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2013 DIGILAW 889 (JHR)

Nagendra Nath Kumar v. State of Jharkhand

2013-07-23

SHREE CHANDRASHEKHAR

body2013
Order The petitioner has approached this Court seeking a direction upon the respondents, for payment of retiral benefits with interest at the rate of 18% and costs. 2. The brief facts of the case are that, the petitioner superannuated from service from the post of Soil Conservation Officer with effect from 28.2.2010. However, in spite of several representations made by the petitioner the retiral benefits of the petitioner was not paid to the petitioner. The petitioner completed all the requisite formalities and submitted all necessary papers to the department for payment of retiral dues and it has also been stated in the writ petition that no departmental proceeding or criminal prosecution was ever initiated against the petitioner however, since 'No Dues Certificate' was not provided by the department, pension to the petitioner was not paid. In these facts, the petitioner has approached this Court by filing the present writ petition. 3. A counter-affidavit-dated 16.7.2013 has been filed on behalf of respondent no. 6 admitting that the authority slip has been issued from the office of the Accountant General (A&E), Ranchi. 4. A counter-affidavit has been filed by the respondent-State of Jharkhand in which, a copy of letter dated 31.3.2013 issued by the Soil Conservation Officer, Ghatshila stating that the 'No Dues Certificate' with respect to the petitioner is being issued, has been brought on record. 5. In view of the counter-affidavit filed on behalf of the respondent-State of Jharkhand, a direction is given to the respondent no. 2 to ensure that the retiral benefits of the petitioner, as admissible in law, is given to the petitioner within a period of four weeks from the date of communication of this order. However, this Court is of the view that this matter cannot be left at this stage by simply allowing the writ petition. A direction upon the State of Jharkhand to take urgent steps in the matter of payment of retiral benefits to the employees, is required to be issued by the Court. The facts of this case depicts a sorry state of affairs in the State of Jharkhand where even after 3 years of retirement, an employee is not paid his/her retiral dues. There is a catena of judgments by the Hon'ble Supreme Court discussing the right of an employee in so far as the claim for pension, gratuity etc. are concerned. 6. There is a catena of judgments by the Hon'ble Supreme Court discussing the right of an employee in so far as the claim for pension, gratuity etc. are concerned. 6. The term 'pension' has been defined in American Jurisprudence as thus:- "However, by modern usage, the 'pension' is• not restricted to pure gratuities. Thus, it has been held that a pension paid to a governmental employee for long and efficient service is not an emolument the payment of which is barred by a State constitutional provision, but is a deferred portion of the compensation earned for services rendered. ...A pension is closely akin to wages in that it consists of payments provided by an employer, is paid in consideration of past services, and serves the purpose of helping the recipient meet the expense of living." 7. The concept of 'pension' has been discussed in Halsbury's Laws of England, as thus:- "Meaning of 'pension': 'Pension' means a periodical payment or lump sum by way of pension, gratuity or superannuation allowance as respects which the Secretary of State is satisfied that it is to be paid in accordance with any scheme or arrangement having its object or one of its objects to make provision in respect of persons serving in particular employments for providing them with retirement benefits.... 'Pension' does not include:- (i) a payment to an employee which consists solely of a return of his own contributions, with or without interest; (ii) that part of a payment to an employee which is attributable solely to additional voluntary contributions by that employee made in accordance with the scheme or arrangement; (iii) a periodical payment or lump sum insofar as that payment or lump sum represents compensation under the statutory compensation schemes and is payable under a statutory provision, whether made or passed before, on or after 31.7.1978." 8. The concept of 'pension' has also been described in Corpus Juris Secundum as thus:- "A pension is a periodical allowance of money granted by the Government in consideration or recognition of meritorious past services, or of loss or injury sustained in the public service. A pension is mainly designed to assist the pensioner in providing for his daily wants, and it presupposes the continued life of the recipient." 9. A pension is mainly designed to assist the pensioner in providing for his daily wants, and it presupposes the continued life of the recipient." 9. In a welfare State, pension is treated not only as a reward for past service but with a view to helping the employee to avoid destitution in old age. The concept of retiral benefit to a citizen has evolved on the consideration that an employee who rendered service during the useful years of his life must not 'be left to penury in his old age. 10. In "Deokinandan Prasad vs. State of Bihar and Others", reported in (1971)2 SCC 330 , the Hon'ble Supreme Court finally set at rest the ongoing debate regarding the nature of pension by holding that the right of a person to receive pension is property under Article 31 (1) and by a mere executive order the State has no power to withhold the same. The decision by the Constitution Bench of the Hon'ble Supreme Court in "Deokinandan Prasad vs. State of Bihar and Others" (supra) finally settled the notion of pension being a bounty. a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore no right to pension can be enforced through Court, as wrong. 