Nixon Alexander vs State Of Kerala
2021 Latest Caselaw 19560 Ker

           IN THE HIGH COURT OF KERALA AT ERNAKULAM
                               PRESENT
          THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS
                                    &
           THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
FRIDAY, THE 17TH DAY OF SEPTEMBER 2021 / 26TH BHADRA, 1943
                         WA NO. 833 OF 2020
AGAINST THE JUDGMENT IN WP(C) 15603/2019 OF HIGH COURT OF
                                KERALA
APPELLANT/PETITIONER:

            NIXON ALEXANDER
            AGED 62 YEARS
            S/O.ALEXANDER (LATE), WATER HOUSE, VELIYANNUR,
            VELLANAD, VILLAGE INDUSTRIES OFFICER (RTD.),
            DISTRICT KHADI AND VILLAGE INDUSTRIES OFFICE,
            THIRUVANANTHAPURAM - 695 543.

            BY ADVS.
            SRI.SHAJI THOMAS
            SRI.JEN JAISON

RESPONDENTS/RESPONDENTS:

    1       STATE OF KERALA
            REPRESENTED BY THE SECRETARY TO GOVERNMENT,
            INDUSTRIES DEPARTMENT, GOVERNMENT SECRETARIAT,
            THIRUVANANTHAPURAM - 695 033.

    2       THE SECRETARY,
            KERALA KHADI AND VILLAGE INDUSTRIES BOARD
            VANCHIYOOR P.O., THIRUVANANTHAPURAM - 695 035.

            BY ADVS.
                     SRI.N.RAJAGOPALAN NAIR
                     SRI.SAIGI JACOB PALATTY, SR.GOVT.PLEADER


        THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON
17.09.2021,    THE     COURT   ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 W.A. No.833 of 2020

                                     2

      ALEXANDER THOMAS & A.BADHARUDEEN, JJ.
    -----------------------------------------------------------------
                        W.A.No.833 of 2020

      [arising out of the impugned judgment dated 12.12.2019 in
                        W.P.(C) No.15603/2019]
    -----------------------------------------------------------------
            Dated this the 17th day of September, 2021

                            JUDGMENT

ALEXANDER THOMAS, J.

The appellant herein had filed W.P.(C) No.15603/2019,

whereby the main prayer raised was for a direction to the 2 nd

respondent - Kerala Khadhi and Village Industries Board

(Employer) to grant interest on the delayed payment of the

retiral/pensionary benefits paid at the rate of 12% to the petitioner

on account of the delay involved therein.

2. The learned Single Judge after hearing both sides has

rendered the impugned judgment dismissing W.P.(C) and thus

rejecting the prayer of the petitioner for grant of interest on the

delay in payment of retiral/pensionary benefits. Aggrieved by the

said impugned judgment rendered by the learned Single Judge on

12.12.2019 dismissing the above WP(C), the writ petitioner

therein, has filed the instant intra court appeal under Section 5(i)

of the Kerala High Court Act, 1958.

W.A. No.833 of 2020

3. Heard Sri.Shaji Thomas, learned counsel appearing for

the writ appellant/writ petitioner, Sri.Saigi Jacob Palatty,

learned Senior Government Pleader appearing for R1 and

Sri.N.Rajagopalan Nair, learned Standing Counsel for the Kerala

Khadi and Village Industries Board, appearing forR2.

4. The appellant/petitioner had retired from service of the

respondent Kerala Khadi & Village Industries Board while holding

the post of Village Industries Officer on 30.11.2012. He had not

submitted his pension papers prior to his retirement as required

by the norms. As a matter of fact, the appellant had submitted his

pension papers before the 2nd respondent only on 11.01.2013. The

2nd respondent - Khadi Board had passed proceedings formally

sanctioning the pensionary/retiral benefits in favour of the

petitioner on 22.02.2014. At that point of time, litigative disputes

were pending between employees, similarly situated as the

appellant and the respondent Khadi Board employer, as to the

manner and method for computing the last pay of such employees

for the purpose of computation of pensionary benefits. It appears

that the verdict of this Court was in favour of the employees. Being

aggrieved thereby, the respondent - Khadi Board had taken up the W.A. No.833 of 2020

matter by filing SLP before the Apex Court. At the time when the

appellant retired from service, the said litigative proceedings were

pending. Therefore, the respondent - Khadi Board had taken up

the stand that though the formal orders have already been passed

sanctioning the retiral/pensionary benefits by computing the last

pay on the basis of the verdict which was favourable to the

employees, since the matter was in dispute in SLP before the Apex

Court, the entire pensionary benefits so sanctioned cannot be

disbursed to the employees like the appellant, and that they have

to execute the Indemnity Bond so that in case the SLP proceedings

is ultimately successful, the pensioners will be obliged to return

back the due pensionary amounts calculated on the basis of the

lower last pay.

