1. A very sorry state of affairs is prevailing in this State in respect of payment of pension, gratuity, provident fund and other retirement benefits (hereinafter referred to as ‘retirement benefits’) of persons holding civil posts under the State Government, Central Government and their different Undertakings (hereinafter referred to as the ‘the State’). We have come across cases where such payments have not been made even for 14/15 years. We have also come across cases where the employee concerned had died without receiving such payments during his life-time and his widow or other dependants have to go on begging for such payment which falls to deaf ears. We are supposed to live in a civilised country which is declared to be a “Socialist Republic”. It is not fit and proper that in such a society an employee should be deprived from getting his just dues after his retirement for a number of years and in most of the cases without any lawful excuse. The right of such an employee so far as such benefits are concerned, had come up for consideration before the Supreme Court from time to time and the Supreme Court has laid down the law relating to the same and there cannot be any further scope for any doubt or dispute regarding the same. We may indicate only some of those cases viz. Deokinandan Prasad v. State of Bihar (A.I.R 1972 S.C 1409), State of Punjab v. Iqbal Singh ((1976) 2 SCC 1 : A.I.R 1976, S.C 667), D.S Nakara v. Union of India ((1983) 1 SCC 305 : A.I.R 1983 S.C 130). Devki Nandan Prasad v. State of Bihar ((1983) 4 SCC 20 : A.I.R 1983, S.C 1134), Deokinandan Prasad v. State of Bihar (1984 Supp SCC 410 : A.I.R 1984, S.C 1560), State of Kerala v. M. Padmanabhan Nair ((1985) 1 SCC 429 : A.I.R 1985, S.C 356), Major G.S Sodhi v. Union Of India. ((1991) 2 SCC 371). Reference may also be made to a Division Bench decision of this Court in Harendra Nath v. State of Bihar (1987 P.L.J.R 581).
2. From the aforesaid the principles clearly emerge as follows: The grant of pension does not depend upon an order being passed by the authorities to that effect. It may be that for the purposes of quantifying the amount, having regard to the period of service and other allied matters, it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to the officer/employee not because of the said order but by virtue of the Rules. Pension is not a bounty payable on the sweet-will and pleasure of the Government. On the other hand, the right to pension is a valuable right vesting in a Government servant. Before the amendment of the Constitution, it was made clear that the right to receive pension was property under Article 31(1) and by a mere executive order the State has no power to withhold the same. Similarly, it was held that the said claim was also property under Article 19(1)(f) and it is not saved by sub-article (5) of Article 19.
3. If there is any question of any reduction in pension or gratuity, an opportunity to show cause must be given. Even in the case of dismissal of a Government servant he cannot be deprived of his pension unless there is any statutory provision to that effect. In appropriate case the Court has got power to grant interest, in addition to the direction for payment of pensionary benefits due to the employee concerned in view of the delay in such payment. The Court has also power to direct and the State has also power to take proper action against the officer or officers concerned who are guilty of delay and laches in respect of payment of such pension.
4. In this context a special reference may be made to certain observations made in D.S Nakara v. Union of India ((1983) 1 SCC 305 : A.I.R 1983, S.C 130):
“In the course of transformation of society from feudal to welfare and as socialistic thinking acquire respectablity, State obligation to provide security in old age, an escape from undeserved want was recognised and as a first step pension was treated not only as a reward for past service but with a view to helping the employee to avoid destitution in old age. The quid-pro-quo was that when the employee was physically and mentally alert, he rendered unto the master the best, expecting him to look after him in the fall of life. A retirement system therefore, exists solely for the purpose of providing benefits. In most of the plans of retirement benefits, everyone who qualifies for normal retirement receives the same amount (see Retirement Systems for Public Employees by Bleekney, page 33.) (Para 22). “Let us therefore examine what are the goals that pension scheme seeks to subserve? A pension scheme consistent with available resources must provide that the pensioner would be able to live: (i) free from want, with decency, independence and self-respect and (ii) at a standard equivalent at the pre-retirement level. This approach may merit the criticism that if a developing country like India cannot provide an employee while rendering service a living wage, how can one be assured of it in retirement? This can be aptly illustrated by a small illustration. A man with a broken arm asked his doctor whether he will be able to play the Piano after the cast is removed. When assured that he will, the patient replied, ‘that is funny, I could not before.’ It appears that in determining the minimum amount required for living decently is difficult, selecting the percentage representing the proper ratio between earnings and the retirement income is harder. But it is imperative to note that as self sufficiency declines the need for his attendance or institutional care grows. Many are literally surviving now than the past. We owe it to them and ourselves that they live, not merely exist. The philosophy prevailing in a given society at various stages of its development profoundly influences its objectives. These objectives are in turn a determinant of a social policy. The law is one of the chief instruments whereby the social policies are implemented and pension is paid according to rules which can be said to provide social security law by which it is meant those legal mechanisms primarily concerned to ensure the provision for the individual of a cash income adequate, when taken along with the benefits in kind provided by other social services (such as free medical aid) to ensure for him a culturally acceptable minimum standard of living when the normal means of doing so failed, “(see Social Security Law by prof. Harry Calvert, page 1).” (Para 26).
“Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and, therefore, one is required to fall back on savings. One such saving in kind is when you gave your best in the hey day of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a State allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to a Government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation for service rendered. In one sentence one can say that the most practical raison d'etre for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon.” (Para 29).
5. In the case of Devaki Nandan Prasad v. State of Bihar ((1983) 4 SCC 20 : A.I.R 1983, S.C 1134 : 1983 PLJR (SC) 96) the Supreme Court directed the State and the subordinate Officers responsibles for this work by a Writ of mandamus to complete the computation by a particular date and directed that by that date pension payment order correct and consistent with the order shall be issued without fail to the petitioner. The State was also directed by a mandamus to pay arrears of pension on the basis of such computation within the period directed with interest, inasmuch as the Supreme Court was of the opinion that the State had harassed the petitioner, which according to Supreme Court, was intentional, deliberate and motivated. The Supreme Court directed exemplary costs quantifying it at Rs. 25,000/- to be paid to the petitioner within a certain period.
6. In the case of Deokinandan Prasad v. State of Bihar (1984 Supp SCC 410 : A.I.R 1984, S.C 1560) the Supreme Court expressed its hope and desire that in future the employees, which serve the Government, would not be exposed in fall of their life to such a costly and unending litigation to claim what is justly due to them on the date on which the bond of service is snapped.
7. It appears that this lesson has not as yet been learnt in most of the cases. On the other hand, in most of the cases the State and its officers have chosen to ignore the same and accordingly, the hope and desire expressed by the Supreme Court has been made nugatory.
8. It was pointed out in the case of State of Kerala v. M. Padamanabhan Nair ((1985) 1 SCC 429 : A.I.R 1985, S.C 356) that any culpable delay in settlement and disbursement of pension and gratuity must be visited with the penalty of payment of interest at the current market rate till actual payment.
9. In the case of Harendra Nath v. State of Bihar (1987 P.L.J.R 581) a Division Bench of this Court while appreciating the fact that this will be an unnecessary burden on the State Exchequer, empowered the authorities, if they so desired, to recover the amount in question from the person responsible for such delay.
10. In the case of M. Padmanabhan Nair (supra) the Supreme Court expressed the view that State Government was being rightly saddled with a liablity for the culpable neglect in the discharge of duty by the District Treasury Officer who delayed the issuance of the L.P.C but since the concerned officer had not been impleaded as a party defendant to the suit, the Court was unable to hold him liable for the decretal amount. In this context it was observed that it would, however, be for the State Government to consider whether the erring official should or should not be directed to compensate the Government the loss sustained by it by his culpable lapses. In the opinion of the Supreme Court such action, if taken, would help generate in the officials of the State Government a sense of duty towards the Government under whom they serve as also a sense of accountability to members of the public.