11. In "D.S. Nakara and Others vs. Union of India", reported in (1983)1 SCC 305 , a Constitution Bench of the Hon'ble Supreme Court has held as under:- "28. Pensions to civil employees of the Government and the defence personnel as administered in India appear to be a compensation for service rendered in the past. However, as held in Douge vs. Board of Education a pension is closely akin to wages in that it consists of payment provided by an employer, is paid in consideration of past service and serves the purpose of helping the recipient meet the expenses of living. This appears to be the nearest to our approach to pension with the added qualification that it should ordinarily ensure freedom from undeserved want. 29. This appears to be the nearest to our approach to pension with the added qualification that it should ordinarily ensure freedom from undeserved want. 29. Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and, therefore, one is required to fall back on savings. One such saving in kind is when you give your best in the heyday of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus, the pension payable to a Government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. In one sentence one can say that the most practical raison dieter for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon. 31. From the discussion three things emerge:-(i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rules which are statutory in character because they are enacted in exercise of powers conferred by the proviso to Article 309 and clause (5) of Article 148 of the Constitution; (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare measure rendering socioeconomic justice to those who in the heyday of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in lurch. It must also be noticed that the quantum of pension is a certain percentage correlated to the average emoluments drawn during last three years of service reduced to 10 months under liberalised pension scheme. It must also be noticed that the quantum of pension is a certain percentage correlated to the average emoluments drawn during last three years of service reduced to 10 months under liberalised pension scheme. Its payment is dependent upon an additional condition of impeccable behaviour even subsequent to retirement, that is, since the cessation of the contract of service and that it can be reduced or withdrawn as a disciplinary measure;" 12. In "A.P. Srivastava vs. Union of India and Others" reported in (1995)6 SCC 227 , while interpreting provisions of under Rr. 36, 48, 48-A and 48-B of CCS (Pension) Rules, 1972, the Hon'ble Supreme Court has held that a temporary Government servant would be entitled to pension after completing more than 20 years of service even after he is required to retire by the employer in exercise of power under Rule 56(i) of the Fundamental Rules. 13. In "Union of India vs. Gurnam Singh", reported in (1982)2 5CC 314, the Hon'ble Supreme Court has held that the right to receive encashment of leave earned on retirement is a condition of service. 14. In Sudhir Chandra Sarkar vs. Tata Iron and Steel Co. Ltd. and Others, reported in (1984)3 SCC 369 , the Hon’ble Supreme Court, has held as under:- "16. Pension and gratuity coupled with contributory provident fund are well-recognised retiral benefits. These retiral benefits are now governed by various statutes such as the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Payment of Gratuity Act, 1972. These statutes were legislative responses to the developing notions of fair and humane conditions of work, being the promise of Part IV of the Constitution. Article 37 provides that "the provisions contained in Part IV-Directive Principles of State Policy, shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws". Article 41 provides that "the State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment old age, sickness and disablement, and in other cases of undeserved want". Article 41 provides that "the State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment old age, sickness and disablement, and in other cases of undeserved want". Article 43 obligates the State "to secure, by suitable legislation to all workers, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure...". The State discharged its obligation by enacting' these laws. But much before the State enacted relevant legislation, the trade unions either by collective bargaining or by statutory adjudication acquired certain benefits, gratuity being one of them. Pension and gratuity are both retiral benefits ensuring that the workman who has spent his useful span of life in rendering service and' who never got a living wage, which would have enabled him to save for a rainy day, should not be reduced to destitution and penury in his old age. As a return of long service he should be assured social security to some extent in the form of either pension, gratuity or provident fund whichever retiral benefit is operative in the industrial establishment. It must not be forgotten that it is not a gratuitous payment, it has to be earned by long and continuous service. 