High Court of KeralaDivision BenchDismissed (Original petition fails)

O.P.(KAT) No.113 of 2020

Case / Petition Number:O.P.(KAT) No.113 of 2020

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Alexander Thomas
  • T.R. Ravi
Judgment Date
2021-01-28
Court Decision / Holding
The original petition is dismissed; the High Court upholds the Tribunal’s order directing payment of interest on the DCRG at 9% per annum from 08.11.2011 and release of Rs.7,700, with no order as to costs.
Final Disposition
Dismissed (Original petition fails)

Parties to the Case

Appellants / Petitioners

  • V. Radhakrishnan Nair, S/o Velayudhan Pillai, Retired Deputy Director of Prosecution, Thiruvananthapuram

Respondents

  • State of Kerala, represented by the Secretary to Government, Home Department, Secretariat, Thiruvananthapuram, Kerala
  • Director General of Prosecutions, Kerala, Ernakulam
  • Director of Prosecutions (Administration), Directorate of Prosecutions, Kerala, Ernakulam
  • Accountant General, Office of the Principal Accountant General (Civil and Commercial Audit), Thiruvananthapuram, Kerala

Legal Representation & Advocates

Counsels for Petitioners

  • • Janaki Krishnan A., Advocate

Counsels for Respondents

  • • Sri. B. Vinod, Sr. Govt. Pleader

Case Synopsis & Summary

This is a Kerala High Court petition (O.P.(KAT) No.113 of 2020) arising from a Kerala Administrative Tribunal (KAT) order dated 19.12.2018 in OA No.738/2013. The retired Deputy Director of Prosecution, who filed the OA, challenges fixation of a liability of Rs.7,700 deducted from his DCRG and other minor recoveries, and seeks release of the amount along with interest for delayed gratuity payment. He had gratuity fixed at Rs.3,30,000 and later revised to Rs.7,00,000 but withheld due to the liability. The OA prayed to set aside Annexures A3, A4, A22 and A23, declare the liability illegal, arbitrary and unsustainable, and obtain interest on delayed gratuity and 12% interest on the withheld Rs.7,700. The Tribunal found several items (Rs.6,860 and Rs.910) to be unauthorised or inadequately quantified, and directed the 1st petitioner to pay interest on DCRG at 9% per annum from 08.11.2011 and to release Rs.7,700. The State unsuccessfully argued that the liability arose from audit observations and was proper. Citing a chain of Supreme Court decisions directing interest on belated DCRG (rates from 8% to 18%, with 9% chosen here), the High Court dismissed the petition, holding the Tribunal’s order in accordance with law, and denying relief to the petitioner. No costs.

Provisions of Law Cited

Constitution of India, Articles 226 and 227

Submissions & Arguments

Contentions of Appellants / Petitioners

The OA applicant contends that the liability fixation of Rs.7,700 under Annexures A3 and A4 is illegal, arbitrary and unsustainable, as it was fixed without following the Rules and without affording him an opportunity to explain. He argues that audit observations related to TA claims were not a directive to disallow, and that the disposal of these records, especially after retirement, left him unable to produce further evidence. He seeks setting aside the liability, release of Rs.7,700 with interest, and interest on delayed gratuity payment. He also prays for interest on the belated gratuity to be paid at a significant rate (12%), and for the amount withheld to be released with interest.

Contentions of Respondents

The respondents contend that the liability was fixed in response to audit observations and the deduction from the DCRG was lawful. They argue that the CAG observations necessitated scrutiny and remedial action by the Controlling Officer, and that the TA observations did notdirect them to disallow the same. They maintain that the liability fixation and recovery were justified and that the Tribunal’s direction to pay 9% interest on the delayed DCRG aligns with Supreme Court precedents on recoveries arising from belated payments.

