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2003 DIGILAW 590 (CAL)

ATUL CHANDRA MAHATA v. STATE OF WEST BENGAL

2003-11-27

PRATAP KUMAR RAY

body2003
PRATAP KUMAR RAY, J. ( 1 ) HEARD the learned Advocates appeaing for the parties. ( 2 ) IN the instant case, it is the grievance of the petitioner that gratuity and commuted value of the pension though already sanctioned by the pension payment order, as yet has not been released. The petitioner has retired long back on 1st March, 2001. The Treasury Officer concerned was directed to file an affidavit as to why the amount as sanctioned was not released. An affidavit by the said Treasury Officer has been filed taking a point that in view of the Circular letter issued by the Joint Secretary Finance department, Government of West Bengal dated 25th June, 2002 and 11th august, 2003 gratuity and commuted value of pension were not released. The said circular letters since have been applied as Shield by the respondent to deny the petitioner's gratuity and commuted value of pension which is neither bounty nor charity now is required to be dealt with though the petitioner has not challenged the same. The circular letter dated 25th june, 2002 of Finance Department reads thus :"the issue of disbursement of pension (including arrears of pension) and other retirement benefits namely, commuted value of pension and gratuity to the teaching and non-teaching employees of non-Govt. aided educational institutions (Primary, Secondary, Jr. High Schools and Madrasahs) in respect of whom, Pension Payment order has been/will be issued, has been under consideration of the govt. The undersigned is directed to say that the Governor has been pleased to decided that: (1) The current pension as well as appears of pension of the teaching and non-teaching staff of the aforementioned educational institutions may be disbursed as usual. (2) The Gratuity and the commuted value of pension in respect of those staff will be disbursed in phases even a maximum period of three years. Order detailing modalities of such payment will be issued shortly. (3) Full pension will be paid to the aforesaid teachers and non-teching staff upto the month in which CVP is disbursed. (4) The commuted value of pension, which has already been fixed by the Director of Pension, Provident Fund and Group insurance, West Bengal, with reference to the date of retirement will, however, remain unchanged. (3) Full pension will be paid to the aforesaid teachers and non-teching staff upto the month in which CVP is disbursed. (4) The commuted value of pension, which has already been fixed by the Director of Pension, Provident Fund and Group insurance, West Bengal, with reference to the date of retirement will, however, remain unchanged. (5) Gratuity, commuted value of pension of the teaching and non-teaching staff of aforesaid institutions, who requires money for the treatment of critical illness of himself, herself or members of his/herfamily orfordaughter'smarriage may, however, be released in exceptional circumstances. But in such cases, the incumbent has to apply to the Director of Treasuries and Accounts, West Bengal, through the Director of School Education, West Bengal with necessary supporting documents. Necessary amendment to the West Bengal Service (Commutation of Pension) Rules, 1983 will be made in due course. " ( 3 ) THE Circular dated 11th August, 2003, issued by the Joint Secretary to the Finance Department, Government of West Bengal reads thus :-"in Finance Department Memorandum No. 6536-F dated 25. 6. 2002 it was declared that Gratuity and Commuted Value of pension in respect of the teaching and the non-teaching staff of the above mentioned Educational Institutions would be disbursed in phases. The undersigned is now directed to say that the Governor is pleased to decide that Gratuity and Commuted Value of Pension of the teachers and non-teaching employees of Non-Government aided educational Institutions (Primary, Secondary, Junior High School and madrasahs) who retired on or before 31. 12. 1998 may be disbursed now provided the P,p. O. in respect of them is issued by the competent authority. Other conditions in the aforesaid memorandum remain unchanged. " ( 4 ) RELEASE of Gratuity and Commuted Value of Pension is controlled and guided by Death-cum-Retirement Benefit Scheme, 1981, issued by the order of the Hon'ble Governor of the State of West Bengal in pursuance of the recommendation of the Second Pay Commission. Under the said scheme the relative provisions of Gratuity and Commuted Value of Pension are as follows :"commutation of Pension. 36. Under the said scheme the relative provisions of Gratuity and Commuted Value of Pension are as follows :"commutation of Pension. 36. An employee who is eligible forthe benefit of pension under this Scheme shall be entitled to commute for a lump sum payment at the rate determined by Government from time to time any portion not exceeding one-third of any pension which has been or may be granted to him under this Pension Scheme, provided that an employee against whom a judicial or departmental proceeding has been initiated or a pensioner against whom any such proceeding has been instituted or continued shall not be permitted to commute any portion of his pension during the pendency of such proceeding. 