1. This Writ Petition is filed to issue Writ of Mandamus declaring the proceedings No.1839/A-A1/2004 dated 05.10.2007; and also the inaction of respondent in paying the retiral benefits to the petitioner within one month from the retirement as illegal and arbitrary and consequently, to direct the respondent to release the interest amount @18% p.a. on retiral benefits for the period from 31.07.2004 to 25.05.2007.
2. Heard Sri Omkar, learned counsel, representing Smt K.Udaya Sri, learned counsel-on-record for petitioner, and Sri Raj Kumar Rudra, leaned Standing Counsel for the respondent-Telangana Board of Intermediate Education.
3. The facts of case, shorn off unnecessary details, as averred in the affidavit, are that the petitioner was appointed as Junior Assistant in the respondent-Board of Intermediate Education on 09.10.1972 and was subsequently promoted as Senior Assistant, Superintendent and Administrative Officer; that while the petitioner was working as Superintendent, D-Section, a charge memo dated 13.02.2004 was issued alleging professional negligence of duty in relation to an incident of the year 1997-98;
3.1. It is further averred that by proceedings dated 31.03.2007, the terminal benefits of the petitioner, which had been withheld, have been released, however, the same was paid to the petitioner in the month of May, 2007; that, as such, the petitioner submitted a representation dated 05.09.2007 seeking payment of interest for the delayed period @ 18% per annum; that the said claim was rejected by the respondents by proceedings dated 05.10.2007. Aggrieved thereby, the present writ petition is filed.
4. Learned counsel for the petitioner submitted that in terms of Regulation 22 of the APBIE Death-cum-Retirement Gratuity Regulations, 1980, the petitioner was permitted to voluntarily retire from service on 31.07.2004 without prejudice to the disciplinary proceedings pending against him; that by proceedings dated 02.11.2005, the respondents directed release of the petitioner’s GPF, GIS, FBF and 75% pension, while withholding gratuity and encashment of earned leave on the ground of the pending disciplinary proceedings; that the enquiry had already been concluded in July, 2004 and the Enquiry Officer had submitted her report on 31.07.2004.
4.1. He further submitted that the petitioner made as many as 54 representations seeking release of his retiral benefits, but no action was taken; that nearly three years after his retirement, a show-cause notice No.52/A-A3/2004-2 dated 20.02.2007 was issued proposing recovery of Rs.6,385/- from each of the three individuals allegedly responsible for the pecuniary loss caused to the respondent-Board, including legal expenses; that the suit-OS.No.194 of 1999, which was referred in the said show cause notice, was filed by a firm against the respondent before the IV Senior Civil Court, City Civil Court, Hyderabad, seeking recovery of Rs.1,98,874/- with future interest, nevertheless, the said suit was dismissed for default on 05.04.2005 and the application filed by the firm for restoration of the suit was also dismissed, vide orders dated 31.08.2005.
4.2. He further submitted that the petitioner submitted his explanation on 02.03.2007, reiterating that there was no lapse on his part; and that the petitioner had not been furnished with a copy of the enquiry report at any point of time and that the basis for arriving at the alleged loss was also not disclosed. He further submitted that the civil suit referred to in the show-cause notice had already been dismissed; that, notwithstanding the same, the respondents issued proceedings dated 23.03.2007 imposing punishment of recovery of Rs.6,385/-, including legal expenses, towards the alleged pecuniary loss caused to the Board.
4.3. He further submitted that even thereafter, the petitioner’s gratuity and other retiral benefits were withheld for nearly three years; that after repeated representations, the respondents ultimately released the withheld benefits by letter dated 31.03.2007, and the petitioner received the retiral benefits only in May, 2007.
4.4. He further submitted that the petitioner thereafter made a representation dated 05.09.2007 seeking payment of interest @ 18% p.a. on the delayed retiral benefits; however, the respondents rejected the claim by the impugned proceedings dated 05.10.2007, which is illegal and arbitrary exercise of power by the respondent. By contending thus, learned counsel for petitioner prayed to allow the Writ Petition.
5. In support of his contentions, learned counsel for the petitioner relied on the judgments rendered by the Hon’be Apex Court in Vijay L.Mehrotra v. State of U.P. and others ((2001)9 SCC 687) and Dr. Uma Agrawal v. State of U.P. and others (AIR 1999 SC 1212)
6. In Vijay L.Mehrotra’s case (cited supra), the Hon’ble Apex Court has held as under:
“In case of an employee retiring after having rendered service, it is expected that all the payment of the retiral benefits should be paid on the date of retirement or soon thereafter if for some unforeseen circumstances the payments could not be made on the date of retirement.
