Krishna Pal Singh And Others vs State Of U.P. Through Principal ...
2022 Latest Caselaw 654 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

?Court No. - 4
 

 
Case :- WRIT - A No. - 1038 of 2022
 

 
Petitioner :- Krishna Pal Singh And Others
 
Respondent :- State Of U.P. Through Principal Secretary, Dairy Department And Others
 
Counsel for Petitioner :- Manushresth Misra,Ravindra Kumar Singh
 
Counsel for Respondent :- C.S.C.
 

 
Hon'ble Rajan Roy,J.

Heard.

The petitioners retired from the service of opposite parties on various dates between 2015 to 2019 but the post-retiral dues were not paid to them within time. The petitioners filed writ petition before this Court bearing Writ Petition No.7027 (S/S) of 2021 [Krishna Pal Singh & Ors. vs. State of U.P. and Ors.] which was disposed of on 13.01.2021 in the following terms:-

"Heard learned counsel for the petitioners, learned Standing Counsel for respondent Nos.1 and 3 and Sri Pankaj Patel, learned counsel for respondent No.2.

All the petitioners are the retired employees of Pradeshik Cooperative Dairy Federation Limited, Lucknow (PCDF), except the petitioner No.12, who is legal heir of the retired employee. The dispute pertains to the release of payment of gratuity.

Learned counsel for the petitioners has submitted that in an identical situation where the dispute cropped in Writ Petition No. 22272 (S/S) of 2020 and considering the claim setup by the parties, this Court passed the following order vide order dated 25.11.2020 :-

"In view of the aforesaid facts, the opposite parties are directed to make payment of the outstanding pensionary benefits of the petitioner as indicated in the order dated 31st October, 2020 within a period of three months from the date a copy of this order is produced. Grant of interest to the petitioner shall also be considered by the opposite parties within the same time period and if found eligible, the petitioner shall be paid the same along with the pensionary benefits."

Sri Pankaj Patel, learned counsel for the opposite party No.2 at the very outset has submitted that non payment of gratuity to the present petitioners is on account of financial difficulties and there is a proposal already floated to the Government for necessary payment.

It is expected that the Government shall process the proposal/request forwarded by the PCDF so that the gratuity admissible to the petitioner is paid at the earliest.

However, the petitioners are at liberty to make a representation to the opposite party No.2 alongwith a certified copy of this order enclosing a copy of the order dated 25.11.2010 passed in Writ Petition No. 22272 (S/S) of 2020, and if such a representation is filed, their claim for payment of gratuity as well as the interest thereon may be considered at par and without any discrimination within a period of three months.

This, however, does not suggest that any impediment coming in the way of any individual claim may not be considered by the opposite parties.

The writ petition is disposed of with the aforesaid observations."

In compliance of the said order, as informed by learned counsel for the petitioner, the principal amount of the post-retiral dues have been paid but interest has been denied on the ground of financial crunch.

In this context, Sri Pankaj Patel, learned counsel for the opposite parties submits that there is no intentional delay in making the payment of dues but due to unavoidable circumstances and on account of financial crunch, the same was not paid, therefore, interest is not payable.

The argument is not tenable. This issue has already been considered and decided by this Court in Writ Petition No.22370 (S/S) of 2021 [Ram Khelawan Shukla vs. M.D. Pradeshik Cooperative Dairy Federation Lko. & Anr.] vide judgment dated 25.10.2021 which reads as under:-

"This petition has been filed challenging an order dated 21.06.2021 passed by the Managing Director, Pradeshik Co-operative Dairy Federation Limited, Lucknow whereby he has declined to pay interest on the belated disbursement of gratuity to the petitioner.

Heard Mr. Pradeep Kumar Tripathi, learned counsel for the petitioner and Mr. Pankaj Patel, learned counsel for the respondents.

