Kerala High Court
K.R.Varghese vs State Of Kerala on 6 January, 2025
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W.P.(C)No.23154 of 2020 :1:
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE VIJU ABRAHAM
MONDAY, THE 6TH DAY OF JANUARY 2025 / 16TH POUSHA, 1946
WP(C) NO. 23154 OF 2020
PETITIONER:
K.R.VARGHESE
AGED 60 YEARS
S/O.K.T. RAPHEAL, HEADMASTER(RETIRED), ST.JOSEPH'S
HIGHER SECONDARY SCHOOL, THALASSERY, RESIDING AT
KANNANAIKKAL HOUSE, CONVENT ROAD, MATTAM P O,
THRISSUR - 680602.
BY ADVS.
KALEESWARAM RAJ
SRI.VARUN C.VIJAY
KUM.A.ARUNA
KUM.THULASI K. RAJ
SMT.MAITREYI SACHIDANANDA HEGDE
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE SECRETARY TO GOVERNMENT,
DEPARTMENT OF GENERAL EDUCATION, SECRETARIAT,
THIRUVANANTHAPURAM -695001.
2 DIRECTOR OF GENERAL EDUCATION
GENERAL EDUCATION DEPARTMENT, JAGATHI,
THIRUVANANTHAPURAM - 695014,
3 THE DEPUTY DIRECTOR OF EDUCATION
KANNUR - 670001.
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W.P.(C)No.23154 of 2020 :2:
4 THE DISTRICT EDUCATIONAL OFFICER,
THALASSERY, KANNUR - 670101.
5 THE MANAGER,
ST. JOSEPH'S HIGHER SECONDARY SCHOOL, THALASSERY,
KANNUR - 670101.
BY ADV GOVERNMENT PLEADER
OTHER PRESENT:
GP -RIYAL DEVASSY
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 06.01.2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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W.P.(C)No.23154 of 2020 :3:
VIJU ABRAHAM, J.
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W.P.(C) No.23154 of 2020
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Dated this the 6th day of January, 2025
JUDGMENT
The above writ petition is filed seeking a declaration that the
petitioner is entitled to receive interest at the rate of 12% per
annum of the grant total amount of Rs.29,61,039/- for the period
from July 2018 to February, 2020 and for a consequential direction
to the respondents to disburse the interest at the said rate.
2. The petitioner retired from service as Headmaster on
30.04.2015. While in service, certain allegations were made
against the petitioner regarding misappropriation of Parent-
Teacher Association (PTA) funds. The petitioner was placed under
suspension as per order dated 09.06.2014. No disciplinary action
was taken against the petitioner by the management and the
petitioner was directed to go on leave by the Manager and to take
leave till 26.03.2015. Later the petitioner applied for commuted
leave from 26.03.2015 to 30.04.2015, on which date he retired
from service. It is submitted that no disciplinary proceedings were
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initiated against him and no FIR was registered against him.
Aggrieved by the non-disbursement of the retirement benefits, the
petitioner approached this Court by filing W.P.(C) No.2060 of
2016, which was disposed of as per Ext.P1 judgment. By Ext.P1,
this Court held that the retirement benefits due to the petitioner
are not liable to be withheld any more and if at all it is in case an
enquiry or trial is held in Vigilance Court or Tribunal and
petitioner is found guilty, it is up to the respondents to take
appropriate action against the petitioner in accordance with law as
provided in part III of KSR or to resort to any civil remedies if
necessary. With the said observations, direction was issued to the
respondents to disburse the pensionary benefits including DCRG
and commuted value of pension, due to the petitioner within a
period of three months from the date of receipt of a copy of the
judgment. The petitioner submits that based on the allegation of
the misappropriation of the PTA funds, a complaint was submitted
before the Court of Enquiry Commissioner and Special Judge,
Kozhikode and a preliminary enquiry was conducted based on the
order issued by the Special Court. A quick verification report was
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submitted before the Court wherein it was recommended to
register a criminal case against the petitioner for misappropriation
of large scale of school funds. A detailed investigation was
ordered by the Enquiry Commission, Special Court, and a vigilance
case was registered as V.C.No.3/2013 under Section 13(1) and
13(2) of Prevention of Corruption Act against the petitioner. On
04.04.2016 Ext.P2 order was issued wherein provisional pension
was ordered to be disbursed to the petitioner. It is contended that
in spite of the specific direction in Ext.P1 judgment, there was
delay in disbursing the said amount. The amount was actually
disbursed only on February, 2020 and therefore the petitioner is
entitled to get interest at the rate of 12% on the amount due for
the period from June 2018, ie., the date of Ext.P1, to February,
2020, the date on which the amount was actually disbursed to the
petitioner. The petitioner relies on the judgment D. S. Nakara &
Others v. Union of India [(1983) 1 SCC 305], O.P. Gupta v.
