1. The petitioner, who was employed as a Doctor in the Department of Health Services, retired on superannuation on 31.3.2010. His Death-cum- Retirement Gratuity (DCRG) was not released to him within a reasonable time. The facts show that, after the retirement of the petitioner, the 1st respondent issued a letter dated 18.10.2010 to the petitioner stating that, in terms of an audit report, an amount of Rs.11,183/- was noted as the liability of the petitioner. The petitioner took up the contention that the said liability was not his personal liability and, according to him, following a representation to the 3rd respondent (the Director of Health Services), the contention of the petitioner that he was not personally liable for the said amount was accepted. It is stated that even thereafter the 1st respondent took the stand that an amount of Rs.489/- is due from the petitioner which compelled the petitioner to file representations before respondents 2 to 4. It is stated that the 2nd respondent sought clarification from the 1st respondent on at least three occasions and finally, through Ext.P10 dated 4.7.2011, the 1st respondent informed the 2nd respondent that, though there are no liabilities pending against the petitioner, a vigilance enquiry pertaining to the utilisation of sterilization fund during 2009- 2010 at the time when the petitioner was working as Superintendent at the Taluk Hospital, Punalur was pending.
2. The petitioner, therefore, approached the Lok Ayukta with Ext.P1 complaint against inordinate delay in issuing a non-liability certificate and consequential disbursal of DCRG. It is alleged that the 1st respondent had purposefully delayed the issuance of the non-liability certificate on account of some personal grudge against the petitioner.
3. The respondents entered appearance before the Lok Ayukta and reiterated that the delay in issuance of non-liability certificate was attributable to the petitioner as an amount of Rs.489/- was found due from the petitioner and further that the vigilance enquiry in respect of the sterilization programme was ongoing. From a letter issued by the 3rd respondent (Ext.P.4 in this Writ Petition), it was revealed that the petitioner was not in any manner concerned with the vigilance enquiry stated to be pending in the matter of sterilization funds. When the complaint of the petitioner was pending before the Lok Ayukta, the DCRG was disbursed to him on 18.9.2012, i.e. two years and five months, after his retirement. Though the petitioner requested the Lok Ayukta to award interest for the delay in disbursal of DCRG, the Lok Ayukta, through Ext.P6 order rejected the claim for interest after noticing that the DCRG had been finally disbursed to the petitioner. It is therefore that this Writ Petition has been filed challenging Ext.P.6 order of the Lok Ayukta. The respondents have filed a counter-affidavit reiterating that there was no inordinate delay on the part of the respondents in disbursing the DCRG due to the petitioner.
4. Sri. M.Sreekumar, the learned counsel appearing for the petitioner relies on the judgment of a Division Bench of this Court in Kerala Land Development Corporation v. Raveendran; 2013 (3) KLT 408 and the judgment of the Supreme Court in State of U.P. v. Dhirendra Pal Singh; (2017) 1 SCC 49 to contend that, where there was a long and inordinate delay on the part of the respondents in disbursing DCRG due to the petitioner without sufficient reasons, he was entitled to interest.
5. The learned Government Pleader with reference to the counteraffidavits filed on behalf of the 2nd respondent and the 5th respondent would contend that the delay had occurred only on account of the conduct of the petitioner himself and that there was no liability whatsoever to pay any interest as is claimed by the petitioner. It is contended that as soon as the non-liability certificate was received following clearance by the Vigilance Department, the amount of DCRG due to the petitioner was released to him.
6. A Division Bench of this Court in Kerala Land Development Corporation (supra) took the view that, even if an organization is governed by a separate Gratuity Rules and the Payment of Gratuity Act, 1972 is not applicable, the provision for interest under the Payment of Gratuity Act, 1972 would apply on account of the fact that no scheme for payment of gratuity can run contrary to the provisions of the Payment of Gratuity Act, 1972. In Dhirendra Pal Singh (supra), the Supreme Court referred to the judgment in State of Kerala v. M. Padmanabhan Nair; (1985) 1 SCC 429 and held that pension and gratuity are not bounty and are valuable rights in the hands of an employee. The Court found on the basis of the law laid down in Padmanabhan Nair (supra), that if any culpable delay in disbursement of gratuity or pension has been occasioned, such delay must be compensated by an order for payment of interest. In State Bank of India v. Vijay Lakshmi Thakral, ILR (2011) 3 Del 329 it was held: -
“13.Black's Law Dictionary (7th Edition) defines ‘interest’ inter alia as the compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use; especially, the amount owed to a lender in return for the use of the borrowed money. According to Stroud's Judicial Dictionary of Words And Phrases (5th edition) interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. The essence of interest in the opinion of Lord Wright, in Riches v. Westminister Bank Ltd., (1947) 1 All ER 469 is that it is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had the use of the money, or, conversely, the loss he suffered because he had not used that money. The general idea is that he is entitled to compensation for the deprivation. Hence interest is a compensation payable when the money is unnecessarily withheld by one whose obligation was to pay the same at a given time and the same is not paid in breach of the legal rights of the creditor.”
7. In the facts of the present case, the petitioner retired on 31.3.2010. The facts noticed above shows that the disbursement of DCRG of the petitioner was unnecessarily delayed raking up small or irrelevant issues. At first, the reason cited was that there was a liability of Rs.11,183/- in terms of an audit report. Subsequently, on a representation by the petitioner, it was agreed that the amount due from the petitioner was only Rs.489/-. Still thereafter, while issuing a non-liability certificate, the 1st respondent stated that a vigilance enquiry was pending. This objection of the 1st respondent was also found to be unsustainable when the matter was pending before the Lok Ayukta. Therefore, I am of the view that this is a case where there was a culpable and avoidable delay in the disbursal of DCRG to the petitioner. Going by the law laid down by this Court in Kerala Land Development Corporation (supra) and by the Supreme Court in State of Kerala v. M. Padmanabhan Nair and in Dhirendra Pal Singh (supra), I am of the view that the petitioner is entitled to interest on the amount of DCRG, which was disbursed to him only on 18.9.2012, i.e, two years and five months, after his retirement. The petitioner retired on 31.3.2010. In the facts and circumstances of the case, including the fact that the petitioner had, admittedly, contested his liability for a sum of Rs.11,183/-, I am of the view that a reasonable time after the retirement of the petitioner can be granted to the respondents for payment of DCRG. Accordingly, I hold that the petitioner is entitled to interest on the delayed payment of DCRG for the period from 1.10.2010 to 18.9.2012, the date on which the DCRG was disbursed to him. A reasonable rate of interest shall be 6%.
Accordingly, this writ petition is allowed. Ext.P6 order
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will stand set aside. The competent among respondents 2 to 5 will pay simple interest at the rate of 6% per annum for the period from 1.10.2020 to 18.9.2012 on the amount of DCRG disbursed, to the petitioner. This shall be done within a period of three months from the date of receipt of a certified copy of this judgment. Despite service of notice, the 1st respondent has not chosen to enter appearance. He has chosen not to contest the allegations made against him by the petitioner before this Court, though he contested the matter before the Lok Ayukta. Therefore, if the competent among respondents 2 to 5 find that the delay in disbursement of DCRG was on account of any lethargy or on account of any malafides on the part of the 1st respondent, it shall be open to the competent authority to order recovery of the amount paid to the petitioner as interest, from the 1st respondent.