Agarwal Vs. State of U.P. & ANR  INSC 89 (22 March 1999)
CJI., M.JAGANNADHA RAO, & N. SANTOSH HEGDE. M.JAGANNADHA RAO,J.
petitioner was working as Medical Officer in the service of the Government of
Uttar Pradesh and retired on 30.4.1993 on completion of 58 years.
filed this writ petition on 18.11.1995 complaining that she has not been paid
her retiral benefits, namely, gratuity, provident fund, pension etc. This Court
admitted the writ petition on 4.12.1995 and issued notice to the respondents.
respondents submitted to this Court that, after her retirement, in spite of the
petitioner being requested to send three sets of pension papers, petitioner did
not send them. This was, however, denied by the petitioner. This Court directed
the respondents on 12.2.1996 that upon petitioner furnishing three sets of
pension papers with all relevant documents, the same should be processed.
respondents then sent a special messenger to various places to get details of
her service and thereafter the pension papers were sent on 24.12.1996 to the
Director General, Medical Health, U.P. It was stated that provisional pension
was paid in December, 1996 and February, 1997. Arrears were paid on 17.3.1997.
Papers were sent on 29.1.1997 to the Pension Directorate, Lucknow. In regard to the GIS it was
pointed out that the petitioner had not paid premium of Rs.4770/- and
thereafter, the petitioner deposited the same on 9.12.1997. The GIS was sent to
petitioner on 17.12.1997, 90% of GPF was paid on 20.1.1998, balance was paid on
25.4.1998. The Gratuity was paid on 25.6.1997 and the encashment of earned
leave was also paid on the same date. The petitioner demanded interest while
the respondents contended that no interest was payable. Though some other questions
relating to promotion etc.
referred to in the writ petition, learned senior counsel for the petitioner
stated that the petitioner is confining this writ petition only in regard to
the pensionary benefits. Now the only question that remains to be decided is
the question relating to payment of interest. Learned counsel for the
petitioner requested us that some guidelines may be issued regarding the steps
to be taken by departments for prompt payment of retiral benefits.
several writ petitions are being filed in this Court and various High Courts
seeking relief for disbursement of retiral benefits, because of inordinate
delays in payment of these benefits. As Krishna Iyer, J. stated in State of Mysore
vs. C.R.Sheshadri & Others [1974 (4) SCC 308], `a retired government
official is sensitive to delay in drawing monetary benefits. And to avoid
posthumous satisfaction of the pecuniary expectation of the superannuated
public servant - not unusual in government', it is becoming necessary to issue
directions, in several cases, for early payment of these dues. In yet another
case in State of Kerala & Others vs. M.Padmanabhan Nair [1985 (1) SCC 429],
this Court had occasion to point out that usually `the delay occurs by reason
of non-production of the L.P.C(last pay certificate) and the N.L.C.(no
liability certificate) from the concerned departments' but both the documents
pertain to matters, records whereof would be with the concerned government
departments. It was observed that inasmuch as the date of retirement of every
government servant was very much known in advance, it was difficult to
appreciate why the process of collecting the requisite information and issuance
of the abovesaid two documents should not be completed well before the date of retirement
so that the payment of gratuity amount could be made on the date of retirement
or on the following day and the pension, at the expiry of the following month.
This Court stated that the necessity for prompt payment of the retirement dues
to a government servant immediately after his retirement could not be over-emphasised
and it would not be unreasonable to direct that there would be a liability to
pay penal interest on these retirement benefits. In several cases, decided by
this Court, interest at the rate of 12% per annum has been directed to be paid
by the State.
these delays have increased in the last few years, it has become necessary to
refer to the Rules and Departmental instructions which do contain adequate
provisions for compilation of all the necessary data and preparation of the
necessary documents for disbursement of retiral benefits, well in advance. The
present case arises from Uttar Pradesh and we find that the Government of Uttar
Pradesh has issued instructions to the effect that "the Head Office, or
other authority responsible for preparing the pension papers should initiate
the pension case, two years before retirement of the Government servant. At
that stage, the essential information necessary for working out the qualifying
service should be collected, and the entire service book and other service
records should be examined and completed with a view to remove deficiencies and
imperfections, if any, in the service book/records.
