Wajahat Hussain Andrabi vs Union Territory Of J&K & Ors.

Ms. Rahella Khan for AG

JUSTICE RITU TAGORE, MEMBER [JUDL.]

The present Original Application has been filed by the applicant, a retired employee of the Sher-i-Kashmir Institute of Medical Sciences (SKIMS), seeking release of the unpaid portion of his revised gratuity along with consequential reliefs. The grievance of the applicant, in substance, is that although his gratuity was revised and Gratuity Payment Order (GPO) No. 240937223-1 dated 29.04.2010 was issued by the Office of the Principal Accountant General (A&E), Jammu & Kashmir, sanctioning revised gratuity of ₹10,00,000/-, only a part of the amount was actually disbursed to him and the remaining amount of ₹3,25,000/- has remained unpaid for a prolonged period. The applicant has, therefore, sought a direction to the respondents to take necessary steps for revalidation of the said GPO or issuance of a fresh authority, as may be required under the rules, and release the outstanding amount along with interest.

The case set up by the applicant is that he retired from service in May 2008 on attaining the age of superannuation and, consequent upon his retirement, became entitled to all pensionary and retiral benefits admissible to him under the applicable rules. His gratuity was subsequently revised and the total revised gratuity was determined at ₹10,00,000/-. According to the applicant, an amount of ₹3,50,000/- had already been paid to him and the remaining amount of ₹6,50,000/- was thereafter authorized under the revised gratuity order. The Central Administrative Tribunal^{said amount of ₹6,50,000/- was, however, divided into} two installments of ₹3,25,000/- each, out of which only one installment was credited to his account, while the other installment remained unpaid.

The applicant contends that the division of the gratuity into installments was itself contrary to the applicable provisions of the Jammu and Kashmir Treasury Code, which contemplate payment of gratuity in a single sum. He submits that the non-payment of the second installment was not attributable to him in any manner and that, having retired in 2008, he had every reason to believe that his retiral dues had been duly settled. It is his case that the non-payment came to his notice only in the year 2024 when, upon scrutiny of his pension account and verification of his bank statement, he discovered that only ₹3,25,000/- had actually been credited pursuant to the revised authorization.

Upon discovering the discrepancy, the applicant approached the concerned Treasury authorities and Central Administrative Tribunal^{submitted a representation along with the relevant} documents, including his bank statement and affidavit, seeking release of the unpaid amount. Pursuant thereto, the Additional Treasury Officer, Khanyar, Srinagar, vide communication dated 17.10.2024 addressed to the Principal Accountant General (A&E), Jammu & Kashmir, took up the matter and recorded that the applicant was claiming the second half of the revised gratuity amounting to ₹3.25 lakh and that the documents submitted by him reflected non-receipt of the said amount. The Treasury Officer accordingly requested appropriate action and revalidation of the GPO so that the outstanding amount could be disbursed to the applicant.

The applicant further relies upon the communication dated 02.01.2025 issued by the Office of the Principal Accountant General (A&E), Jammu & Kashmir. According to the applicant, the said communication did not dispute either the existence of the GPO or his entitlement to the unpaid amount, but required the matter Central Administrative Tribunal^{to be dealt with at the Treasury level in accordance with} the rules governing belated payment and authorized the competent authority to sanction disbursement of the outstanding installment in accordance with the applicable rules and instructions.

The matter was thereafter again taken up by the Additional Treasury Officer, Khanyar, vide communication dated 13.01.2025, wherein reference was made to Rule 5.88(2) of the Jammu and Kashmir Treasury Code and the fact that the GPO had remained partly unpaid. The Treasury Officer again requested revalidation of the GPO so that the outstanding gratuity could be released in favor of the applicant. The applicant submits that the correspondence exchanged between the concerned authorities clearly demonstrates that there was no dispute regarding the factum of non-payment of the second installment and that the only issue being raised was the procedural requirement of revalidation or fresh authorization.