Cited Precedents (11)

Case NameCitationTreatmentExplanation
University of Kerala v. Dr. V. Sobha Sreemangalam and Anr.(2020) SCC OnLine Kerala 949; (2020) 3 KLT SN 10PositiveCited as part of the catena of Supreme Court decisions directing payment of interest on belated gratuity and DCRG, establishing a 9% rate in analogous circumstances.
State of Kerala v. M. Padmanabhan Nair(1985) 1 SCC 429PositiveJoined the group of Supreme Court precedents authorizing or requiring interest on delayed gratuity payments.
O.P. Gupta v. Union of India(1987) 4 SCC 328PositivePart of the cited line of authority recognizing interest on belated financial obligations.
Dr. Uma Agarwal v. State of U.P.(1999) 3 SCC 438PositiveExtends the principle of interest on belated payments and related pension-like benefits.
Vijay L. Mehrotra v. State of U.P.(2000) 2 SLR 686PositiveJudicial authority cited in support of interest on delayed financial entitlements.
Gorakhpur University v. Dr. Shitla Prasad Nagendra(2001) 6 SCC 591PositiveSupports the proposition of interest on belated payments.
H. Gangahanume Gowda v. Karnataka Agro Industrial Corporation Ltd(2003) 3 SCC 40PositiveCited for the treatment of belated payments and interest accruals.
S.K. Dua v. State of Haryana(2008) 3 SCC 44PositiveUsed to justify interest on belated gratuity payments.
Kerala State Cashew Development Corporation Ltd. v. N. Asokan(2009) 16 SCC 758PositivePart of catena directing interest on belated payment in related contexts.
D.D. Tewari (Deceased) v. Uttar Haryana Bijli Vitran Nigam Ltd.(2014) 8 SCC 894PositiveSupport for interest on belated payments under similar circumstances.
State of U.P. v. Dhirendra Pal Singh(2017) 1 SCC 49PositiveCited in establishing the range and rationale for awarding interest on belated payments.

