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Satyendra Nath Rai & Anr. v. The State Of Bihar & Anr.
Structured Summary of the Opinion — R.M. Prasad, J.
Factual and Procedural Background
The petitioners are retired employees of the Gaya Municipal Corporation who sought a writ of mandamus directing the respondents to pay pensionary benefits. The petitioners specifically claimed entitlement to adequate dearness allowance as per a Government order (Annexure 2), interim relief as per Government letters (Annexures 4 and 4/1), regular monthly payment of pension, and leave encashment (full for petitioners 2 and 3; 60 days for petitioner 1).
The petitioners retired on 4.1.1991, 1.9.1989 and 29.2.1992 respectively. After not being paid retiral benefits and pension for about three years they filed writ petition C.W.J.C No. 8098/94, which was disposed of on 31.1.1996 directing respondents to pay admissible post-retiral dues within three months. Non-compliance prompted an application for contempt (M.J.C No. 1845/96). During the contempt proceedings petitioners received gratuity and some pension but alleged with a lower percentage of dearness allowance; the contempt application was disposed of on 12.5.1998 with a direction to file representations for remaining grievances. The petitioners assert that regular employees of the same category receive a higher percentage of dearness allowance and therefore they are entitled to the same percentage as per the Government letter dated 19.4.1991 (Annexure 2).
The petitioners set out outstanding amounts (totals, amounts paid, and balances) for each petitioner in the opinion. They also complained of non-payment of interim relief (Rs. 50/- from certain dates and 10% of pension from 1.4.1997) and non-payment of leave encashment.
Legal Issues Presented
- Whether the petitioners are entitled to dearness allowance on pension at the rate admissible to Government servants under the Government order dated 19.4.1991 (Annexure 2) and Rules 43 and 44 of the Patna Municipal Corporation Officers and Servants Pension Rules, 1986?
- Whether the respondent Corporation or the State Government bears the legal liability to pay the enhanced dearness allowance and other pensionary dues to the petitioners?
- Whether the earlier direction of this Court (in C.W.J.C No. 8098/94) ordering payment of admissible post-retiral dues had been complied with, and if not, what relief should follow?
Arguments of the Parties
Petitioners' Arguments
- The petitioners asserted entitlement to dearness allowance on pension as part of the pensionary amount revised for Government servants and made applicable to Corporation employees by Rule 44 and the Government order dated 19.4.1991 (Annexure 2).
- They contended regular employees of the Corporation receive a higher percentage of dearness allowance (the opinion records a claim of 170% in one place and, later, the court records 17% being paid to regular employees); petitioners said they were being denied the same.
- They alleged respondents were evading payment of appropriate dearness allowance and interim relief and had not paid leave encashment due to them.
Respondent Gaya Municipal Corporation (Respondent No. 2) — Arguments / Position
- The Corporation stated that the State Government released only 92% for dearness allowance payments to the Corporation employees, and accordingly 92% DA was paid to the petitioners with their pension.
- The Corporation maintained it was financially incapable of meeting the liability created under the Rules and that payment of retiral dues depended on release of funds by the State Government.
- In a counter affidavit the Corporation stated that petitioners had been paid the entire admitted amount of retiral benefits earlier (as pleaded in paragraph 6 of respondent no. 2's counter affidavit).
State (Urban Development Department, Government of Bihar) — Arguments / Position
- The State explained that it had made available limited financial assistance to local bodies (30% subsidy and 40% loan for salary payments up to March 2000), which included dearness allowance at 92% for working employees and medical allowance of Rs. 50/- per employee per month.
- The State asserted it had not released funds for payment of pensionary benefits to local bodies' retirees and that payment of pensionary benefits is the responsibility of the concerned Municipal Corporation or urban local bodies.
- The State referenced a departmental letter (no. 256 dated 28.1.1999) directing local bodies that payment of pensionary benefits is their responsibility.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court's analysis proceeded from the statutory and rule-based framework governing municipal employees' pension rights:
- Statutory power and rule-making authority: The court noted Section 61 of the Patna Municipal Corporation Act empowers the State Government to make rules concerning annuities, gratuities, provident or annuity funds and sanction of pensions from the Corporation's fund. The State exercised that power and framed the Patna Municipal Corporation Officers and Servants Pension Rules, 1986.
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Content of the relevant rules: The court summarized the content of the Rules relied upon by the petitioners:
- Rule 43 provides that any increase or relief (temporary or permanent) in pension sanctioned by the Government to Corporation employees over and above existing prescriptions will be admissible and the Corporation is bound to pay it.
- Rule 44 provides that the amount of pension (rate or slab) when revised in the case of a Government servant or after the date of adoption, the revised rate shall be admissible to Corporation employees. The court explicitly noted the Rule had been adopted by the respondent Corporation and applies to its employees.
- Allocation of financial responsibility: The court observed that Chapter VII of the Act concerns the municipal fund and that the liability to pay salaries and pensionary dues lies with the Corporation. The State's counter affidavit confirmed the State only released limited funds (subsidy/loan) for salaries and did not assume liability for pensionary payments.