Central Administrative Tribunal^{07.The applicant has further placed reliance upon the} subsequent correspondence issued by the Principal Accountant General (A&E), wherein it was noticed that payment of 50% of DCRG in installments was contrary to Rule 5.86(a) of the Jammu and Kashmir Treasury Code, which provides that gratuity is to be paid in a single sum and not by installments. According to the applicant, once the competent authorities themselves acknowledged that the gratuity had been divided into installments contrary to the governing provision and that one installment had remained unpaid, the respondents could not defeat his substantive entitlement merely by relying upon the expiry of the GPO.

It is accordingly submitted on behalf of the applicant that the respondents have themselves acknowledged the existence of the outstanding amount and have not disputed that the applicant was entitled to receive the same. The applicant contends that he cannot be made to suffer on account of an administrative error in the manner in which Central Administrative Tribunal^{the gratuity was authorized or disbursed. According to} him, the expiry of the GPO may require the respondents to undertake some procedural exercise, but such expiry cannot extinguish an amount which had already been sanctioned in his favor and which remained unpaid for reasons entirely beyond his control.

The applicant has further submitted that he is an aged retired employee and has already been deprived of a substantial part of his retiral dues for a period of more than fourteen years. He contends that the continued withholding of the amount, despite his repeated representations and the official correspondence acknowledging the outstanding payment, is arbitrary, unreasonable and contrary to the settled principles governing retiral benefits. He has accordingly prayed for release of the outstanding amount of ₹3,25,000/- along with interest, besides other consequential reliefs. In the Original Application, interest at the rate of 18% per annum has been claimed from the date the amount became Central Administrative Tribunal^{due till actual payment.}

Per contra, the respondents have opposed the Original Application primarily on the ground that the same is misconceived and premature. According to the respondents, the issue relates to the non-payment of the second installment under GPO No. 240937223-1 dated 29.04.2010 and, since the said GPO was valid only for the prescribed period, the matter is required to be dealt with in accordance with the procedure governing belated payment, revalidation and issuance of pensionary authorities. It is their contention that the Treasury cannot make payment on the basis of an authority which has already ceased to remain operative.

The respondents have, however, substantially acknowledged the factual position regarding issuance of the GPO and the non-payment of the second installment. Their pleadings disclose that the applicant's revised gratuity was determined at ₹10,00,000/- and that an amount of ₹6,50,000/- was thereafter authorized for Central Administrative Tribunal^{payment in two equal installments of ₹3,25,000/- each. It} is stated that one such installment was paid whereas the other remained unpaid. Thus, the fact that the applicant has not received the entire amount authorized under the revised gratuity order is not seriously disputed by the respondents.

The respondents submit that the difficulty arose because the GPO had been issued in the year 2010 and its validity had expired. According to them, Rule 5.88(2) of the Jammu and Kashmir Treasury Code provides for the validity of a Gratuity Payment Order for one year and, after expiry of that period, the Treasury cannot act upon the old authority without the requisite revalidation or fresh sanction from the competent authority.

Respondent No. 2 has further contended that the present case involves a partially paid GPO and that there is no specific provision in the applicable rules prescribing a mechanism for revalidation of an authority where one portion thereof has already been paid and another portion Central Administrative Tribunal^{remains outstanding. According to Respondent No. 2, the} prevailing procedure contemplates revalidation in cases where the entire amount covered by the authority remains unpaid, whereas the present case involves only the unpaid balance. It is, therefore, submitted that the necessary sanction from the competent authority, including the Finance Department wherever required, has to be obtained before the outstanding amount can be released.

Respondent No. 2 has also submitted that its role in the matter is consequential and that the payment of pensionary benefits is dependent upon the sanction and authority issued by the competent Pension Sanctioning Authority. It is stated that, vide communication dated 02.01.2025, the Treasury authorities had already been advised to obtain the necessary sanction from the Finance Department for the unpaid portion and thereafter disburse the amount. According to Respondent No. 2, therefore, it has no further role unless and until the necessary revalidation or fresh sanction is placed before it.

