Withholding Pension Payments During Vigilance Proceedings Justified: Kerala High Court

Background

S. Gopalakrishnan Potti was suspended in 2000 while serving as Joint Development Commissioner, following the registration of a vigilance case. Although he was reinstated in 2001, his promotion was withheld due to the ongoing case. Subsequently, he was promoted as Additional Development Commissioner in 2008, pursuant to an interim order by the High Court, and he retired later that year. A bond was executed in April 2009, but his pensionary benefits were delayed until July 2011, even after his acquittal in 2010. The petitioner sought penal interest for the period between 2009 and 2012, claiming that similar employees had received timely benefits.

Arguments

The petitioner argued that his pension and gratuity should not have been delayed, particularly as others facing similar cases had received their benefits on time. He emphasized that he had been acquitted honorably, and there was no reason for the delay in authorizing his dues. He further contended that his suspension period should have been regularized and that he deserved back wages and penal interest.

The State, represented by Senior Government Pleader A.J. Varghese, countered that the petitioner was denied promotion under Rule 31(a)(i) of the Kerala State and Subordinate Service Rules due to the vigilance case. It was submitted that pensionary benefits were disbursed as per statutory guidelines, specifically Rule 3A(a) of Part III Kerala Service Rules (KSR), which permits withholding benefits during pending disciplinary proceedings. The State argued that there was no undue delay, as benefits were disbursed promptly following the petitioner's acquittal.

Court's Reasoning

The court upheld the KAT's view that withholding pensionary benefits during the pendency of disciplinary or vigilance proceedings is justified under Rule 3A(a) of Part III KSR. The court distinguished the petitioner's case from precedents such as Ramesh Kumar v. Union of India (AIR 2015 SC 2904), where back wages were awarded due to an administrative error, not due to a vigilance case. Addressing the petitioner's argument for penal interest, the court noted that the delay fell within the permissible period of three years. Further, it noted R. Muraleedharan v. State of Kerala (2015 (3) KLT 755) clarified that benefits delayed due to judicial proceedings are not subject to penal interest.

The court emphasized that promotions granted retrospectively do not automatically entitle the beneficiary to back wages unless there was a wrongful denial of promotion. It concluded that the petitioner's promotion was delayed due to valid reasons and that his notional promotion did not warrant monetary benefits. Lastly, the court reiterated that the High Court's jurisdiction under Article 226 and 227 is supervisory, not appellate. It cannot re-evaluate factual findings of the Tribunal unless there is a manifest error, which was not evident in this case. The petition for penal interest and back wages was dismissed.

Counsel for the Petitioner: Mr. K. Jaju Babu (Sr.), Mr. P.P. Kurien, and Ms. M.U. Vijayalakshmi

Counsel for the Respondents: Mr. A.J. Varghese, Senior Government Pleader

Case Title: S. Gopalakrishnan Potti v State of Kerala and Another

Citation: 2024 LiveLaw (Ker) 707

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