Vs. Director of Inspection  INSC 499 (29 September 1994)
S. (J) Mohan, S. (J) Venkatachalliah, M.N.(Cj)
1994 SCC (6) 589 JT 1994 (6) 354 1994 SCALE (4)349
Judgment of the Court was delivered by S. MOHAN, J.- Leave granted.
facts in brief in this appeal are as under.
appellant retired as Director General of Income Tax on 28-2-1986. He was informed that his payment of gratuity could
not be made till the receipt of "No Demand Certificate" from the
Directorate of Estates.
While he was working in Delhi, he occupied a pooled Central
Government accommodation. The licence fee was fixed at Rs 88 per month. The
rules relating to charging of licence fee were amended in June 1976. So, + From
the Judgment and Order dated 29-8-1991 of the Central Administrative Tribunal,
New Delhi in O.A. No. 399 of 1987 590 he had to pay damages for use and
occupation of the accommodation equal to the market licence fee as might be
determined by the Government from time to time. In May 1979, appellant was
transferred out of Delhi. However, he continued to retain
the official residence notwithstanding the fact that the allotment was
cancelled from 1-7-1979. He was re-transferred to Delhi in 1983 and the allotment was regularised.
During the period of his unauthorised occupation, proceeding under Public
Premises (Eviction of Unauthorised Occupants) Act, 1971 (hereinafter referred
to as 'the Act'), the Estate Officer levied damages against the appellant.
Against this order of levy of damages, an appeal was preferred to the District
Judge. By order dated 25-7- 1984, the damages came to be reduced from Rs 1070
to Rs 176.
During the pendency of the appeal before the District Judge under the Act, the
appellant preferred Civil Writ Petition No. 665 of 1984 in the High Court of
Delhi challenging the recovery from him for the period 1-1-1976 to August 1979. By an order dated 9-8-1984, the High Court took the view that it was open to
the appellant to approach the department concerned inasmuch as the damages have
been reduced to Rs 176 per month by the District Judge in appeal.
these two proceedings since the Directorate of Estate did not order the refund,
the appellant wrote a letter dated 19-12-1984 requesting that orders be passed in
relation to refund. There was no response. Without deciding the same and
refusing to issue a No Demand Certificate if the appellant's gratuity was
withheld, the appellant would be entitled to interest at the rate of 18% per annum.
On these allegations, he moved an application under Section 19 of the
Administrative Tribunals Act, 1985 before the Central Administration Tribunal,
Principal Bench, New Delhi in OA No. 399 of 1987. The respondent contested the
same stating that the appellant ought to have vacated the Government
accommodation allotted to him by 31-12-1975, that he did not do. Therefore, he
was informed that he would be charged market rent w.e.f. 1-1-1976. When he was transferred to Meerut in June 1979, he
ought to have vacated the premises within two months from the date of transfer,
even this was not done. With effect from 1-9-1979 for his unauthorised
occupation, he became liable to pay damages under the Allotment Rules for
overstay. The Estate Officer by his order dated 12-3-1983 passed an order for
however, came to be reduced to Rs 176 per month. That has not been cleared.
Therefore, the final "No Demand Certificate" could not be issued. It
is under these circumstances, the gratuity came to be withheld.
Tribunal on a consideration of the above held that death-cumretirement gratuity
(hereinafter referred to as 'DCRG') could not be withheld merely because the
employee had not vacated the allotted premises during the course of his
employment. Inasmuch as the appellant continued to retain the allotted
residence even after retirement, interest at the rate of 10% could be paid to
regard the refund of the excess damages i.e. Rs 1070 less Rs 176 for the period
1-10-1979 to 20-11-1981, it was directed to be refunded and 591 the recovery of
damages could be made under Fundamental Rule 48-A(iv)(c)(ii)(8).
this appeal before us the appellant urges that he would be entitled to 18%
interest at least in view of judgment of this Court in State of Kerala v. M. Padmanabhan Nair1. Relying on
this ruling, it is submitted that there is unjustified culpable delay in
issuing the No Demand Certificate. The Tribunal having held that DCRG cannot be
withheld because of the pendency of the claim for damages should have awarded
interest at the rate of 18% per annum.
respondent has not entered appearance.
This Court in M. Padmanabhan Nair case I has held as under: "Pension and
gratuity are no longer any bounty to be distributed by the Government to its
employees on their retirement but have become, under the decisions of this
Court, valuable rights and property in their hands and any culpable delay in
settlement and disbursement thereof must be visited with the penalty of payment
of interest at the current market rate till actual payment."
The Tribunal having come to the conclusion that DCRG cannot be withheld merely
because the claim for damages for unauthorised occupation is pending, should in
our considered opinion, have granted interest at the rate of 18% since right to
gratuity is not dependent upon the appellant vacating the official
accommodation. Having regard to these circumstances, we feel that it is a fit
case in which the award of 18% is warranted and it is so ordered. The DCRG due
to the appellant will carry interest at the rate of 18% per annum from 1-6-1986 till the date of payment. Of course this shall be
without prejudice to the right of the respondent to recover damages under
Fundamental Rule 48-A.
the civil appeal is allowed. However, there shall be no order as to costs.