Union of India [(1987) 4 SCC 328] and also the judgment in A.
J. Randhawa, Superintending Engineer (Retd.) v. State of
Punjab and others [1997 117 ELR 6] to contend for the
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position that if there is delay in payment of the retirement benefits
due to no fault on the part of the employee, he is entitled for
interest for the delayed payment.
3. A counter affidavit has been filed by the 3 rd respondent
wherein it is contended that though the petitioner has retired from
service on 30.04.2015 while he was working as Headmaster, there
was an allegation of misappropriation of PTA funds and it was the
petitioner who was handling the fund during the period from 2009
to 2013. Based on the Vigilance Enquiry report the petitioner was
suspended from service. The learned Government Pleader relying
on G.O.(P).NO.803/2002/Fin dated 30.12.2002 contended that the
said Government Order clarifies that the pensionary benefits of the
employees against whom cases are pending before the judiciary
can be finally settled only after the disposal of the cases, because
one cannot certify that service of the employee was satisfactory
before final judgment is pronounced and in such cases, they are
eligible for provisional pension only as provided in Rule 3A of Part
III KSR. It is also contended that though the department had
instructed the Manager of the school to initiate disciplinary action
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against the petitioner, the same was not obeyed by the Manager,
instead transferred the petitioner to another school under the
same management and directed him to avail compulsory leave till
retirement. It is true that the case registered against the petitioner
by the Vigilance Department was disposed in his favour on
10.05.2019. Thereafter W.P.(C) No.2060 of 2016 was disposed of
as per Ext.P1 judgment whereby pensionary benefits were
directed to be paid and a further direction was issued to the DEO,
Thalassery to take steps for complying with the directions in
Ext.P1 judgment, but the DEO has informed that the Manager has
compelled the petitioner to avail commuted leave without obeying
the direction of the Government to take disciplinary action against
the petitioner. Later, the Accountant General has authorised the
pensionary benefits on 03.01.2020 and NLC was given on
25.01.2020 and as such all pensionary benefits was received by
the petitioner on 11.02.2020 itself. The delay in payment of the
pensionary benefits is only due to the vigilance case pending and
due to un-regularisation of the compulsory leave imposed upon the
petitioner by the Manager. Therefore, the petitioner is not entilted
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for any of the reliefs sought for in the writ petition.
4. This Court in Ext.P1, referred to G.O.(P).No. 803/2002/Fin
dated 30.12.2002, which is relied on by the Government in their
counter affidavit while disposing of W.P.(C) No.2060/2016, and the
Court held that the said Government Order will have no
application in the case of the petitioner, inasmuch as the
respondent has no case that any case is pending before the
judiciary against the petitioner or any case is pending before the
court or Vigilance Tribunal or Vigilance Court and therefore, took
a stand that the said Government Order dated 30.12.2002 is in
favour of the petitioner. The Court has also taken note of the fact
the respondent do not have a case that the petitioner has caused
any loss and that such a loss is determined with notice to him. The
Court further found that if at all it is in case an enquiry or trial is
held in Vigilance Court or Tribunal and petitioner is found guilty, it
is up to the respondents to take appropriate action against the
petitioner in accordance with law as provided in part III of KSR or
to resort to any civil remedies if necessary.
5. Rule 3 of Part III KSR empowers the Government to
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withhold a pension or a part thereof permanently or for a
specified period, and the right of ordering the recovery from a
pension of any pecuniary loss caused to Government if in a
departmental or judicial proceeding, the pensioner is found guilty
of grave misconduct or negligence. The explanation to the said
Rule mandates that judicial proceeding shall be deemed to be
instituted in the case of a criminal proceeding, on the date on
which the complaint or report of police officer on which the
Magistrate takes cognizance, is made. Rule 3-A part III KSR is
also relevant for consideration of the present case, which
mandates that where any departmental or judicial proceedings is
instituted under Rule 3 or where a departmental proceeding is
continued under clause (a) of the proviso thereto, he shall be paid
during the period commencing from the date of his retirement to
the date on which, upon conclusion of such proceeding final orders
are passed, a provisional pension not exceeding the maximum
pension which would have been admissible on the basis of his
qualifying service up to the date of retirement, or if he was under
suspension on the date of retirement up to the date immediately
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preceding the date on which he was placed under suspension, but
no gratuity or DCRG shall be paid to him until the conclusion of
such proceeding and the issue of final orders thereon. Therefore,
going by Section 3A where a departmental proceedings or judicial
proceedings is instituted and continued, until conclusion of such