Central Administrative Tribunal^{15.The respondents have further submitted that there has} been no mala fide or deliberate withholding of the applicant's dues. According to them, the delay has occurred because of the procedural requirements relating to the validity of the GPO, revalidation and sanction of the competent authority. They have stated that the matter has been taken up through communications dated 17.10.2024, 13.01.2025 and 04.11.2025 and that necessary steps have been initiated for resolving the issue. The respondents, therefore, contend that the Original Application is premature and that no adverse direction is warranted against them.

Respondent No. 4, namely SKIMS, has taken a separate stand that the pensionary case of the applicant was duly processed by it and the necessary papers were forwarded to the Principal Accountant General (A&E) for authorization. It is stated that after issuance of the PPO/GPO, the same was transmitted to the concerned Treasury for disbursement. Respondent No. 4 submits that Central Administrative Tribunal^{it has no financial authority or administrative control over} the actual release of the gratuity from the Treasury and that its role substantially ceased after forwarding the pension papers and the duly issued authority for payment. It has accordingly prayed that no adverse direction be issued against it.

I have heard learned counsel for the applicant as well as learned counsel appearing for the respondents and have carefully gone through the pleadings and the documents placed on record.

On consideration of the pleadings and the matter placed on record, I find that there is no substantial dispute regarding the applicant's entitlement to the revised gratuity or the issuance of GPO No. 240937223-1 dated 29.04.2010. The revised gratuity had been determined at ₹10,00,000/-. The record and the pleadings of the respondents show that an amount of ₹6,50,000/- was duly authorized under the revised GPO and, in terms of Government order No . 08- F of 2011 dated 18.01.2011 Central Administrative Tribunal^{and 23-F of 2011 dated25.04.2011was made payable in} two equal installments of ₹3,25,000/- each. It is also an admitted position that one installment was paid whereas the second installment of ₹3,25,000/- remained unpaid.

The controversy, therefore, is not with regard to the applicant underlying entitlement to the revised gratuity amount, nor the amount that had been sanctioned in his favor. The question that arises for consideration is whether, upon expiry of the validity period of the GPO, and in the absence of any specific procedure providing for revalidation of a partially unpaid authority, can prevent payment of the amount which had already been sanctioned and authorized in favor of the applicant?

Rule 5.86(a) of the Jammu and Kashmir Treasury Code is of significance in this regard. The said provision contemplates payment of gratuity by the Treasury Officer in a single sum and not by installments. The respondents themselves have referred to this provision and the communication issued by the Principal Accountant Central Administrative Tribunal^{General also records that payment of 50% of DCRG in} installments was contrary to the said rule. Thus, the very manner in which the revised gratuity was sought to be disbursed was not in conformity with the provision which required gratuity to be paid in a single sum.

Once the rule requires gratuity to be paid in a single sum, the applicant cannot reasonably be made to suffer because the administration chose to divide the sanctioned amount into two installments. The applicant had no role in determining the manner in which the GPO was issued or the installments were structured. The fact that one installment was paid and the other remained unpaid cannot, therefore, operate to defeat the applicant's substantive entitlement to the balance amount.

The respondents have relied upon Rule 5.88(2) of the Jammu and Kashmir Treasury Code, under which a Gratuity Payment Order remains in force for one year. The said provision undoubtedly regulates the period during which the Treasury can act upon the payment Central Administrative Tribunal^{authority. However, the expiry of the GPO cannot, in my} considered view, be construed as extinguishing the underlying entitlement of the retired employee to an amount which had already been sanctioned and which remained unpaid. The consequence of expiry of the GPO is that the concerned authorities are to expeditiously undertake the necessary procedural exercise for its revalidation or, where necessary, for issuance of a fresh authority. It cannot mean that the substantive liability itself disappears merely because the administrative authority had not acted upon within its period of validity.

The distinction between the substantive entitlement and the procedural authority to disburse the amount assumes particular importance in the present case. The applicant is not asking the Treasury to act mechanically upon an expired GPO. What he seeks is release of an amount which had already been sanctioned in his favor. If, under the applicable rules, the old GPO cannot now be acted upon, the concerned authorities are required to obtain the Central Administrative Tribunal^{requisite sanction or issue a fresh authority in accordance} with law. The procedural requirement cannot be converted into a substantive defence against payment.

