# Smt. Sharda Devi v. General Manager, S.B.I., Lko & Ors

- **Citation:** (2024) 1 ILRA 1203
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-12-21
- **Case number:** Writ-A No. 7332 of 2023
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-sharda-devi-v-general-manager-s-b-i-lko-ors-50853
- **Pages:** 12

## Headnote

A. Service Law - Ex gratia - Nature - As a
matter of right or as a grace of Bank -
1204 INDIAN LAW REPORTS ALLAHABAD SERIES
Delay in payment - Interest claimed -
Permissibility - Held, ex gratia is an
entitlement under a scheme framed by the
Government
and
adopted
by
the
respondent Bank - The dependents of an
employee, who dies in harness, have a
right to receive a lump sum payment
determined
in
accordance
with
the
scheme, which is just called 'ex gratia'.
The entitlement to receive ex gratia by the
dependents of an employee of the Bank
dying in harness is, therefore, a matter of
right; not the outcome of an act of grace
by the respondent Bank - Petitioner had a
right to receive interest for the delay in
the payment of ex gratia lump sum. (Para
20 and 24)

Writ petition allowed. (E-1)

List of cases cited:

## Text

1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1203

20. In the present facts and
circumstances, it is, therefore, quite evident
that rejection of petitioner's claim for
reimbursement on the ground that it was
not within a time frame indicated in the
Rules of 2011 is not in consonance with the
judgments
rendered.
Therefore,
such
contentions by the opposite parties are
rejected.

21. So far as the second ground for
rejection is concerned, it is also evident
from the letter dated 07.04.2022 issued
by the Chief Medical Officer, Pratapgarh
that claims of petitioner for medical
reimbursement were verified and found
established and corroborated whereafter
recommendation
was
made
by
the
concerned authority in accordance with
rules. The letter dated 07.04.2022 issued
by the Chief Medical Officer does not
indicate
that
petitioner's
claim
for
reimbursement was not in the proper
format. Therefore, it does not stand a
reason that such a ground is being taken
for the first time by the opposite parties
in counter affidavit which has been filed.

22. Once petitioner has submitted
original receipts and bills regarding
reimbursement of claims pertaining to
expenses incurred on treatment of his
deceased wife and the same have been
verified by the competent authority, such
claim cannot be permitted to be denied
mainly on the technical ground that it is
not in the prescribed format.

23. Considering the aforesaid
discussions, it is evident that the twin
grounds taken by the opposite parties to
deny
petitioner's
claim
for
reimbursement were not in accordance
with either rules or the judgments
indicated here-in-above.

24. In consideration thereof, a writ in
the
nature
of
mandamus
is
issued
commanding the opposite party no.2, i.e
The Director, Technical Education, Uttar
Pradesh, Vikas Nagar, Kanpur and other
competent authorities to ensure payment of
reimbursement of amount of Rs.3,04,935/-
to petitioner within a period of six weeks
from the date of certified copy of this order
is produced before the said authority. In
view of the fact that petitioner's claims are
lying unattended since 07.04.2022 (the date
when they were verified by the Chief
Medical Officer, Pratapgarh), it is directed
that interest at the rate of 8% per annum on
the outstanding amount shall also be
payable to petitioner with effect from
07.04.2022 till the date of actual payment.

25.

Resultantly,
the
petition
succeeded and is allowed.

26. Parties to bear their own costs.
----------
(2024) 1 ILRA 1203
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.12.2023

BEFORE

THE HON'BLE J.J. MUNIR, J.

Writ-A No. 7332 of 2023

Smt. Sharda Devi ...Petitioner
Versus
General Manager, S.B.I., Lko & Ors.
 ...Respondents

Counsel for the Petitioner:
Sri Arvind Prabodh Dubey

Counsel for the Respondents:
Sri Satish Chaturvedi

A. Service Law - Ex gratia - Nature - As a
matter of right or as a grace of Bank -
1204 INDIAN LAW REPORTS ALLAHABAD SERIES
Delay in payment - Interest claimed -
Permissibility - Held, ex gratia is an
entitlement under a scheme framed by the
Government
and
adopted
by
the
respondent Bank - The dependents of an
employee, who dies in harness, have a
right to receive a lump sum payment
determined
in
accordance
with
the
scheme, which is just called 'ex gratia'.
The entitlement to receive ex gratia by the
dependents of an employee of the Bank
dying in harness is, therefore, a matter of
right; not the outcome of an act of grace
by the respondent Bank - Petitioner had a
right to receive interest for the delay in
the payment of ex gratia lump sum. (Para
20 and 24)

Writ petition allowed. (E-1)

List of cases cited:

1. U.O.I.& anr. Vs Manorma Devi; 2022 SCC
OnLine Del 674

(Delivered by Hon'ble J.J. Munir, J.)