- Government direction and parity: The court relied on the Government order dated 19.4.1991 (Annexure 2) issued in exercise of Rule 43's power, which directed that increases in pension admissible to Government servants should be made available to local body employees. The court accepted that regular employees were being paid the benefit in pursuance of that order.
- Conclusion from the above: Given the Rules adopted by the Corporation, the Government order, and the statutory allocation of responsibility under Chapter VII, the court concluded there was no justification for denying petitioners the dearness allowance at the rate admissible to Government employees. The Corporation, as employer, bore the responsibility to generate funds and pay the dues established by the Rules and the Government direction.
- Non-compliance with earlier order: The court found that the Corporation had not complied with the earlier direction of this Court to pay entire admissible dues and therefore relief was justified.
Holding and Implications
Holding: The writ petition is allowed.
Direct orders and immediate consequences:
- The respondent Gaya Municipal Corporation is directed to pay dearness allowance to the petitioners at the rate admissible to Government servants in light of the Government's direction under Rule 43 (Annexure 2). This payment must be made within two months of receipt or production of a copy of the judgment/order.
- The petitioners are awarded costs of Rs. 2,000, payable by the Corporation within the same two-month period.
- For any other remaining dues not yet paid, the petitioners may file a representation before the Administrator of the respondent Corporation; that representation must be considered and disposed of by a reasoned order within four weeks of filing, and any amount found payable must be paid within two weeks of disposal of the claim.
Broader implications: The court expressly applied the rules and the Government's administrative direction to hold the employer (the Corporation) responsible for pension enhancements. The opinion does not purport to establish a new legal precedent beyond the application of the existing statutory scheme and Rules to the facts; it enforces the Rules and the Government order against the Corporation and clarifies allocation of financial responsibility under Chapter VII of the Act.
R.M Prasad, J.:— In this application the prayer is for issuance of a writ in the nature of mandamus directing/commanding the respondents to pay pensionary benefits of the petitioners such as adquate dearness allowance as per Government order, contained in Annexure 2, and also interim relief as provided by the Government for the retired employees time to time, contained in Annexures 4 and 4/1. Further prayer is to direct the respondents to pay pension of the petitioners regularly every month and to pay leave encashment of petitioners no. 2 and 3 in full and of petitioner no. 1 for 60 days.
2. In short, the relevant facts are that the petitioners retired as an employee of Gaya Municipal Corporation, Gaya on 4.1.1991, 1.9.1989 and 29.2.1992 respectively. When they were not paid the retiral benefits and pension for about three years they filed writ petition bearing C.W.J.C No. 8098/94 which was disposed of on 31.1.1996 with the direction to the respondents to pay entire admissible post retiral dues to the petitioners within three months. When the respondents did not comply the said order of this Court the petitioners filed M.J.C No. 1845/96 for initiating contempt proceeding against them. However, during the pendency of the contempt application the petitioners were paid gratuity and also pension but with lesser percentage of dearness allowance from the date of their retirement. It is claimed that the petitioners protested but this Court disposed of the contempt application on 12.5.1998 directing the petitioners to file representation before respondent no. 2 for their remaining grievance, if any. According to their case, the regular employees of the same category are paid higher percentage of dearness allowance which was allowed time to time but they were denied of the same. It is, thus, claimed that they are entitled for the same percentage of the dearness allowance as allowed by the Government and shown in Annexure 1 series on the basis of the Government letter dated 19.4.1991, contained in Annexure 2. According to the petitioners, they are yet to be paid their pension as follows:
Total Paid Balance Petitioner no. 1 Rs. 1,56,108 Rs. 1,01,341 Rs. 54,767 Petitioner no. 2 Rs. 1,63,514 Rs. 97,124 Rs. 66,390 Petitioner no. 3 Rs. 1,19,918 Rs. 75,711 Rs. 44,267
3. It is also their case that the respondents are not paying interim relief of Rs. 50/- as allowed by the different Government's letters with effect from 1.4.1995 and 10% of the pension with effect from 1.4.1997 It is also alleged that they have not been paid the amount of leave encashment for which they are entitled.
4. A counter affidavit has been filed on behalf of the Administrator of the Corporation (respondent no. 2) in which it is stated that the State Government released only 92% against the dearness allowance for payment to the employees of the Corporation and accordingly, 92% dearness allowance were paid to the petitioners with their pension. It is further stated that when the State Government shall release the fund on enhanced rate of dearness allowance the petitioners shall be paid on such enhanced rate. According to the said respondent, the petitioners have been paid the entire admitted amount of retiral benefits.
5. A rejoinder has been filed on behalf of the petitioners to the said counter affidavit in which it is stated that the respondents have denied the enhanced dearness allowance of the petitioner's and are evading the payment of appropriate dearness allowance. According to the petitioners, as the Government ordered the local body to pay 100% as dearness allowance to the employees of the local body and the regular employees of the Corporation are being paid 170% of dearness allowance, the plea of non-release of fund by the Government for payment of enhanced dearness allowance to the petitioners is not tenable.
