Union Of India Thru The Gen Mgr. ... vs Central Administrative Tribunal ...
2014 Latest Caselaw 1013 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 

 
Reserved
 

 
Court No. - 33
 

 
Case :- WRIT - A No. - 20681 of 2009
 

 
Petitioner :- Union Of India Thru The Gen Mgr. N.C.R. & Ors
 
Respondent :- Central Administrative Tribunal & Anr
 
Counsel for Petitioner :- Alok Kumar Rai,A.K.Gaur
 
Counsel for Respondent :- S.C.,Sanjay Singh
 

 

 
Hon'ble Rajes Kumar, J.

Hon'ble Anjani Kumar Mishra, J.

(Delivered by Hon'ble Rajes Kumar, J.)

Heard Sri A.K. Gaur, learned counsel for the petitioners and Sri S.S. Sharma, learned counsel appearing on behalf of respondent no. 2.

By means of the present writ petition, the petitioners have challenged the order of the Central Administrative Tribunal, Allahabad Bench, Allahabad dated 3.11.2008 passed in Original Application No. 365 of 2003, filed by the respondent no. 2, whereby the original application has been allowed.

The brief facts of the case are that respondent no. 2, who was a Railway employee, retired on 31.10.1994, while he was posted at Mirzapur. He was provided Railway accommodation No. 83-B, Type-II, Railway Colony, Mirzapur. It appears that after the retirement, he had been allowed to retain the house upto 29.2.1995. No further permission was granted to retain the said house after 1st March, 1995. Admittedly, the respondent no. 2 had vacated the premises on 15.2.2000. The respondent was required to pay the penal rent for the period 1.3.1995 to 15.2.2000 for which it appears that notices had been given to which the respondent no. 2 filed reply and finally by the order dated 8.1.2000, penal rent at Rs.1,08,759.07 p. has been calculated. Further, on consideration of the reply of the respondent no. 2, by the order dated 24.4.2002, after the adjustment of gratuity amount of Rs. 36,855/-, the respondent no. 2 has been asked to pay balance amount of Rs.71,904/-.

Being aggrieved by the aforesaid two orders dated 8.1.2000 and 24.4.2002, the respondent no. 2 filed Original Application No. 365 of 2003.

The main contention of respondent no. 2 before the Tribunal was that the accommodation has been retained upto 2000 because of non-payment of post retiral dues and further that the penal rent cannot be adjusted with the gratuity amount. The Tribunal by the impugned order has directed the payment of rent/damages @ Rs.200/- per month with effect from 1.11.1994 till the date on which the premises has been vacated and directed the respondent no. 2 to pay the amount within eight weeks. The Tribunal further held that amount of rent cannot be adjusted with the gratuity amount and accordingly directed to pay the amount of gratuity or any other post retiral dues within a period of two months from the date of aforesaid deposit of rent/damages.

Learned counsel for the petitioners submitted that the rent has been calculated in accordance to the rules. At no stage, calculation of penal rent has been challenged by the respondent no. 2. Penal interest was chargeable as the respondent no. 2 has retained the accommodation unauthorizedly without permission. The Tribunal has erred in fixing the rent/damages @ Rs.200/- per month without any basis. He further submitted that the amount of gratuity can be adjusted with the amount of penal rent. Reliance has been placed on the decision of the Apex Court in the case of Wazir Chand Vs. Union of India and others, reported in JT 2000 (Suppl. 1) SC 515.

Learned counsel for the respondent no. 2 submitted that post retiral benefits, including pension and gratuity, etc. is the right of the retired employee and is not a bounty and is payable on the date of retirement. The respondent no. 2 could retain the accommodation for the reason that his post retiral benefits could not be settled and were paid in the year 1998. Even after four years, full gratuity has not been paid and the same has been illegally adjusted with the penal interest. He submitted that neither Rule 323 of the Manual of Railway Pension Rules, 1950 (hereinafter referred to as the "Rules, 1950") nor the Rule 15 of the Railway Services (Pension) Rules, 1993 (hereinafter referred to as the "Rules, 1993") provides for adjustment or the recovery of penal rent from the post retiral dues, gratuity, etc.

Reliance has been placed on the decision of the Apex Court in Civil Appeal No. 4832-4833 of 1999, Union of India and others Vs. Madan Mohan Prasad, decided on 28.2.2002, the Division Bench decision of this Court in the case of Smt. Marjaddi Vs. Central Administrative Tribunal, Allahabad Bench, Allahabad and others, reported in 2004 (3) E.S.C. (All) 1375 and the decision of the Bombay High Court in the case of N.C. Sharma Vs. Union of India and others, reported in 2002-2003 A.T. Full Bench Judgments-212. He submitted that the decision in the case of Wazir Chand Vs. Union of India and others (supra) has been considered by the Apex Court in the case of Union of India and others Vs. Madan Mohan Prasad (supra) and the Apex Court in this decision has observed that in none of the decisions, the actual import or the effect to the relevant rules regarding payment of DCRG had been considered.