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Extracted Judgment Text

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O.P.(KAT) No.113 of 2020 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** **&** **THE HONOURABLE MR. JUSTICE T.R.RAVI** **THURSDAY, THE 28TH DAY OF JANUARY 2021 / 8TH MAGHA, 1942** ## **OP(KAT).No.113 OF 2020** **AGAINST ORDER DATED 19.12.2018 IN O.A.NO.738/2013 OF THE KERALA ADMINISTRATIVE TRIBUNAL, THIRUVANANTHAPURAM BENCH** ## **PETITIONERS/RESPONDENTS IN OA:** - **1 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, HOME DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001, KERALA,** - **2 DIRECTOR GENERAL OF PROSECUTIONS, KERALA, ERNAKULAM, KOCHI, KERALA-682018.** - **3 DIRECTOR OF PROSECUTIONS(ADMINISTRATION) DIRECTORATE OF PROSECUTIONS, KERALA, ERNAKULAM, 682018.** - **4 ACCOUNTAT GENERAL OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL, (CIVIL AND COMMERCIAL AUDIT), THIRUVANANTHAPURAM, KERALA-695001.** **BY SRI.B.VINOD, SR.GOVT.PLEADER RESPONDENT/APPLICANT IN OA:** **V.RADHAKRISHNAN NAIR S/O. VELAYUDHAN PILLAI, RETIRED DEPUTY DIRECTOR OF PROSECUTION, THIRUVANANTHAPURAM-695035, RESIDING AT TC 10.617, INDIRAGIRI, S.V. SASTHRI GARDENS, MANNANTHALA, THIRUVANANTHAPURAM-695015, KERALA. BY ADV. SMT.JANAKI KRISHNAN A** **THIS OP KERALA ADMINISTRATIVE TRIBUNAL HAVING BEEN FINALLY HEARD ON 28.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** O.P.(KAT) No.113 of 2020 2 ## **ALEXANDER THOMAS & T.R. RAVI, JJ. -----------------------------------------------O.P.(KAT) No.113 of 2020** _[Arising out of order dated 19.12.2018 in O.A.No.738/2013 of the KAT, Tvm. Bench]_ **--------------------------------------------------** ## **Dated this the 28[th] day of January, 2021** ## **JUDGMENT** ## **T.R. RAVI, J.** The original petition has been filed challenging the order dated 19.12.2018 in O.A.No.738/2013 of the Kerala Administrative Tribunal, Thiruvananthapuram (hereinafter referred to as Tribunal). The State and its Officers who were respondents before the Tribunal are the petitioners herein and the applicant is the respondent. 2. The respondent retired from service on 31.03.2011 as Deputy Director of Prosecution. A sum of Rs.3,30,000/- was sanctioned as gratuity as per Annexure A30 order dated 30.03.2011, which was later revised as Rs.7 lakhs as per Annexure A31 order dated 08.11.2011. The amounts though sanctioned, were not released to the respondent for the reason that there was a liability of Rs.7,700/-. As per Annexure A1 order dated 22.08.2011, the Director of Prosecution O.P.(KAT) No.113 of 2020 3 ordered that there were certain liabilities relating to missing and damaged books and TA claims submitted by the respondent. The respondent was directed to clear the said liabilities. Thereafter, on 18.01.2012, a liability certificate was issued by the Additional Chief Secretary to Government noting that there was a liability of Rs.7,700/to be recovered from the respondent. Annexure A3 was followed by Annexure A4 order issued by the Director of Prosecution, directing to recover the liability of Rs.7,700/- from the DCRG sanctioned to the respondent. The DCRG payable to the respondent was released much later in August, 2012, after deducting the amount of Rs.7,700/-. 3. Aggrieved by the actions of the petitioners, the respondent approached the Tribunal by filing O.A.No.738 of 2013, praying to set aside Annexures A3, A4, A22 and A23 and declare that the fixation of liability of Rs.7,700/- as per Annexures A3 and A4 is illegal, arbitrary and unsustainable. The respondent also prayed for a direction to pay interest for delayed payment of the gratuity as well as for release of the withheld amount of Rs.7,700/- along with interest at the rate of 12% per annum. The respondent contended that the fixation of the liability was not in accordance with the provisions contained in the Rules and was without affording him an opportunity to explain. On merits, it was O.P.