37. Sanctioning authority : The sanctioning authority means the Director or any officer (s) authorised by him. 38. Rate of commuted value of pension : The rate of commuted value of pension payable under this scheme have been shown in Appendix-VII. 39. Application of Commutation : An application for commutation of pension shall be submitted by an employee after he has retired to the sanctioning'authority as mentioned in Paragraph- 37 in the form as prescribed in Appendix-VIII. 40. An employee of the Non-Government educational institution, shown in Statement-l shall apply to the Competent authority (Director or any Officer authorised by htm) in From-A for commutation of a portion of his pension including a provisional pension through the Head of the Institution, or if he/who is or was himself/herself the pension, through the Head of the Institution, or if he/she is or was himself/herself the Head of the Institution, the application shall be sent to the Competent authority direct. (1) The Competent Authority shall, on receipt of application in form A- (a) acknowledge the receipt of Rorm-A in Part-II of that Form and despatch the same to the applicant; (b) forward Form A in original to the Audit Officei in Part-Ill of that Form with the request that Part-IV of that Form may be completed and returned to him as early as possible so that action for getting the applicant examined by the appropriate medical authority can be taken. (2) The Audit Officer shall, on receipt of Form A from the competent Authority complete Part-iv of that Form and transmit the same to the Competent Authority as early as possible. (2) The Audit Officer shall, on receipt of Form A from the competent Authority complete Part-iv of that Form and transmit the same to the Competent Authority as early as possible. (3) The Competent Authority shall, on receipt of Form A from the Audit Officer intimate the applicant in Part-V (1) of Form A if the applicant desires to commute a sum not exceeding Rs. 251- or in part-V (2) of Form A if the applicant desires to commute a sum exceeding Rs. 25/- the lump sum amount payable on commutation in the event of his being reported by such Medical Authority/medical boards, as the Competent Authority may consider fit for commutation and shall at the same time instruct him to appear for examination before the Medical Authority/medical Board with in three weeks from the date of its order, or if he has applied for commutation in advance of the date of his retirement within three months from the date of order but in case earlier than the date of retirement and shall supply a copy of Part-1 of Form B to the applicant. If the applicant appears before the Medical Authority/medical Board, he shall be deemed to have accepted the amount authorised to be commuted. (4) A copy of Part-V (1) of Part-V (2) of form A, as the case may be, shall be endorsed by the Competent Authority in the appropriate Medical Authority Medical Board through the Director of Health Services (for cases in Calcutta)/the Chief Medical Officer of Health (for any other case) with (i) Part - II and Part-Ill of Form B; (ii) Form A with Part- IV of that Form duly completed in orginal; (iii) Two copies of the applicant's photograph of which one copy shall be attested by an officer belonging to Group 'a1 service of the State Government. (5) (I) If the applicant after receipt of communication from the competent Authority under sub-para (3) fails to appear for Medical examination before the Medical Authority/medical Board on the date and at the time communicated to him (including any change therein either at the request of the applicant or due to administrative reasons) and there is no reasonable ground for his failure, the Medical authority/medical Board shall report the fact to the competent authority concerned and return to him the document received under sub-para (4 ). (ii) With the return of documents to the Competent Authority under Clause (i) the application for commutation shall be deemed to have been withdrawn. (6) The Director of Health Services, West Bengal/the Chief medical Officer of Health shall on receipt of the documents referred to in sub-para (4) (a) arrange for the medical examination or the applicant by the Medical Authority at the nearest available station from the residence of the pensioner; (b) transmit the documents referred to in sub-para (4) to the medical Authority with the direction to examine the applicant; (c) inform the applicant as to the place and date of his medical examination and direct the Medical Authority to communicate to the applicant the time of such examination. " ( 5 ) SO, it appears that the retirement benefits including Gratuity and commuted Value of Pension of the teaching and non-teaching staff is controlled by the said Scheme of 1981. It is settled law now that a scheme is to be considered as a Statute and it has every effect like a Statute. Reliance may be placed on the case of Bidyeswar Pandey v. . . . . . . . . . . reported in AIR 1989 SC 341 at page 346 being a judgment passed by the division Bench of the Apex Court relying upon its earlier judgment passed in the case of Indrapaul Gupta v. Model Inter College, reported in 1984 (3) scc 384 wherein it has been held that the Pension Scheme has its statutory effect in the category of subordinate legislation. From the Scheme of 1981, it appears that it was issued on the recommendation by the Hon'ble governor of the