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2005 DIGILAW 188 (GUJ)

V. D. DULERA v. STATE OF GUJARAT

2005-03-16

J.N.BHATT

body2005
J. N. BHATT, J. ( 1 ) RULE. Service of Rule is waived by learned AGP Mr. Bhate for and on behalf of the Respondents. In view upon consensual request and also the urgency since there is an involvement of serious question of payment of interest on delayed payment, for more than a decade the matter is heard today on merits. ( 2 ) THE petitioner in this petition, has questioned the inaction and non-payment of interest, on the ground of delayed payment of the amount of difference, arising out of the order passed by the respondent-authority, granting promotion with deemed date i. e. w. e. f. 2/1/1971 with a further direction to treat the period from 1971 to 1978 as notional promotion, whereas, dues arising out of the deemed date of promotion with pecuniary benefits for the period from 1979 onwards. For a period running over more than 11 years interest is claimed by invocation of the provisions of Article 226 of the Constitution of India and claiming the interest, at the rate of 18% p. a. for delayed payment raising plea of no fault of the petitioner. The claim made by the petitioner is not challenged by filing affidavit-in-reply and as a matter of fact and virtually factual profile does not seem to be in any controversy except the rate of interest only at the time of making submission. ( 3 ) IT will be, therefore, material and relevant, at this juncture, to highlight some of the important dates and events, which would have substantial effect and influence in decision-making process, upon a Judicial Review in this petition under Article 226. Following aspects have, unquestionably, emerged from the record: (I) On 9/8/1969, the petitioner had joined the service of the Respondent NO. 4-B. J. Medical College as Junior Clerk. He came to be promoted to the post of Senior Clerk and then to the post of Head Clerk in course of the service tenure. (II) The Respondent-Authorities took a decision to give deemed date promotion to the petitioner i. e. w. e. f. 2/1/1971 by passing written order recorded on 1/1/1993 upon repeated representations. (III) On 21/4/1993, by an office order issued by the Respondent No. 4, number of benefits emanating from the deemed date promotion-order, with head-wise breakup were articulated. (II) The Respondent-Authorities took a decision to give deemed date promotion to the petitioner i. e. w. e. f. 2/1/1971 by passing written order recorded on 1/1/1993 upon repeated representations. (III) On 21/4/1993, by an office order issued by the Respondent No. 4, number of benefits emanating from the deemed date promotion-order, with head-wise breakup were articulated. (IV) Again, the petitioner was informed by the Respondent No. 4, under the instructions of the Government, that he has, also, been granted further benefits of Higher Grade Pay-Scales and arrears thereof, and also that of revised Pay-Scale and arrears thereof, which came to be followed by an order passed, on 6/7-12-1999. (V) The petitioner went on voicing his grievance for non-payment, as well as, ventilating his repeated request for delay for payment of the amount due and payable on account of the deemed date promotion order by, writing letters and representations on various occasions, but in vain. (VI) The Respondent No. 4-Authority, on 25/8/2004 communicated to the Respondent No. 3- the Additional Director (Medical Education) Health, Medical Service and Medical Education, copy whereof, is placed on record, wherein, the legally due and payable consequential benefit on account of deemed date of promotion order was confirmed but it delayed in making payment until 11/1/2005 and that to, after resorting to constitutional writ redressal though he retired, on 30/11/2004. (VII) The Respondent-Authorities have not chosen it fit to file affidavit-in-reply in this petition. ( 4 ) IT is in this context, the only controversy, which needs to be analyzed, evaluated and adjudicated upon is, as to whether the petitioner is entitled to the interest on the delayed payment of the amount of difference arising out of the deemed date promotion order and if yes, at what rate. ( 5 ) IN case of delayed payment without interest and without justification, as well as, without any blame worthiness of the petitioner, obviously, there would be unjust enrichment to the authority which is as such obliged to pay due and payable amount to the petitioner. Legally unjust enrichment is a very well celebrated doctrine. ( 5 ) IN case of delayed payment without interest and without justification, as well as, without any blame worthiness of the petitioner, obviously, there would be unjust enrichment to the authority which is as such obliged to pay due and payable amount to the petitioner. Legally unjust enrichment is a very well celebrated doctrine. Apart from that, even, in absence of any provisions, in the service conditions or Rules, the indifferenceness and apathetic conduct and approach of the authorities cannot be let off, since it not, only, entails unjust enrichment to the authority but also creates unreasonable, unjust and inequitable loss of amount of interest on the due payment, in time, to the employee or the officer concerned in a Government employment. It is in this context, even in absence of any other specific Rule or provision in Government Resolution or Circular of the Government, the affected person is entitled to the relief