Mr. Gella Ram Vaswani And Anr. vs Municipal Corporation Of Delhi ...
2004 Latest Caselaw 942 Del

JUDGMENT

Manmohan Sarin, J.

1. By this common judgment Civil Writ No.5808/02 titled as Gella Ram Vaswani & Anr. Vs. M.C.D. And Civil Writ No.1139/03 titled as Inderjit Kaur Vs. M.C.D. are being decided as similar facts and common question of law is involved.

2. Petitioners had filed the above writ petitions seeking directions to the respondent-MCD to release pensionary benefits/ gratuity, together with interest at the rate of 18 p.a. on account of delay entailed in its payments. The facts relating to the individual petitioners may be briefly noted.

3. Petitioner No.1, Gella Ram Vaswani, in CW No.5808/02, joined the Municipal Corporation on 1.10.1955 as an Assistant Teacher. He superannuated as Headmaster of a school on 31.7.1988. The gratuity amount of Rs.37,950/-(Rupees thirty seven thousand and nine hundred and fifty only was not paid on superannuation and was withheld. It was paid on 31.10.2003. Petitioner No.2 Smt. Janki Radhwani is with widow of late Sh. Mohan Radhwani who had joined the Municipal Corporation in 1961 as Junior Engineer (Civil). Late Mohan Radhwani was promoted as Asstt. Engineer. Unfortunately he expired on 9.2.1993. Petitioner No.2 Janki Radhwani, widow of late Mohan Radhwani was paid the family pension, yet the death-cum-gratuity payment was withheld. Petitioner No.2 made several representations. She submitted "No Dues Certificate" on 20.11.1996. A 'No Dues Certificate' from the Land and Estate Department was also submitted on 26.9.2001 yet the death-cum-gratuity payment was not released. Death-cum-gratuity amounting to Rs.97,600 was paid on 21.6.2004. Both the petitioners claim interest at the rate of 18% pa. from the date gratuity became payable till the date it was paid.

4. Smt. Inderjit Kaur, petitioner in CW No.1139/03 is the widow of late Sh. Gurdarshan Singh who had joined MCD as Asstt. Teacher. Late Gurdarshan Singh superannuated as Headmaster on 30.6.1988. Petitioner as widow was entitled to the family pension as also the gratuity. The Chief Accountant (Pension) had informed the petitioner that pension of Rs.1318/- plus DA, admissible along with one time gratuity of Rs.44,138/- had been approved by the Chief Accountant on 1.7.1988. Respondent- MCD failed to release the gratuity amount and the same was paid only on 16.3.2004. The petitioner had been in occupation of the premises allotted to her husband which were vacated on 30.4.2001. Repeated opportunities in C.W.5808/02, from October, 2002 to March,2004 were given to the respondent to file the counter affidavit but the same was not filed. Similarly in CW No.1139/03 opportunities to file counter affidavit were given from May, 2003 to 16.3.2004, yet the counter affidavit was not filed. Arguments were heard in the Civil Writ petitions on 13.9.2004 and the judgment reserved.

5. Ms. Gita Mehrotra who appears on behalf of respondent-MCD submits that gratuity payment was withheld in these cases as the petitioners had not vacated the allotted accommodation even after retirment. Besides, she submits that there was delay in furnishing of the 'No Dues Certificate.' The cases were processed when premises were vacated and No Dues Certificate and clearance were received.

6. The questions which arise for consideration are; Firstly whether respondents could withhold the payment of gratuity on the ground of non-vacation of the allotted premises and the delay in furnishing of the No Dues Certificate? Secondly the entitlement of the petitioners to claim interest and the rate thereof.

7. Learned counsel for the petitioner has placed reliance on the decision of Division Bench of this Court in LPA No.118/89 relating to the cases where number of petitioners had filed writ petitions against the Corporation claiming the flats/ quarters in their occupation to be allotted to them on the basis of Resolution passed by the MCD. Pending the hearing of appeals and petitions, stay of dispossession had been granted. LPAs were decided vide order dated 21.7.2000 and occupants were required to surrender vacant possession within a period of three months in which event normal license fee would be charged and upon failure to do so, damages at the current market rate could be charged. A further direction was given that dues withheld by the MCD will be released within a period of two months after delivery of vacant and peaceful possession. Learned counsel for the petitioner has placed reliance on a Contempt Petition (Civil) No.155/2002 in IA No. 17 in SLP (Civil) No.17492/2000, wherein the respondent Corporation was directed to pay interest on delayed payment of gratuity at 12% p.a. from the date of retirement.

8. Let us first examine whether the payment of gratuity can be withheld pending the vacation of the official accommodation even though a claim for damages for unauthorised occupation can be made. Reference is invited to the decision of Supreme Court in the case of R. Kapur Vs. Director of Inspection (Painting and Publication) Income Tax and Anr. . In paras 10 and 11 of the said judgment the Supreme Court noted as under:-

"10. This Court in M. Padmanabhan Nair case has held as under:-

"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."