State of West Bengal accepting the recommendation of the Second Pay Commission. In that view of the matter, the Scheme was its statutory force. Under Clause 45 of the said Scheme of 1981 under chapter-XI it is provided that in respect of matters which are not at all mentioned in the said Scheme, the relative provisions of the West Bengal services (Death-cum-Retirement Benefit) Rules, 1971 would apply mutatis mutandis subject to the approval of the State Government. ( 6 ) NOW, before dealing with the circular letters issued by Chief secretary the law relating to release of retirement benefits including gratuity, Pension etc. as considered and decided by the Apex Court is to be looked into. ( 6 ) NOW, before dealing with the circular letters issued by Chief secretary the law relating to release of retirement benefits including gratuity, Pension etc. as considered and decided by the Apex Court is to be looked into. It has now been settled by several judgments of the Apex court that Gratuity and retirement benefits are not bounty and/or charity, but those are deferred payments and required to be paid immediately on the death or retirement. It has been further held by the Apex Court that withholding of gratuity and retirement benefits will invite the penal consequence of payment of interest and other damage and compensation. Reliance may be placed on the judgment passed in the case of Gorakpur university v. Dr. Shila Prosad Nagendra and Ors. reported in 2001 (6) SCC 591 , corresponding to AIR 2001 SC 2433 wherein the Apex Court relying on its earlier judgment passed in the case of R. Kapur v. Director of inspection, reported in 1994 (6) SCC 489 and the case of State of Kerala v. M. Padmanavan Nair, reported in 1985 SC 356; Som Prokash Reki v. Union of India, reported in AIR 1981 SC 212 as well as the judgment passed in the case of S. N. Mathur v. Gorakpur University reported in 1996 (W) education Service Cases 212 held "gratuity and Provident Fund amount is a property in the hand of a retired employee and it is not a bounty and it cannot be withheld for any reason. " This judgment of the Apex Court is a judgment passed under Article 141 of the Constitution of India and it has a binding effect as law of the land upon all Courts in India as well as all statutory and other administrative bodies. Having regard to such proposition of law as settled by the Apex Court, no State Government or the Central government has any power to pass any administrative circular letter contrary to the law as settled by the Apex Court in the aforesaid judgment. Having regard to such proposition of law as settled by the Apex Court, no State Government or the Central government has any power to pass any administrative circular letter contrary to the law as settled by the Apex Court in the aforesaid judgment. Having regard to such position it appears that the circular letter of the joint Secretary dated 25th June, 2002 as well as that of 11th August, 2003 as were issued as per the direction of the Hon'ble Governor of the State of west Bengal and became an administrative instruction in terms of Article 162 of the Constitution of India, cannot exist and stand and it is contrary to the judgment of the Apex Court wherein law has already been declared and settled. In that view of the matter, the circular letters providing disbursement of the Gratuity amount phasewise within a maximum period of three years and other embargo as mentioned are not legally sustainable. In that view, the circular letters dated 25th June, 2002 and 11th August, 2003 both are quashed and set aside. From the judgment of the Apex court, it appears that non-payment of Gratuity and other retirement benefits in proper time will invite the Court directing payment of interest at a penal rate as well as necessary order directing payment of damage and compensation. In the case of State of Gujarat v, Umabhaj M. Patel, reported in 2001 (3) SCC 314 the Apex Court allowed 18% interest for withholding of Provident Fund and Gratuity amount. Further, 20% interest has been imposed by the Apex Court for non-payment of Provident Fund and Gratuity amount in the case of reported in 1998 (4) SCC 379 (Ex. Capf, R. S. Dhuli v. State of Haryana and Ors. ). Since it has already been held by the Apex court that it is a property in the hand of the employee concerned who has retired denial of such will invite the penal consequence of interest. Long back in the judgment the Apex Court has considered about the consequence about the consequences of non-payment of the amount due to a person concerned by the authorities, being in a case relating to direction by the arbitrator about payment of interest for the post litigation period. Long back in the judgment the Apex Court has considered about the consequence about the consequences of non-payment of the amount due to a person concerned by the authorities, being in a case relating to direction by the arbitrator about payment of interest for the post litigation period. While dealing with the matter the Apex Court considered the issue in a very lucid manner by considering jurisprudential factor and the basic concept of law in that field. The case as was considered by the Apex Court was under the cause title Ex. Engineer Dhan Kanal, Minor Irrigation Division, Orissa v. M. C. Bharadwaj (Deceased LRs) and Ors,, reported in 2001 (2) SCC 721 being the