The petitioner retired from the services of the respondent-Pradeshik Cooperative Dairy Federation Limited, as a Field Supervisor on 31.07.2018. He was entitled to payment of gratuity on the day following his retirement. He was paid his gratuity in the manner that a sum of Rs.50,000/- was paid on 16.06.2020, a sum of Rs.55,388/- on 16.09.2021 and in the end, a sum of Rs. 8,09,197/- on 08.06.2021. It is submitted by the learned counsel for the petitioner that in effect a substantial sum of gratuity was paid to him on 08.06.2021 with an eyewash for a payment being made in two parts earlier, and, that too, with substantial delay. It is urged that there is delay of about thirty four months in payment of the substantial sum of gratuity due to the petitioner. It is not disputed by the learned counsel appearing for the respondents that the establishment is governed by the Payment of Gratuity Act, 1972. It is also pointed out that the petitioner was repeatedly driven to move this Court by the respondents in order to realize his post retiral benefits. The earliest was a petition, being Service Single No.14050 of 2020, which was disposed of by order dated 28.08.2020, directing the respondent-Pradeshik Cooperative Federation Limited, to take a decision in regard to the petitioner's grievance about payment of his post retiral benefits within a period of six months.

In compliance with the said order, an order dated 31.10.2020 was passed by the Managing Director, Pradeshik Cooperative Federation Limited, Lucknow to the effect that on 26.06.2020, a sum of Rs. 2,52,609/- have been paid towards Employees Provident Fund together with 8.65% interest. It was also said that the interest demanded by the petitioner at the rate of 9% was not payable, as there was no delay in payment of any of his dues. The order also mentions payment of the sums of gratuity being Rs.50,000/- and Rs.55,388/- on 16.06.2020 and 16.09.2020, respectively. The order dated 31.10.2020 repudiated the petitioner's case that there was any delay in satisfying his claim of his post retiral benefits. This constrained the petitioner to file another writ petition, being Service Single No.22272 of 2020, seeking a direction to pay the remainder of his gratuity to the tune of Rs.7,78,142/- and the balance of Employees Provident Fund, being a sum of Rs.33,369/- within a determinate period of time. Interest on the said dues was also demanded. This petition came to be allowed vide judgment and order dated 25.11.2020.

Upon a perusal of the judgment and order dated 25.11.2020 passed in Service Single No.22272 of 2020, it appears that the respondents cited their precarious financial condition and the financial stringency in justification of the delay in discharging their liability to pay the petitioner's post retiral benefits. This contention of the petitioner was unequivocally repelled by this Court, relying on the decisions of the Supreme Court in D.S. Nakara Vs. Union of India, AIR 1983 SC 130 and Kapila Hingorani Vs. State of Bihar, (2003) 6 SCC 1. A mandamus was issued to the respondents to pay the outstanding pensionary benefits of the petitioner, as indicated in the order of the Managing Director dated 31.10.2020, within three months from the date a copy of the order was produced before them. It was further ordered that grant of interest to the petitioner shall also be considered by the respondents within the same period of time, and, if found eligible, the petitioner shall be paid interest along with the pensionary benefits.

This judgment of the learned Single Judge dated 25.11.2020 was appealed to the Division Bench vide Special Appeal (Defective) No.148 of 2021. The appeal was dismissed vide judgment and order dated 15.03.2021 and the judgment of the learned Single Judge was affirmed. The order passed by the learned Single Judge appears to have been disobeyed, compelling the petitioner to take resort to contempt proceedings. Contempt No. 725 of 2021 was instituted by the petitioner. Notice in the contempt application was issued to the opposite parties, who are various officers of the Pradeshik Cooperative Dairy Federation Limited, Lucknow ordering them to appear in person on 01.07.2021 and show cause. In those contempt proceedings, it appears from a later order dated 14.09.2021 that the substantive dues of the petitioner were paid, but the dispute about interest still survives. Taking note of this fact, the contempt matter was consigned to record vide order dated 14.09.2021.

