Calcutta High Court (Appellete Side)
Dulal Chandra Das vs The Durgapur Projects Limited & ... on 22 June, 2021
22.06.2021
Court No. 19
Item no.09
CP
WPA 10065 of 2021
Dulal Chandra Das
vs.
The Durgapur Projects Limited & ors.
(via video conference)
Mr. Siddhartha Sarkar
Mr. Hirak Ray
....for the petitioner.
Mr. Sujit Sankar Koley
Mr. Suprio Ranjan Saha
Mr. S. K. Mukherjee
....for the respondents.
The writ petitioner joined Durgapur Projects
Limited, a Government of West Bengal Enterprise, on
February 1, 1991. Durgapur Projects Limited is a
State under Article 12 of the Constitution of India. The
petitioner has alleged that the delay on the part of the
employer in paying the retirement benefits along with
leave encashment, etc. entitles the petitioner to claim
interest on all retiral benefits on account of delayed
payment. The right of retired employees to get interest
on account of delayed payment of pension, gratuity
and other retirement benefits was elaborately
discussed and upheld by the Hon'ble Apex Court in
the matter of S.K. Dua vs. State of Haryana & Anr.
reported in (2008) 3 SCC 44. Such right was declared
by the Hon'ble Apex Court to be a constitutional right.
The petitioner retired from service on January
31, 2017. The gratuity and leave encashment were
released on July 12, 2018. The petitioner made a
representation for payment of interest on account of
such delayed payment. The representation of the
petitioner was not responded to.
Aggrieved, the petitioner has moved this Court
under Article 226 of the Constitution of India and
prayed for interest on delayed payment of gratuity and
leave encashment. Reliance has been placed on a
decision of the Hon'ble Apex Court in the matter of
The State of Andhra Pradesh & Anr. vs. Smt. Dinavahi
Lakshmi Kameswari in Civil Appeal No. 399 of 2021.
The Hon'ble Apex Court at paragraph 14 of the said
judgement has categorically held that interest on
delayed payment of any salary due to any employee
was payable by the employer. Paragraph 14 of the said
judgment is quoted below:
"14. The direction for the payment of the
deferred portions of the salaries and pensions is
unexceptionable. Salaries are due to the
employees of the State for services rendered.
Salaries in other words constitute the rightful
entitlement of the employees and are payable in
accordance with law. likewise, it is well settled
that the payment of the pension is for years of
past service rendered by the pensioners to the
State. Pensions are hence a matter of a rightful
entitlement recognised by the applicable rules
and regulations which govern the service of the
employees of the State. The State Government
has complied with the directions of this Court
for the payment of the outstanding dues in two
tranches. In so far as the interest is concerned,
we are of the view that the rate of 12% per
annum which as been fixed by the High Court
should be suitably scaled down. While learned
counsel for the respondents submits that the
award of interest was on account of the action of
the Government which was contrary to law, we
are of the view that the payment of interest
cannot be used as a means to penalize the State
Government. There can be no gain saying the
fact that the Government which has delayed the
payment of salaries and pensions should be
directed to pay interest at an appropriate rate."
Mr. Sarkar, further places reliance on an order
of this Court by which the Durgapur Projects Limited,
the respondent, employer of the petitioner herein, had
been directed to pay interest on leave encashment as
also gratuity at the rate of 6% per annum from the
date of retirement to the date of actual payment.
Mr. Koley and Mr. Saha, learned Advocates who
appear on behalf of the respondents draw the
attention of this Court to an order of the Division
Bench of this Court passed in MAT No.108 of 2020
dated March 11, 2020. According to Mr. Koley,
although the Division Bench granted interest on
gratuity but did not award interest on leave
encashment. Mr. Koley further contends that the
financial condition of the respondent-company is in a
precarious condition and award of interest on gratuity
and leave encashment would cause them financial
hardship. It is next contended that the petitioner has
moved this Court belatedly, much after the payments
were received and accepted.