1. The petitioner's husband, the late
Indra
Mani
Yadav
was
a
Class-III
employee in the service of the State Bank
of India. He was posted at the State Bank
of India, Branch Khalilabad, District Sant
Kabir Nagar in the year 2007. He met with
an accident and died in harness on
31.12.2007. The petitioner, the deceased
employee's widow, moved the respondent
Bank, seeking payment of death-retirement
benefits on account of her husband's
services. These benefits were paid to the
petitioner by the Bank.

2. The petitioner next moved an
application
seeking
compassionate
appointment for her son. The Bank
responded to the petitioner's application by
their memo dated 01.12.2011 saying that
w.e.f. 04.08.2005, the Establishment had
discontinued
granting
compassionate
appointment, but in its stead, pay a lump
sum money, styled as ex gratia. It was said
in the memo dated 01.12.2011 that the
Bank were forwarding to the petitioner an
application form for the payment of ex
gratia, which the petitioner may, within a
week of receipt thereof, submit to the
Bank, completing all other formalities
required.

3. The petitioner says that she
submitted the application form to the
Khalilabad Branch of the Bank on
13.12.2011, a copy of which is on record
as Annexure No.3 to the writ petition.
This application is in a printed proforma,
filled up with grueling details and
information.

4. It is the petitioner's case that after
submitting her application form for
payment of the ex gratia, she submitted
several representations to expedite it, but
all that she received was assurance
extended by different officials of the
Bank. The petitioner, being the widow of
a deceased Bank employee, had faith in
the higher officials of that organization
and trusted them for their word. She
moved a representation dated 22.09.2012,
followed by another dated 23.11.2012,
requesting payment of the ex gratia, to
which
she
was
entitled.
These
applications were duly received by the
respondent Bank. After a substantial
period of this chase and false assurances
extended, the petitioner was compelled to
institute Writ-A No.12428 of 2022 before
this Court, seeking a direction to the Bank
to release the ex gratia payable to her and
further to consider her representation dated
27.12.2021. This petition was disposed of
by this Court vide an order dated
01.09.2022,
directing
the
Regional
Manager, State Bank of India, Gorakhpur
to decide the petitioner's representation and
also look into her grievance about the non-
1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1205
payment of ex gratia in terms of the claim.
It was also ordered that the ex gratia, found
due to the petitioner, be paid to her within a
period of six weeks from the date a
certified copy of the order was produced
before the Bank. In compliance with the
orders
passed
by
this
Court,
the
respondent Bank paid the petitioner's ex
gratia on 01.09.2022, the sum of money
paid being Rs.7 lacs. The petitioner
expected that the payment made, being
one after a long lapse of time, would
carry interest, but that was not paid.

5. It is the petitioner's case that the
respondent
Bank
officials,
despite
knowledge of the fact that her husband
had died in harness in the year 2007, did
not choose to pay her the ex gratia, to
which she was then entitled under the
relevant scheme. It is also asserted on
behalf of the petitioner that after moving
an application for the payment of ex
gratia on 19.12.2011, the said sum of
money was paid by the Bank on
19.11.2022, to wit, after a lapse of 11
years. It is the petitioner's case that
though she is entitled to the payment of
ex gratia on account of her husband's
demise in harness that payment was
withheld for more than a decade, due to
lethargy and inaction of the respondents
in breach of their duty.

6. The petitioner, after receipt of the
ex gratia, moved an application on
06.12.2022, followed by another dated
17,12,2022, requesting payment of the
accrued interest. The petitioner asserts
that no decision was taken by the Bank
with regard to her claim for payment of
interest on account of all this delay. She
has, therefore, instituted the present writ
petition, praying that a mandamus be issued
to the respondent Bank to pay due interest
on the delayed disbursement of the ex
gratia.

7. A counter affidavit has been filed
on behalf of the Bank, where receipt of the
petitioner's application dated 13.12.2011
for payment of ex gratia has been denied
by the Branch concerned. The stand of the
Bank with regard to receipt of the
petitioner's application aforesaid can best
be understood by the following averments
in Paragraph No.7 of the counter affidavit:

"7. ......... The deponent sought
the confirmation about the availability of
the application of the petitioner stated to be
dated 13.12.2011 however, the branch has
informed that no such application was
received in the branch. Deponent submits
that the branch manager has informed that
the branch possess the copy of the writ
petition no 12428 of 2022 and the
annexures filed therewith by the petitioner.
The deponent also sought the information
from the regional office and the present
regional office has also informed that no
such application is traceable in the regional
office/not available in the concerned file
available in the region."