I have considered rival submissions and perused the records.

Two questions arise for consideration:-

1- Whether the Tribunal was justified in directing the payment of rent/damages @ Rs.200/- per month with effect from 1.11.1994 till the date of vacation of premises?

2- Whether the penal interest can be adjusted with the post retiral dues, namely, gratuity, etc.?

So far as the first issue, namely, the direction of the Tribunal fixing the rent @ Rs.200/- per month is concerned, we are of the view that the same is without any basis. In the impugned order dated 8.1.2002, the complete calculation of the penal rent at Rs.1,08,759.07 p. has been given. It appears that the said calculation has not been disputed by the respondent no. 2 and he has not challenged the determination of the amount in the original application. The only contention therein was that the accommodation has been retained because the post retiral dues has not been settled and paid.

We are of the view that the delay in settlement of post retiral dues and its payment and the retention of accommodation without permission unauthorizedly are two separate issues. Merely because the post retiral dues had not been settled within time and had been settled belatedly, it would be open to the retired employee to claim interest for such delay, but this reason will not absolve the respondent no. 2 from the liability of penal rent, which is payable in accordance to rules for the illegal retention of accommodation. The record reveals that the calculation of penal interest has been made after giving opportunity and exchange of correspondence, which has not been disputed by the respondent no. 2 at any stage. Therefore, we are of the view that respondent no. 2 is liable to pay penal interest at Rs.1,08,759.07 p. and the Tribunal has erred in directing payment of rent/damages @ Rs.200/- per month. The order of the Tribunal to this extent is liable to be set aside.

Now coming to the second question that whether the penal interest can be adjusted with the post retiral dues, namely, gratuity. We are of the view that it cannot be.

It would be appropriate to refer Rule 323 of the Manual of Railway Pension Rules, 1950 and Rule 15 of the Railway Services (Pension) Rules, 1993.

323 (I) A claim against the Railway servant may be on account of one or the other of the following :

a) losses (including short collection in freight charges shortage in stores) caused to the Government as a result of negligence or fraud on the part of the Railway servant while he was in service;

b) other Government dues such as overpayment on account of pay and allowances, or admitted and obvious dues such as house rent, Post Office, Life Insurance premia, outstanding advance, etc;

c) non-Government dues.

ii)Recovery from recurring pensions as also commuted value thereof, which are governed by the Pensions Act, 1871, can be made only in terms of para 315: accordingly, a recovery of only item (a) may be made from these provided the conditions laid down in para 315 are fulfilled. A recovery on account of item (a) which cannot be made in terms of Para 315, and any recovery on account of items (b) and (c), cannot be made from these even with the consent of the Railway servant. The amount due on account of item (a) which cannot be recovered from these and/or on account of item (b), can, however, be recovered from, ordinary/terminal/death/death-cum-retirement gratuity which are not subject to the Pensions Act, 1871. It is permissible to make recovery of Government dues from the ordinary/terminal/death/death-cum-retirement gratuity due even without obtaining his consent, or without obtaining the consent of the members of his family in the case of a deceased Railway servant.

Rule 15. Recovery and adjustment of Government of Railway dues from pensionary benefits:-

(1) It shall be the duty of the Head Office to ascertain and assess Government or Railway dues payable by a railway servant due for retirement.

(2) The Railway or Government dues are ascertained and assessed, which remain outstanding till the date of retirement or death of the railway servant, shall be adjusted against the amount of the retirement gratuity or death gratuity or terminal gratuity and recovery of the dues against the retiring railway servant shall be regulated in accordance with the provisions of sub-rule (4).

(3) For the purpose of this rule, the expression "railway or Government due" includes :-

(a) dues pertaining to railway or Government accommodation including of arrears of licence fee, if any;

(b) dues other than those pertaining to railway or Government accommodation, namely balance of house-building or conveyance or any other advance overpayment or pay allowances, leave salary or other dues such as Post Office or Life Insurance premia, losses (including short collection in freight charges shortage in stores) caused to the Government or railway as a result of negligence or fraud on the part of the railway servant while he was in service.

