M. Gopalakrishnan v. The Union of India, rep. by Secretary to Government, Finance (Banking) Department, New Delhi

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 16.7.2008C O R A M :THE HONOURABLE MR. JUSTICE K. CHANDRUW.P.No.36342 of 2003M.Gopalakrishnan .. Petitioner-vs-1. The Union of India, rep.by Secretary to Government, Finance (Banking) Department, New Delhi.2. The Chairman & Managing Director, Indian Bank, 31, Rajaji Salai, Chennai-600 001. .. RespondentsPRAYER : Petition filed under Article 226 of the Constitution ofIndia praying for the issuance of a writ of mandamus directing therespondents herein to settle all the terminal and pensionarybenefits due to the petitioner together with interest at 18% perannum from 31.12.1995 till the date of actual payment within a timeframe. For petitioner :: Mr.R.Subramanian, SC for Mrs.S.Hemalatha For respondents :: Mr.V.Balasubramanian, SCGSC (R1) Mr.G.Venkatraman for M/s.Aiyar & Dolia (R2) O R D E R The writ petition is filed for a direction to the respondentsto settle all the terminal benefits including pension due to thepetitioner together with interest at the rate of 18% per annum from31.12.1995 till the date of actual payment.2. When the matter came up for admission on 11.12.2003, thelearned counsel for the second respondent bank took notice of thewrit petition. Subsequently, the matter was adjourned on severaldates and finally was admitted on 16.2.2004. Later, an applicationwas also filed for fixing an early date. That application wasordered on 24.7.2007. Till date, the first respondent union of India https://hcservices.ecourts.gov.in/hcservices/ had not filed any counter affidavit. It is only the secondrespondent, who had filed a counter affidavit dated ''nil'' (March2008).3. It is seen from the records that the petitioner had joinedas a Probationary Officer in the second respondent bank, even beforeits nationalisation, in the year 1959. He had worked in variouscapacities and occupied the post of General Manager till 01.7.1987.Subsequently, he was appointed as the Executive Director of the bankby the Government of India on 02.7.1987. He later became theChairman and Managing Director of the Bank. 4. When he was an officer of the bank, he was governed by theService Regulations, PF rules and gratuity rules applicable toofficers. On his relinguishment, the second respondent bank settledthe terminal benefits, such as, provident fund and gratuity upto thelevel of General Manager. The provident fund accumulation standingto his credit was also settled on 21.9.1987. He also encashed hisprivilege leave on 26.2.1988. When he became the Executive Directorand thereafter the Chairman-cum-Managing Director, being a wholetime director, he was governed by the terms and conditions underwhich he was appointed by the first respondent Union of India.Though he had reached the age of superannuation as on 31.12.1995, hewas not paid his terminal benefits. 5. The second respondent had taken a stand that since the firstrespondent by a communication dated 30.12.1995 informed him not torelease the terminal benefits on account of the pendency of thecriminal cases against the petitioner, they have not released thesame. He was not entitled to receive the terminal benefits in viewof the pendency of the criminal cases. It was also informed that thepetitioner's contributory provident fund was released on 31.1.2005.A list of cases pending against the petitioner filed by the CBI,which were either pending investigation or pending trial before aSpecial Court, was enclosed along with the counter affidavit. In theadditional typed set of papers filed by the second respondent, therecords relating to various payments were enclosed, the receipt ofwhich is not denied by the petitioner. 6. The communications received from the first respondent Unionof India, dated 08.6.2004 and 30.12.2005 may be usefully reproducedbelow:-''A.Communication dated 08.6.2004 received from theUnder Secretary to Government of India, Ministry ofFinance, Department of Economic Affairs (BankingDivisions): "I am directed to refer to your letter dated24.12.2003 addressed to Secretary (Financial Sector) onthe subjected cited above. The matter has been considered https://hcservices.ecourts.gov.in/hcservices/ in consultation of Reserve Bank of India. It is advisedthat the terminal benefits due to Shri M.Gopalakrishnanmay not be released by the bank until furtherinstructions from the Government.2. You are requested that counter affidavit onbehalf of