CONSTITUTION OF INDIA, 1950
Articles 12, 21, and 300-A — Right to Livelihood and Property — Terminal Benefits — Withholding of Dues:
Held: Pension, Gratuity, and other terminal benefits are not a bounty but constitute "property" under Article 300-A. Deprivation of such statutory entitlements, particularly for senior citizens who retired without stigma, violates the "right to livelihood" under Article 21 and is impermissible save by authority of law.
Held: District Cooperative Central Bank (DCCB) and Primary Agricultural Cooperative Society (PACS) are instrumentalities falling under the definition of "State" (Article 12), possessing a constitutional obligation to pay statutory dues promptly.
II. PAYMENT OF GRATUITY ACT, 1972
Section 4 (1)(a) — Entitlement to Gratuity — Statutory Right:
Held: Gratuity upon superannuation is a statutory right accruing to the employee; the employer cannot withhold payment based on internal financial disputes or non-remittance of share by an allied entity (PACS).
Held: Forfeiture clauses under Section 4(6) are not attracted in the absence of termination for misconduct, and hence, withholding payment for retired employees is illegal.
Section 7 (3) and (3A) — Delayed Payment of Gratuity — Interest:
Held: Failure to pay gratuity within the statutory period of thirty days mandates the payment of simple interest on the delayed amount as per Section 7(3A). Interest was awarded at a rate of 10% per annum from the date the amount became payable until the date of actual payment.
III. ADMINISTRATIVE LAW / CO-OPERATIVE SOCIETIES
Financial Incapacity — Joint and Several Liability — Policy Decisions:
Held: The plea of financial incapacity or paucity of funds advanced by the PACS (Respondent No. 3) for non-remittance of its share towards terminal benefits is not a valid defence to deny retired employees their statutory dues.
Held: In light of the Memorandum of Intent dated 11.01.2013 and the employees’ service under both entities, the DCCB (Respondent Nos. 1 & 4) and the PACS (Respondent No. 3) are held jointly and severally liable to ensure the immediate payment of all terminal benefits.
Direction: DCCB was directed to effect payment of all dues and costs within eight weeks, with liberty to recover the appropriate share from the PACS.
APHC010243682016
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI
(Special Original Jurisdiction)
[3504]
FRIDAY, THE THIRTY FIRST DAY OF OCTOBER
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM
WRIT PETITION NO: 8465/2016
Between:
Chittiboyina Bharata Rao ...PETITIONER
AND
The Krishna District Cooperative Central Bank Ltd and
Others
...RESPONDENT(S)
Counsel for the Petitioner:
1.PEETA RAMAN
Counsel for the Respondent(S):
1.A RAJENDRA BABU
WRIT PETITION NO: 8675/2016
Between:
P. Chandramouleswara Rao ...PETITIONER
AND
The Krishna District Cooperative Central Bank Ltd and
Others
...RESPONDENT(S)
Counsel for the Petitioner:
1.PEETA RAMAN
Counsel for the Respondent(S):
1.A RAJENDRA BABU
2025:APHC:45848
2
WRIT PETITION NO: 8878/2016
Between:
Banda Siva Rama Krishna Prasad ...PETITIONER
AND
The Krishna District Cooperative Central Bank Ltd and
Others
...RESPONDENT(S)
Counsel for the Petitioner:
1.PEETA RAMAN
Counsel for the Respondent(S):
1.A RAJENDRA BABU
WRIT PETITION NO: 9772/2016
Between:
A. Sai Babu ...PETITIONER
AND
The Krishna District Cooperative Central Bank and
Others
...RESPONDENT(S)
Counsel for the Petitioner:
1.PEETA RAMAN
Counsel for the Respondent(S):
1.A RAJENDRA BABU
The Court made the following:
2025:APHC:45848
3
THE HONOURABLE SRI JUSTICE MAHESWARA RAO KUNCHEAM
WRIT PETITION Nos.8465, 8675, 8878 & 9772 of 2016
COMMON ORDER:
The writ petitions are filed to declare the action of the respondents in
withholding the terminal benefits of the petitioners as illegal, arbitrary, etc., and
for consequential direction to pay the terminal benefits to the petitioners along
with interest @ 18% per annum and also to pay costs of these proceedings to
the petitioners.