Now, the petitioner presses for payment of interest due on the much belated payment of the substantial sum of his gratuity. The impugned order dated 21.06.2021 has been passed holding that there is no delay in payment of the petitioner's gratuity, as it was dependent upon availability of funds. About the order of the Managing Director dated 21.06.2021, this Court must remark that it is not only manifestly illegal but contumacious. This Court had clearly held inter partes in Service Single No.22272 of 2020 that financial stringency or precarious financial condition is not a ground to delay payment of post retiral benefits of an employee, holding so, on the strength decisions of their Lordships of the Supreme Court in D.S. Nakara (supra) and Kapila Hingorani (supra). The Managing Director, in writing the same reasoning to deny interest, has not only transgressed his office and passed an illegal order, but also virtually said something in contempt of the judgment dated 25.11.2020 passed by this Court inter partes. This Court does not wish to enter into that issue as in these writ proceedings, that is not the office or the frame of the cause. Apart from the fact that non-availability of funds is not a ground to delay payment of post retiral benefits of an employee like the petitioner here, what has been belatedly paid to the petitioner is his gratuity and it is a common ground between parties that the Payment of Gratuity Act, 1972 applies.

Sub-sections (3) and (3-A) of Section 7 of the Payment of Gratuity Act, 1972 read:

"(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

(3-A) If the amount of gratuity payable under sub-section (3), the employer shall pay, from the date on which the gratuity become payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground."

Clearly, any delay in payment of gratuity after thirty days carries interest payable at the rate that is payable on long-term deposits that the Government may, by notification, specify. Taking note of the prevalent rates of interest provided on long-term deposits, the delay in payment of the sum of gratuity to the petitioner, which is beyond thirty days, from his retirement, ought to carry simple interest at the rate of 6% per annum. In the opinion of this Court, the impugned order by the reasoning indicated, cannot be sustained.

The writ petition succeeds and is allowed. The impugned order dated 21.06.2021, is hereby quashed to the extent that it refuses interest on the delayed payment of the sum of gratuity to the petitioner. A mandamus is issued to the Managing Director, Pradeshik Co-operative Dairy Federation Limited, Lucknow commanding him to pay the petitioner interest at the rate of 6% per annum reckoned from thirty days next after the date of his retirement on the delayed disbursement of gratuity to him. The aforesaid calculation shall be done within a period of two weeks and the due of sum of interest shall be paid to the petitioner within two weeks thereafter.

Let this order be communicated to the Managing Director, Pradeshik Co-operative Dairy Federation Limited, 29, Park Road, Lucknow by the Senior Registrar.

There shall be no order as to costs."

Learned counsel for the parties informs that special appeal against the said judgment bearing Special Appeal Defective No.541 of 2021 [M.D. Pradeshik Cooperative Dairy Federation Lko. & Anr. vs. Ram Khelawan Shukla] has been dismissed on 23.12.2021. The said order of the Division Bench reads as under:-

"(order on C.M. Application No.174231 of 2021)

Heard Shri Lalit Shukla, learned counsel for the appellants and Shri Pradeep Kumar Tripathi, learned counsel for the sole respondent.

This is an application filed on behalf of appellant/ applicant to condone the delay in filing the present Special Appeal. As per the report of Stamp Reporter dated 21.12.2021, the appeal is beyond time by 25 days. As the cause shown in the affidavit filed in support of condonation of delay is sufficient, hence, the delay in filing the appeal is condoned, hence the application is allowed. Office is directed to allot regular number to the present appeal.

(order on appeal)

The present intra court appeal has been preferred against the judgement and order dated 25.10.2021 passed in Service Single No.22370 of 2021 (Ram Khelawan Shukla vs. M.D. Pradeshik Co-Operative Dairy Federation Ltd. & Anr.), whereby the learned Single Judge directed the appellants to pay the respondent/ writ petitioner the interest at the rate of 6% per annum reckoned from thirty days next after the date of his retirement on the delayed disbursement of gratuity. The aforesaid calculation was directed to be done within a period of two weeks and the due sum of interest was directed to be paid to the respondent/ writ petitioner within two weeks thereafter.

