The Director of Municipal Administration vs Veerabhadregowda

A.N. Venugopala Gowda, J.—Challenge in this appeal is to the order passed by the learned Single Judge allowing the writ petition. 1st Respondent had filed the writ petition against the Appellant and the 2nd Respondent seeking to quash an order of the Appellant dated 30.01.2009 (Annexure-E) and direct the payment of interest on the difference of arrears of salary and terminal benefits.

Material facts which had led to the filing of the writ petition are as follows:

Sri Veerabadregowda - 1st Respondent/Petitioner with educational qualification of a pass in 8th standard was appointed in the Mandya Municipality as a peon in the pay scale of Rs. 50-1-60 and he reported for duty as such on 11.02.1965. He was promoted as Octroi Mutsadi by an order dated 20.10.1966. However, he was reverted as a peon on 03.11.1966, since a CRB candidate was posted to his place. Again he was promoted as Octroi Mutsadi by an order dated 02.12.1966 in the pay scale of Rs. 65-1-70-2-90. Subsequently he was promoted as a whole-time storekeeper in grade Rs. 90-200 by an order dated 13.10.1976. Thereafter he was promoted as second division clerk under G.O dated 17.09.1976 and his pay was fixed at Rs. 110/- with effect from 18.10.1976. He was transferred as a second division clerk to Malavalli Municipality as per the orders of the Divisional Commissioner, Mysore during 1984. He was reverted from the post of storekeeper to that of a post of Class-IV servant, pursuant to an order dated 08.08.1985 of Divisional Commissioner, Mysore, on the ground that, he did not possess the requisite educational qualification prescribed under the Rules to hold the post of storekeeper.

Said reversion order was questioned in W.P. No. 12579/1985. Since the writ petition was dismissed on 16.10.1995, Writ Appeal No. 4558/1996 was fifed, which was allowed by a judgment dated 22 09.1997, whereby, the order of reversion dated 08.08.1985 was quashed on the ground that the same was in violation of principles of natural justice. Liberty was reserved to the authorities to consider the grant of monetary benefits, if the employee is found entitled to.

Director of Municipal Administration granted opportunity of hearing to Sri Veerabadregowda to have his say in the matter by appearing before him on 20.12.1999. Veerabadregowda appeared before the said authority and contended that, reversion is incorrect and he be awarded the monetary benefits flowing therefrom. The said authority considering the matter and the fact that Veerabadregowda had worked in the capacity of storekeeper right from 1976 till 1985 when he was reverted, held that, it may not be proper for reverting an official, when the official had been granted promotion and allowed him to work in the promotional post for fairly a very long period. Further it was noticed that, the pay scale of Rs. 80-145 attached to the posts of Bill Collectors, Octroi Mutsadi and equivalent posts were revised to Rs. 90-200 from 01.01.1970. and as such it was held that Veerabadregowda is entitled to pay scale of Rs. 80-145 from the date he was promoted to the post of Octroi Mutsadi i.e., from 02.12.1966 and the revised pay scale of Rs. 90-200 from 01.04.1970 and he shall be entitled to all consequential services and monetary benefits flowing therefrom as if he has discharged the duties of the said post.

Sri Veerabadregowda retired from service of City Municipal Council, Mandya, on 31.07.2000. He filed W.P. 27483/2003 to direct the payment of interest on the belated payments and consider his case for time bound promotion of 10 years and 15 years. Said writ petition was allowed by an order dated 23.02.2007, quashing the impugned endorsement therein and directing the Director of Municipal Administration to consider the representation submitted on 10.04.2000 and dispose of the same expeditiously. After verification of the records and examining the claim, it was found that Veerabadregowda is eligible for time bound advancement and automatic grant of special promotion. However, it was held that, he was not entitled for payment of interest on the difference of pay due for the period as claimed by Veerabadregowda. An order was passed accordingly on 07.09.2007. Said order was questioned in W.P. No. 2126/2008, insofar as it relates to denial of interest in the difference of pay for the delayed period contending that, he ought to have been paid Rs. 2,56,460/- in the year 1985, but was actually paid on 04.04.2000 and similarly he ought to have been paid Rs. 59,840/- on 31.07.2000, but was paid on 19.12.2007 and hence should be compensated by payment of interest. While disposing of the writ petition, Director of Municipal Administration was directed to reconsider the matter. In compliance of the said order, an order dated 30.01.2009 (Annexure-E) was passed, rejecting the claim for payment of interest. Said order was questioned in the writ petition.

Learned Single Judge has held that the writ Petitioner was unjustly denied of his just due and has to be compensated by way of payment of nominal amount of interest. Learned Single Judge even though has noticed that there is no provision, taking into consideration the decision of the Apex Court in the case of S.K. Dua v. State of Haryana and Anr. AIR 2008 SCW 689 has held that, the writ Petitioner is entitled to interest atleast at a nominal rate of 6% p.a. and has allowed the writ petition.

Sri D. Vijaya Kumar learned AGA appearing for the Appellant contended that, the decision in the case of S.K. Dua (supra) has no application and the reliance placed on the said decision to grant the relief in terms of the impugned order is wholly erroneous. The marked difference in the case has not been noticed by the learned Single Judge. It is not a case wherein the Appellant had illegally withheld any monetary benefits. It was pointed out that on account of pendency of the litigation in this Court from 1985 to 1997 and the subsequent decisions thereafter, the entitlement of the employee was considered and order was passed and hence the direction issued to pay the interest is wholly erroneous. It was contended that, the learned Single Judge has not considered the matter in the correct perspective.