Rule 323 of the Rules, 1950 came up for consideration before the Apex Court in the case of Union of India and others Vs. Madan Mohan Prasad (supra). The Apex Court held as follows:

"The learned counsel for the appellants relied upon the decisions of this Courts in Union of India v. Sisri Kumar Deb [1991 (1) SCC & S 781], Director of Technical Education v. K. Sita Devi [1991 Supp. (2) 386] and Wazir Chand v. Union of India & Ors. [JT 2000 (Suppl. 1) SC 515]. In none of these decisions, the actual import or the effect to the relevant rules regarding payment of DCRG had been considered. In that view of the matter, these decisions cannot be of much help to the appellants. The relevant rule applicable so far as the respondent is concerned is rule 323 which is available in the manual of Railway Pension Rules, 1950. It is made clear therein that claim against the railway servant may be on account of three circumstances;

"(a) losses (including short collection in freight charges shortage in stores) caused to the government as a result of negligence or fraud on the part of the railways servant while he was in service;

(b) other government dues such as overpayment on account of pay and allowances, or admitted and obvious dues such as house rent, post office, life insurance premia, outstanding advance etc;

c) non-government dues."

It cannot be said that the case put forth on behalf of the appellants can be brought in any one of these categories. The claim made on behalf of the appellants is not only to collect normal house rent but also penal damages, in addition. That is not within the scope of rule 323 at all. What is contemplated therein is 'admitted' and 'obvious' dues. The payment resulting in penal damages is neither 'admitted' nor 'obvious' dues apart from the fact that determination has to be made in such a matter. It is also permissible under relevant rules to waive the same in appropriate cases. In that view of the matter, it cannot be said that such due is either 'admitted' or 'obvious'. Hence, we do not think that the view taken by the tribunal calls for any interference. However, it is made clear that while the appellants have to disburse the DCRG to the respondent the normal house rent, inclusive of electricity and water charges, which are 'admitted' or 'obvious' dues can be deducted out of the same, if still due."

In the aforesaid case, the Apex Court has also considered the earlier decisions in the case of in Union of India v. Sisri Kumar Deb [1991 (1) SCC & S 781], Director of Technical Education v. K. Sita Devi [1991 Supp. (2) 386] and Wazir Chand v. Union of India & Ors. [JT 2000 (Suppl. 1) SC 515] and has observed that in none of these decisions, the actual import or the effect to the relevant rules regarding payment of DCRG had been considered. Rule 15 of the Rules, 1993 has been considered by the Bombay High Court in the case of N.C. Sharma Vs. Union of India and others (supra). The Bombay High Court has observed that Rule 15 of the Rules 1993 indicates that the Railway or Government dues should be (a) ascertained and assessed and (b) they should remain outstanding till the date of retirement or death of railway servant only then, it is permissible to adjust the same against the amount of retirement gratuity or terminal gratuity and (c) recovery of all dues against railway servant shall be regulated in accordance with the provisions of sub-rule 4 of Rule 15.

We fully agree with the view of Bombay High Court. Rule 15 (1) says it shall be the duty of the Head Office to ascertain and assess Government or Railway dues payable by a railway servant due for retirement. The words 'due for retirement', according to us mean the dues upto the date of retirement. Rule 15 (2) of the Rules, 1993 provides for the recovery of Railway or Government dues as ascertained and assessed, which remain outstanding till the date of retirement or death of the railway servant, means the dues as ascertained and assessed on the date of retirement or death of the railway servant. It does not contemplate dues accruing after the date of retirement. Thus, the penal interest which accrued after the retirement is not covered under Rule 15 (2). The language of Rule 15 (4) is identical to Rule 323 of the Manual of Railway Pension Rules 1950, which has been considered and interpreted by the Apex Court in the case of Union of India and others Vs. Madan Mohan Prasad (supra).

The Division Bench of this Court in the case of Smt. Marjaddi Vs. Central Administrative Tribunal, Allahabad Bench, Allahabad and others (supra) has also held that the recovery of damages for retention of official quarter against the gratuity is illegal.