11. The Tribunal having come to the conclusion that Death Cum Gratuity (DCRG) cannot be withheld merely because the claim for damages for unauthorised occupation is pending, should in our considered opinion, have granted interest at the rate of 18% since right to gratuity is not dependent upon the appellant vacating the official accommodation. Having regard to these circumstances, we feel that it is a fit case in which the award of 18% is warranted and it is so ordered. The DCRG due to the appellant will carry interest at the rate of 18% per annum from 1.6.1986 till the date of payment. Of course this shall be without prejudice to the right of the respondent to recover damages under the Fundamental Rule 48-A. Thus, the civil appeal is allowed. However, there shall be no order as to costs.

9. It is pertinent that Municipal Corporation of Delhi itself taking note of decision of Supreme Court in R. Kapur's case (Supra) issued a circular on 20.1.1995. Paras 2 and 3 of the said circular are significant:-

"2. On a review of the matter, in deference to judgment of the Hon'ble Supreme Court dated 29th September,1994 in Civil Appeal No.6342/1994, wherein it was, inter alia, held that right of DCRG is not dependent upon the retiree vacating the official accommodation, it is hereby directed that in future DCRG of a retired/ deceased employee shall not be withheld due to non-receipt of 'No Demand Certificate' from the Lands and Estate Department. Of course, this shall be without prejudice to the right of the MCD to recover damages under FR-48-A as also eviction action under the Public Premises (Eviction of Unauthorised Occupants) Act,1971 as upheld by the Apex Court in the judgment as aforesaid.

3. As per provisions of Rule 72(6) of the CCS (Pension)/ (Amendment) Rules,1991, the recovery of license fee for the occupation of municipal accommodation beyond the permissible period of four months after the date of retirement of the allottee shall be the responsibility of the Lands & Estate Deptt., which stipulates that any amount becoming due on account of license fee for retention of official accommodation beyond the permissible period after retirement and remaining unpaid shall be recovered by the Lands and Estate Deptt., through the Accounts Officer (Pension) from the dearness relief without the consent of the pensioner. In such cases, no dearness relief shall be disbursed until full recovery of such dues has been made."

10. It would be seen that the Municipal Corporation itself recognised that the death-cum-gratuity payment was not dependent upon the retiree vacating the official accommodation. Further that the same be not withheld due to non receipt of No Demand Certificate from the Lands and Estate Department. Recovery of license fee or damages could be made under Rule 72(6) of the CCS (Pension)/(Amendment) Rules,1991 and could be recovered from the dearness relief element of pension to which the employee may be entitled.

11. From the foregoing, it would be seen that non vacation of government accommodation would not provide a tenable cause to the respondents to withhold payment of gratuity, although it may be noticed that in the cases under consideration, the payment was delayed far beyond the date of vacation of government accommodation.

12. Let us now come to the second question of entitlement to interest for delayed payment. Learned counsel for the petitioner as noted above had placed reliance on the decision of Supreme Court in the Contempt petition awarding 12% interest against the MCD. He further places reliance on Gorakhpur University and Others Vs. Dr. Shitla Prasad Nagendra and Others . Supreme Court in the cited case had upheld the direction of the High Court to the respondent to pay the entire pension and provident fund with 18% interest. This was also case of overstaying in government allotted accommodation. The Court taking notice of claim for payment of interest at market rate had awarded the said interest. Similarly, in the case of R. Kapur (Supra) the Supreme Court had in fact increased the awarded rate of interest by Tribunal from 10% to 18%.

13. The question, to my mind, is no longer res integra. There has been a statutory amendment of the Payment of Gratuity Act by an Amendment Act of 1987 whereby Section 7(3-A) has been added w.e.f. 1.10.1987. The provision is as under:-

"7. Determination of the amount of gratuity:-

(3-A)If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes 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:"

14. Supreme Court in the case of H. Gangahanume Gowda Vs. Karnataka Agro Industries Corpn. Ltd. had the occasion to consider this provision. The Supreme Court observed as under:-

"Payment of gratuity with or without interest, as the case may be does not lie in the domain of discretion but it is a statutory compulsion. Specific benefits expressly given in a social beneficial legislation cannot be ordinarily denied. Employees on retirement have valuable rights to get gratuity and any culpable delay in payment of gratuity must be visited with the penalty of payment of interest. Earlier there was no provision for payment of interest on the delayed payment of gratuity. In view of that lacuna sub-section (3-A) was added to Section 7 by an amendment, which came into force with effect from 1.10.1987. There is a clear mandate in the provisions of Section 7 to the employer for payment of gratuity within time and to pay interest on the delayed payment of gratuity. There is also provision to recover the amount of gratuity with compound interest in case the amount of gratuity payable was not paid by the employer in terms of Section 8 of the Act."

15. The position which emerges is that under Section 7 a person eligible for payment of gratuity is to apply to the employer for payment of gratuity. Sub-section (2) obliges the employer, whether such an application is made or not, to determine the amount of gratuity payable and give the notice in writing to the employee as well as the controlling authority, of the amount so determined. Sub-section (3-A) makes the statutory provision for payment of interest. Payment of interest is exempted only if the delay is on account of fault of the employee and the employer obtains permission of the Controller for delayed payment. None of these two conditions are satisfied in the present case.

16. In view of the statutory provisions, it is no longer a question of discretion with regard to rate of interest. Following the Supreme Court decision in the above case, I direct respondents to pay interest at the rate of 10% p.a. on the principal amount of gratuity w.e.f. 30 days after the date of superannuation till the date of payment.

Petitions are allowed in the above terms.