judgment of the Constitution Bench where the controvercy arose about the powers of the Arbitrator under the Arbitration Act, 1940 awarding interest for pre-reference period. Majority speaking through Doraiswamy Raju, J. has opined that the basic proposition of law that a person deprived of the use of money, to which he is legitimately entitled, has a right to be compensated for the deprivation by whatever means it may be called, namely, interest, compensation or damages and this proposition is unmistakable and valid; efficacy and binding nature of such law cannot either be deminished or whittled down. It was held that in absence of anything in the arbitration agreement, excluding the jurisdiction of the arbitrator to award interest on the amount would continue due under the contract and in the absence of any other prohibition proposition the arbitrator can award interest. The said judgment of the Constitution Bench has been relied upon by the Apex Court very recently in the case of South eastern Coal Fields Ltd. v. State of Madhya Pradesh and Ors. , reported in air 2003 SCW 5258 wherein in Paragraph 20 the Court held that delay in payment of the royalty under Mines and Minerals Regulation and development Act being Act 67 of 1957, would invite the liability to pay interest by the Government. Besides, in the case of Union of India v. Justice s. S. Sandhawalia Khandelwalla the Apex Court imposed 18% interest for illegal withholding of the service benefits which has been reported in AIR 1994 SC 1377 . Besides, in the case of Union of India v. Justice s. S. Sandhawalia Khandelwalla the Apex Court imposed 18% interest for illegal withholding of the service benefits which has been reported in AIR 1994 SC 1377 . Further, it is a settled law that Interest Act, 1939 as well as interest Act, 1978 both have the applicability so far as the payment of interest is concerned, whereas under the special scheme and/or statute and/or the rule, no provision of interest has been made. Reliance may be placed on applicability of the Interest Act in the present case on the judgment of the Apex Court passed by a Constitution Bench long back in the year 1963 being the case of National Insurance Co. v. Life Insurance corpn. of India, reported in AIR 1963 SC 1171 at page 1179. Similar view was taken by the Apex Court in the earlier years in the case of Umran singh, reported in AIR 1961 SC 908 at page 917 by a Bench of Hon'ble three Judges of the Apex Court. The same point further. . . even in the case of S. R. B. v. Union of India, reported in AIR 1997 SC 27 applying interest Act wherein the Apex Court passed a direction of penal interest plus cost of the litigation when pension amount and other retirement benefits were not released in due time. Having regard to the above on interest point as well as on the point of release of retirement benefits this Court accordingly is of the view that the Government acted most arbitrarily by denying the Gratuity and Commuted value of pension to the teaching and non-teaching staff who retired long long back. Accordingly, the Government must suffer cost of litigation as well as damage and, compensation. The circular of Chief Secretary as relied upon by the Treasury Officer, has already been quashed. In that view of the matter, the respondents are directed to release to the petitioner grantuity and commuted value of pension along with interest @ 18% per annum with effect from the next date of retirement till the date of such payment which is to be made within four weeks from the date of communication of the order, failing which, further interest @ 20% p. a. to be paid on the said gratuity amount in addition to other coercive consequences in accordance with law. So far as the commuted value of persion is concerned, it is the petitioner's money. The respondents are directed to release the same within a month from this date, failing which, interest @12% p. a. to be paid on that account. ( 7 ) SINCE the petitioner has suffered a lot as he retired long back in 2001. . . . . . as pension payment order was issued long back, the petitioner is entitled to an amount of Rs. 5. 000/- as cost which is to be paid to the petitioner by the State Government within four weeks from date. ( 8 ) THE payment of interest as directed, however, would be reimburesed from the salary of the concerned officer, for whose fault there was a delay for such payments upon hearing the concerned officer. ( 9 ) ACCORDINGLY, the writ application is allowed. ( 10 ) SINCE the circular letter has already been quashed, but as it appears from different Court cases that many teaching and non-teaching staff are being deprived of theirgratuity, retirement benefits and commuted value of pension, this Court feels that this judgment be referred to the chief Secretary to the Government of West Bengal for issuing necessary circular letter in terms of the Court's order directing the concerned authorities not to withhold the gratuity and retirement benefits and commuted value of pension to the teaching and non-teaching staff. ( 11 ) SINCE the learned Advocate forthe State-respondent is appearing, the petitioner need not communicate this order. The respondents are directed to take immediate steps on the communication of the learned advocate for the State. Liberty granted to the learned Advocate appearing for the parties to take the gist of the order.