In the case of Gorakhpur University vs. Dr. Shitla Prasad Nagendra and others, reported in 2001 92) SCSLJ 247, the post retiral dues of the Professor of the University had been withheld on the ground that the Professor has retained the University's accommodation after his retirement. The Apex Court has held that pension and gratuity are no longer matters of any bounty to be distributed by the Government but are valuable rights acquired and property in their hands and any delay in settlement and disbursement whereof should be viewed seriously and dealt with severely by imposing penalty in the form of payment of interest. The Apex Court has held as follows:

"We have carefully considered the submission on behalf of the respective parties before us. The earlier decision pertaining to this very university, reported in S.N. Mathur is that of a Division Bench, rendered after considering the principles laid down and also placing reliance upon the decisions of this Court reported in R. Kapur which in turn, relied upon earlier decisions in State of Kerala Vs. M. Padmanabhan Nair and Som Prakash. This Court has been repeatedly emphasizing the position that pension and gratuity are not longer matters of any bounty to be distributed by the Government bur are valuable rights acquired and property in their hands and any delay in settlement and disbursement whereof should be waived seriously and dealt with severely by imposing penalty in the form of payment of interest. Withholding to withhold disbursement of the terminal benefits. Such is the position with reference to amounts due towards provident fund, which is rendered immune from attachment and deduction or adjustment as against any other dues from the employee. In the context of this, mere reliance on behalf of the appellant upon yet another decision of a different Division Bench of the very High Court rendered without taking note of any of the earlier decisions of this Court but merely proceedings to decide the issue upon equitable considerations of balancing conflicting claims of respective parties before it does not improve the case of the appellant any further. Reliance placed for the appellant University on the decision reported in Wazir Chand does not also sound well on the facts and circumstances of this case. It is not clear from the facts relating to the said decision as to whether the person concerned was allowed to remain in occupation on receipt of the normal rent as in the present case. As noticed earlier, the case of contesting respondent in this case is that the university authorities regularly accepted the rent at normal rates every month fro the petitioner till the quarters were vacated and that in spite of request made for the allotment of the said quarters in favour of the son of the respondent, who is in the service of the University, no decision seems to have been taken and communicated though it is now claimed in the court proceedings that he is not entitled to this type of accommodation. Further the facts disclosed such as the resolutions of the University resolving to waive penal rent from all Teachers as well as that of the Executive Council dated 18/7/1994 and the actual such waiver made in the case of several others cannot be easily ignored. The lethargy shown by the authorities in not taking any action according to law to enforce their right to recover possession of the quarters from the respondent or fix liability or determine the so-called penal rent after giving prior show cause notice or any opportunity to him before even proceeding to recover the same from the respondent renders the claim for penal rent not only a seriously disputed or contested claim but the University cannot be allowed to recover summarily the alleged dues according to its whims in a vindictive manner by adopting different and discriminatory standards. The facts disclosed also show that it is almost one year after the vacation of the quarters and that too on the basis of certain subsequent orders increasing the rates of penal rent, the applicability of which to the respondent itself was again seriously disputed and to some extent justifiably too, the appellant cannot be held to be entitled to recover by way of adjustment such disputed sums or claims against the pension, gratuity and provident fund amounts indisputably due and unquestionably payable to the respondent before us. The claims of the University cannot be said to be in respect of an admitted or conceded claim or sum due. Therefore, we are of the view that no infirmity or illegality could be said to have vitiated the order, under challenge in this appeal, to call for our interference, apart from the further reason that the disbursements have already been said to have been made in this case as per the decision of the High Court."

In the case State of Kerala Vs. M. Padmanabhan Nair and Som Prakash, reported in (1985) 1 SCC 429, the Apex Court has held as follows:

"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 visited with the penalty of payment of interest at the current market rate till actual payment."

The Division Bench of the Bombay High Court in the case of V.U. Warrier Vs. Secretary, Oil and Natural Gas Commission, Dehradun and another, reported in 2003 (3) Mh. L.J. 168 has held as follows:

"Legal position is no more res integra that pension and gratuity becomes valuable rights and property in the hands of employees on their retirement and payment of pension and gratuity cannot be withheld even if the employee has remained in unauthorized occupation of employer's accommodation and become liable to pay damages under the allotment Rules for overstay. To recover damages from such retired employees for unauthorized occupation, the employer has to pursue appropriate remedy in law but the said amounts cannot be set off against pension and gratuity amount payable to retired employee."

In view of the aforesaid discussions, we are of the view that the amount of post retiral dues, including gratuity could not be retained for the recovery of penal rent and could not be adjusted with the penal rent. The order of the Tribunal to this extent is liable to be sustained.

We accordingly hold that :

(a) the respondent no. 2 is liable to pay penal interest at Rs.1,08,759.07 p. within a period of three months.

(b) The amount of gratuity at Rs.36,855/- cannot be adjusted with the amount of penal interest. It is liable to be paid. Since it has been retained illegally, the respondent no. 2 is entitled for the interest @ 9% from the date of retirement when it became due to be payable till the date of actual payment, which we direct to be paid within a period of two months.

The writ petition is accordingly allowed in part to the extent, stated above.

Dated: 18th April, 2014

OP