5. The case of the respondent employer as projected

before the learned Single Judge was that, they had repeatedly

requested the appellant also to furnish the Indemnity Bond and he

had refused to do so and, therefore, they could not formally

disburse the above said retiral benefits in favour of the employee,

though it was formally sanctioned on 22.02.2014. Ultimately, it

appears that the SLP was dismissed by the Apex Court on W.A. No.833 of 2020

19.01.2018 as withdrawn by the respondent - Khadi Board. Even

thereafter, the respondent employer had not disbursed the

sanctioned pensionary benefits in favour of the appellant, who was

then constrained to approach the Lok Ayukta for taking action

against the officers concerned and also for getting the pensionary

amounts released in his favour. Taking note of the above stand of

the respondent Khadi Board, the Lok Ayukta passed an interim

order directing that for the time being, the appellant may comply

with the formality of executing a formal Indemnity Bond so that

the amounts could be disbursed to him. Both sides submit that

these aspects are evident from Annexure-A1 proceedings of Lok

Ayukta rendered on 26.06.2018 in Complaint Petition

No.572/2014 filed at the behest of the appellant herein. It appears

that Annexure-A1 proceedings dated 26.06.2018 is after the

dismissal of the aforesaid SLP on 19.01.2018. According to the

appellant, though the appellant had executed the Indemnity Bond,

still the amount was not disbursed in his favour which constrained

him to again approach the Lok Ayukta, and the said forum had

issued Annexure-A2 order dated 26.07.2018 directing that on the

petitioner produce the Indemnity Bond before the respondent W.A. No.833 of 2020

Khadi Board, the employer shall initiate action and release to the

complainant the due pensionary benefits in his favour within three

weeks. The appellant has got a case that even thereafter, the

amounts were not formally released due to the recalcitrant attitude

of the officials concerned. But ultimately, the amount was released

by the respondent Khadi Board in favour of the employee only on

28.01.2019. Thereafter, the Lok Ayukta had closed the Complaint

proceedings as can seen from Annexure-A3 order dated

29.01.2019.

6. Further, it appears that the Lok Ayukta had also given

liberty to the appellant to move appropriate forum to initiate

appropriate proceedings in respect of his prayer for grant of

interest on the delayed payment of pensionary/retiral benefits.

Thereupon, appellant had filed a formal representation before the

respondent Khadi Board praying for grant of interest at the rate of

12% per annum on the delayed payment of retiral benefits and the

said plea for interest was rejected by the 2 nd respondent as per the

impugned Ext.P6 order dated 10.04.2019. Aggrieved thereby, the

appellant had approached the learned Single Judge by filing the

instant W.P.(C), which has been dismissed on 12.12.2019. The W.A. No.833 of 2020

learned Single Judge noted that going by the rules, the employee

like the appellant was obliged to file the pension papers with the

respondent - Khadi Board before the date of retirement, so that

the employer will get sufficient opportunity to process the pension

claims and get it formally sanctioned and released, and that it was

found by the learned Single Judge that though the appellant had

retired from service on 30.11.2012, he had in fact submitted the

pension papers only belatedly thereafter on 11.01.2013. But that

the respondent Khadi Board had formally issued the proceedings

sanctioning the retiral benefits on 20.02.2014 and that the

repeated pleas of the employer to submit the Indemnity Bond was

refused by the appellant. Presumably, it appears that the stand of

the respondent employer in insisting for Indemnity Bond has been

accepted by the learned Single Judge, and it has been found that

the delay in payment of the pension benefits were only on account

of the stand of the pensioner in not submitting Indemnity Bond

within the stipulated time, and that he has submitted it only much

later after the intervention of the Lok Ayuta, etc. On these

grounds, the learned Single Judge has taken the view that this

cannot be a fit case to exercise discretion under Article 226 of the W.A. No.833 of 2020

Constitution of India to consider the prayer for interest on the

delayed payment of pensionary benefits, and thus dismissed the

W.P.(C) .