(KAT) No.113 of 2020 4 contended that as regards the TA claims, the Accountant General had only sought for clarification and had not directed to disallow the same and as such, to proceed as if there is a liability was unjustified. Respondent further contended that all the details and supporting documents regarding TA claims were available with petitioners 2 and 3 and since the respondent had already retired from service, he is not in a position to produce evidence regarding the same. 4. The Tribunal after considering the entire evidence on record, found that in Annexure A12 letter, the Accountant General had only made some observations regarding the TA bills submitted by the respondent and the direction was only to examine the said observations and intimate the result to the Audit Department. The Tribunal found that instead of examining the observations, the 3[rd] petitioner fixed the objected amount as liability of the respondent. The above finding is supported by the reply statement filed by the 4[th] petitioner wherein it has been specifically stated that the 4[th] petitioner had not directed any other petitioners to recover the amount held under audit observation and that it was the duty of the Controlling Officer to verify the audit objection and to take remedial action. The Tribunal found that the liability of Rs.6,860/- imposed on the respondent on that count was O.P.(KAT) No.113 of 2020 5 unauthorised and unwarranted. The Tribunal also found that the liability of Rs.910/- imposed towards the cost of library books cannot also be legally supported since the same was not properly quantified. The Tribunal hence, allowed the original application directing the 1[st] petitioner to pay interest on the amount of DCRG at the rate of 9% per annum from 08.11.2011, the date of issue of Annexure A31 revising the gratuity, till the date of payment. The Tribunal also directed the release of Rs.7,700/- withheld from the DCRG. 5. The question regarding the liability of the employer to pay interest on delayed payment of DCRG is no longer res integra. In the decision in **University of Kerala v. Dr.V.Sobha Sreemangalam and Anr.** reported in [2020 SCC OnLine Kerala 949 = (2020) 3 KLT SN 10 page 7], a Division Bench of this Court has catalogued the decisions of the Apex Court viz. **State of Kerala v. M.Padmanabhan Nair** [(1985) 1 SCC 429], **O.P.Gupta v. Union of India** [(1987) 4 SCC 328], **Dr.Uma Agarwal v. State of U.P.** [(1999) 3 SCC 438], **Vijay L.Mehrotra v. State of U.P.** [(2000) 2 SLR 686], **Gorakhpur University v. Dr.Shitla Prasad Nagendra** [(2001) 6 SCC 591], **H.Gangahanume Gowda v. Karnataka Agro Industrial Corporation Ltd** [(2003) 3 SCC 40], **S.K.Dua v. State** 6 O.P.(KAT) No.113 of 2020 **of Haryana** [(2008) 3 SCC 44], **Kerala State Cashew Development Corporation Ltd. v. N.Asokan** [(2009) 16 SCC 758], **D.D.Tewari (Deceased) v. Uttar Haryana Bijli Vitran Nigam Ltd.** [(2014) 8 SCC 894] and **State of U.P. v. Dhirendra Pal Singh** [(2017) 1 SCC 49], wherein the Apex Court has directed payment of interest ranging from 8% per annum to 18% per annum, depending on factual situations, and finally directed the payment of interest on the belated payment of DCRG at the rate of 9% per annum from the date of retirement till the date of payment. In the light of the catena of decisions of the Hon'ble Supreme Court on the issue as narrated in the above said decision of the Division Bench of this Court, we have no hesitation to hold that the directions issued by the Tribunal in the case on hand, to pay interest on the amount of DCRG at the rate of 9% per annum from 08.11.2011, the date of issue of Annexure A31 revising the gratuity, till the date of payment is very much in accordance with law and does not warrant any interference by this Court in exercise of its extraordinary and supervisory jurisdiction under Articles 226 and 227 of the Constitution of India. We do not find any illegality, irregularity, impropriety or irrationality in the order of the Tribunal. O.P.(KAT) No.113 of 2020 7 ## The original petition fails and the same is accordingly dismissed. In the circumstances of the case, there will be no order as to costs. Sd/- **ALEXANDER THOMAS, JUDGE** - Sd/- **T.R. RAVI, JUDGE** dsn O.P.