Life Insurance Corporation Of ... vs Sunita Devi & Anr
2014 Latest Caselaw 5202 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                      Date of Decision: 16th October, 2014.

+      LPA No.736/2010 & C.M.No.18371/2010 (for condonation of
       delay in filing the appeal)

       LIFE INSURANCE CORPORATION OF INDIA ..... Appellant
                    Through: Mr. Kamal Mehta, Adv.

                                Versus

       SUNITA DEVI & ANR                                   ..... Respondents
                    Through:           Mr. V.N. Jha, Adv. for R-1.
                                       Ms. Ratna D. Dhingra and Ms.
                                       Bhavna Dhami, Advs. for R-2.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. This intra court appeal impugns the order dated 28th April, 2010 of the

learned Single Judge, allowing W.P.(C) No.3774/2008 filed by the

respondent No.1 inter alia by directing the appellant to release to the

respondent No.1 / writ petitioner the amount of Rs.2,27,800/- together with

simple interest @ 6% per annum from 24th November, 2004 within four

weeks of the order and with a further direction that if the payment is not

made within the said time, the appellant will pay penal simple interest @

12% per annum for the period of delay.

2. Notice of the appeal was issued and the appeal ordered to be heard

along with LPA No.544/2010. The appellant applied for early hearing

stating that LPA No.544/2010 with which this appeal was ordered to be

heard stands dismissed vide order dated 12th March, 2012. We have heard

the counsels for the parties.

3. The writ petition from which this appeal arises was filed, pleading: (i)

that the husband of the respondent No.1 / writ petitioner was an employee of

Indian Airlines and a member of the Pension Scheme introduced in the year

1994 by Indian Airlines; (ii) that under the said Scheme known as Indian

Airlines Employees; Self - Contributory Superannuation Pension Scheme, a

Trust (whose trustees are the respondent No.2 to the appeal), was formed

and a percentage from the salary payable to each employee every month

was deducted to be credited to the fund under the said Scheme and to be

invested with the appellant and the retiring employees were to get pension

equivalent to 40% of the last drawn salary; (iii) that under the said Scheme,

on demise of an employee, the payment of annuity amount was to be paid to

his nominee / legal representative; (iv) that the husband of the respondent

No.1 / writ petitioner appointed the respondent No.1 / writ petitioner as his

nominee under the said Scheme; (v) that the husband of the respondent No.1

/ writ petitioner upon retirement from Indian Airlines started drawing

pension of Rs.2,278/- per month under the said Scheme; (vi) that the

husband of the respondent No.1 / writ petitioner died on 21 st October, 2004;

(vii) that the respondent No.1 / writ petitioner vide letter dated 24 th

November, 2004 intimated the appellant of the death of her husband and

requested the appellant for payment of the annuity to her as the nominee

under the aforesaid Scheme of her husband; (viii) however, no payment was

made; (ix) that after much cajoling, the appellant vide letter dated 17 th

January, 2008 to the respondent No.1 / writ petitioner informed that the

appellant could settle the payment only when the trustees provided the

Claim Form duly attested by them and signed by the nominee and which the

trustees had not done; and, ultimately, the writ petition from which this

appeal arises was filed seeking a direction for release of the amount of

Rs.2,27,800/- stated to be due under the said Scheme together with interest

@ 18% per annum from 24th November, 2004, when the respondent No.1 /

writ petitioner had first sought release of the amount and till the payment

thereof.

4. The appellant contested the writ petition inter alia pleading that it

maintained the fund on behalf of the Trust and could release the payment

only after the proper discharge was made by the Trust and which had not

been done qua the respondent No.1 / writ petitioner. Though the respondent

No.2 trustees also contested the writ petition, inter alia on the ground of the

respondent No.1 / writ petitioner being not allowed to the amount claimed

owing to amendment to the Scheme, but the respondent No.2 trustees

having not supported this appeal and their own LPA being LPA

No.544/2010 having been dismissed, need is not felt to elaborate their

pleadings.

5. The learned Single Judge vide the impugned judgment allowed the

writ petition, holding:

(a) that no real justification had been shown for denying the

payment of the balance corpus amount of Rs.2,27,800/- to the

respondent No.1 / writ petitioner;

(b) that any amendment made to the Scheme could only have

prospective effect and could not deprive the vested rights of the

retired employees, as held in Air India Employees Self-Contributory

Superannuation Pension Scheme Vs. Kuriakose Vs. Cherian (2005)

8 SCC 404;

(c) that after payment of commutation amount of Rs.1,13,900/- to

the husband of the respondent No.1 / writ petitioner, the respondent

No.1 / writ petitioner was entitled to receive the balance of the total

corpus of Rs.2,27,800/- and which corpus had been arrived at on the

basis of annuities purchased and had got crystallized and the appellant

could not back track on the basis of subsequent amendment to the

Scheme;

(d) that the Trust had no objection to any orders being passed in

the writ petition allowing the prayer of the respondent No.1 / writ

petitioner and its role was limited to forwarding the claim of the

respondent No.1 / writ petitioner to the appellant and which it was

prepared to do.