Learned counsel for the appellants submits that without looking to the poor financial condition of the appellants- Pradeshik Co-Operative Dairy Federation Ltd., Lucknow, the learned Single Judge has erred in directing the payment of interest on the delayed payment of gratuity amount.

For convenience, the operative portion of the impugned judgment and order dated 25.10.2021 is reproduced herein below:-

"Now, the petitioner presses for payment of interest due on the much belated payment of the substantial sum of his gratuity. The impugned order dated 21.06.2021 has been passed holding that there is no delay in payment of the petitioner's gratuity, as it was dependent upon availability of funds. About the order of the Managing Director dated 21.06.2021, this Court must remark that it is not only manifestly illegal but contumacious. This Court had clearly held inter partes in Service Single No.22272 of 2020 that financial stringency or precarious financial condition is not a ground to delay payment of post retiral benefits of an employee, holding so, on the strength decisions of their Lordships of the Supreme Court in D.S. Nakara (supra) and Kapila Hingorani (supra). The Managing Director, in writing the same reasoning to deny interest, has not only transgressed his office and passed an illegal order, but also virtually said something in contempt of the judgment dated 25.11.2020 passed by this Court inter partes. This Court does not wish to enter into that issue as in these writ proceedings, that is not the office or the frame of the cause. Apart from the fact that non-availability of funds is not a ground to delay payment of post retiral benefits of an employee like the petitioner here, what has been belatedly paid to the petitioner is his gratuity and it is a common ground between parties that the Payment of Gratuity Act, 1972 applies.

Sub-sections (3) and (3-A) of Section 7 of the Payment of Gratuity Act, 1972 read:

"(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

(3-A) If the amount of gratuity payable under sub-section (3), the employer shall pay, from the date on which the gratuity become payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground."

Clearly, any delay in payment of gratuity after thirty days carries interest payable at the rate that is payable on long-term deposits that the Government may, by notification, specify. Taking note of the prevalent rates of interest provided on long-term deposits, the delay in payment of the sum of gratuity to the petitioner, which is beyond thirty days, from his retirement, ought to carry simple interest at the rate of 6% per annum. In the opinion of this Court, the impugned order by the reasoning indicated, cannot be sustained.

The writ petition succeeds and is allowed. The impugned order dated 21.06.2021, is hereby quashed to the extent that it refuses interest on the delayed payment of the sum of gratuity to the petitioner. A mandamus is issued to the Managing Director, Pradeshik Co-operative Dairy Federation Limited, Lucknow commanding him to pay the petitioner interest at the rate of 6% per annum reckoned from thirty days next after the date of his retirement on the delayed disbursement of gratuity to him. The aforesaid calculation shall be done within a period of two weeks and the due of sum of interest shall be paid to the petitioner within two weeks thereafter. "

After considering the submissions made by learned counsel for the parties and upon perusing the judgment and order dated 25.10.2021, we notice that the same has been rendered by learned Single Judge with cogent and justifiable reasons and therefore, no interference is warranted.

In view of the facts and circumstances of the case on a plain reading of the judgement and order dated 25.10.2021, we do not notice any such perversity, as such we are not inclined to interefere with the same. Learned Single Judge while dismissing the writ petition vide judgment and order dated 25.10.2021 has adverted to all the facts of the case, hence, we do not find any fault in the same.

This Special Appeal is, accordingly, dismissed."

In view of the above, there is no reason to call for counter affidavit as the facts are not in dispute. Therefore, this petition is disposed of in terms of the judgment dated 25.10.2021 passed in Writ Petition No.22370 (S/S) of 2021 [Ram Khelawan Shukla vs. M.D. Pradeshik Cooperative Dairy Federation Lko. & Anr.]. The petitioners shall be entitled to the benefit of the observation/ direction contained therein on the same terms.

Order Date :- 7.4.2022

A.Nigam