Municipal Corporation of Delhi V. Teacher Welfare Union (Regd.) and Assistant Teacher

LPA/780/2002

AI Insights

The case involves the Municipal Corporation of Delhi (MCD) appealing against a decision that ordered the payment of interest on delayed salary arrears to the Teacher Welfare Union and its members, who are teachers in MCD primary schools. The teachers had filed a writ petition claiming arrears of salary as per the 5th Central Pay Commission recommendations effective from 1.1.1996. Although the MCD decided to implement these recommendations, the payment of arrears was delayed. The Single Judge had ordered interest on these arrears, which the MCD contested in this appeal, arguing that the delay was not their fault and that the recommendations were not automatically applicable to them.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 818599 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 24-08-2012
• Assessment Year: misc
• Other Referred Cases: Chairman & MD, Kerala SRTC v. K.O. Varghese & Ors., Officers and Supervisors of I.D.P.L v. Chairman and M.D., I.D.P.L and others, State of U.P. and others v. Dr. Om Prakash Singh
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: U S CHAUDHARY; VIPIN CHAUDHARY
• Assessee Lawyers: H S PHOOLKA; AJAY ARORA; KAPIL DUTTA
• Keywords: Interest on delayed payment; Salary revision; Municipal Corporation of Delhi; Teacher Welfare Union; 5th Central Pay Commission
• Section: 5th Central Pay Commission