In this case, there is absolutely no reason or justification for not making the payments for months together. We, therefore, direct the respondent to pay to the appellant within 12 weeks from today simple interest at the rate of 18% with effect from the date of her retirement.”
7. In Dr. Uma Agarwal’s case (cited supra), the Hon’ble Apex Court has held as under:
“We have referred in sufficient detail to the Rules and instructions which prescribe the time-schedule for the various steps to be taken in regard to the payment of pension and other retiral benefits. Delay in settlement of retiral benefits is frustrating and must be avoided at all costs. In cases where a retired government servant claims interest for delayed payment, the court can certainly keep in mind the time-schedule prescribed in the Rules/instructions apart from other relevant factors applicable to each case.
The case before us is a clear example of departmental delay which is not excusable.”
8. Learned Standing Counsel for the respondent submitted that the contention of the petitioner that his explanation to the charge memo was not considered before ordering an enquiry was factually incorrect; that a charge memo was issued to the petitioner vide Rc.No.52/A-A3/2004-2, dated 13.02.2004, to which he submitted his explanation on 04.03.2004; that after considering the explanation, a departmental enquiry was ordered; and that the enquiry was conducted in accordance with the prescribed procedure and the petitioner had himself admitted his mistake during enquiry; and that the Enquiry Officer, after considering the documentary and oral evidence, found the charge against the petitioner proved.
8.1. He further submitted that the petitioner had submitted a representation seeking voluntary retirement with effect from 31.07.2004, which was accepted without prejudice to pending disciplinary proceedings pending against him.; that as the disciplinary proceedings were pending and there was a possibility of recovery of money from the petitioner towards the loss caused to the respondent, his gratuity and encashment of earned leave were withheld, however, the provisional pension, GPF, GIS and FBF benefits were sanctioned.
8.2. He submitted that after disposal of the civil proceedings initiated by the firm, the total pecuniary loss caused to the Board was assessed at Rs.19,154/-; that as three individuals were found responsible for the loss, it was decided to recover Rs.6,385/- from each of them, including the petitioner, subject to the outcome of any further proceedings arising out of the civil case; that a show-cause notice was issued to the petitioner proposing recovery of Rs.6,385/- towards the pecuniary loss attributable to him; that after considering the matter, orders were passed on 31.03.2007 releasing the terminal benefits which had been withheld and directing recovery of Rs.6,385/- from the petitioner; that after conclusion of the disciplinary proceedings, the withheld terminal benefits were subsequently released.
8.3. Learned Standing Counsel further submitted that the petitioner was not entitled to claim interest @ 18% on the terminal benefits, as the withholding of terminal benefits was neither arbitrary nor deliberate, but was necessitated because of pending disciplinary proceedings against the petitioner and the possibility of recovery of the pecuniary loss being caused to the respondent-Board; that the petitioner had voluntarily retired from service without prejudice to the disciplinary proceedings pending against him; that his retirement did not extinguish the liability arising from the irregularity committed during his service; that the respondents had acted strictly in accordance with the applicable rules.
9. He finally submitted that the petitioner had failed to establish any illegality, arbitrariness or procedural infirmity either in the disciplinary proceedings or in withholding and subsequent release of his terminal benefits; that the claim for interest was therefore unsustainable; that the writ petition is devoid of any merit and is liable to be dismissed.
10. This Court has carefully considered the rival submissions advanced by the learned counsel appearing for the parties and perused the material available on record.
11. The principal issue that arises for consideration is whether withholding of the petitioner’s gratuity and encashment of earned leave, and consequent delay in release of the said retiral benefits, was unjustified so as to entitle the petitioner to interest thereon at the rate of 18% per annum.
12. The material available on record discloses that the petitioner voluntarily retired from service with effect from 31.07.2004 without prejudice to the disciplinary proceedings pending against him. After his retirement; the respondent-Board sanctioned his GPF, GIS, FBF and provisional pension, while gratuity and encashment of earned leave were withheld.
13. It is further evident that the enquiry officer submitted report on 31.07.2004 holding the petitioner guilty of the charges. With regard to the dispute regarding payments, a firm had instituted O.S.No.194 of 1999 before the competent Civil Court claiming a substantial amount from the respondent-Board. The pendency of the said suit had a direct bearing on the determination of the actual pecuniary loss suffered by the Board, and the suit was ultimately dismissed and the restoration application was also dismissed on 31.08.2006.