17. Can such social security measure be denuded of its efficacy and enforcement by so interpreting the relevant rules that the workman could be denied the same at the absolute discretion of the employer notwithstanding the fact that he or she has earned the same by long continuous service? If Rule 10 is interpreted as has been done by the High Court, such would be the stark albeit unpalatable outcome. It is therefore necessary to take a leaf out of history bearing on the question of retiral benefits like pension to which gratuity is equated. In Burhanpur Tapti Mills Ltd. vs. Burhanpur Tapti Mills Mazdoor Sangh this Court observed that: "a scheme of gratuity and a scheme of pension have much in common. Gratuity is a lump sum payment while pension is a period payment of a stated sum". Undoubtedly both have to be earned by long and continuous service. 18. In Burhanpur Tapti Mills Ltd. vs. Burhanpur Tapti Mills Mazdoor Sangh this Court observed that: "a scheme of gratuity and a scheme of pension have much in common. Gratuity is a lump sum payment while pension is a period payment of a stated sum". Undoubtedly both have to be earned by long and continuous service. 18. For centuries the courts swung in favour of the view that pension is either a bounty or a gratuitous payment for loyal service rendered depending upon the sweet will or grace of the employer not claimable as a right and therefore, no right to pension can be enforced through court. This view held the field and a suit to recover pension was held not maintainable. With the modem notions of social justice and social security, concept of pension underwent a radical change and it is now well-settled that pension is a right and payment of it does not depend upon the discretion of the employer, nor can it be denied at the sweet will or fancy of the employer. [Deokinandan Prasad vs. State of Bihar, State of Punjab vs. Iqbal Singh and D.S. Nakara vs. Union of India.] If pension which is the retiral benefit as a measure of social security can be recovered through civil suit, we see no justification in treating gratuity on a different footing. Pension and gratuity in the matter of retiral benefits and for recovering the same must be put on par.” 15. In "Poonamal vs. Union of India", reported in (1985)3 SCC 345 :- 7. ".........pension is a right not a bounty or gratuitous payment. The payment of pension does not depend upon the discretion of the Government but is governed by the relevant rules and anyone entitled to the pension under the rules can claim it as a matter of right. (Deoki Nandan Prasad vs. State of Bihar, State of Punjab vs. Iqbal Singh and D.S. Nakara vs. Union of India) Where the Government servant rendered service, to compensate which a family pension scheme is devised, the widow and the dependent minors would equity be entitled to family pension as a matter of right. In fact we look upon pension not merely as a statutory right but as the fulfilment of a constitutional promise inasmuch as it partakes the character of public assistance in cases of unemployment, old-age, disablement or similar other cases of undeserved want. In fact we look upon pension not merely as a statutory right but as the fulfilment of a constitutional promise inasmuch as it partakes the character of public assistance in cases of unemployment, old-age, disablement or similar other cases of undeserved want. Relevant rules merely make effective the constitutional mandate. That is how pension has been looked upon in D.S. Nakara judgment. At the hearing of this group of matters we pointed out that since the family pension scheme has become non-contributory effective from September 22, 1977 any attempt at denying its benefit to widows and dependents of Government servants who had not taken advantage of the 1964 liberalisation scheme by making or agreeing to make necessary contribution would be denial of equality to persons similarly situated and hence violative of Article 14. If widows and dependents of deceased Government servants since after September 22, 1977 would be entitled to benefits of family pension scheme without the obligation of making contribution, those widows who were denied the benefits on the ground that the Government servants having not agreed to make the contribution, could not be differently treated because that would be introducing an invidious classification among those who would be entitled to similar treatment. When this glaring dissimilar treatment emerged in the course of hearing in the Court, Mr. B. Dutta learned counsel appearing for the Union of India requested for a short adjournment to take further instructions." 16. In "PEPSU RTC vs. Mangal Singh and Others", reported in (2011)11 SCC 702 , the Hon'ble Supreme Court has held as under:- "49. To sum up, we state that the concept of pension has been considered by this Court time and again and in a catena of cases it has been observed that the pension is not a charity or bounty nor is it a conditional payment solely dependent on the sweet will of the employer. It is earned for rendering a long and satisfactory service. It is in the nature of deferred payment for the past services. It is a social security plan consistent with the socio-economic requirements of the Constitution when the employer is State within the meaning of Article 12 of the Constitution rendering social justice to a superannuated Government servant. It is a right attached to the office and cannot be arbitrarily denied. It is a social security plan consistent with the socio-economic requirements of the Constitution when the employer is State within the meaning of Article 12 of the Constitution rendering social justice to a superannuated Government servant. It is a right attached to the office and cannot be arbitrarily denied. (See A.P. Srivastava vs. Union of India, Vasant Gangaramsa Chandan vs. State of Maharashtra, Subrata Sen vs. Union of India, Union of India vs. P.D. Yadav, Grid Corpn. of Orissa vs. Rasananda Das and All India Reserve Bank Retired Officers Assn. vs. Union of India)." 