Judgement Text

"LPA 780/2002 Page 1 of 5 IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision: 24th August, 2012 + LPA 780/2002 M.C.D. ..... Appellant Through: Mr. H.S. Phoolka, Sr. Adv. with Mr. Ajay Arora and Mr. Kapil Dutta, Advs. Versus TEACHER WELFARE UNION (REGD.) & ORS. ..... Respondents Through: Mr. U.S. Chaudhary and Mr. Vipin Chaudhary, Advs. CORAM: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW A.K. SIKRI (Acting Chief Justice): 1. The appellant herein is the Municipal Corporation of Delhi which has filed this appeal challenging the orders dated 14th March, 2002 passed by the learned Single Judge in writ petition filed by the respondent under Article 226 of the Constitution of India. This writ petition was filed in the year 1999. Respondent No.1 is the Teacher Welfare Union and the respondent No.2 was an assistant teacher and one of the members of the respondent No.1 union. The respondent No.1 union represents the cause of teachers teaching in various MCD primary schools. The grievance of the respondents was that even when the MCD had accepted the recommendations of the 5th Central Pay Commission qua its employees, LPA 780/2002 Page 2 of 5 which had come into effect from 1.1.1996, it had only released some adhoc payments. Therefore, the petition was filed for release and payment of entire arrears of pay after the implementation of the recommendations of the 5th CPC and for interest @ 24% per annum to them. 2. The Central Govt., on the basis of recommendations of the 5th Central Pay Commission (5th CPC), had revised the salary of its employees w.e.f. 1.1.1996, though this decision was taken some time in the year 1997/1998 by the Central Govt. Admittedly, the recommendations of the 5th CPC are not automatically binding upon the MCD. It appears that the MCD took the decision to implement the recommendations qua all its employees including the teachers (respondents herein) also, albeit from 1.8.1997. 3. As mentioned above, the recommendations of the 5th CPC in respect of Govt. employees were implemented w.e.f. 1.1.1996. This question arose in the case of MCD as well, namely, whether the MCD employees could get the revised pay scale w.e.f. 1.1.1996 or not. Pending this decision, MCD vide circular dated 18.11.1997 decided to release ad hoc payment of `5,000/- which amount was paid to all Group ‘D’ employees. Thereafter, vide circular dated 26.11.1997 another ad hoc payment was approved in respect of Group ‘A’, ‘B’ and ‘C’ employees as well and these amounts were released. On 30.3.1998, the MCD decided to make another ad hoc payment of `10,000/-, this amount was also paid to the respondents. Subsequently, only in December, 1999 a decision was taken to implement the 5th CPC recommendations w.e.f. 1.1.996 and accordingly it was decided to make payment of arrears of salary for the period from 1.1.1996 to 31.7.1997 after adjusting the ad hoc payments which were already released. LPA 780/2002 Page 3 of 5 Office order dated 28.12.1999 was issued in this behalf. 4. Before issuance of this officer order dated 28.12.1999, the respondents herein filed the writ petition some time in August 1999 claiming arrears of salary as per the 5th CPC recommendations w.e.f. 1.1.1996 along with interest @ 24% per annum. Since arrears were paid after issuance of the office order dated 28.12.1999, when the writ petition came up for hearing before the learned Single Judge in the year 2002, the only question remained, as to whether the respondents should be paid interest thereupon or not. Vide impugned order dated 14th March, 2002, the learned Single Judge had directed payment of interest @ 9% per annum on delayed payments from 1.6.1998 to 31.1.2000. From this date, the Central Govt. had paid the arrears to its employees and the decision was also implemented by the DTC. Challenging this order, the present appeal is preferred. 5. Mr. H.S. Phoolka, learned senior counsel for the appellant submits that since recommendations of the 5th CPC were not automatically applicable and it depended upon the decision to be taken by the MCD, no liability of interest could be fastened inasmuch as the MCD took the decision to implement the 5th CPC recommendations only in December, 1999 and thereafter the arrears were paid immediately from 1.1.1996 to 31.7.1999, therefore, there is no delay in making the payments. He has also relied upon the following judgments in support of his contention that it was for the MCD to take a decision to give the benefit of 5th CPC to its employees or not: LPA 780/2002 Page 4 of 5 (i) Chairman & MD, Kerala SRTC v. K.O. Varghese & Ors., (2007) 8 SCC 231; (ii) Officers and Supervisors of I.D.P.L v. Chairman and M.D., I.D.P.L and others, AIR 2003 SC 2870; and (iii) State of U.P. and others v. Dr. Om Prakash Singh, AIR 2004 SC 4193. 6. We are of the view that the reliance placed on the judgments in support of the proposition advanced have no application. In the present case, the MCD took the decision to revise the salary and it was taken with effect from 1.1.1996, though in the year 1997. Therefore, there is no question of cut-off date. The only question is that inspite of this decision in 1997, the arrears were not released immediately thereafter. Entire arrears were not paid even after the options were invited for which last date was 10th March, 1998. Interest is granted with effect from 1.6.1998 to 31.1.2000 by the learned Single Judge when the payment was made. 7. Another submission of Mr. Phoolka was that MCD was facing serious financial crunch and, therefore, if the payment was made in installments, liability of interest should not be fastened upon it. It is not necessary to go into this aspect in view of the concession given by learned counsel for the respondents. He has, however, highlighted an altogether different aspect. He submits that since arrears were paid in February 1999, due to the payment of substantial arrears in February 1999, the tax liability became much higher and the teachers were made to pay interest on the said amount in respect of which tax at source was deducted only in February / March LPA 780/2002 Page 5 of 5 2000. He, thus, submits that at least the interest which has become payable to the income tax department because of the delayed release of the arrears should be the liability of the MCD as it was not due to the fault of the employees. This appears to be justified and a genuine demand of the respondents as it appears that there is a delay in making payment by the MCD and the MCD could have been fastened with the liability of payment of interest, but for the concession shown by the learned counsel for the respondent. In view thereof, we modify the impugned order of the learned Single Judge insofar as direct payment of interest @ 9% per annum w.e.f. 1.6.1998 to 31.1.2000, this is substituted by the direction that the interest which was paid by the respondents to the income tax department and was deducted from the salary of the employees shall be reimbursed by the appellant to the respondents. This amount shall be worked out and released by the appellant in favour of the employees, who are found entitled for the same, within two months. 8. With the aforesaid directions, the appeal stands disposed of. ACTING CHIEF JUSTICE RAJIV SAHAI ENDLAW, J. AUGUST 24, 2012 pk "