State of Kerala represented by the Secretary to Government, Department of Agriculture, Secretariat, Thiruvananthapuram, Kerala & The Director of Agriculture, Thiruvananthapuram; The Principal Agricultural Officer, Thrissur; The Assistant Principal Agricultural Officer, District Agricultural Officer, Thrissur, Kerala v. K.K. Soman, Retired Joint Director of Agriculture, Kadavath House, Pulloor, Irinjalakuda 680 683, Kerala.

_**OP(KAT).228/18**_ 1 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR.JUSTICE V.G.ARUN** **FRIDAY, THE 01ST DAY OF NOVEMBER 2019 / 10TH KARTHIKA, 1941** ## **OP(KAT).No.228 OF 2018(Z)** **AGAINST THE ORDER/JUDGMENT IN TA 1680/2012 DATED 18-05-2016 OF KERALA ADMINISTRATIVETRIBUNAL, THIRUVANANTHAPURAM** ## **PETITIONER/S:** **1 STATE OF KERALA REPRESENTED BY SECRETARY TO THE GOVERNMENT,DEPARTMENT OF AGRICULTURE, SECRETARIAT,THIRUVANANTHAPURAM, KERALA. 2 THE DIRECTOR OF AGRICULTURE THIRUVANANTHAPURAM, KERALA. 3 THE PRINCIPAL AGRICULTURAL OFFICER THRISSUR, KERALA. 4 THE ASSISTANT PRINCIPAL AGRICULTURAL OFFICER DISTRICT AGRICULTURAL OFFICER, THRISSUR, KERALA.** ## **BY SR.GOVERNMENT PLEADER SRI.ANTONY MUKKATH** ## **RESPONDENT/S:** **K.K. SOMAN RETIRED JOINT DIRECTOR OF AGRICULTURE,KADAVATH HOUSE, PULLOOR, IRINJALAKUDA 680 683,KERALA.** ## **OTHER PRESENT:** **THIS OP KERALA ADMINISTRATIVE TRIBUNAL HAVING BEEN FINALLY HEARD ON 01.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _**OP(KAT).228/18**_ 2 ## **K.VINOD CHANDRAN & V.G.ARUN, JJ.** ----------------------------------------------O.P(KAT).No.228 of 2018 ----------------------------------------------Dated this the 1[st] day of January, 2019 ## **JUDGMENT** ## _**Arun, J**_ The original petition is filed against Annexure 4 order of the Kerala Administrative Tribunal in T.A.No.1680 of 2012. The respondent herein, after his retirement as Principal Agricultural Officer on 31.7.2006, filed W.P(C).No.17302 of 2008 before this Court aggrieved by the denial of the death cum retirement gratuity (DCRG) due to him. The writ petition was transferred to the Kerala Administrative Tribunal on its constitution and renumbered as T.A.No.1680 of 2012. The averments in the transferred application, which culminated in the impugned order rendered by the Tribunal, are as follows: The applicant retired from service on 31.7.2006. Prior to his retirement, the applicant had intimated the Head of the Department about his impending retirement and had also furnished details regarding the stations he had worked during his tenure. In spite of such intimation, the service papers of the applicant were forwarded to the Accountant General only on _**OP(KAT).228/18**_ 3 12.9.2006. The monthly pension of the applicant was sanctioned as per Exhibit P4 order dated 19.2.2007. By Exhibits P5 and P6 gratuity payment orders, gratuity amount of Rs.3,30,000/- was sanctioned by the Accountant General. But the Non Liability Certificate (NLC) of the applicant was not issued. The gratuity was not paid to the applicant due to non-production of NLC. 2. After repeated requests for issuance of NLC, the applicant was issued with Exhibit P9 liability certificate dated 15.1.2008, noting a total liability of Rs.19,973/-, out of which, except a paltry amount of Rs.739/-, the balance liability was fixed towards excess consumption of fuel for the official vehicle during 20042005. According to the applicant, the liability was fixed without any factual basis and even otherwise, the liability fixed after retirement, without notice, was invalid. The DCRG, except an amount of Rs.19,973/- was disbursed to the applicant on 10.2.2008. Being aggrieved by the withholding of Rs.19,973/and the delay in disbursing the undisputed portion of the DCRG , the transferred application was filed seeking the following reliefs: _“i. writ of certiorari or other appropriate writ, direction or order calling for the records leading to Ext.P9(a), P20, P21 and P24 liability certificates and to quash the same._ _ii. To issue a writ of mandamus or other appropriate writ, direction or order directing the respondents to release an amount of Rs.19,972/-_ _**OP(KAT).228/18**_ 4 _withheld from the DCRG payable to the petitioner with interest at 12% p.a from 1.8.2006 till the date of payment._ _iii. Issue a writ of mandamus or other appropriate writ, direction or order directing the respondents to grant interest at the rate of 12% per annum on the DCRG amount of Rs.3,30,000/disbursed for period from 1.8.2006 to 10.2.2008 to the petitioner.”