11. Though most of the cases in the Supreme Court arose out of the State of Bihar, still it appears that not much attention is paid to the same by the Government or Government undertaking in this State. Only in a few of these cases the employee concerned, or upon his death his widow or dependents, who can afford to come to the Court to seek relief, do so. But in most of the cases they are left high and dry. Having come to the Court also does not mean that he gets immediate relief. This is because of the procedural formalities laid down by the Code of Civil Procedure and/or the Rules of the Court and the dilatory tactics on the part of the State and which are not due to any fault or laches of the petitioner. After the writ petitions are filed, they are taken up for admission sometimes about one year after they are filed, mainly because the State does not bother to file counter affidavits but get adjournments from time to time for such purpose because no instruction is being given by the State to their learned Advocates. Even when such counter affidavits are filed, no lawful or bonafide explanation for such delay in payment is offered in most of cases. In some of the cases, but not all, some interim orders are passed directing some payments to be made but in spite of the same in many cases the State does not even bother to make payment in compliance of the Court's order.
12. Recently, this Bench directed that the retirement benefit cases be heard in priority to any other cases, for two days in a week, so that an uniform order may be passed following some settled principles and so that some uniform pattern be followed by the State we requested the learned Advocate General to assist the Court in this connection after obtaining proper instructions from the different departments concerned. We must place on record our appreciation for the very fair stand taken and very valuable assistance given and suggestions made by the learned Advocate General in this connection.
13. After serious consideration of various aspects of the matter, we lay down the procedure to be followed by the State in respect of such retirement benefits. The State must strictly follow the same without making any departure. Whatever has happened has happened but in future the State must make such payments strictly in terms of the uniform order in the line of these procedures laid down. However, facts of each case must be different. In some cases there may be some special feature. We shall take the same into consideration while passing such order. However, we shall always follow the broad principles in all the cases as laid down hereinbelow:
Pension Retirement Benefits
A. General Cases.—(1) Where the employee concerned is not under suspension or is not facing any disciplinary proceeding or criminal case, the procedure to be followed is as follows:
(a) The admitted amount relating to (i) pension, (ii) general provident fund and (iii) gratuity be paid within two months from the date of retirement, if not earlier.
(b) Simultaneous with such payment, the authority concerned shall supply to the employee concerned a chart giving details of calculation in respect of the payments made under each head.
(c) If no dispute is raised by the employee in respect of the amount paid or calculation made as above, then the payment of the balance amount, if any, is to be made to the employee within six months from the date of his retirement. Otherwise, the payment made under clause (a) above shall be treated as final in full and final satisfaction of the claim of the employee concerned on this account.
(d) However, if the employee concerned disputes the quantum or any other aspect of such calculation or chart, then he shall be entitled to make a representation to that effect to the authority concerned within a period of one month from the date of receipt of the chart. Such representation shall give full details and particulars.
(e) Upon receipt of such representation, the authority concerned shall dispose of the same and pass a final order and make final payment to the employee within three months from the date of receipt of such representation. It is made clear that if the representation of the employee is accepted in toto and final payment is made on that basis, in that event no reason need be given. Otherwise, the reasons must be given for the same and to that extent.
2. So far as the “Leave Encashment Benefit” is concerned, the same must be paid to the employee within a period of two months from the date of retirement of the employee concerned.
3. As soon as any “sanction order” is issued by the authority concerned, the Accountant General must issue the “authority slip” on the basis of the same within two weeks from the date of submission of the sanction order, to the employee and the concerned Treasury.
B-Other cases. — (i) Whether the employee concerned is under any order of suspension at the time of his retirement, but no charge sheet had yet been issued and served, then such charge sheet must be served and the enquiry proceedings concluded and final order passed within a period of four months from the date of retirement. If any appeal or revision or review is preferred against such order under the relevant Rules, then the same must be disposed of, by giving reasons, within a period of two months of preferring such proceeding. It is made clear that all persons concerned must make all efforts to expedite such proceedings. It is also made clear that the authorities concerned shall be entitled to proceed ex parte depending on the facts and circumstances of each case. The payment of retirement benefits on such basis is to be made accordingly within a period of six months from the date of such final order. In each case, the provisions contained in paragraph ‘A’ above shall apply mutatis mutandis. However, 75 percent of the retirement benefits must be paid even in that case within two months from the date of retirement.
(ii) Cases where Rule 43 of the Pension Rules applies:
In cases where Rule 43 applies, the departmental proceedings are to be concluded within a period of six months and payments be made accordingly. Provisions of Paragraph ‘A’ above shall apply mutatis-mutandis in such cases also. However, 75 percent of the retirement benefits must be paid even in that case within two months from the date of his retirement.