7. In the Writ Appeal, a specific plea has been taken up by

the appellant that at no point of time, has he been directed the

respondent employer to submit the Indemnity Bond, either after

the retirement of the pensioner or after the formal sanction of the

retiral benefits on 22.02.2014. That, the SLP which was the basis

for the alleged disputes between the parties regarding norm of

fixation of last pay was dismissed as withdrawn by the Apex Court

on 19.01.2018. Even thereafter, the amounts were not paid, which

compelled him to approach the Lok Ayukta and, as and when, the

Lok Ayukta had directed the petitioner may execute the Indemnity

Bond, he had in fact, submitted the same and even thereafter, the

amounts were not paid, and it is only after repeated intervention of

the Lok Ayukta and the amount was ultimately paid on 28.01.2019,

which led to the closure of the Lok Ayukta proceedings on

29.01.2019 as per Annexure-A3, etc.

8. Further, it is pointed out by Sri.Shaji Thomas, learned

counsel appearing for the appellant in the Writ Appeal/petitioner W.A. No.833 of 2020

in Writ Petition, that it is true that the appellant had not submitted

the pension papers within the time and that in fact he had

submitted the pension papers only on 11.01.2013, after the

retirement of his service on 30.11.2012. That thereafter, though the

Board had formally passed orders on 20.02.2014 sanctioning the

retiral benefits on the basis of the correct last pay as ordered in the

verdict secured in favour of the employee, the due amounts were

never paid even after the dismissal of the SLP. On this basis the

learned counsel for the appellant would submit that he would not

claim for the interest for the period immediately after the date of

retirement, but would submit that this Court may order for

interest only after the petitioner had submitted the pension papers

on 11.01.2013, for the period up to the actual payment of the retiral

benefits on 28.01.2019. Further, it is pointed out that the appellant

can never be blamed for not executing the Indemnity Bond

inasmuch as, the respondent employer had never insisted that the

petitioner should execute any such Indemnity Bond and for the

first time, when the employer had taken up such a stand before the

Lok Ayukta, the appellant had immediately complied the said

requirement, etc and that, therefore, non submission of the W.A. No.833 of 2020

Indemnity Bond cannot be a ground for non suiting the appellant.

Further, the learned counsel appearing for the appellant would

place serious reliance on the judgment of the Division Bench of

this Court rendered on 25.11.2016 in W.A.No.1435 of 2015 and

connected case (arising out of the judgment of the learned Single

Judge rendered on 03.12.2014 in W.P.(C) No.28931/2013),

wherein in similar cases, where those disputes in SLP proceedings

regarding the entitlement of higher amount of DCRG in the case of

pensioners of KSEB, this Court held that after the dismissal of the

SLP, the KSEB cannot deny interest even to the pensioners, who

have not furnished the Indemnity Bond, etc. It pertinent to refer

Paragraph No.3 of the judgment of the Division Bench of this

Court rendered on 25.11.2016 in W.A.No.1435 of 2015 and

connected case, which reads as follows:

"3. Law is settled that gratuity under the Act is payable on retirement of an employee and that interest on belated payment of gratuity is a statutory liability. Insofar as these cases are concerned, admittedly there occurred a delay in disbursement of gratuity. However, the liability for interest was sought to be got absolved by the appellant by contending that their liability for interest was only up to the date of deposit of the gratuity amount on 19.02.2009 and that such interest has also been deposited. According to them, they are not responsible for the delay thereafter to be made liable for interest, since delay thereafter occurred only due to the inability of the employees W.A. No.833 of 2020

concerned to furnish security as ordered by this Court."

9. The Division Bench in the above judgment has only

affirmed the judgment rendered by the learned Single Judge in

W.P.(C) Nos.28931 of 2013 and connected case, whereby it is

ordered that the respondent - KSEB shall pay interest to the

pensioners concerned on the gratuity amount, more particularly

on the dismissal of the SLP as withdrawn.

10. To ascertain the correct fact as to whether or not the

appellant was directed by the employer to furnish the Indemnity

Bond, we had requested Sri.N.Rajagopalan Nair, learned Standing

Counsel for the respondent Khadi Board to get factual instructions

and to file a statement, if so required. Now, an affidavit dated

07.09.2021 has been filed on behalf of the 2 nd respondent Khadi

Board in the present Writ Appeal, wherein, it has been stated that

on verification of the records in the Project Office,

Thiruvananthapuram, where the appellant was working at the time

of retirement, it could not be ascertained that written

communication was send by the Khadi Board instructing the

appellant herein to furnish the Indemnity Bond as envisaged in

Ext.R2B letter. Further that, the Project Office is not having any W.A. No.833 of 2020

documents to show that any specific letter was send to the

appellant calling upon him to submit the Indemnity Bond, etc. But

that the Khadi Board has only followed the procedure envisaged in

Rule 116 of the Kerala Service Rules with regard to the release of

DCRG to safe guard public money, in case the SLP was ultimately

decided by the Apex Court in favour of the respondent employer.