8. The receipt of other applications
was also denied by the Bank, as also
assurance given by higher officials, as they
are called, by the Bank. It is pleaded on
behalf of the Bank that the order of this
Court dated 01.09.2022, passed in Writ-A
No.12428 of 2022, directs the Bank to
release the petitioner's ex gratia, but does
not order payment of interest. It is also
pleaded by the Bank that the petitioner
applied for ex gratia on 10.10.2022 and it
was paid to her promptly thereafter on
19.11.2022. It is also the respondent Bank's
case that ex gratia is paid after the
beneficiary applies for it in prescribed
1206 INDIAN LAW REPORTS ALLAHABAD SERIES
format, complete in all respects. Here, the
application dated 10.10.2022 was received
in the Bank after the petitioner had filed
Writ-A No.12428 of 2022. The receipt of
other applications has been denied. In
Paragraph
No.15
of
their
counter
affidavit,
the
Bank
say
that
after
considering the petitioner's application
dated 19.12.2022 for the payment of
interest on the ex gratia, they declined it
as there is no provision in the scheme for
payment of interest.

9. Heard Mr. Arvind Prabodh
Dubey, learned Counsel for the petitioner
and Mr. Satish Chaturvedi, learned
Counsel for the respondents.

10. The question involved is: If the
petitioner is entitled to award of interest
on the payment of ex gratia released with
delay? The other question involved is:
Whether at all there was a delay in the
payment of ex gratia? On facts here, it
would be more logical to answer the
second question first. This involves an
issue of fact if the petitioner was
responsible for delay in the payment of
ex gratia due to her. This stand of the
respondent
Bank
postulates
that
a
dependent of an employee, who dies in
harness, is not entitled to receive ex
gratia unless he/ she applies for it. To this
end, they have pressed in aid their very
comprehensive application form, which a
dependent, seeking payment of ex gratia,
must fill up and submit in order to be
entitled
to
it.
A
question
would,
therefore, arise, apart from the fact if the
petitioner did actually make her application
promptly or belatedly, if the making of an
application is the duty of a dependent of the
deceased, like a money claim, which
cannot otherwise be paid? Or, it is the duty
of the Bank, whose employee has died in
harness leaving dependents eligible under
the ex gratia scheme, to facilitate them in
applying promptly.

11. At the hearing of this petition, Mr.
Satish Chaturvedi placed before this Court
a copy of the State Bank of India Corporate
Centre Mumbai Circular No. CDO/P&HRPM/65/2014-15 dated 27th December,
2014. It would be apposite to set out this
circular in all its detail. It reads:

"All branches and offices of

State Bank of India

Madam/ Dear Sir

(I)
SBI
SCHEME
FOR
COMPASSIONATE APPOINTMENT IN
EXCEPTIONAL CIRCUMSTANCES

(II)
SBI
SCHEME
FOR
PAYMENT OF EX-GRATIA LUMPSUM
AMOUNT
IN
LIEU
OF
COMPASSIONATE APPOINTMENT

Please refer to our circular letter
No. CDO/P&HRD-PM/28/2005-06 dated
04th August 2005 and e-circular Nos.
CDO/P&HRD-PM/20/2011-12,
CDO/P&HRD-PM/06/2012-13
and
CDO/P&HR-PM/75/2013-14 dated 13th
May, 2011, 17th April, 2012 and 25th
February, 2014 respectively.

2. Following receipt of recent
communication from Ministry of Finance,
GOI vide letter F.No. 18/2/2013-IR dated
5th December 2014 that all Public Sector
Banks can have both the options i.e.
compassionate appointment or payment of
lumpsum ex-gratia amount, the Executive
Committee of the Central Board of the
Bank in its meeting held on 23rd
December, 2014 has approved continuation
of following two schemes duly modified as
under:
1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1207