_ 3. Before the Tribunal, it was contended by the applicant that as per Note 2 to Rule 3 of Part III KSR, the liability can be recovered from the DCRG payable only after giving a reasonable opportunity to the employee concerned. Note 3 to Rule 3 of Part III KSR stipulates that the liabilities of an employee should be quantified either before or after retirement and intimated to him before retirement, if possible. It was contended that in the case of the applicant, the liability was fixed after 20 months of his retirement. Reliance was placed on Exhibit P27 circular to contend that in cases where no departmental action is pending, NLC should be issued within three months of the audit being conducted. Reference was made to Rule 116(5) of Part III KSR to contend that in all cases where the liability could not be assessed and fixed before retirement of the Government employee, efforts should be made to assess and adjust the recoverable dues within one year from the date of retirement of the employee concerned. That, if in any case the liability could not be assessed within one _**OP(KAT).228/18**_ 5 year, the amounts withheld from the DCRG or the surety bond or cash deposit should be released. It was submitted that withholding of the entire DCRG amount of Rs.3,30,000/- for 20 months, on account of an alleged liability for Rs.19,973/-, entitles the applicant for exemplary interest for the unjustified delay. 4. Countering the contentions of the applicant it was submitted by the official respondents/the petitioners herein that, the DCRG could be released to the applicant only after getting liability certificate/non liability certificate from the officers concerned. That, the applicant having worked as District Head in the Directorate of Agriculture for seven years, it was not possible to fix the liability prior to his retirement. It was contended that as per Ruling No.1 under paragraph 5 of Rule 116 of Part III KSR, one year time is available for fixing the liability and the liability certificate having been issued within a reasonable period of 18 months, there was no reason to award interest on the gratuity amount already paid. 5. The Tribunal found that fixation of liability against the applicant was done without following due procedure and without giving reasonable opportunity to the applicant to submit his version. Based on the said finding, the Tribunal set aside the orders fixing liability and directed to fix the liability afresh after affording an opportunity of being heard to the applicant, keeping _**OP(KAT).228/18**_ 6 in view the observations in the order. Considering the fact that for the liability of Rs.19,973/-, the entire amount of gratuity was withheld for 18 months, it was directed to pay interest @ 9% per annum on the gratuity amount, less the liability of Rs.19,973/-, for the period from 1.10.2006 to 10.2.2008. It was directed that in case the liability of Rs.19,923/- (sic Rs.19,973) is set aside, the applicant should be paid interest at the rate of 9% on the said amount also. 6. When the original petition was taken up for consideration, it was submitted that the liability of Rs.19,973/- has been regularised, since filing of the original petition. The learned Senior Government Pleader contended that the liability not having been finalised at the time of applicant's retirement, it was well within the authority of the Government to have withheld the DCRG. It is submitted that immediately on finalisation of the liability and issue of liability certificate, the undisputed portion of the DCRG was disbursed to the applicant. It is submitted that as per Ruling No.1 under paragraph 5 of Rule 116 of Part III KSR, time limit of one year is provided for fixing the liability and that the liability having been fixed within 18 months of retirement of the applicant, the Tribunal had erred in directing interest to be paid on the DCRG amount. 