11. Reliance is placed by the 2nd respondent Khadi Board

on Ext.R2B letter dated 29.06.2018, which insists for the execution

of the Indemnity Bond. The appellant has contended that even

according to the employer, Ext.R2B has been issued for the first

time only on 29.06.2018, whereas, the appellant had retired from

service as early as on 30.11.2012, and even the full amount of

pensionary benefits are sanctioned in his favour as early as on

20.02.2014, and that the restrictions in Ext.R2B letter was never

applicable to him after his retirement, and at any rate, Ext.R2B

dated 29.06.2018 has lost its complete relevance after the

dismissal of the SLP filed by the 2 nd respondent Khadi Board on

19.01.2018. Further that Ext.R2B letter dated 29.06.2018 has no

relevance especially after the Lok Ayukta verdict as referred in

Annexure-A1 dated 26.06.2018, Annxure-A2 dated 26.07.2018 W.A. No.833 of 2020

and Annexure-A3 final order dated 29.01.2019, etc.

12. Therefore, after hearing both sides it is manifestly clear

that at no point of time, the respondent Khadi Board has called

upon the petitioner to execute an Indemnity Bond as urged by

them in the writ proceedings. That apart, we are inclined to take

the view that the appellant is entitled to secure the benefit of the

ratio decidendi laid down by the Division Bench of this Court in

judgment dated 25.11.2016 in W.A No.1435/2015, in the case of

pensioners in the KSEB, which appears to be broadly similar to the

present case inasmuch as, the SLP was then pending as to whether

the pensioners were entitled for higher amount of gratuity and

ultimately the employer had insisted for submission of Indemnity

Bond by the pensioners pending disposal of the SLP, and later the

SLP itself was dismissed as withdrawn, etc. However, we are not

inclined to grant interest to the appellant for the period

immediately after his date of retirement on 30.11.2012, inasmuch

as, he had not complied with his obligation to furnish the pension

papers prior to his retirement. As a matter of fact, he submitted

the pension papers only on 11.01.2013 and hence we are inclined to

take the view that the appellant is entitled for interest of the W.A. No.833 of 2020

delayed payment of the pensionary/retiral benefits for the period

from 01.03.2013 (six weeks after the submission of the pension

papers on 11.01.2013) up to 28.01.2019 (the day on which the

pensionary/retiral benefits were actually released to him), at the

rate of 6% per annum.

13. Sri.Shaji Thomas, learned counsel for the appellant,

has strongly urged that this Court should grant interest atleast at

the rate of 12% per annum or atleast at the rate of 10% per annum,

whereas Sri.N.Rajagopalan Nair, learned Standing Counsel for the

respondent Khadi Board that in case this Court is awarding any

interest, the same may not be above 6% per annum as presently

the Fixed Deposit rates are also of that rate, and more so

particularly in view of the extreme financial difficulty faced by the

Khadi Board, and its various economic activities not only in the

COVID-19 period but even otherwise. After hearing both sides, we

are inclined to order interest @ 7% p.a.

14. Hence, it is ordered that the interest at the rate of 7%

per annum on the above said pensionery benefits shall be paid by

the 2nd respondent Board to the appellant for the abovesaid

period from 01.03.2013 up to 28.01.2019, without any delay at W.A. No.833 of 2020

any rate within 2 months from the date of receipt of a copy of

this judgment. In the light of these aspects, the impugned

judgment dated 12.12.2019 rendered by the learned Single Judge

dismissing W.P.(C) No.15603/2019 will stand set aside.

With these observations and directions, the above Writ

Appeal will stand disposed of.

Sd/-

ALEXANDER THOMAS, JUDGE

Sd/-

A.BADHARUDEEN, JUDGE

ww W.A. No.833 of 2020

APPENDIX OF W.A 833/2020 PETITIONER'S ANNEXURES

ANNEXURE-A1 TRUE PHOTOCOPY OF THE ORDER DATED 26.06.2018 OF THE HON'BLE LOKAYUKTA IN COMPLAINT NO.572/2014.

ANNEXURE-A2 TRUE PHOTOCOPY OF THE ORDER DATED 26.07.2018 OF THE HON'BLE LOKAYUKTA IN COMPLAINT NO.572/2014.

ANNEXURE-A3 TRUE PHOTOCOPY OF THE ORDER DATED 29.01.2019 OF THE HON'BLE LOKAYUKTA IN CCC NO.08/2018.

RESPONDENTS' ANNEXURES

ANNEXURE R-2B A TRUE COPY OF LETTER NO.K.B.435/2013/ E1(A) PENSION, DATED 29-06-2018.