A. Scheme for Compassionate
Appointment in exceptional circumstances
(As per Annexure-l and 'B-1', B-2′).

B. Scheme for payment of exgratia
lumpsum
amount
in
lieu
of
Compassionate
Appointment
with
following modifications:

Existing
Exgratia Scheme
Revised
Ex-gratia
Scheme (effective from
05.08.2014)
Cadre
Maxi
mum
Amou
nt of
Exgratia
Minimum
50%
Amount
of
Ex-
gratia
payable
on
account
of
not
fulfilling
penury
norms of
monthly
income of
family
less than
60%
of
last
drawn
salary of
deceased
employee
net
of
taxes
Maxim
um
Amount
of Exgratia
Minimum 50%
Amount of Ex-
gratia
payable
on account of
not
fulfilling
penury
norms
of
monthly
income
of
family less than
75%
of
last
drawn salary of
deceased
employee net of
taxes
Superv
ising
Rs.10
.00
lac
Rs.5.50
lac
Rs.14.0
0 lac
Rs.7.00 lac
Cleric
al
Rs.9.
00 lac
Rs.4.00
lac
Rs.12.0
0 lac
Rs.6.00 lac
Subor
dinate
Rs.8.
00 lac
 Rs.4.00
lac
Rs.10.0
0 lac
Rs.5.00 lac

C. The dependants of deceased
employees falling under Scheme (A) i.e.
where death is treated as in "Exceptional
Circumstances" will have the option to
chose either compassionate appointment or
ex-gratia lump sum amount as per the
eligibility under the scheme.

However, in all other cases of
death as also in case of premature
retirement due to incapacitation before
reaching the age of 55 years, only ex-gratia
lumpsum amount will be paid as per the
eligibility
and
no
compassionate
anointment will be considered.

3. All other instructions relating
to the scheme for Payment of Ex-gratia
lumpsum amount shall remain unchanged.

4. Both the modified schemes
will be effective from 05.08.2014 and all
cases of death/premature retirement on
medical ground occurred before 05.08.2014
will be dealt with as per the respective old
schemes.

5. Please bring the contents of the
circular to the knowledge of all concerned.

Yours faithfully

(Ashwini Mehra)

Deputy Managing Director &
Corporate Development Officer"

12. A reading of the corporate office
circular dated 27th December, 2014 would
show that earlier the State Bank of India
had a scheme for ex gratia payment in the
event of death in harness, but no provision
for offering compassionate appointment.
However,
acting
in
terms
of
a
communication from the Ministry of
Finance, Government of India carried in the
letter bearing No. F.No. 18/2/2013-R dated
5th December, 2014, the Central Board of
the State Bank of India in their meeting
held on 23rd December, 2014, approved
1208 INDIAN LAW REPORTS ALLAHABAD SERIES
the continuation of the ex gratia scheme,
already in vogue, and accepted the scheme
for compassionate appointment modified in
the terms indicated in the corporate office
circular dated 27th December, 2014. A
reading
of
the
circular
dated
27th
December, 2014 would show that whereas
compassionate appointment is available in
the two exceptional circumstances recorded
in
the
scheme
for
compassionate
appointment, the existing ex gratia scheme
revised
w.e.f.
05.08.2014,
would
be
available in all other cases of death or
premature retirement due to incapacitation
before reaching the age of 55 years.
Therefore, in cases of death, the payment of
ex gratia lump sum is a right of the
dependents, who are eligible under the
scheme and not a discretion available with
the respondent Bank, subject to fulfillment
of conditions as in case of compassionate
appointment.

13. This Court is mindful of the fact
that the petitioner's husband died prior to
revision of the ex gratia scheme w.e.f.
05.08.2014, but there was an existing ex
gratia scheme, that was always in vogue. It
was, therefore, the duty of the respondent
Bank to have ensured that the petitioner,
upon the demise of her husband, was
facilitated in submitting her application for
the award of ex gratia lump sum. The
respondents cannot be heard to say that
because the petitioner did not proactively
assert her claim when they sent her the ex
gratia payment form, her entitlement to
receive it would commence when she
actually made the application. In fact, the
petitioner's entitlement to receive the ex
gratia lump sum is not at all dependent
upon the petitioner, or for that matter, any
other dependent of the deceased employee,
filling up the prescribed form; the right
accrues upon the death in harness of an
employee, whose dependent is entitled
under the scheme (revised or pre-revised)
in force in the Bank establishment. The
prescribed form, on which the dependent
has to make an application, is a means and
mode to realize that right, but never a
condition, on which the existence or the
commencement of the right depends.

14. To understand it the way Mr.
Chaturvedi wants us to do, would cause the
profoundly welfare purpose of the scheme
to be lost to a mercantile approach. This
Court, therefore, holds that the petitioner's
entitlement to receive the ex gratia lump
sum accrued on the day that her husband
died in harness; not on the day when she
made the application.

