
appellant
approached
the
High Court seeking for issuance of a direction to the
respondents regarding payment of pension and release of
the gratuity amount which are retiral benefits with an
interest at the rate of 18% on the delayed payments.
The learned single Judge has allowed the Writ Petition
vide order dated 25.08.2010, after setting aside the
action of the respondents in withholding the amount of
gratuity and directing the respondents to release the
withheld amount of gratuity within three months without
awarding interest as claimed by the appellant.
The
High Court has adverted to the judgments of this Court
particularly, in the case of State of Kerala & Ors. Vs.
M. Padmanabhan Nair1, wherein this Court reiterated its
earlier view holding that the pension and gratuity are
no
longer
any
bounty
to
be
distributed
by
the
Government to its employees on their retirement, but,
have
become,
under
the
decisions
of
this
Court,
valuable rights and property in their hands and any
culpable delay in settlement and disbursement thereof
must be dealt with the penalty of payment of interest
at the current market rate till actual payment to the
employees.
Court
still
The said legal principle laid down by this
holds
good
in
so
far
as
awarding
the
interest on the delayed payments to the appellant is
concerned.
This aspect of the matter was adverted to
in the judgment of the learned single Judge without
assigning any reason for not awarding the interest as
claimed by the appellant.
That is why that portion of
(1985) 1 SCC 429
the judgment of the learned single Judge was aggrieved
of by the appellant and he had filed L.P.A. before
Division Bench of the High Court.
The Division Bench
of the High Court has passed a cryptic order which is
impugned in this appeal.
It has adverted to the fact
that there is no order passed by the learned single
Judge with regard to the payment of interest and the
appellant has not raised any plea which was rejected by
him, therefore, the Division Bench did not find fault
with the judgment of the learned single Judge in the
appeal and the Letters Patent Appeal was dismissed.
The correctness of the order is under challenge in this
appeal before this Court urging various legal grounds.
4.
It
retired
is
an
from
superannuation
undisputed
service
on
fact
on
31.10.2006
that
attaining
and
the
the
appellant
the age of
order of the
learned single Judge after adverting to the relevant
facts and the legal position has given a direction to
the employer-respondent to pay the erroneously withheld
pensionary
benefits
and
the
gratuity
amount
to
the
legal representatives of the deceased employee without
awarding interest for which the appellant is legally
entitled,
therefore, this Court has to exercise its
appellate jurisdiction as there is a miscarriage of
justice in denying
the interest to be paid or payable
by the employer from the date of the entitlement of the
deceased employee till the date of payment as per the
aforesaid legal principle laid down by this Court in
the
judgment
referred
to
supra.
We
have
to
award
interest at the rate of 9% per annum both on the amount
of pension due and the gratuity amount which are to be
paid by the respondent.
5.
It
is
needless
to
mention
that
the
respondents
have erroneously withheld payment of gratuity amount
for which the appellants herein are entitled in law for
payment
gratuity
of
penal
under
amount
the
on
the
provisions
delayed
of
the
payment of
Payment of
Gratuity Act, 1972. Having regard to the facts and
circumstances of the case, we do not propose to do that
in the case in hand.
6.
For the reasons stated above, we award interest
at the rate of 9% on the delayed payment of pension and
gratuity amount from the date of entitlement till the
date of the actual payment.
If this amount is not paid
within six weeks from the date of receipt of a copy of
this order, the same shall carry interest at the rate
of 18% per annum from the date of amount falls due to
the deceased employee.
With the above directions, this
appeal is allowed.
............................................................J.
[DIPAK MISRA]
............................................................J.
[V. GOPALA GOWDA]
New Delhi,
August 1, 2014
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