I have heard the contentions of the respective
parties.
The decision of the Hon'ble Division Bench was
passed prior to the decision of the Hon'ble Apex Court.
According to the Apex Court's decision, a retired
employee has the right to grant of interest on delayed
payment of salary and pension. Thus, the Hon'ble
Apex Court has decided the issue and in such event,
the Hon'ble Apex Court's judgment shall have an
overriding effect over the Division Bench Judgment.
Next, another learned Judge sitting in co-ordinate
jurisdiction has already passed an order in favour of a
similarly situated employee of the same company, who
is a respondent herein, thereby granting 6% interest
on account of delayed payment of interest and also
leave encashment. Such order has been accepted by
the respondent.
The Hon'ble Apex Court has already held in S.K.
Dua (supra) that an employee had a right under
Articles 14, 19 and 21 of the Constitution of India to
claim interest on delayed payment of retirement
benefits. Relevant paragraph is quoted below:-
"14. In the circumstances, prima facie, we are of
the view that the grievance voiced by the
appellant appears to be well founded that he
would be entitled to interest on such benefits. If
there are statutory rules occupying the field, the
appellant could claim payment of interest
relying on such rules. If there are administrative
instructions, guidelines or norms prescribed for
the purpose, the appellant may claim benefit of
interest on that basis. But even in absence of
statutory rules, administrative instructions or
guidelines, an employee can claim interest
under Part III of the Constitution relying on
Articles 14, 19 and 21 of the Constitution. The
submission of the learned counsel for the
appellant, that retiral benefits are not in the
nature of 'bounty' is, in our opinion, well
founded and needs no authority in support
thereof. In that view of the matter, in our
considered opinion, the High Court was not
right in dismissing the petition in limine even
without issuing notice to the respondents."
Leave encashment is also a retirement benefit,
which is granted to an employee in lieu of service
rendered. All retirement benefits are paid in
recognition of the sincere and long drawn service
rendered by an employee to the employer. It is neither
a charity nor gratis granted by an employer.
Moreover, the doctrine of Comity of Courts
persuades this Court to accept the decision of the co-
ordinate Bench dated April 16, 2021 passed in WPA
No.9030 of 2021. The reasons supplied by His
Lordship is accepted. The order of the Hon'ble Apex
Court has been considered and the order of the
Division Bench has been distinguished.
The Hon'ble Apex Court had observed in Neon
Laboratories Ltd. v. Medical Technologies Ltd, reported
in (2016) 2 SCC 672 that a Court must give due
deference to the enunciation of law made by another
Court unless the reasons assigned by such Court
giving the decision are contrary to law or
incomprehensible. A similar view was taken in the
decision of Nirendra Kumar Saha v. Steel Authority of
India Ltd reported in 2009 SCC OnLine Cal 619,
where it was held that the doctrine of Comity of
Courts demanded that Courts should adopt a
consistent and uniform approach towards
administration of justice by taking adequate care to
ensure elimination of conflicting orders.
In Union of India v. Tarmen Singh reported in
(2008) 8 SCC 648, the Apex Court held that in spite of
delay in filing an application for grant of interest on
gratuity and order retirement benefits, the delay would
not be fatal and shall not take away the claim of the
petitioner in getting interest on delayed payment.
Under such circumstances, this Court does not
find any reason to differ from the order of this Court
passed on an earlier occasion in favour of similarly
situated employees of the same respondent company.
This writ petition is disposed of with a direction
upon the respondents to pay 6% interest on the
gratuity as also the leave encashment benefits. Such
payment shall be made under separate heads for
gratuity and leave encashment, payable from the next
day of the date of superannuation up to the date of
payment.
Having considered the financial condition of the
respondent company this Court directs that the
payment should be made within a period of six
months from the date of communication of this order.
With the above observations, this writ petition is
disposed of.
All parties are directed to act on the basis of the
server copy of this order.
(Shampa Sarkar, J.)