(KAT) No.113 of 2020 8 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** **A PHOTO COPY OF THE ORIGINAL APPLICATION NO.738/2013 ALONG WITH ANNEXURES** - **EXHIBIT P1 (A1) TRUE COPY OF ORDER N.272/C/02/DGP DATED 22.08.2011 OF THE 3RD RESPONDENT** - **EXHIBIT P1 (A2) TRUE COPY OF THE REPRESENTATION DATED 24.8.2011 SUBMITTED BY THE APPLICANT BEFORE THE 3RD RESPONDENT** - **EXHIBIT P1 (A2) TRUE COPY OF THE REFERENCE 3RD CITED IN (A) ANNEXURE-A2** - **EXHIBIT P1(A3) TRUE COPY OF THE LIABILITY CERTIFICATE NO 71564/C4/2011/HOME DATED 18.01.2012** - **EXHIBIT P1(A4) TRUE COPY OF THE ORDER NO.272/C/2002/DGP DATED 14.2.2012 OF THE 3RD RESPONDENT** - **EXHIBIT P1(A5) TRUE COPY OF THE REPRESENTATION DATED 12.9.2012 SUBMITTED BY THE APPLICANT BEFORE THE 1ST RESPONDENT** - **EXHIBIT P1(A6) TRUE COPY OF THE REPRESENTATION DATED 17.9.2012 SUBMITTED BY THE APPLICANT BEFORE THE 1ST RESPONDENT** - **EXHIBIT P1(A7) TRUE COPY OF THE LETTER NO.PENSION/ 8399/2012-13 DATED 26.09.2012 OF THE DISTRICT TREASURY OFFICER, THIRUVANANTHAPURAM** - **EXHIBIT P1(A8) TRUE COPY OF THE REPRESENTATION DATED 12.10.2012 SUBMITTED BY THE APPLICANT BEFORE THE GOVERNMENT** - **EXHIBIT P1(A9) TRUE COPY OF THE LETTER NO.272/C/2002/DGP DATED 17.10.2012 OF THE 2ND RESPONDENT** - **EXHIBIT P1(A10) TRUE COPY OF THE LETTER NO.PENSION/9387/12-** O.P.(KAT) No.113 of 2020 9 **13 DATED 31.10.2012 OF THE DISTRICT TREASURY OFFICER, THIRUVANANTHAPURAM** **EXHIBIT P1(A11) TRUE COPY OF THE REPRESENTATION DATED 9.11.20-12 SUBMITTED BY THE APPLICANT BEFORE THE GOVERNMENT** **EXHIBIT P1(A12) TRUE COPY OF THE LETTER DATED 3.6.2011 OF THE ACCOUNTANT GENERAL** - **EXHIBIT P1(A13) TRUE COPY OF THE REPRESENTATION DATED 12.4.2012 SUBMITTED BY THE APPLICANT BEFORE THE GOVERNMENT** **EXHIBIT P1(A14) TRUE COPY OF THE LETTER DATED 23.6.2011 OF THE APPLICANT TO THE 4TH RESPONDENT** - **EXHIBIT P1(A15) THE COPY OF THE TREASURY CHELLAN RECEIPT EVIDENCING THE REMITTANCE OF THE EXCESS T.A.** **EXHIBIT P1(A16) TRUE COPY OF THE LETTER NO.1083/C/09/DGP DATED 11.12.2009** **EXHIBIT P1(A17) TRUE COPY OF THE LETTER NO.3069/D/09/DGP DATED 31.2.2009 THE 3RD RESPONDENT** **EXHIBIT P1(A18) TRUE COPY OF THE LETTER NO.2835/E/09/DGP DATED 3.3.2010 THE 3RD RESPONDENT EXHIBIT P1(A19) TRUE COPY OF THE ORDER NO.481/C/10/DGP DATED 01.06.2010** - **EXHIBIT P1 (A20) TRUE COPY OF THE LETTER NO.2835/E/09/DGP DATED 16.7.2010 OF THE 3RD RESPONDENT** - **EXHIBIT P1 (A21) TRUE COPY OF THE ORDER NO.272/C/02/DGP DATED 7.10.2005 OF THE 2ND RESPONDENT** - **EXHIBIT P1(A22) TRUE COPY OF THE GOVERNMENT LETTER NO.38093/C4/2012 /HOME DATED 9.8.2012** - **EXHIBIT P1(A23) TRUE COPY OF THE GOVERNMENT LETTER NO.77002/C4/2012 /HOME DATED 14.2.2013** - **EXHIBIT P1(A24) TRUE COPY OF THE G.O(RT) NO.2143/2006/HOME** O.P.(KAT) No.113 of 2020 10 ## **DATED 20.9.2006** **EXHIBIT P1(A25) TRUE COPY OF THE LETTER NO.272/C/02/DGP DATED 19.5.2011** **EXHIBIT P1(A26) TRUE COPY OF THE LETTER NO.272/C/02/DGP DATED 14.6.2011 OF THE 3RD RESPONDENT** - **EXHIBIT P1 (A27) TRUE COPY OF THE LETTER NO.272/C/02/DGP DATED 27.6.2011 OF THE 3RD RESPONDENT** - **EXHIBIT P1 (A28) TRUE COPY OF THE APPLICATION DATED 8.10.2012** - **EXHIBIT P1 (A29) TRUE COPY OF THE LETTER NO.C.CELL/AUDIT/RTI ACT/VOL.XVI/182 DATED 16.10.2012 OF THE 4TH RESPONDENT** - **EXHIBIT P1 (A30) TRUE COPY OF THE ORDER DATED 30.3.2011 OF THE 4TH RESPONDENT** - **EXHIBIT P1 (A31) TRUE COPY OF THE ORDER NO.P R 21011643/P2/3/151128506 DATED 08.11.20111 OF THE 4TH RESPONDENT** - **EXHIBIT P2 TRUE COPY OF THE REPLY STATEMENT DATED 07.08.2013 FILED BY THE FOURTH PETITIONER** - **EXHIBIT P3 TRUE COPY OF THE REPLY STATEMENT DATED 17.01.2014 FILED BY THE FIRST PETITIONER** - **EXHIBIT P4 TRUE COPY OF THE REJOINDER ALONG WITH ANNEXURES DATED 12.11.2018 FILED BY THE RESPONDENT** - **EXHIBIT P4(A32) G.O(MS) 16/2009/HOME DATED 4.2.2009 ISSUED BY THE 1ST RESPONDENT** - **EXHIBIT P4(A33) LETTER NO.25320/LIB/2012/LAW, THIRUVANANTHAPURAM DATED 30.11.2012 RECEIVED UNDER THE RTI ACT** **EXHIBIT P5 TRUE COPY OF THE ORDER DATED 19.12.2018 IN OA 738/2013**