Accordingly, the writ petition was allowed and the respondent

No.2 trustees were directed to within a period of two weeks send the

duly attested Claim Form of the respondent No.1 / writ petitioner to

the appellant and the appellant was directed to, within a further period

of two weeks thereafter, release the amount of Rs.2,27,800/- with

interest as aforesaid to the respondent No.1 / writ petitioner. Costs of

Rs.5,000/- were also imposed on the appellant.

6. LPA No.544/2010 supra was preferred by the respondent No.2

trustees of the Scheme against the aforesaid judgment and which as

aforesaid was dismissed in the light of the judgment aforesaid of the

Supreme Court.

7. We are told that the appellant has already paid the sum of

Rs.2,27,800/- with interest to the respondent No.1 / writ petitioner. The

counsel for the respondent No.1 / writ petitioner however states that the

entire amount due towards interest as directed has not been paid,

particularly the penal interest and a sum of approximately Rs.60,000/- is still

outstanding in terms of the judgment of the learned Single Judge.

8. Though the counsel for the respondent No.2 trustees sought to urge

that the payment having been made, this appeal has become infructuous but

we do not agree. If the appeal were to be allowed and no money were to be

found to be due to the respondent No.1 / writ petitioner or if the liability

were found to be that of the respondent No.2 trust, restitution can always be

ordered.

9. The counsel for the appellant however in his arguments did not

contest the entitlement of the respondent No.1 / writ petitioner to the sum of

Rs.2,27,800/-; the only challenge is on the ground of the impugned

judgment foisting the liability for interest on the appellant. It is argued that

the appellant could have made the payment to the respondent No.1 / writ

petitioner only upon the claim of the respondent No.1 / writ petitioner being

cleared / approved by the respondent No.2 trustees and which the

respondent No.2 trustees had failed to do; thus the appellant could not be

burdened with interest. It is further argued that in fact the counsel for the

appellant had stated before the learned Single Judge that the appellant had

no objection to any orders being passed but the said statement, in the

impugned judgment, has been attributed to the respondent No.2 trust, which

in fact was contesting the petition.

10. We had during the hearing of the appeal on 14 th October, 2014

enquired from the counsel for the appellant, as to whether the appellant was

controverting that the amount due to the respondent No.1 / writ petitioner at

the time of the first claim by her in the year 2004 was Rs.2,27,800/- and if

so, the said money admittedly having remained in the coffers of the

appellant and the appellant having continued to enjoy the benefits thereof,

even if the fault in not issuing approval was of the respondent No.2 trustees,

what was wrong with the appellant being made liable for payment of

interest. On request of the counsel for the appellant to take definite

instructions in this regard, the hearing was adjourned to today. We further

asked the counsel for the appellant to take instructions on as to interest at

what rate was payable under the Scheme.

11. Today, the counsel for the appellant confirms that under the said

Scheme, on the demise of the husband of the respondent No.1 / writ

petitioner and upon claim being made by the respondent No.1 / writ

petitioner in the year 2004, the sum of Rs.2,27,800/- was payable. He

further states that interest @ 7% per annum was payable under the Scheme

and clarifies that no such interest on the sum of Rs.2,27,800/- has been

computed or paid.

12. The position which thus emerges is that the interest @ 6% per annum

which the learned Single Judge has directed to be paid for the delay in

payment is less than the interest rate payable under the Scheme. We fail to

see as to what possibly can be the justification for the appellant to appeal

against the direction for payment of interest at a rate less than what it was

contractually liable to pay on the monies invested with it.

13. The counsel for the appellant however persists that the default was of

the respondent No.2 trustees. We do not feel the need to adjudicate thereon

as the same would be irrelevant to the final relief. The money as aforesaid

having remained in the pocket of the appellant and the appellant having

continued to enjoy the same, it is the appellant and not the respondent No.2

trustees who is to be liable for the payment of interest for the delay in

payment.

14. The counsel for the appellant also states that there is no reason for

direction for payment of penal interest @ 12% per annum.

15. We may note that the said direction is only for delay beyond the time

granted for payment by the Court. The appellant, for the period from 2004

to 2010 having been directed to pay interest at a rate lesser than what it was

contractually bound to pay, we do not feel the need to interfere with the

interest @ 12% per annum for the subsequent delay.

16. There is thus no merit in the appeal, which is dismissed.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE OCTOBER 16, 2014/'bs'