C. Nomination.—The employer must require all the employees to execute all nomination papers within a period of six months from the date of their employment. Changes, if any, in such nomination, as proposed, must be intimated by the employees immediately.
D. Succession Certificate.—In the case of the death of the employee concerned, no succession certificate shall ordinarily be required. However, when the genuineness of the claimant or the nominee is disputed, necessary orders may be obtained from the Administrator-General who shall expedite the matter and dispose of the same within a period of three months from the date of making of any application. Where the Administrator-General has no jurisdiction in the matter succession certificate, if required, must be furnished.
E. Interest.—Ordinarily, the employee shall be entitled to get interest at the rate of 12 percent per annum to be calculated from the date of his retirement. However, this rate may be varied by the Court, by increasing or reducing the same, depending on the facts and circumstances of each case.
F. Costs.—The court shall be entitled to direct the costs to be awarded in its discretion.
G. Action against defaulting Officers/employees. — It is made clear that in all cases where the appropriate authority or the Court holds that the non-payment or delay in payment of the benefits, as above, was wholly or partially due to any default, laches or negligence on the part of any officer or employee or the authority concerned, then the appropriate authority shall be entitled to take appropriate action against the employee or officer concerned including giving directions for recovery of any amount paid on account of costs or interest as above from such person/officer.
It is made clear that, notwithstanding any such power of the authority concerned, it shall always be open to the Court to pass such order to that effect as it thinks fit.
14. Having laid down the procedure to de followed in general, we shall now deal with the facts of this case so that we can pass a suitable order and give necessary directions. The petitioner joined the Provincial Government in April, 1944. He was a permanent employee of the State Government and lastly he was working in the Transport Department of the State Government. With effect from 1st of April, 1959, a Statutory Corporation, being the Bihar State Road Transport Corporation (the respondent no. 1 herein) was incorporated under the Road Transport Corporation Act, 1950. The petitioner gave his consent to continue in foreign service with the Corporation. The relevant document in the present case is the order no. 3404 dated 30th of April, 1959, (Annexure ‘9’ to the writ petition). That letter says down the terms and conditions of deputation or transfer of a Government servant to the Corporation. The relevant portion of that letter reads as follows:
The State Government have decided to form the Bihar State Road Transport Corporation with effect from the 1st May, 1959, all the functions performed at present by the Political (Transport) Department and the Offices subordinate thereto, in respect of the Rajya Transport, Bihar, will vest in the Corporation. With effect from the same dates such services of the staff employed in the Rajya Transport Department will not be required by the Government with effect from 1st May, 1959. Government have, therefore, been pleased to decide to adopt the following procedure and the Bihar State Road Transport Corporation will be advised to accept the term and conditions outlined as therein: (i) Permanent Government servants on deputation to Political (Transport) Department, employed in the Rajya Transport, Bihar, as on the 30th April, 1959:
The services of all permanent Government servants (including the technical staff) whose services are on loan to the Political (Transport) Department for employment in the Rajya Transport, Bihar, will be placed at the disposal of the Bihar State Road Transport Corporation on foreign services terms with effect from the 1st May 1959.
The staff so deputed shall continue to enjoy under the Corporation, the same service conditions in respect of pay, increment, leave, promotions and discipline as under Government, and, in addition, they will continue pensionary rights which will include the right to count emoluments for pension in respect of not only such posts as may be created by the Corporation on the 1st of May, 1959, in lieu of the posts in existence under Government on the afternoon of the 30th April, 1959, but also such new posts as may be created thereafter by the Corporation. The pensionary benefit admissible shall be subject to the same conditions and restrictions as may be applicable under the Pension Rules of the State Government for the time being in force, on the date of retirement of the staff.
16. The pension and leave contribution, or if there is an apportionment of these charges between the State Government and the Corporation for the services rendered under the Corporation by the permanent Government servant, the amount of leave salary and/or pension contribution as may be apportioned, shall be payable by the Corporation.”
15. The petitioner continued in the Corporation under these circumstances, until he retired in the year 1981. In spite of the fact that 10 years have passed since such retirement, admittedly the petitioner has not been paid the retirement benefits due to him. Accordingly, he filed this Writ petition against the Corporation, to which the State of Bihar was also added a party-respondent by an order of this Court.