14. The record further discloses that after the civil proceedings attained finality, the respondent issued proceedings dated 23.3.2007, assessing the total loss suffered by the respondent-Board at Rs.19,154/- and the liability was apportioned among the three persons found responsible and an amount of Rs.6,385/- was directed to be recovered from the petitioner. Subsequently, the withheld terminal benefits of the petitioner were released by proceedings dated 31.03.2007.
15. Therefore, withholding of the aforesaid benefits cannot be considered in isolation from the circumstances in which the disciplinary proceedings were pending.
16. In this regard, it is relevant to refer to Regulation 9 of the APBIE Death-cum-Retirement Gratuity Regulations, 1980, which contemplates withholding of pension or gratuity, either in full or in part, and recovery of pecuniary loss, where, in departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence committed during the period of service.
17. In the present case, on culmination of the disciplinary proceedings, the petitioner was found guilty of the charges and he was ultimately subjected to recovery for the pecuniary loss attributable to him.
18. Further, the suit-OS.No.194 of 1999 filed by a firm against the respondent-Board with regard to dispute involving payments, which indirectly is attributable to pecuniary loss caused by the petitioner, was pending and was ultimately, dismissed for default on 05.04.2005 and subsequently, the application filed for restoration of the suit was also dismissed on 31.08.2006.
19. From the above, it is obvious that both the departmental and judicial proceedings, with regard to the charges levelled against the petitioner, were pending against the petitioner even after his retirement in the year 2004. Undisputably, the petitioner was permitted to voluntarily retire from service without prejudice to the disciplinary case pending against him.
20. Thus, the withholding of the gratuity and encashment of earned leave, during the period when the liability was being determined, cannot be said to have been wholly without authority or justification.
21. The contention of the petitioner that the enquiry had concluded on 31.07.2004 and, therefore, there was no justification for withholding the benefits thereafter, also cannot be accepted in the facts of the present case. The disciplinary proceedings and the determination of the pecuniary liability were intertwined with the civil proceedings instituted by M/s Sri Sai Paper Rolls Convertors, which were pending on the date of retirement of the petitioner. The respondent-Board was required to ascertain the extent of the actual loss suffered by it before taking a final decision regarding recovery from the persons found responsible. The record discloses that, after the relevant proceedings were concluded, the disciplinary matter was finalised, the withheld benefits were released along with imposing the punishment of recovery of Rs.6,385/- from the petitioner.
22. The reliance placed by the learned counsel for the petitioner on the judgments of the Hon’ble Supreme Court in Vijay L.Mehrotra’s case (cited supra), and Dr. Uma Agarwal’s case (cited supra) does not advance the case of the petitioner. In those cases, the Courts were concerned with situations where the retiral benefits were withheld without sufficient justification or where the delay was attributable to departmental inaction. The principle emerging from those decisions is that retiral benefits cannot be withheld indefinitely without justification and that, where the delay is attributable to the department, the employee is entitled to interest.
23. However, in the present case, withholding of retiral benefits was occasioned on account of pendency of disciplinary as well as judicial proceedings concerning the liability of the petitioner.
24. Further, it is to be noted that petitioner was not deprived of all his retiral benefits, i.e., GPF, GIS, FBF and provisional pension were sanctioned to him after his retirement, while only the gratuity and encashment of earned leave were withheld pending determination of his liability. The petitioner was ultimately found responsible for the irregularity and an amount of Rs.6,385/- was recovered from him towards the pecuniary loss attributable to his conduct. The withheld terminal benefits were thereafter released. In such circumstances, the withholding cannot be characterised as arbitrary, deliberate or unjustified so as to warrant payment of interest merely on the ground that there was a lapse of time between the date of retirement and the date of release.
25. Having regard to the statutory framework under Regulation 9 of the Regulations, 1980, the nature of the irregularity committed by the petitioner, the pendency of the disciplinary proceedings, and the subsequent finding of liability against the petitioner, this Court is of the considered opinion that the withholding of gratuity and encashment of earned leave for the relevant period cannot be said to be unjustified. The petitioner has failed to establish that the delay in release of the said benefits was attributable to any arbitrary or unjustified action on the part of the respondents. Accordingly, the petitioner is not entitled to interest at the rate of 18% per annum on the withheld retiral benefits. The proceedings dated 05.10.2007 rejecting the petitioner’s claim for interest, therefore, does not warrant interference by this Court.
26. In the result, the writ petition fails and accordingly dismissed.
27. Miscellaneous petitions pending, if any, shall stand closed. No costs.