The contention of Respondent No. 2 that there is no specific provision dealing with revalidation of a partially paid GPO also does not persuade me to deny relief to the applicant. The absence of a particular procedural mechanism cannot be treated as extinguishing an otherwise admitted liability. If the existing rules do not provide for revalidation of a partially paid GPO, the appropriate course for the respondents is to obtain the necessary sanction from the competent authority and issue a fresh payment authority, if required. The administrative authorities cannot leave the applicant without a remedy merely because the payment authority issued more than a decade ago was not fully acted upon.

The respondents' own correspondence supports this conclusion. The Treasury authorities acknowledged the applicant's claim and sought revalidation of the GPO. The Central Administrative Tribunal^{Principal Accountant General's office advised that the} matter be settled at the appropriate level and that the competent authority may sanction the outstanding payment. The Treasury thereafter again sought appropriate action. Significantly, the subsequent correspondence also noticed that payment of 50% of DCRG in installments was contrary to Rule 5.86(a). Thus, the inter–se correspondence between the concerned authorities demonstrates that the outstanding amount was duly acknowledged and that a part of the gratuity payable to the applicant continued to remain unpaid.

The correspondence on record, indicates that for about one year the matter remained confined to inter –se communications between the departments/authorities, without any resultant effective or expeditious action for release of unpaid gratuity to the applicant. The applicant cannot be expected to bear the consequence of this inter-departmental uncertainty. He retired in 2008 and the revised gratuity was sanctioned in 2010. The non-payment Central Administrative Tribunal^{of the second installment was not attributable to any act or} omission on his part. There is no material placed before this tribunal to show that the outstanding amount was withheld on account of any disciplinary proceeding, recovery, dispute regarding qualifying service or any other lawful impediment attributable to the applicant. The only difficulty pointed out by the respondents is the expiry of the GPO and the procedural requirement of obtaining a fresh authority.

The applicant's entitlement was not awaiting determination. The gratuity had already been sanctioned and quantified. The only surviving issue is payment of the balance amount. An administrative procedure relating to revalidation or fresh sanction may certainly be necessary after expiry of the GPO, but such procedure cannot be allowed to indefinitely postpone payment of a retiral benefit which had already accrued to the applicant.

The stand of Respondent No. 2 that its role is consequential and that it can act only upon receipt of the Central Administrative Tribunal^{necessary sanction cannot, therefore, be accepted as a} ground for withholding relief. The applicant is not concerned with the internal allocation of functions between the Pension Sanctioning Authority, Finance Department, Principal Accountant General and Treasury. The concerned authorities must coordinate amongst themselves and complete the formalities necessary for payment. An employee who has already retired cannot be required to shuttle from one department to another merely because the authorities have not been able to resolve an internal procedural issue.

As regards Respondent No. 4, namely SKIMS, its contention that it processed the pension case and forwarded the papers for authorization, and that it does not exercise financial control over the actual disbursement of the amount by the Treasury, appears to have substance. In the circumstances, I do not find it necessary to issue any independent direction against Respondent No. 4. The necessary action for release of the outstanding amount Central Administrative Tribunal^{shall be undertaken by the authorities presently competent} to sanction, revalidate and disburse the same.

The applicant has claimed interest at the rate of 18% per annum. The question of grant of interest, however, is required to be determined having regard to the overall facts and circumstances of the case. Considering the prolonged delay in payment of the applicant's retiral dues, the nature of the amount withheld duly sanctioned in favor of the applicant, the failure of the respondents No. 1 to 3 to resolve the matter within a reasonable time. Further, there being no material on record attributing any delay on the part of the applicant, therefore, keeping in view the principles laid down in judicial precedents governing award of interest on the delayed payment of retiral benefits, this Tribunal is of the view that interest at the rate of 6% per annum, simple interest, on the outstanding amount would meet the ends of justice. The claim for interest at the @18% p.a is, accordingly not found justified.

Central Administrative Tribunal^{31.Since the GPO dated 29.04.2010 remained operative for} one year, the interest shall be calculated from 29.04.2011, i.e. upon expiry of the validity period of the GPO, till the date of actual payment.