15. This takes us to the other limb of
the question, which is essentially one of
fact. And, that is if the petitioner indeed
made
the
requisite
application
on
13.12.2011, as she asserts, or she made it
on 10.10.2022, as the respondent Bank
would have us believe. A copy of the
application that the petitioner says, she
made on 13.12.2011, is annexed as
Annexure No.3 to the writ petition, a fact
already mentioned. It has also been noticed
by this Court in an earlier part of the
judgment that it runs into 13 pages. A
perusal of the application shows also the
fact that it carries such intricate details
about various matters that it has made us
call those details to be 'gruelling';
excruciating. But, it is a fact that a
photostat copy of the application, that is
annexed, carries the minutest of detail in
the
application
form,
all
filled
up
punctiliously by the petitioner with nothing
left incomplete. It defies sound and robust
logic why a person, who is entitled to some
benefit upon submission of an application
form to the respondent would fill up every
1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1209
detail of it and then desist from submitting
it.

16. There is indeed no earthly reason
not to submit the application form, that is
complete in all respects, and if submitted,
would lead to award of handsome monetary
benefits to the petitioner. The clinching fact
that shows that the application form dated
13.12.2011 was indeed submitted, is the last
part of the proforma, which mentions in
Column
E,
recommendation
for
consideration/ rejection. Here, the rejection
has been scored out and the application with
a recommendation for consideration has been
signed by the Branch Manager/ HOD. Across
the length and breadth of the counter affidavit
while denying that the respondent Bank never
received
the
application
form
dated
13.12.2011, they have not said a word about
the signatures of the Branch Manager on the
application form, recommending it, that
figure at Page No.36 of the paper-book, part
of the document annexed as Annexure No.3
to the writ petition. The inference is obvious
and that is that the application form, a xerox
copy whereof, complete in all respects, the
petitioner somehow managed to procure and
keep with herself, was submitted to the Bank
on 13.12.2011 and recommended by the
Branch Manager. It is for this reason and the
other circumstances that we refuse to believe
the respondent Bank's stand that the petitioner
did not submit her application form for award
of the ex gratia lump sum on 13.12.2011, but
did that as late as on 10.10.2022.

17. This brings us to the first of the two
questions mooted; and, that is, if the
petitioner is entitled to award of interest on
the payment of ex gratia released with
delay.

18. It is urged on behalf of the learned
Counsel for the petitioner that the payment
of ex gratia lump sum being withheld by
the respondent Bank for a long period of
time, or for whatever period of time, the
petitioner is entitled to interest on the
belated payment. He submits that interest is
awarded to the party for the deprivation of
the use of money, to which the party
claiming would otherwise be entitled, if
paid within time by the party obliged.

19. On the other hand, learned
Counsel for the respondent Bank submits
that the ex gratia lump sum is governed by
a scheme, which is in the nature of a
concession. All that is payable under the
scheme is the sum of money to be
calculated by the terms thereof. It is Mr.
Chaturvedi's submission further that to
receive ex gratia lump sum is not a right of
the petitioner, like pension or gratuity, but a
mere concession, the delay in disbursement
whereof, cannot be capitalized upon by the
beneficiary to raise a claim for interest.

20. The only issue to be examined
here is, if the petitioner's entitlement to
receive the ex gratia lump sum is one that
she is entitled as a matter of right or it is
some kind of an ad hoc help, that is
extended by the State purely as an act of
grace. The ex gratia lump sum paid here is
not the kind of ex gratia payment, that one
finds the State extending by way of grace
or a humane gesture to the victims of a vis
major
or
a
railway
accident.
The
unfortunate scores, who loose their lives,
say, in a train accident, or suffer injury,
cannot demand it by the hands of their
dependents or themselves, in case of injury.
Nevertheless, the State is often around
extending a helping hand with some
monetary recompense to the injured and the
dependents of those killed in a railway
accidnt or natural calamity. These are acts
of pure grace by the State, where the
1210 INDIAN LAW REPORTS ALLAHABAD SERIES
payment made to victims is ex gratia in the
true sense of the term. There is no right to it
nor a law to provide for it. The ex gratia
lump sum involved here is completely
different from how the term is generally
understood. This is an entitlement under a
scheme framed by the Government and
adopted by the respondent Bank, or one
already framed and enforced by the
respondent Bank in their establishment,
where the dependents of an employee,
who dies in harness, have a right to
receive a lump sum payment determined
in accordance with the scheme, which is
just called 'ex gratia'. The entitlement to
receive ex gratia by the dependents of an
employee of the Bank dying in harness is,
therefore, a matter of right; not the
outcome of an act of grace by the
respondent Bank.