Sri S.N. Babu learned advocate appearing for the 1st Respondent/Petitioner contended that, there being no dispute with regard to the entitlement of the amount being the difference of salary and emolument as well as the terminal benefits, in view of the delay in effecting the payment, the employee has to be compensated by way of payment of interest. Strong reliance was placed on the decision in the case of S.K. Dua (supra) by pointing out that, even in the absence of Statutory Rules Administrative Instructions or Guidelines it has been held that, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. Learned Counsel made submissions in support of the findings and conclusion of the learned Single Judge in the impugned order.

Keeping in view the rival contentions, the point for consideration is:

Whether the Appellant is entitled to payment of interest for the delayed period on the difference of salary and emoluments?

1st Respondent was reverted from the post of storekeeper to that of a post of Class-IV servant on 08.08.1985 on the ground that he did not possess the requisite educational qualification prescribed under the Rules to hold the post of storekeeper. Challenge made to the said order in W.P. No. 12579/1985 was unsuccessful. However, the said order was quashed in W.A. No. 4558/1996 by a judgment dated 22.09.1997, on the ground that, the reversion was in violation of principles of natural justice and the authorities were granted liberty of considering the grant of monetary benefits, if the employee is found entitled to. The authority having considered the case, keeping in view the fact that the employee had worked in the promotional post for fairly a very long period and in the meantime the posts of Bill Collectors/Octroi Mutsadi and others been equated with the revision of pay scales from 01.01.1970, it was held that, the employee was entitled to the pay scale of Rs. 80-145 from the date when he was promoted to the post of Octroi Mutsadi i.e., from 02.12.1966 and the revised pay scale of Rs. 90-200 from 01.01.1970 and as a result, to all consequential services and monetary benefits. By a further order dated 16.01.2001, keeping in view the decision in W.P. 37941/2002 in the case of N. Shivananjappa v. State of Karnataka and Ors., the employee was held entitled to time bound advancement and automatic grant of special promotion with annual increments etc. The claim for payment of interest was disallowed. In between, the employee having attained the age of superannuation, retired from services on 31.07.2000. The 1st Respondent has been paid the difference of salary of Rs. 2,56,460/- on 04.04.2000. He has also been paid the difference of retirement benefit of Rs. 59,840/- on 19.12.2007. The grievance is only with regard to the delay in payment of the said amount.

In the case of S.K. Dua (supra) the Appellant retired from services on 30.06.1998 on reaching the age of superannuation. He was paid provisional pension, but other retirement benefits were not given to him, which included commuted value of pension, leave encashment, gratuity etc., totalling to about Rs. 12 lakhs. They were withheld till finalization of disciplinary proceedings. Appellant submitted replies to the charge sheets/show cause notices, inter alia, denying allegations and asserting that, they were uncalled for and were issued with malafide intention and oblique motive. Accepting the replies, Appellant was exonerated of all the charges and retirement benefits were given to him between June 11 and July 18, 2002. The grievance was that, though he retired in June 1998, retirement benefits to which he was otherwise entitled, were given to him after four years of his superannuation and in the circumstances, he was entitled to interest on the amount, which had been withheld by the Respondents and paid to him after considerable delay. Since the payment was not made despite representation and notices, he filed writ petition, which was summarily dismissed and the order was challenged in the Apex Court, wherein taking notice of the fact that the proceedings having been dropped and the retirement benefits having been extended after four years, prima facie the claim for payment of retirement benefits was held well-founded, even if there are no statutory orders occupying the field entitling the employee to claim interest relying on such Rules. With the said observation, the order under challenge was set-aside and the matter was remanded to the High Court for consideration.

From the record it is clear that, the Appellants have given effect to the judgment dated 22.09.1997 passed in W.A. No. 4558/1996 and also the order dated 23.02.2007 passed in W.P. No. 27483/2003. The writ Petitioner has been allowed the salary and emoluments eligible under the Time Bound Advancement & Automatic Grant of Special Promotion. Indisputedly there is neither any rule nor regulation muchless departmental instructions, providing for payment of interest and compensate for the delayed payment of salary etc., except in the matter of payment of DORG. Learned Single Judge has also noticed the said fact. However, by making reference to the case of S.K. Dua (supra), the direction was issued to pay interest. In the absence of rules, regulations or departmental circulars, entitling an employee for payment of interest on the delayed payment of salary etc., the Appellants could not have been directed to pay the interest. The case of S.K. Dua (supra) has no application to the case on hand, since it pertains to retirement benefits to which he was otherwise entitled to was paid after 4 years of superannuation. The instant case claim pertains to payment of interest on the delayed salary and emoluments. No order can be passed by the court for payment of interest as compensation, if it is not a condition of service. The claim of the Petitioner relating to interest on delayed payment of arrears of salary and emoluments has no basis and ought to have been rejected, learned Single Judge has passed the impugned order on account of misdirection in not noticing the material fact that, in the case of S.K. Dua (supra) related to payment of retirement benefits to which he was otherwise entitled, which was delayed and paid after four years. Without noticing the material aspects, relying upon the said decision, the impugned order has been passed. The said decision has no application to the case on hand and further the claim of the writ Petitioner has no valid basis, ought to have been dismissed. Hence, the impugned order is unjustified.

In the result, the writ appeal stands allowed and the impugned order stands set-aside. Consequently, the writ petition stands dismissed as devoid of merit.

However, there shall be no order as to costs.