6. A counter affidavit has been filed on behalf of the State (Urban Development Department, Government of Bihar Patna). According to the stand taken on behalf of the State in the said counter affidavit the Department has made available 30% as subsidy and 40% as loan for payment of salary of the employees of the Corporation upto March, 2000. It includes dearness allowance @ 92% of basic pay of working employees and medical allowance of Rs. 50/- per employee per month. However the Government has not released fund for payment of pensionary benefits to the employees of the local bodies. According to them, the payment of pensionary benefits to the retired employees of the Corporation is the responsibility of the concerned Municipal Corporation or urban local bodies. It is further stated that the Department has already sent direction to all local bodies vide letter no. 256 dated 28.1.1999 that the payment of pensionary benefits to local bodies employees is the responsibility of the concerned local bodies.
7. Although two rejoinder affidavits have been filed on behalf of the petitioners but in none of them the petitioners have deined the statement made in paragraph 6 of the counter affidavit filed on behalf of respondent no. 2 wherein it is stated that they have been paid the entire admitted amount of retiral benefit earlier. Thus, the only grievance now remains is with respect to adequate dearness allowance as per the Government orders, contained in Annexure 2.
8. It is not in dispute that the respondent Gaya Municipal Corporation is also governed by the provisions contained in Patna Municipal Corporation Act, 1951 and the Rules framed thereunder. It is submitted on behalf of the petitioners that according to the provisions contained in Rule 44 of Patna Municipal Corporation Officers and Service Pension Rules, 1986 framed by the State Government in exercise of powers under section 61 of the Patna Municipal Corporation Act the amount of pension (rate or slab) when revised in case of Government servant or after the date of adoption, Rule is admissible to Corporation employees also. As such, according to him the petitioners are entitled for dearness allowance on pension which is part of the amount of pension as revised in the case of Government Servant but they have been arbitrarily kept denied of the said benefit merely on account of paucity of fund.
9. Learned counsel appearing for the Corporation has submitted that the respondent Corporation is financially not capable of meeting the liability created under the said Rule and the payments of retiral dues to the employees of the Corporation are made on release of fund by the State Government. On the other hand, learned Government Pleader No. IX appearing for the State has submitted that there is no liability of the State Government with respect to the pensionary benefits of the employees.
10. This Court finds substance in the submissions of the learned Government Pleader No. IX. Section 61 of the Act empowers the State Government to make Rules for annuities and gratuities or for the creation of a provident or annuity fund and also for sanction of pension from the fund of the Corporation. In exercise of the said power the State Govt. framed Patna Municipal Corporation Officers and Servants Pension Rules, 1986. Rule 43 of the said Rules provides that any increase or relief either temporary or permanent in pension as sanctioned by the Government to the Corporation employees over and above what is already prescribed will be admissible to the Corporation employees and the Corporation will be bound to pay it. Rule 44 provides that the amount of pension (Rate or Slab) when revised in case of Government servant or after the date of adoption the rule be admissible to the corporation employees, it is not in dispute that the said Rule has been adopted by the respondent Corporation and applies to its employees also.
11. Chapter VII of the Act provides for provisions with respect to the municipal fund and the liability to pay salary and other dues including the pensionary dues to the employees is of the Corporation. From the counter affidavit of the State it appears that the State Government, however, keeping in view the financial condition simply release fund; 30% by way of subsidy and 40% as loan to different local bodies including the respondent Corporation but the ultimate responsibility and liability is of the Corporation to pay such dues of the employees.
12. The State Government in exercise of power under Rule 43 issued order dated 19th April, 1991, contained in Annexure 2, that the benefit of increase in pension admissible to the Government servants should also be made available to the employees of the local bodies. It is not in dispute that in pursuance to the said order the regular employees of the Corporation are being paid 17% of dearness allowance. As I have already indicated above, the responsibility to generate fund for meeting the liability is of the Corporation under Chapter VII. Learned counsel for the Corporation has not been able to show any provision under which there is any liability of the State Government to provide fund for payment of such dues.
13. Under such circumstances, this Court does not find any justification to deny the benefit of dearness allowance to the petitioners at the rate as is admissible to the Government employees. The Corporation being their employer was solely responsible for generating fund and to pay the dues of the petitioners in accordance with the provisions as contained in Rules 43 and 44 of the Rules read with Annexure-2. Thus, this Court finds that the Corporation has not complied with the earlier direction of this Court to pay the entire admissible dues.
14. Accordingly, this writ petition is allowed. The respondent Corporation is directed to pay dearness allowance as admissible to the Government servants in the light of the direction of the Government issued in exercise of power under Rule 43 as contained in Annexure 2 within two months of the receipt/production of a copy of this judgment/order. In the facts and circumstances of this case the petitioners shall be entitled for a cost of Rs. 2,000/- which shall be paid to them by the Corporation within the aforesaid time.
15. With respect to any other remaining dues, if still not paid, the petitioners will be at liberty to approach the Administrator of the respondent Corporation by filing a representation which shall be considered and disposed of by a reasoned order within four weeks of the filing of the representation. Any further amount found payable with respect to it shall be paid within two weeks of disposal of their claim.
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