16. An interim order was passed in the Writ Petition on 8th of January, 1990 whereby the petitioner was directed to file an application in required form before the Corporation and the Corporation was directed to pass necessary orders and to make recommendation to the State Government, if the rules so required. As would appear from the order of the Court dated 1st of May, 1991, the stand taken by the Corporation was that the petitioner was working with the Corporation on foreign service in terms of Annexure-9 to the writ petition and that he retired as a Government servant on foreign service. It was not disputed that for the period the petitioner was in the service of the Corporation, the latter was liable to pay the gratuity and other benefits to the petitioner. By the said order dated 1st of May, 1991, the Court directed the Corporation to compute the amount which the Corporation was liable to pay the same to the petitioner before 21st of May, 1991.
17. The stand taken by the Corporation in the affidavit was that since the petitioner was admittedly in Government service, he was entitled to retirement benefits and other dues from the parent department of the State Government.
18. The learned Advocate appearing for the Corporation stated that the reason for such non-payment of the retirement benefits to the petitioner for the last ten years was that “Correspondences are going on between the Government and the Corporation”. Actually, he has blamed the Government and not opposed the petition. We have no hesitation in holding that the stand of the Corporation is untenable, particularly having regard to Annexure 9 to the petition. In any event a period of ten years is certainly a sufficient period for setting any possible difference of view between the Corporation and the State Government. We are quite sure that if the matter was taken up properly and seriously with the Government by the Corporation there would not have been such inordinate delay and unnecessary harassment to the petitioner. In any view of the matter, it is entirely a matter between the Undertaking and the Government and the petitioner should not have been made to suffer for the same. Accordingly, we allow this application and pass the following order:
19. The Corporation is directed to pay all the retirement benefits to the petitioner within a period of two months from this date after taking into consideration and making adjustment of the amounts, if any, paid already. Simultaneous with such payment, the Corporation shall submit a chart giving computation calculations on the basis of which such payment is being made. If no dispute is raised by the petitioner in respect of the amount paid or calculation made, as above, that should be treated as the payment in full and final settlement of the claim of the petitioner against the Corporation on account of pensionary/retirement benefits. If the petitioner disputes the quantum or any other aspect of such calculation/computation, he shall be entitled to make a representation to that effect to the authority concerned within a period of one month from the date of receipt of such “calculation”. Such representation shall give full details and particulars.
20. Upon receipt of such representation, the authority concerned shall consider and dispose of the same and pass a final order and make final balance payment, if any, to the petitioner within three months from the date of receipt of such representation. It is made clear that if the representation of the petitioner is accepted in toto and final payment is made on that basis, in that event no reason need be given, otherwise the relevant order must contain reasons for the same and to that extent.
21. In this case, we have no hesitation in holding that the concerned officers of the Corporation are guilty of unnecessary delay, gross negligence and laches. The Petitioner has been made to suffer unnecessarily for the last 10 years. There is no reason or justification for the same. The concerned officers of the Corporation are responsible for the same. Accordingly, we pass also the following order:
22. Over and above the amount due, the petitioner shall be paid interest at the rate of 15 percent annum from the date of his retirement, i.e, with effect from 1.6.1981 to be paid along with such dues. Having regerd to the fact that the petitioner has been harassed for ten years because of such conduct of the Corporation and its officers, we also direct the Corporation to pay a sum of Rs. 2500/- as exemplary cost to the petitioner. Such costs shall be paid within a period of one month from this date.
23. The Corporation is also directed to cause an enquiry to be made as to the officer/officers responsible for such delay and harassment and to take suitable action against such person or persons, including recovery of the amount of interest and costs directed to be paid to the petitioner.
24. We make it clear that we are not going into the question as to whether the Corporation is entitled to any re-imbursement from the State Government. That is a matter entirely between the Corporation and the State Government and this Court in this writ petition has nothing to do with the same. However, if the Corporation so desires, it shall be entitled to take up the matter with the State Government but we make it clear that on that pretext the payments directed as above shall not be delayed. This application is allowed accordingly.
25. Application allowed with direction and guideline.
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