21. Reference in this connection
may be made to a Bench decision of the
Delhi High Court in Union of India and
another v. Manorma Devi, 2022 SCC
OnLine Del 674. The question involved
in Manorma Devi (supra) is set out in
Paragraph No.2 of the report, which
reads:

"2. The short issue involved in
the writ petition is : whether the
respondent is entitled to the interest on
"ex gratia" monetary compensation which
was, admittedly, payable to her, because
of her husband dying in harness?"

22. As the facts in Manorma Devi
would show, the writ petition before the
Delhi High Court arose out of a judgment
of the Central Administrative Tribunal,
which was twice moved by the original
applicant, Manorma Devi, the widow of a
gangman with the Northern Railway, who
died in harness on 26.02.1998. Manorma
Devi became aware of the scheme
entitling dependents of a government
servant dying in harness to receive ex
gratia payment, much later in the day and
she approached the Railways with her
claim as late as on 02.08.2013.

23. Upon her claim not being attended
by
the
Railways,
Manorma
Devi
approached the Central Administrative
Tribunal in the year 2013, that was
disposed of with a direction to the
respondent Railways to answer the legal
notice dated 02.08.2013 served upon the
Divisional Railway Manager within a
specified period of time. It was also
directed that the respondent Railway would
deal with all points raised in the legal
notice. Be that as it may, the result, after
moving the Tribunal in their contempt
jurisdiction, was that Manorma Devi was
paid an ex gratia of Rs.5 lacs by the
Railways, but denied her claim for interest
that she had sought on account of the delay
in satisfying her claim. Manorma Devi
again
approached
the
Central
Administrative Tribunal in the year 2017,
on occasion raising a case regarding nonpayment of interest. The Tribunal allowed
the Original Application. This brought the
Union of India and the Railways to the
High Court, where they invoked the writ
jurisdiction against the order of the Central
Administrative Tribunal granting interest
on the delayed payment of ex gratia to
Manorma Devi. It was in the context of
these facts that it was observed by their
Lordships of the Division Bench, after
noticing the submissions advanced on
behalf of the Railways:

"15. Mr. Singh, who appears on
behalf of the petitioners, says that the
impugned order is flawed for the following
reasons:
1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1211

(i) First, there is no provision for
payment of interest on the ex gratia
compensation paid to the respondent.

(ii) Second, the respondent has
contributed to the delay i.e., she did not
make a demand for payment of the
compensation till 02.08.2013.

16. We have heard Mr. Singh and
perused the record.

17. According to us, both the
submissions
of
Mr.
Singh
are
unsustainable.

18. The fact that there is no
provision for payment of interest cannot be
the reason for denying interest. We would
have appreciated this submission, if there
was a specific provision in the circular
relied upon by the petitioners, to the effect,
that no interest would be paid on the
amount, which was to be paid as
compensation qua employees, who died in
harness. Interest is paid to a person when
she/he is, deprived of use of money. It
offsets the impact of inflation which
diminishes the value of money. In such
situations, unless there is a bar, interest
should be paid in the ordinary course. The
following observations of the Supreme
Court in Irrigation Deptt., Govt. of Orissa
v. G.C. Roy, (1992) 1 SCC 508, articulated
this rationale, while examining the power
of the arbitrator to award pendent lite
interest:

"43. The question still remains
whether arbitrator has the power to award
interest pendente lite, and if so on what
principle. We must reiterate that we are
dealing with the situation where the
agreement does not provide for grant of
such interest nor does it prohibit such grant.
In other words, we are dealing with a case
where the agreement is silent as to award of
interest.
On
a
conspectus
of
aforementioned decisions, the following
principles emerge:

(i) A person deprived of the use
of money to which he is legitimately
entitled has a right to be compensated for
the deprivation, call it by any name. It may
be
called
interest,
compensation
or
damages. This basic consideration is as
valid for the period the dispute is pending
before the arbitrator as it is for the period
prior to the arbitrator entering upon the
reference. This is the principle of Section
34, Civil Procedure Code and there is no
reason or principle to hold otherwise in the
case of arbitrator.........

(iii)......The arbitrator must also
act and make his award in accordance with
the general law of the land and the
agreement.....

(iv) Over the years, the English
and Indian courts have acted on the
assumption that where the agreement does
not prohibit and a party to the reference
makes a claim for interest, the arbitrator
must have the power to award interest
pendente lite. Thawardas [Seth Thawardas
Pherumal v. Union of India, (1955) 2 SCR
48 : AIR 1955 SC 468] has not been
followed in the later decisions of this
Court.
It
has
been
explained
and
distinguished on the basis that in that case
there was no claim for interest but only a
claim for unliquidated damages. It has been
said repeatedly that observations in the said
judgment were not intended to lay down
any such absolute or universal rule as they
appear to, on first impression. Until Jena
case, [(1988) 1 SCC 418 : (1988) 1 SCR
253] almost all the courts in the country
had upheld the power of the arbitrator to
award interest pendente lite. Continuity
1212 INDIAN LAW REPORTS ALLAHABAD SERIES
and certainty is a highly desirable feature
of law.