the bank may be got prepared and a copy ofthe same be forwarded to this Division for filing thesimilar counter in the matter".B.Communication dated 30.12.2005:-"The tenure of Shri M.Gopalakrishnan, as CMD,Indian Bank will expire on 31.1.1995. It is advisedthat the terminal benefits like Provident Fund,Gratuity, Leave Encashment etc. due to ShriGopalakrishnan may not be released by the bank untilfurther instructions from the Government."7. In accordance with these two communications sent by theGovernment of India in the counter affidavit filed by the secondrespondent, in paragraph 6, it was averred as follows:-''6. .... However, on his superannuation on 31.12.1995,the Ministry of Finance sent a communication to thisrespondent on 30.12.1995 bearing No.20/02/1987 B O Iadvising this respondent not to release the terminalbenefits. I submit that incidentally the casesinitiated by the Central Bureau of Investigationagainst the petitioner are pending and as such thepetitioner may not be entitled to receive the terminalbenefits at this stage... ... "But, however, the legal authority for taking such a stand has notbeen shown. 8. Mr.G.Venkataraman, learned counsel appearing for M/s.Aiyarand Dolia also submitted that since the petitioner had not optedwithin the time stipulated under the Indian Bank (Employees) PensionRegulations, 1995 and also not remitted the amounts received, he isnot eligible for any pension. In support of this proposition, herelied upon the judgment of the Supreme Court in Jai SinghB.Chauhan -vs- Punjab National Bank reported in AIR 2005 SC 3134. Ashe placed reliance upon paragraphs 8 and 9, they may be usefullyreproduced below:-''8. As per Regulation 3(3)(b) option was to beexercised in writing within one hundred and twenty daysfrom the notified date to become member of the fund"."9. Regulation 3(3)(c) is also of considerableimportance. It required transfer of the entirecontribution of the Bank along with interest accrued https://hcservices.ecourts.gov.in/hcservices/ thereon to the credit of the fund constituted for thepurpose under Regulation 5, and authorized trust of fromthe amount of the Provident Fund of the Bank to takeeffect the transfer". 9. The respondents cannot blow hot and cold on the issuerelating to the petitioner's pension. By the time the petitioner hadreached his age of superannuation, namely, 31.12.1995, he hadcompleted 36 years of service. In the absence of any orderinterdicting the same, he is eligible for all terminal benefitsincluding superannuation pension. It is only because of the firstrespondent's letter advising them not to pay the pensionarybenefits, the second respondent had not paid his pension and not forthe reason now adduced in the counter affidavit. 10. If the petitioner is involved in any criminal case asmentioned in the counter affidavit, then the Criminal Court willhave to take care of making recoveries from the properties of thepetitioner if a decision is rendered against him. But till suchtime, the respondents cannot withhold payment of terminal benefitsincluding pension. The first respondent has also not come up withany counter affidavit to justify the legal denial of terminalbenefits to the petitioner. The decision in Jai Singh B.Chauhan'scase (cited supra) relied on by the second respondent's counsel hasno bearing on the present case. It was the definite stand of thebank that they will consider the payment of pension on the basis ofthe conclusion of the criminal proceedings. Even this stand theywere forced to take because of the communication received by thefirst respondent.11. Under the circumstances, the writ petition stands allowed.The respondents are directed to pay all the terminal benefitsincluding the superannuation pension to the petitioner within aperiod of eight weeks from the date of receipt of a copy of thisorder. Since the pension has been withheld without any legaljustification, the petitioner is also entitled to get interest @ 9%per annum on the amounts withheld from the date of superannuation,i.e. 31.12.1995 till the date of payment. However, there will be noorder as to costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.js https://hcservices.ecourts.gov.in/hcservices/ To1. The Secretary to Government of India, Finance (Banking) Department, New Delhi.2. The Chairman & Managing Director, Indian Bank, 31, Rajaji Salai, Chennai-600 001. 1 cc to Ms.Hemalatha, Advocate, SR. 377181 cc to Mr.V. Balasubramanian, Advocate, SR. 37591W.P.No.36342 of 2003CK (CO)kk 5/1