17. In view of the aforesaid decisions of the Hon'ble Supreme Court, there cannot be any manner of doubt that an employee has a right to receive his/her retiral dues and an employee can be denied demand of the retiral benefits only under a procedure prescribed under the law. In "S.K. Mastan Bee vs. General Manager, South Central Railways and Another, reported in (2003)1 SCC 184 , a plea raised by the respondents that a claim for the pension was raised after more than 20 years, has been rejected by the Hon'ble Supreme Court and it has been held that it is an obligation of the employer to calculate and pay the retiral dues of the employee, Denial of pension to the petitioner is violative of Article 21 of the Constitution of India. The Hon'ble Supreme Court has dealt with the issue in the following words:- 6. "We notice that the appellant's husband was working as a Gangman who died while in service. It is on record that the appellant is an illiterate who at that time did not know of her legal right and had no access to any information as to her right to family pension and to enforce her such right. On the death of the husband of the appellant, it was obligatory for her husband’s employer viz. the Railways, in this case to have computed the family pension payable to the appellant and offered the same to her without her having to make a claim or without driving her to a litigation. On the death of the husband of the appellant, it was obligatory for her husband’s employer viz. the Railways, in this case to have computed the family pension payable to the appellant and offered the same to her without her having to make a claim or without driving her to a litigation. The very denial of her right to family pension as held by the learned Single Judge as well as the Division Bench is an erroneous decision on the part' of the Railways and in fact amounting to a violation of the guarantee assured to the appellant under Article 21 of the Constitution. The factum of the appellant's lack of resources to approach the legal forum timely is not disputed by the Railways. The question then arises on facts and circumstances• of this case, was the Appellate Bench justified in restricting the past arrears of pension to a period much subsequent to the death of the appellant's husband on which date she had legally become entitled to the grant of pension? In this case as noticed by us hereinabove the learned Single Judge had rejected the contention of delay put forth by the Railways and taking note of the appellant's right to pension and the denial of the same by the Railways illegally considered it appropriate to grant the pension with retrospective effect from the date on which it became due to her. The Division Bench .also while agreeing with the learned Single Judge observed that the delay in approaching the Railways by the appellant for the grant of family pension was not fatal, in spite of the same it restricted the payment of family pension from a date on which the appellant issued a legal notice to the Railways i.e. on 1.4.1992. The Division Bench .also while agreeing with the learned Single Judge observed that the delay in approaching the Railways by the appellant for the grant of family pension was not fatal, in spite of the same it restricted the payment of family pension from a date on which the appellant issued a legal notice to the Railways i.e. on 1.4.1992. We think on the facts of this case inasmuch as it was an obligation of the Railways to have computed the family pension and offered the same to the widow of its employee as soon as it became due to her and also in view of the fact that her husband was only a Gangman in the Railways who might not have left behind sufficient resources for the appellant to agitate her rights and also in view of the fact that the appellant is an illiterate, the learned Single Judge, in our opinion, was justified in granting the relief to the appellant from the date from which it became due to her, that is the date of the death of her husband. Consequently, we are of the considered opinion that the Division Bench fell in error in restricting that period to a date subsequent to 1.4.1992. 18. In the present case and also in several other cases, this Court has noticed that the claim of an employee has not been finalised by the authorities for years together. Sometimes, a plea of the employee not submitting the documents, has been taken whereas, sometimes the blame has been put on some other authority. Inaction on the part of the Government authorities is abdiction of duty by the authorities and it must be deprecated by this Court. It is the duty of the State to put the employee on notice, even before the employee superannuates from service, regarding the requirements for grant of pension such as, submission of necessary documents etc. and calculate the pension of the employee in time and ensure that the ex-employee gets his retiral benefits peacefully at the sunset of his life. 19. In view of the aforesaid it is desirable that the State of Jharkhand should frame detailed guidelines in so far as the calculation of pension and grant of pension to the employees are concerned. At this stage, Mr. 19. In view of the aforesaid it is desirable that the State of Jharkhand should frame detailed guidelines in so far as the calculation of pension and grant of pension to the employees are concerned. At this stage, Mr. Ajit Kumar, the learned Additional Advocate General, appears and shares the concern of the Court and assures the Court that he would communicate the direction of the Court to the concerned authority of the State of Jharkhand and he also hopes that the. State would come out with a detailed guidelines in this regard. 20. Let a copy of this order be sent to the Chief Secretary of the State of Jharkhand. 21. Call the matter after 12 weeks.