(v) Interest pendente lite is not a
matter of substantive law, like interest for
the period anterior to reference (prereference period). For doing complete
justice between the parties, such power has
always been inferred.

44. Having regard to the above
consideration, we think that the following
is the correct principle which should be
followed in this behalf:

Where the agreement between the
parties does not prohibit grant of interest
and where a party claims interest and that
dispute (along with the claim for principal
amount or independently) is referred to the
arbitrator, he shall have the power to award
interest pendente lite. This is for the reason
that in such a case it must be presumed that
interest was an implied term of the
agreement
between
the
parties
and
therefore when the parties refer all their
disputes - or refer the dispute as to
interest as such - to the arbitrator, he shall
have the power to award interest. This does
not mean that in every case the arbitrator
should necessarily award interest pendente
lite. It is a matter within his discretion to be
exercised in the light of all the facts and
circumstances of the case, keeping the ends
of justice in view."

19. Also see the observations
made in Pickett (Administratrix of the
Estate of Ralph Henry Pickett Decd.) v.
British Rail Engineering Ltd., [1978] 3
WLR 955.

"......My Lords, I believe the
reasoning of the Court of Appeal to be
unsound on this point. It is based upon a
fallacy; and is inconsistent with the statute.

First, the fallacy. It is assumed
that because the award of damages made at
trial is greater, in monetary terms, than it
would have been, had damages been
assessed at date of service of writ, the
award is greater in terms of real value.
There is here a complete non sequitur. The
cash awarded is more, because the value of
cash, i.e. its purchasing power, has
diminished. In theory the higher award at
trial has the same purchasing power as the
lower award which would have been made
at the date of the service of the writ : in
truth, of course, judicial awards of damages
follow, but rarely keep pace with, inflation
so that in all probability the sum awarded at
trial is less, in terms of real value, than
would have been awarded at the earlier
date. In theory, therefore, and to some
extent in practice, inflation is taken care of
by increasing the number of money units in
the award so that the real value of the loss
is met. The loss, for which interest is given,
is quite distinct, and not covered by this
increase. It is the loss which is suffered by
being kept out of money to which one is
entitled.

Secondly, the statute. Section 22,
Administration
of
Justice
Act
1969,
amending
section
3,
Law
Reform
(Miscellaneous
Provision)
Act
1934,
provides that the court shall (my emphasis)
exercise its power to award interest on
damages, or on such part of the damages as
the court considers appropriate, "unless the
court is satisfied that there are special
reasons why no interest should be given in
respect of those damages." Such is the
general rule laid down by the statute, which
does, however, confer upon the court a
discretion as to the period for which
interest is given and also permits differing
rates. Nothing can be clearer than the duty
placed upon the court to give interest in the
1 All. Smt. Sharda Devi Vs. General Manager, S.B.I., Lko & Ors.
1213
absence of special reasons for giving none.
Inflation is an economic and financial
condition of general application in our
society. Its impact upon this plaintiff has
been neither more nor less than upon
everybody else : there is nothing special
about it."

20.
Insofar
as
the
second
submission is concerned i.e., that the
respondent made a demand only on
02.08.2013, is also untenable for the
reason that it was incumbent upon the
petitioners to first provide her necessary
information that she was entitled to
receive ex gratia compensation, and, after
the necessary formalities were fulfilled,
to pay the same as per her entitlement in
terms of the circular dated 05.11.1999.

24. It is not in dispute that the
respondent's husband died on 26.02.1998,
and,
therefore,
right
to
ex-gratia
compensation accrued in her favour, in
terms
of
the
parent
circular
dated
11.09.1998.

25. That being the position, the
respondent is, in our view, entitled to the
interest for the delay caused by the
petitioners
in
payment
of
ex-gratia
compensation."