proceedings and final orders are passed, the employee is entitled
only of a provisional pension and no gratuity or DCRG shall be
paid to him until the conclusion of such proceedings. Dealing with
the delay in payment of the pensionary benefits, guidelines were
issued by the Government as per G.O.(P) No.185/2002/Finance
dated 27.03.2002 and the said guideline dealing with cases of
vigilance enquiry, mandates that in cases vigilance enquiry is
pending at the time of retirement, a preliminary report may be
obtained and if the report reveals that it is a long drawn out
process, pensionary benefits may be settled and recovery of loss
made through Revenue Recovery or civil proceedings on
conclusion of the vigilance enquiry. For any delay beyond one year
of retirement, persons entrusted with internal and vigilance
enquiry and disciplinary action will be held personally responsible
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and interest if payable will be realised from them. After the
issuance of the said Government Order, a clarification was issued
by the Finance Department as per G.O.No.803/2002/Fin. dated
30.12.2002, which is referred to in Ext.P1 judgment and also in the
counter affidavit of the Government, which clarifies a doubt
regarding the applicability of G.O.(P)No.185/2002/Fin. dated
27.03.2002, in respect of cases which are pending before the
Vigilance Court/Vigilance Tribunal or other Courts, and the
Government after examining the matter clarified that the cases
which are pending before the Courts/Vigilance tribunal /Vigilance
Courts do not come under the purview of G.O. dated 27.03.2002
and the pensionary benefits of the employees, against whom cases
are pending before the judiciary can be finally settled only after
the disposal of the cases. Rule 3 defines judicial proceedings as
proceedings on which the complaint or report of police officer on
which the Magistrate takes cognizance, is made. Rule 3 only
mandates withholding of pension only if a departmental or
vigilance proceedings is pending consideration. In the present
case it cannot be said that any departmental or vigilance
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proceedings is pending consideration before the Government.
Therefore, it is rightly found in Ext.P1 judgment that G.O.(P)
No.803/2002/Fin. dated 30.12.2002 has absolutely no application
since no matter is pending consideration before the
court/Vigilance Tribunal/Vigilance Court and therefore, the
Government Order applicable is G.O.(P)No.185/2002/Fin dated
27.03.2002 which specifically mandates how pensionary benefits is
to be settled in cases where vigilance case enquiry is pending.
6. The counter affidavit reveals that an enquiry report was
submitted by the Vigilance Department and the petitioner was
suspended from service till finalisation of the enquiry. But Clause
(ii) of the Government Order G.O.(P)No.185/2002/Fin dated
27.03.2002 specifically mandates that the report should contain as
to whether the enquiry will take more time and in such
circumstance the pensionary benefits must be settled and the
recovery of loss should be made through revenue recovery or civil
proceedings on conclusion of the vigilance enquiry and if there is
delay of more than one year from the date of retirement, the
officers concerned will be liable for payment of interest if any.
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Now coming back to the facts of the case, a report was filed by the
Vigilance Department and the petitioner was kept under
suspension as per order dated 15.10.2014 and thereupon a crime
was also registered. Later the petitioner has retired from service
on 30.04.2015. Even at the time of disposal of W.P.(C)
No.2060/2016 as per Ext.P1 on 13.03.2018, the department has no
case that any matter is pending before the judiciary, ie., before the
Vigilance Tribunal/Vigilance Court. Therefore, it cannot be said
that any judicial proceeding was pending against the petitioner at
the time of retirement or even at the time of Ext.P1 judgment
dated 13.03.2018.
7.In Ext.P1 judgment, the respondents were directed to
disburse the pensionary benefits including DCRG and commuted
value of pension due to the petitioner within a period of three
months. Admittedly the retirement benefits were received by the
petitioner only on 11.02.2020. Yet another aspect to be noted is
Ext.P9 order of the enquiry Commissioner, Special Judge,
Thalassery dated 10.05.2019, in which after conducting the
investigation a final report was filed to the effect that no offence is
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forthcoming to prosecute the accused (petitioner) and requested to
accept the final report and treat the case as "further action
dropped" and the said final report requesting to drop further
action was accepted by the Enquiry Commissioner, Special Judge,
Thalassery as per Ext.P9 order. Even though by Ext.P9 order,
whereby the proceedings were dropped against the petitioner is
dated 10.09.2018, the amount was disbursed to the petitioner even
going by the counter affidavit only on 11.02.2020, almost a year
later. Taking into consideration the mandate of Rule 3 and G.O.(P)
No.185/2002/Fin dated 27.03.2002 and taking into consideration
the specific direction in Ext.P1 judgment to disburse the
pensionary benefits including DCRG and commuted value of
pension due to the petitioner within a period of three months and
Exts.P9 to P11, I am of the view that the delay in payment of the
retirement benefits is solely attributable only on the department.