process should be completed" atleast eight months in advance of the date
of retirement of the Government servant. The actual computation and preparation
of the pension papers should then start and "any deficiency or
imperfection, or omission which still remains in the service records should be ignored,
and the determination of qualifying service should be proceeded with on the
basis of entries in the service records, whatever the degree of imperfection to
which it might have been possible to bring them by that time". "The
process of determining the qualifying service and the average emoluments and
the admissible pension and gratuity should be positively completed within a
period of 2 months and the pension papers sent to the Accountant-General not
later than 6 months before the date of retirement. The said office is to issue
the pension payment order (including the order for the payment of the
Death-cum-retirement gratuity) one month in advance of the date of
retirement". "It should be ensured that the payment of superannuation
pension commences on the first of the month following the month in which the
government servant retires". This appears to be the clear position in
in this connection also refer to F.R.58 which relates to "preparation of
states that "every Head of Office shall undertake the work of preparation
of pension papers in Form 7 two years before the date on which the Government
servant is due to retire on superannuation or on the date on which he proceeds
on leave preparatory to retirement whichever is earlier". F.R.59 deals
with the `stages for the completion of pension papers'. Sub-clause (1)(a) bears
the heading, the first stage, and refers to the verification of service
details. There are five parts in this sub-clause. Sub-clause (1)(b) refers to the
second stage, namely, making good the omissions in the service book. Sub-clause
1(b)(ii) is important and it states very clearly as follows:
effort shall be made to complete the verification of service, as in clause (a)
and to make good omissions, imperfections or deficiencies referred to
sub-clause (i) of this clause. Any omission, imperfections or deficiencies
including the portion of service shown as unverified in the service book which
it has not been possible to verify in accordance with the procedure laid down
in clause (a) shall be ignored and service qualifying for pension shall be
determined on the basis of the entries in the book." This directive in the
rules is obviously intended to see that once the period is quite close to 10 months
before the retirement of an employee, further time is not to be wasted in
verifying data which it has not been possible to verify by following the
procedure in sub-clause (1)(a) of F.R.59. Sub-clause (1)(c) refers to the third
stage and it says that atleast 10 months before the date of retirement, the
Head office shall take various steps by issuing a Certificate to the government
servant and the officer can offer his remarks and thereafter, he shall be
furnished Form 4 and Form 5 which he has to fill-up and send to the Head Office
atleast 8 months before the date of retirement. F.R.60 refers to `completion of
pension papers' in Part-I of Form 7 atleast 6 months before the date of
retirement of the government servant. F.R.61 deals with the `Forwarding of
Pension Papers to Accounts Officer', in Form 5 and Form 7 with a covering
letter in Form 8 along with service book duly completed, upto date, and other
documents. This has to be done atleast 6 months before the date of retirement.
63 refers to recovery of amounts due by the government servant and the
particulars in this behalf are to be sent atleast 2 months before the date of
retirement, so that the same could be recovered from the gratuity. F.R.64 deals
with provisional pension. F.R.65 requires the Accounts Officer to assess the
amount of pension and gratuity atleast one month before the date of retirement.
F.R.68 requires interest to be paid on delayed payment of gratuity. As already
stated, in cases of delayed payment of pension, this Court has levied interest
at 12% per annum in several cases.
have referred in sufficient detail to the Rules and instructions which
prescribe the time- schedule for the various steps to be taken in regard to the
payment of pension and other retiral benefits. This we have done to remind the
various governmental departments of their duties in initiating various steps atleast
two years in advance of the date of retirement. If the rules/instructions are
followed strictly much of the litigation can be avoided and retired government
servants will not feel harassed because after all, grant of pension is not a
bounty but a right of the government servant. Government is obliged to follow
the Rules mentioned in the earlier part of this order in letter and in spirit.
in settlement of retiral benefits is frustrating and must be avoided at all
costs. Such delays are occurring even in regard to family pensions for which
too there is a prescribed procedure. This is indeed unfortunate. In cases where
a retired government servant claims interest for delayed payment, the Court can
certainly keep in mind the time-schedule prescribed in the rules/instructions
apart from other relevant factors applicable to each case.
case before us is a clear example of department delay which is not excusable.
The petitioner retired on 30.4.1993 and it was only after 12.2.1996 when an
interim order was passed in this writ petition that the respondents woke up and
started work by sending a special messenger to various places where the
petitioner had worked.
an exercise should have started atleast in 1991, two years before retirement.
The amounts due to the petitioner were computed and the payments were made only
during 1997-98. The petitioner was a cancer patient and was indeed put to great
hardship. Even assuming that some letters were sent to the petitioner after her
retirement on 30.3.1993 seeking information from her, an allegation which is
denied by the petitioner, that cannot be an excuse for the lethargy of the
department inasmuch as the rules and instructions require these actions to be
taken long before retirement. The exercise which was to completed long before
retirement was in fact started long after the petitioner's retirement.
this is a fit case for awarding interest to the petitioner. We do not think
that for the purpose of the computation of interest, the matter should go back.
Instead, on the facts of this case, we quantify the interest payable at Rs.1 lakh
and direct that the same shall be paid to the petitioner within two months from
writ petition is disposed of accordingly. There will be no order as to costs.