7. The scope and ambit of Rule 116, with specific reference _**OP(KAT).228/18**_ 7 to Ruling No.1 under paragraph 5 was elaborately considered by this Court in the judgment O.P(KAT).No.398 of 2018 The contextually relevant portion of the judgment is extracted hereunder: _“8. A conjoint reading of the Rulings and the provisions with respect to the procedure relating to pensions contained in Chapter VIII of Part III makes it explicit that the pension and other retirement benefits are to be granted immediately on the retirement of an employee and in cases where it could not be granted, pension and death-cum-retirement gratuity should be disbursed in accordance with the procedure under Ruling Nos.1 to 3 of Rule 116. The mandate of Ruling No.5 is that in the unlikely event of the assessment and finalisation of liabilities not being completed at the time of retirement of an employee, it should be completed within a period of one year. If not, the amount withheld from the death-cumretirement gratuity or the surety bond, or cash deposit accepted under Ruling Nos.1 or 3, will have to be released. The rigour of the requirement of releasing retirement benefits immediately on superannuation of an employee is reflected from the dictate in Ruling No.5, that disciplinary action shall be taken against the employees responsible for the failure to assess and adjust the liabilities within the prescribed period. The time limit of one year for assessment of liabilities is subject to the stipulation mandating release of DCRG on acceptance of surety bond or cash deposit, or after withholding the estimated amount of outstanding dues from the DCRG or 10% of the DCRG, as the case may be. Hence, Ruling No.5 of Rule 116 cannot be relied on to contend that an outer time limit of_ _**OP(KAT).228/18**_ 8 _one year has been provided for finalising the assessment and for disbursal of pension in all cases, nor can it be taken as an enabling provision permitting the amount of DCRG to be retained with the Government for one year. The prescribed period mentioned in Ruling No.5 can only be the day of retirement or the following day in the case of DCRG and the first day of the month after retirement, in the case of pension. Further, Ruling No.5 applies only if the whole or substantial portion of the pension and gratuity of the Government employee has been disbursed on the basis of surety bond or cash deposit or by retaining a portion of the pension or DCRG in the manner prescribed in Ruling Nos.1 to 3._ _9. Even accepting that under Rule 116 (5), the Government could ascertain and determine the liability within one year from retirement of an employee, it only enables the recovery, of any such liability assessed, from the DCRG. It is not a provision to be resorted to mechanically in every case of retirement, which would only be a validation of the red tape prevalent in Government offices and the gross official apathy towards a Government servant facing impending severance from service. Here there is no allegation against the applicant that he failed to forward an application for pension within time. Once that is done it is for the higher authorities to act with expediency so as to enable payment of pension and DCRG immediately on superannuation. The claim for interest will depend on the facts of each case, especially with reference inter alia to the liability eventually fixed.”_ 8. In the instant case also, the applicant had intimated the superior officer regarding his impending superannuation much _**OP(KAT).228/18**_ 9 prior to the date of retirement itself and had even furnished the details of the stations where he had worked during his tenure. Therefore, there is no justification for having delayed the fixation of liability and thereby, the disbursal of DCRG. It is disheartening and shocking to note that for an alleged liability of Rs.19,973/-, the DCRG of Rs.3,30,000/- was withheld, in spite of the specific procedure prescribed in Rule 116. As held by the Honourable Supreme Court in _**State of Kerala and others v. M.Padmanabhan Nair**_ [(1985) 1 SCC 429], pension and other retirement benefits are no longer a bounty to be disbursed according to the whims and fancies of the employer, and on the other hand, is a right accrued on the employee based on the service rendered by him. The Government, which is supposed to be a model employer, should discourage official apathy and thereby save the retired employees from the ignominy of cringing and later litigating for their rightful benefits. In that view of the matter, the Tribunal was fully justified in directing payment of interest on the amount of DCRG less the amount of Rs.19,973/fixed as liability. The liability having been regularised, the original petitioners are bound to pay interest on the entire amount of DCRG for the period from 1.10.2006 to 10.2.2008. Interest is also liable to be paid on the amount of Rs.19,973/- from 10.2.2008 till the date of payment. Accepting the contention of the learned _**OP(KAT).228/18**_ 10 Senior Government Pleader that