24. Here also, this Court would notice
that there is no bar under the Scheme in
force
in
the
respondent
Bank's
establishment on the award of interest for
the belated payment of ex gratia lump sum.
We have already held for a fact that there
was indeed no delay in moving for the
award of ex gratia. We have believed the
petitioner's case that she moved her
application for payment of ex gratia in the
prescribed form on 13.12.2011, which was
recommended by the Branch Manager at
the relevant time. This Court is in
wholehearted agreement with the view on
the position of the law expressed by their
Lordships of the Division Bench of the
Delhi High Court in Manorma Devi that
the petitioner had a right to receive interest
for the delay in the payment of ex gratia
lump sum. We have also indicated our own
reasons why delay in the payment of ex
gratia under a scheme, like the one under
consideration here, would attract the award
of interest.

25. In the result, this petition
succeeds and is allowed with costs. A
mandamus is issued to the General
Manager, State Bank of India, Hazrat Ganj,
Lucknow, the Regional Manager, State
Bank of India, Buddh Vihar, Taramandal,
Gorakhpur,
the
Chief
Manager
(Administration), State Bank of India,
Buddh Vihar, Taramandal, Gorakhpur and
the Branch Manager, State Bank of India,
Khalilabad, District Sant Kabir Nagar to
ensure, amongst themselves, payment of
simple interest, on the ex gratia already
paid, at the rate 7% per annum from
13.12.2011 until realization. The interest
shall be paid within a period of two months
by the respondent Bank to the petitioner
from the date of receipt of a copy of this
judgment.

26. Let a copy of this order be
communicated to the General Manager,
State
Bank
of
India,
Hazrat
Ganj,
Lucknow, Regional Manager, State Bank
of
India,
Buddh
Vihar,
Taramandal,
Gorakhpur,
the
Chief
Manager
(Administration), State Bank of India,
Buddh Vihar, Taramandal, Gorakhpur and
the Branch Manager, State Bank of India,
Khalilabad, District Sant Kabir Nagar by
the Registrar (Compliance).
----------
1214 INDIAN LAW REPORTS ALLAHABAD SERIES
(2024) 1 ILRA 1214
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.12.2023

BEFORE

THE HON'BLE AJIT KUMAR, J.

Writ-A No. 10371 of 2022

Prakash Chandra Mishra ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Arvind Srivastava

Counsel for the Respondents:
C.S.C.

A. Service Law - Constitution of India -
Article 311 - UP Subordinate Rank
Officers Police Officers (Discipline and
Appeal) Rules, 1991 - Rule 8(2)A -
Dismissal from service - Ground of
conviction order was taken, which was
stayed and subsequently set aside in the
Criminal Appeal - Validity challenged -
No assessment regarding conduct of
petitioner was made - Effect - Held,
authority is required to record reasons
for dismissing the employee on the
ground of conviction in a criminal case
as
to
why
his
continuance
would
adversely
affect
the
government
establishment - There is no evaluation
or
assessment
otherwise
qua
the
conduct
of
the
petitioner
for
the
purposes
of
taking
a
decision
to
continue a convicted employee in the
establishment or not - Held further,
once the petitioner has been acquitted
in the criminal case and the only ground
taken in the order impugned terminating
the services is the conviction in such
criminal case, the order impugned is also
not sustainable on merits. (Para 23, 25
and 27)

Writ petition allowed. (E-1)
List of cases cited:

1. U.O.I.Vs Tulsi Ram Patel; AIR 1985 SC 1416

2. Sadanand Mishra Vs St. of U.P.; 1993 LCD 70

3. Ratan Singh Vs St. of U.P. & ors.; 2013 (11)
ADJ 352

4. Biresh Kumar Vs St. of UP & or.s; 2014 (9)
ADJ 768 (DB)

(Delivered by Hon'ble Ajit Kumar, J.)

1. Heard Sri Arvind Srivastava,
learned
Advocate
appearing
for
the
petitioner and Sri P.K. Srivastava, learned
Additional Chief Standing Counsel for the
State-respondents.

2. This is the fourth round of
litigation by the petitioner questioning the
decision of the disciplinary authority in
dispensing with/terminating the services of
the petitioner only on the ground that he
has been convicted and sentenced in a
criminal case under the judgment and order
dated 25.03.2004 in Session Trial No.396
of 1999 which he appealed against before
the High Court in Criminal Appeal
No.1706 of 2004. The conviction of the
petitioner
has
been
under
Sections
307/504/506
Indian
Penal
Code
and
Section 35 of the Arms Act. In the pending
criminal appeal petitioner had already been
enlarged on bail as the execution of the
sentence has been stayed by the order of
the Court and later on conviction and
sentence has been set aside as the Criminal
Appeal stood allowed.

3. It is to equally worth to mention
here that on account of petitioner being sent
to jail as a result of conviction in the
session trial case, petitioner could be
released on bail only in Criminal appeal
and so he could not report for duty and