The applicant approached the Treasury authorities in 2024 after discovering the non-payment of the second installment. There is no material before this Tribunal to establish that the applicant had actual knowledge of the non-payment at any earlier point of time. His subsequent conduct in obtaining the bank statement, approaching the Treasury and pursuing the matter before the concerned authorities demonstrates that he took all necessary steps once the discrepancy came to his notice. The delay preceding his representation, therefore, cannot be treated as a ground for denying him his substantive entitlement.

For the reasons recorded above, I find that the applicant has established his entitlement to the outstanding amount of ₹3,25,000/-, representing the unpaid portion of the revised gratuity sanctioned under GPO No. 240937223-1 Central Administrative Tribunal^{dated 29.04.2010. The expiry of the GPO does not} extinguish the applicant's entitlement to the said amount. The respondents No. 1 to 3 are accordingly required to complete the necessary procedural formalities for revalidation of the GPO or, if such revalidation is not permissible in the case of a partially paid authority, to obtain the requisite sanction from competent authority and issue a fresh payment authority in accordance with law. In this regard if any assistance of Respondent No 4 is required, shall promptly do the needful.

The respondents shall accordingly complete all necessary formalities and release the outstanding principal amount of ₹3,25,000/- in favour of the applicant within a period of six weeks from the date of receipt of a copy of this order. If revalidation of the original GPO is not permissible, the competent authority shall, without further delay, issue the necessary fresh sanction/payment authority for the said amount.

The applicant shall also be paid simple interest at the rate Central Administrative Tribunal^{of 6% per annum, payable by respondents No 1 to 3 on} the outstanding amount of ₹3,25,000/- with effect from 29.04.2011 till the date of actual payment. The concerned authority shall prepare the calculation of the principal amount and interest and communicate the same to the applicant within two weeks from the date of this order.

The respondents shall complete the exercise inter se and shall not require the applicant to approach different departments separately for obtaining revalidation, sanction or fresh authorization. The requirement of inter-departmental consultation, if any, shall be completed by the respondents themselves. The respondents shall also ensure that the matter does not remain pending beyond the stipulated period merely on account of correspondence between the Treasury, Finance Department, Principal Accountant General or any other concerned authority.

In the event the outstanding amount is not released within the period of six weeks stipulated herein, the unpaid amount shall thereafter carry interest at the rate of 9% per Central Administrative Tribunal^{annum, payable by respondents No 1 to 3, from the date} of expiry of the said six-week period until actual payment.

Having regard to the fact that the applicant has been deprived of a part of his retiral gratuity for an extraordinarily long period on account of negligence and fault of the respondents No 1 to 3 and was compelled to approach this Tribunal for release of an amount which had already been sanctioned in his favour, the respondents except respondent No 4 shall also pay costs of ₹10,000/-to the applicant.

The concerned Secretary/Head of the Department shall ensure compliance with these directions through a responsible officer and shall ensure that the matter is taken to its logical conclusion without any further avoidable delay within the stipulated period. A compliance report, along with proof of payment and a calculation sheet showing the principal amount and interest paid to the applicant, shall be placed on record within eight weeks from the date of this order.

Central Administrative Tribunal^{40.It is observed that retiral benefits are not a matter of grace} or charity. Once such benefits have accrued to an employee under the governing rules and have been quantified and sanctioned by the competent authority, the administration is under an obligation to ensure their timely and complete disbursement. Procedural requirements relating to the validity or revalidation of a payment authority are intended to facilitate lawful payment and ensure financial discipline; they cannot be permitted to defeat or indefinitely postpone the substantive entitlement of a retired employee. In the present case, the applicant has already waited for an unreasonably long period for receipt of a part of his gratuity. This Tribunal is sanguine that the respondents shall ensure strict and expeditious compliance with the directions contained herein.

The Original Application is accordingly allowed in the above terms. Pending miscellaneous applications, if any, shall also stand disposed of.

Registry shall consign the record to the Record Room Central Administrative Tribunal^{after due compliance.}