2. Heard Sri Peeta Raman, learned counsel for the petitioners and Sri
A.Rajendra Babu, learned counsel for respondent Nos.1 & 4.
3. The petitioners have approached this Court seeking direction to the
respondents to disburse their terminal benefits. As the relief sought in all these
writ petitions is identical and similar lines of arguments were advanced by the
learned counsel for both sides, they were taken up together.
Brief case of the petitioners:
4. The petitioners were initially appointed as Cadre Secretaries i.e., Paid
Secretaries, under the administrative control of the 1st respondent/Krishna
District Cooperative Central Bank Ltd. (in short ‘DCCB’). As per orders of the
DCCB, the petitioners and other similarly situated persons were allotted to
Primary Agricultural Cooperative Society (in short ‘PACS’). At that point, the
post of Paid Secretary got decategorized as Secretary and from then the
2025:APHC:45848
4
petitioners discharged their duties under the administrative control of concerned
PACS till 01.03.2009.
5. While the things stood thus, in order to implement the NABARD
guidelines on expenditure and man power norms, it was decided to take back
the services of the reverted decategorized Paid Secretaries (Secretaries) of
PACSs by the respective district DCCBs.
6. Subsequently, the petitioners after completing their tenure at the
concerned PACS, again they joined in the service of the 1st respondent DCCB
on 02.03.2009. During the course of their service, the petitioners continued to
work for enrichment of the DCCB and PACSs without any remark and rendered
their unblemished service till their retirement age i.e., on 30.06.2009,
30.04.2011, 30.06.2010 and 30.11.2013 respectively.
7. To the petitioners’ dismay, the terminal benefits due to them on their
retirement right from the year 2009 onwards, were not paid by the respondents
on the ground that the share towards terminal benefits from the 3rd respondent
PACS had not been released.
8. According to the petitioners, the 1st respondent in order to clear/pay the
terminal benefits to the petitioners by adding its share as well as the share of
the APCOB issued Circular vide Establishment/SCA/2013-14, dated
24.01.2014 and asked the President, Penamaluru, PACS to deposit its part
share with regard to the terminal benefits of the petitioners, but the same was
not honoured by the President, PACS, Penamaluru till today.
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5
9. The petitioners who are senior citizens being deprived of their terminal
benefits i.e., gratuity, leave encashment, etc., having left with no other
efficacious remedy have approached this Court under Article 226 of the
Constitution of India, by filing the instant writ petitions.
Submissions of the respective counsels: [[
10. Sri Peeta Raman, learned counsel for the petitioners referring to the
averments made in the writ affidavits, has advanced arguments. He asserted
that indisputably petitioners after extending their unblemished service to the
respondents DCCB, had retired from their respective services without any
disciplinary or criminal proceedings pending against them and in spite of the
same, they have not received their terminal benefits since then.
11. The learned counsel also urged that all the petitioners are senior citizens,
and non-release of the terminal benefits i.e., gratuity and leave encashment,
etc, from the respondent DCCB and PACS, would cause multifarious problems
and adversely affect the petitioners and their family members physically,
psychologically and fiscally. He submitted that the action of the respondents in
withholding the terminal benefits of the petitioners, who are senior citizens, has
put their right to life in peril.
12. The learned counsel for the petitioner also submitted that as the present
writ petitions were instituted way back in the year 2016 and with the efflux of
time, some of the petitioners are no longer in contact with him and he
apprehends that they might have passed away.
2025:APHC:45848
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13. Conversely, Sri A. Rajendra Babu, learned counsel representing
respondent Nos.1 & 4, had drawn the attention of this court to the Circular vide
Establishment/SCA/2013-14 dated 24.01.2014 issued by the 1st
respondent/Krishna District Co-operative Central DCCB to the 3rd respondent,
whereunder, the 1st respondent DCCB Executive Committee on 27.03.2013
approved the Memorandum of Intent dated 11.01.2013, prescribing the scheme
pertaining to the payment of terminal benefits and other benefits to the retired
Special Category Assistants absorbed into the District Co-operative Central
Banks in the State of Andhra Pradesh.
