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Nagar Nigam, Kanpur Nagar Thru' Municipal Commissioner & Anr v. Smt. Rajji - SPECIAL APPEAL No. 693 of 2006 [2006] RD-AH 11051 (6 July 2006)


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Court No. 32

Special Appeal No. 693 of 2006

Nagar Nigam, Kanpur Nagar & another


Smt. Rajji

Hon'ble S.Rafat Alam, J.

Hon'ble Sudhir Agarwal, J.

This special appeal, under the Rules of the Court, is preferred against the judgment of the Hon'ble Single Judge of this Court dated 22.5.2006 allowing the writ petition of the sole respondent with the direction that the appellants shall make payment of retiral dues and pension of the petitioner-respondent with compound interest at the rate of 10% per annum from due date till the date of payment within a period of two months and further shall continue to pay pension, provided her service is pensionable, month to month as and when it falls due.

During the course of submission learned counsel for the appellants confined his submission mainly to the rate of interest awarded by the Hon'ble Single Judge. He contended that the delay in the payment was due to financial crunches and was not deliberate or willful. It is also submitted that in similar other matters this Court has allowed simple interest at the lesser rate. He further submits that the Nigar Nigam is already facing great hardship on account of financial constraint and thus, it would be equitable in the interest of justice that the rate of interest may be at least lower and simple. It is further submitted that in the backdrop of the financial condition of the Nagar Nigam grant of compound interest at the rate of 10% per annum is highly excessive and would cause great hardship to the Nagar Nigam which has to provide civic amenities to the citizens. He further placed reliance on the judgment dated 6.12.2005 in Civil Misc. Writ Petition No. 33804 of 2004 wherein the appellant was respondent and submitted that the grievance was identical to that of the petitioner-respondent and the Hon'ble Court having considered all aspects of the matter allowed 6% simple interest on the arrears of the retiral benefits. It is also submitted that it is not the case where no retiral benefits were paid to the petitioner, but in fact after retirement all the retiral benefits were paid from time to time. Subsequently, with the revised scale of pension and gratuity, some arrears accrued, which could not be paid to the petitioner on account of acute financial crisis prevailing in Nagar Nigam. The period of arrears of revised pension and gratuity is May 2004 to January 2005 and March 2006 to June 2006. He, therefore, submit that non-payment of the aforesaid arrears of revised benefits was not deliberate but for financial crisis, which was beyond their control.

Learned counsel for the respondent, opposing the appeal, submitted that the judgment impugned in this appeal does not require any interference. He, however, admitted that all the retiral benefits were actually paid in time and the dispute pertains only to the revised gratuity and pension for the period as pointed out by the learned counsel for the appellant.

Thus, it appears from the submissions made before us and the pleadings that the petitioner respondent was getting pension regularly after the retirement and other retiral benefits were also paid from time to time, and only the arrears on account of revision of pay scale accrued in pension and gratuity was not paid. It is also not disputed before us that this situation is not only in respect of petitioner-respondent but has prevailed in respect of other employees also. It is also not the case of the petitioner-respondent that he has only been discriminated. Therefore, keeping in view all these aspects and also looking to the facts of the case and also keeping in view that only the revised pension and benefits for a period of two years could not be paid and the rate of interest prevailing in the Banks and Govt. departments have reduced substantially during the aforesaid period, we are of the view that 10% interest on compound basis allowed by the Hon'ble Single Judge is excessive.

We, therefore, in the facts and circumstances of the case, modify the judgment under appeal dated 22.5.2006 to the extent that the petitioner-respondent shall be entitled for payment of retiral benefits as directed by the learned Single Judge with simple interest at the rate of 6%. Rest of the order under appeal is affirmed.

Accordingly, the Special Appeal is partly allowed and the judgment under appeal is affirmed subject to the aforesaid modifications.

Dated. 6.7.2006



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