of interest, once unjustifiable delay in payment is established, and for amount, legally, due and payable to one party, the other party or the authority, for nonpayment or withholding due and payable amount, is obliged to pay interest at the rate of interest, which is considered just and reasonable in the circumstances of the case keeping on mental radar, the statutory benign desideratum of the provisions of section 34 of the Civil Procedure Code. As and when there is such loss or damage to a party, obviously, such a party would be entitled to claim the relief of interest and it is always competent for the Court to award just and reasonable amount of interest in the backdrop of the factual profile, as in this case. ( 6 ) HERE, there is an additional factor which must weigh with the decision making process. In so far as, the award of interest on delayed payment is concerned, there is a Government decision to award 9% of interest p. a. on delayed payment of pensionary benefits, including gratuity. The same principle is to be extended to the inaction in nonpayment of arrears of salary legally due and payable by the employer or the authority concerned. In so far as, the award of interest on delayed payment is concerned, there is a Government decision to award 9% of interest p. a. on delayed payment of pensionary benefits, including gratuity. The same principle is to be extended to the inaction in nonpayment of arrears of salary legally due and payable by the employer or the authority concerned. Of course, the claim is made, by the petitioner in this petition, for interest at the rate of 18% p. a. ( 7 ) IN support of this contention, the reliance is also placed on a decision rendered in "state of Gujarat vs. Umedbhai M. Patel (2001) 3 SCC 314 ". After having threadbare examined the proposition propounded in the said decision and the factual background, it is evident that the direction was given to the authority to pay interest at the rate of 18% on the pecuniary benefits though directed by a judicial adjudication not paid to him within reasonable time. It is in this context the said decision, in the light of the facts of the present case, would not be attracted to press into service the award of interest at the rate of 18% p. a. on the delayed payment of due amount, due to arrears of pay. ( 8 ) IT will be interesting to note at this juncture that the Honble Apex Court in "union of India vs. Justice S. S. Sandhawalia (1994) 2 SCC 240 " has made pertinent observations, in para 4, of the said judgment which reads as follows:"from the foregoing discussion it becomes clear that the Union of India contested the writ petition in the High Court only in regard to the entitlement of the cash equivalent of the allowances including the benefit conferred by Section 22-B of the 1954 Act and the cash benefit claimed for failure of the State of Bihar to provide the original petitioner with a staff car. The Union Government had conceded the demand for the grant of rupees one lakh by way of death-cum-retirement gratuity and had paid the balance of Rs. 51,000 to the original petitioner. Since this payment was delayed by a year or so, the original petitioner claimed interest on the balance amount at 12% per annum, which has been rightly allowed by the High Court. 51,000 to the original petitioner. Since this payment was delayed by a year or so, the original petitioner claimed interest on the balance amount at 12% per annum, which has been rightly allowed by the High Court. Once it is established that an amount, legally, due to a party was not paid to it, the party responsible for withholding the same must pay interest at a rate considered reasonable by the Court. Therefore, we do not see any reason to interfere with the High Courts order directing payment of interest at 12% per annum on the balance of the death-cum-retirement gratuity which was delayed by almost a year. We uphold this part of the High Courts order. " ( 9 ) AFTER having taken into consideration the entire conspectus of the events and catalogue of the circumstances, the delay of 11 years in making payment of an amount due and payable by the Respondent-Authorities and that too without any reasonable and justifiable ground, the petitioner, undoubtedly, is entitled to be paid relief of interest. Now, the question for consideration is as to what would be the rate of interest. Of course, the rate of interest to be paid on the delayed amount would depend upon variety of circumstances, including the prevalent economic circumstances and the rate of interest prevalent in the market. Keeping in mind the factual spectrum and the proposition of law, it would be just and reasonable to award the interest rate of 9% p. a. from the date when the amount became due and payable by virtue by an order recorded, on 1/1/1993, whereby, the petitioner came to be granted deemed date of promotion, till the date the payment came to be made, on 11/1/2005, within a period of three months from today as per the G. R of the State and section 34 of the Code of Civil Procedure, 1908. Otherwise the rate of interest shall be chargeable and payable, at 12% p. a. till the date of payment. Liberty to revive, if this order is not implemented within reasonable period even after three months and thereafter at the rate of 12% p. a. till the end of 2005 for further direction. ( 10 ) IN the result, the petition shall stand allowed. Rule made absolute without any order as to costs. Direct Service permitted. .