the rate of interest(9%) fixed by the Tribunal is higher than the prevailing bank rate, the interest can be reduced to 6% per annum. In the result, the original petition is disposed of, by modifying the impugned order in the following manner: The original petitioners shall pay interest at the rate of 6% on the DCRG amount of Rs.3,30,000/-, from 1.10.2006 to 10.2.2008, and from 10.2.2008 till date of payment on the amount of Rs.19,973/- . The payment as directed above shall be made within a period of three months from the date of receipt of a copy of this judgment, failing which the rate of interest will stand enhanced to 9% and the amount paid as interest component to the applicant shall be recovered from the officials who were responsible for the delay. Sd/- ## **K.VINOD CHANDRAN JUDGE** Sd/- **V.G.ARUN JUDGE** _vgsx_ _**OP(KAT).228/18**_ 11 ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **ANNEXURE A1 TRUE COPY OF TA NO.1680/12 ALONG WITH EXHIBITS.** - **ANNEXURE II TRUE COPY OF THE COUNTER AFFIDAVIT FILED ON BEHALF OF THE 1ST PETITIONER.** - **ANNEXURE III TRUE COPY OF THE REPLY AFFIDAVIT FILED BY THE RESPONDENT.** - **ANNEXURE IV TRUE COPY OF THE ORDER DATED 18/05/2016 IN TA NO.1680/2012.** - **EXHIBIT P1 TRUE COPY OF THE LETTER NO. C(1)10680/05 DATED 23-03-2006** - **EXHIBIT P2 TRUE COPY OF THE LETTER NO. SG1(2) 2928/06 DATED 12-09-2006** - **EXHIBIT P3 TRUE COPY OF THE LETTER DATED 01-012007** - **EXHIBIT P4 TRUE COPY OF THE ORDER NO. SG(2)2928/06 DATED 19-02-2007.** - **EXHIBIT P5 TRUE COPY OF THE GRATUITY PAYMENT ORDER NO. GPO P-08/OR/Q/ 77: 48523 DATED 0304-2007** - **EXHIBIT P6 TRUE COPY OF THE LETTER DATED 30-072007 OF THE ACCOUNT GENERAL TO RURAL DIST. TREASURY OFFICER.** - **EXHIBIT P7 TRUE COPY OF THE NOTICE SENT BY REGD. POST DATED 10-01-2008** - **EXHIBIT P8 TRUE COPY OF THE NOTE RECEIVED BY THE PETITIONER DATED 10-01-2008** - **EXHIBIT P9 TRUE COPY OF LETTER DATED 15-01-2008 NO.AD(1)/2911/06** **EXHIBIT P9(A) TRUE COPY OF THE LIABILITY PAPER DATED 15-01-2008. EXHIBIT P10 TRUE COPY OF THE LETTER DATED 04-011994** _**OP(KAT).228/18**_ 12 - **EXHIBIT P10(A)** **TRUE COPY OF THE AUDIT REPORT PERIOD FROM 01-12-1991 TO 31-12-1993** **EXHIBIT P10(B) TRUE COPY OF THE LETTER DATED 27-072006.** **EXHIBIT P10(C) TRUE COPY OF THE RELEVANT EXTRACT OF THE REPLY DATED 15-03-2007.** - **EXHIBIT P10(D) TRUE COPY OF THE LETTER NO. M. (1)59/2003 DATED 16-03-2007** - **EXHIBIT P10(E) TRUE COPY OF THE LETTER DATED 03-112007** - **EXHIBIT P11 TRUE COPY OF THE GOVERNMENT ORDER NO. G.O(P) NO. 245/98/FIN DATED 19-01-1998** - **EXHIBIT P12 TRUE COPY OF THE ORDER NO. 3249/2005 DATED 27-08-2005** - **EXHIBIT P12(A) TRUE COPY OF THE ORDER DATED 22-102005.** - **EXHIBIT P12(B) TRUE COPY OF THE ORDER DATED 10-05-2006 EXHIBIT P12(C) TRUE COPY OF THE ORDER DATED 10-052006.** - **EXHIBIT P12(D) TRUE COPY OF THE ORDER DATED 10-05-2006 EXHIBIT P12(E) TRUE COPY OF THE ORDER DATED10-05-2006. EXHIBIT P12(F) TRUE COPY OF THE ORDER DATED 10-05-2006 EXHIBIT P12(G) TRUE COPY OF THE ORDER DATED 19-062006.** **EXHIBIT P12(H) TRUE COPY OF THE ORDER DATED 14-07-2006 EXHIBIT P12(I) TRUE COPY OF THE ORDER DATED 14-072006. EXHIBIT P12(J) TRUE COPY OF THE ORDER DATED 14-072006. EXHIBIT P 13 TRUE COPY OF THE ORDER NO. TB.(3) 3249/05 DATED 30-07-2005.** _**OP(KAT).228/18**_ 13 - **EXHIBIT P14 TRUE COPY OF THE ORDER NO. TB(3) 133356/04 DATED 06-07-2005** - **EXHIBIT P15 TRUE COPY OF THE LETTER NO. TB.(3) 2708/08 DATED 24-03-2008** - **EXHIBIT P16 TRUE COPY OF THE ORDER NO. TB(3) 3249/05 DATED 05-05-2005** **EXHIBIT P17 TRUE COPY OF THE LETTER NO. AOD. II(2) 38863/05 DATED 10-09-2005** - **EXHIBIT P17(A) TRUE COPY OF THE AUDIT REPORT EXHIBIT P18 TRUE COPY OF THE LETTER NO. AD(1) 8472/05 DATED 04-07-2006** - **EXHIBIT P18(A) TRUE COPY OF THE REPLIES TO AUDIT REPORT.** - **EXHIBIT P19 TRUE COPY OF THE LETTER NO. AUD.11(2) 58013/2006 DATED 16-12-2006** - **EXHIBIT P19(A) TRUE COPY OF THE RELEVANT EXTRACT OF THE AUDIT REPORT.** - **EXHIBIT P20 TRUE COPY OF THE LETTER NO. AD(1) 12302/06 DATED 11-01-2008** - **EXHIBIT P21 TRUE COPY OF THE LETTER NO. AUD. II(2) 38863/05 DATED 14-11-2006** - **EXHIBIT P22 TRUE COPY OF THE NOTE DATED 09-01-2006 EXHIBIT P23 TRUE COPY OF THE LETTER NO. AUD.1(2) 3709/06 DATED 30-01-2008** - **EXHIBIT P24 TRUE COPY OF THE LIABILITY CERTIFICATE DATED 30-01-2008** **EXHIBIT P25 TRUE COPY OF THE CIRCULAR DATED 06-051985 EXHIBIT P26 TRUE COPY OF THE CIRCULAR DATED 09-071987 EXHIBIT P27 TRUE COPY OF THE CIRCULAR DATED 30-111999**