Holding

Since the respondent’s applicable scale of pay had not been finally fixed, the High Court could not validly order payment of pension with interest; the pension must be computed on the undisputed scale and paid subject to the pending decision.

Summary

The respondent, D.L. Uppal, retired on 31 January 1994 and claimed his pension, which had not been paid. The Punjab & Haryana High Court ordered payment of gratuity with 12% interest and directed that the pension be computed on the basis of his last drawn emoluments, subject to a pending determination of the correct scale of pay, and that interest be paid on the arrears. The State appealed, contending that the pension could not be fixed or attract interest until the scale of pay was finally decided. The Supreme Court held that, because the applicable scale of pay was still pending, the High Court could not validly order payment of pension with interest. Accordingly, the Court reversed the High Court order, directing the State to compute the pension on the undisputed scale of pay and pay it within two months, and to release the gratuity within four weeks, subject to the final decision on the scale. The appeal was allowed and no costs were awarded.

Issues considered

Whether the High Court could direct payment of pension with interest when the scale of pay on which the pension depends is still pending determination
Whether the State is liable to compute and pay pension on the basis of last drawn emoluments subject to a pending decision on the applicable scale of pay
Whether interest can be awarded on pension arrears in the absence of a final determination of the scale of pay

Subjects

service lawpensiongratuityinterestscale of payhigh court orderappellate jurisdictionspecial leavecomputation of pension

Judgment

A STATE OF HARYANA AND ORS.
v.
D.L. VPPAL

J ANVARY 19, 1996

B [K. RAMASWAMY AND G.T. NANAVATI, JJ.]

Se1vice Law :

Pe11sio11ary be11efit;~Payme11t of-Delay in-High Cowt orde1ing pay-
C me11t of gratuity and pensio11 011 the basis of emolume11ts last draw11-Subject
to final decisio11 regarding scale of pay-Interest also allowed-Held : Si11ce
matter regarding scale of pay pendi11g in High Cowt, State Govt. could not
fix the pension-High Cowt's order regardi11g payme11t of gratuity and pension
with interest reversed-State Govenunent directed to con1pute }Jension on the
undisputed scale and pay the same within two months subject to the decision
D in pending case;-Gratuity to be paid within four weeks.
CIVIL APPELLATE JURISDICTION : Civil. Appeal No. 2856 of
1996.

From the Judgment and Order dated 25.7.94 of the Punjab &
E Haryana High Court in C.W.P. No. 8687 of 1994.

Ms. Nisha Bagchi for Ms. lndu Malhotra for the Appellants.

Pankaj Kalra and Beldev Krishan for the Respondent.

F The following Order of the Court was delivered :

Leave granted.

We have heard counsel on both sides. This appeal by special leave
arises from the order of the Division Bench of the Punjab & Haryana High
G Court made iii C.W.P. No. 8687 of 1994 on July 25, 1994. The respondent
had retired on January 31, 1994 and he claimed his pension and since his
pension has not been paid, he invoked the jurisdiction of the High Court.
In the impugned order, the High Court has directed to pay to the respon-
dent the gratuity with 12% interest thereon within one month from the date
of judgment. It further directed to determine the pension of the respondent
H on the basis of the emoluments last drawn by him which would be subject
818
STATEv. D.L. UPPAL 819

to the final decision that may be made in regard to the actual scale of pay A
' l to which he is eligible and on the basis of which pension may be computed.
Arrears paid would be adjustable thereafter. Accordingly, direction was
given to pay the pension with interest at the rate of 12% p.a. Thus, this
appeal by special leave.

We issued notice only to see that when the dispute as regards the B
computation of pension is pending, how the liability could be fastened with
interest for non-fixation of the pension. Mr. Pankaj Kalra, learned counsel
appearing for the respondent has stated that the respondent's entitlement
is to be computed on the basis of last drawn scale of pay as found by the
High Court which would be adjusted after the fixation of pay. According C
to the learned counsel, even fixation of pay has been correctly done.
Therefore, there is inaction on the part of the State in computing the
pension payable to the respondent. He further contends that persons
similarly situated are being paid pension while the same is being denied to
the respondent. It is contended by the appellants that the scale of pay was
provisionally fixed and this is the matter under consideration. Until it is D
decided, the State is unable to determine the pension payable to the
respondent. Under these circumstances, there is no slackness on the part
of the State in determining the pension payable to the respondent.

Having considered the respective contentions, we are of the view that
the High Court's view is not correct. So long as the scale of pay to which E
the respondent is entitled has not been determined, necessarily the State
Government cannot fix the pension and that is the matter now pending
decision in the High Court. No doubt, specifically no reference is made to
the respondent before fixing the scale of pay and the action of the other
subordinates has been impugned by the State.
F
Under these circumstances, the order of the High Court is reversed.
The appellants are directed to compute the pension on the undisputed
scale of pay and pay the same within a period of two months from the date
of decision. It would be subject to the decision in the pending cases. The
State is directed to decide within six weeks from the date of receipt of a G
copy of this order. The State is also directed to release the gratuity payable
i to the respondent within four weeks from today.

The appeal is allowed. No costs.

G.N. Appeal allowed.