In spite of the specific directions issued by this Court as per
Ext.P1, the delay in disbursal of the retirement benefits to the
petitioner by the department cannot be accepted, specifically in
view of the judgment of this Court in Aravindaksha Panicker N.
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v. The Accountant General, (A&E) Kerala and Others [2007
(4) KHC 764]. It is also to be noted that as per the judgment of
this Court in R. Raja Gopalan v. Travancore Devaswom Board
[2007 (2) KHC 528], Vigilance enquiry will not come within the
ambit of the expression "judicial proceedings' as provided in Rule
3A(a) of Part III KSR. The Apex Court in S.K.Dua v. State of
Haryana and Another [(2008)3 SCC 44], in paragraph 14 held
as follows:
"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
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
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respondents."
In O.P. Gupta's case cited (Supra), in paragraph 24 the Court has
held as follows:
"24. Normally, this Court, as a settled practice, has been
making direction for payment of interest at 12% on delayed
payment of pension. There is no reason for us to depart from
that practice in the facts of the present case. "
The Apex Court in State of Andhra Pradesh and Another v.
Dinavahi Lakshmi Kameswari [(2021) 11 SCC 543] in
paragraph 13 and 14, has held as follows:
"13. 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 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.
Insofar as the interest is concerned, we are of the view that
the rate of 12% per annum which has been fixed by the High
Court should be suitably scaled down. While learned counsel
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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 gainsaying the fact that the
Government which has delayed the payment of salaries and
pensions should be directed to pay interest at an appropriate
rate.
14. We accordingly order and direct that in substitution of
the interest rate of 12% per annum which has been awarded
by the High Court, the Government of Andhra Pradesh shall
pay simple interest computed at the rate of 6% per annum on
account of deferred salaries and pensions within a period of
thirty days from today. This direction shall, however in the
facts and circumstances, be confined to categories 3, 4, 5
and 6 of GOMs No 26 dated 31 March 2020. We clarify that
interest shall be paid to all pensioners of the State at the rate
of 6% per annum on the deferred portion, for the period of
delay. Having regard to the prevailing bank interest, the rate
of 12% per annum which has been fixed by the High Court,
would need to be and is accordingly reduced. "
8. Taking into consideration the above facts and
circumstances and the finding of this Court that there is
absolutely no reason for non-disbursal of the pensionary benefits
due to the petitioner as per the direction in Ext.P1 judgment and
also taking into consideration the fact that in Ext.P9 report all
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actions were dropped as against the petitioner as early as on
10.05.2019 and further that in spite of the issuance of Ext.P9, the
amounts were disbursed to the petitioner only on 11.02.2020, I am
of the view that the petitioner is entitled for interest for the
delayed payment. Therefore, it is ordered that the respondent shall
disburse simple interest at the rate of 6% per annum to the
petitioner on account of the delayed payment of the retirement
benefits including DCRG from the period from June 2018( the date
on which the three months period expired after the
pronouncement of judgment in W.P.(C) No.2060/2016) till
11.02.2020 - the date on which the pensionary benefits were
received by the petitioner. The said amount as directed above shall
be disbursed to the petitioner within an outer limit of three months
from the date of receipt of a copy of this judgment.
The writ petition is disposed of as above.
Sd/-
VIJU ABRAHAM
JUDGE
sm/
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APPENDIX OF WP(C) 23154/2020
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE JUDGMENT DATED
13.03.2018 IN WP(C) NO. 2060/2016
EXHIBIT P2 TRUE COPY OF THE ORDER DATED 04.04.2016.
EXHIBIT P3 TRUE COPY OF THE LETTER DATED 17.08.2018.
EXHIBIT P4 TRUE COPY OF THE LETTER DATED 03.10.2018
ISSUED BY THE DISTRICT EDUCATIONAL
OFFICER(ADDITIONAL CHARGE OF DEPUTY
DIRECTOR OF EDUCATION)
EXHIBIT P5 TRUE COPY OF GOVERNMENT ORDER DATED
16.08.2019.
EXHIBIT P6 TRUE COPY OF THE LETTER DATED 06.09.2019
ISSUED BY THE DEPUTY DIRECTOR OF
EDUCATION, KANNUR.
EXHIBIT P7 TRUE COPY OF THE LETTER DATED 17.06.2019.
EXHIBIT P8 TRUE COPY OF THE LETTER DATED 20.12.2018
ISSUED BY THE DEPUTY DIRECTOR OF
EDUCATION.
EXHIBIT P9 TRUE COPY OF THE ORDER DATED 10.05.2019
EXHIBIT P10 TRUE COPY OF THE EXTRACT OF THE RELEVANT
PAGES OF THE BANK PASSBOOK OF THE
PETITIONER.
EXHIBIT P11 TRUE COPY OF THE LEGAL NOTICE DATED
17.03.2020.