14. The learned counsel submitted that according to the said Memorandum
of Intent, the 1st respondent DCCB directed the 3rd respondent on 24.01.2014
itself to remit their share of gratuity and leave encashment so as to enable
payment to the concerned employees after adding their respective share. He
further submitted that right from the issuance of the said circular to till date, the
3
rd respondent by stating their financial incapacity orally, has not remitted their
share of amount to the 1st respondent DCCB and as a result, the terminal
benefits have not been paid to the petitioners. To that effect, the learned
counsel forwarded written instructions dated 30.08.2025 before this Court
received from the 1st respondent DCCB and the same is made part of record,
at the time of hearing the case.
15. This Court has considered the submissions made by both the counsel
and perused the material available on record.
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16. It is apparent that right from the year 2016 onwards, the respondent
Nos.1 to 4 have not filed their respective counters in spite of multiple
opportunities given by this Court.
17. In view of the fact that all the writ petitions are identical and common
arguments advanced by both the learned counsel for the parties in the
respective cases, this Court ventures to pass Common Order.
Analysis of the Court:
18. The core issue emerged in the instant lis is that the non-payment of
gratuity, leave encashment and other terminal benefits of the retired employees,
without there being any legal impediment is valid or not?
19. It is undisputed that all the petitioners initially joined in the 1st respondent
DCCB as Cadre Secretaries (Paid Secretaries), and discharged their duties in
the 3rd respondent/PACS as per the orders of the 1st respondent DCCB.
Thereafter, the petitioners’ post of Paid-Secretaries got decategorized and the
nomenclature of the said post was metamorphosized as Secretaries. Further,
as there were administrative exigencies, the petitioners worked in the control of
the 3rd respondent/PACS. Pursuant to the change in policy decision, all the
petitioners again joined the 1st respondent DCCB service as Special Category
Assistants on 02.03.2009 (petitioners in W.P.Nos.8465, 8675 & 8878 of 2016)
and 25.10.2010 (petitioner in W.P.No..9772 of 2016). The details of the
petitioners are set out in the below tabular format:-
2025:APHC:45848
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Sl. No. Name and father’s
name
Date of
appointment
Date of
retirement
1. Chittiboyina Bharata
Rao, S/o.Subba Rao
(W.P. No.8465 of 2016)
October, 1984 30.06.2009
2. P. Chandramouleswara
Rao, S/o Satyanarayana
(W.P. No.8675 of 2016)
March, 1974 30.04.2011
3. Banda Siva Rama
Krishna Prasad S/o.
Syama Sundara Dattu
(W.P. No.8878 of 2016)
March, 1978 30.06.2010
4. A. Sai Babu S/o.
Hanumantha Rao (W.P.
No.9772 of 2016)
March, 1978 30.11.2013
20. Finally, on attaining the age of superannuation, the petitioners retired
from their respective service from the 1st respondent DCCB on 30.06.2009
(petitioner in W.P. No.8465 of 2016), 30.04.2011 (petitioner in W.P.No.8675 of
2016, 30.06.2010 (petitioner in W.P.No.8878 of 2016) and 30.11.2013
(petitioner in W.P.No.9772 of 2016) without any stigma
21. It is also borne out from the record that in order to adopt a uniform
procedure in the matters relating to payment of terminal benefits of Special
Category Assistants absorbed in DCCBs, Memorandum of Intent dated
11.01.2013 arrived between the representatives of the A.P Co-operative Banks
Association and A.P. State DCCB’s Employees Union in the presence of
Government Officials including Hon’ble Minister for Co-operation, Government
of A.P; Special Chief Secretary, Agriculture Marketing & Cooperation,
Government of A.P; Addl. Registrar of Co-operative Societies, Government of
A.P; Managing Director, APCOB and Executive Director, A.P. Co-operative
2025:APHC:45848
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Banks Association. The relevant portion of the Memorandum of Intent
dated 11.01.2013 reads as under:
“……….
TERMS AND CONDITIONS
1. The payment of terminal benefits to the SCAs who were
taken into the services of DCCBs as on 01-03-2009 and
thereafter; rendered service up to 5 years in the DCCBs shall
be as under:
(i) Gratuity:
A sum of Rs. 1,00,000/-shall be payable by the
PACS as per its Bye-laws/Service Regulations,
complying the eligibility based on last pay drawn
(basic + DA) at PACS, before absorption into
DCCB.
The DCCB shall pay @one month's salary
(basic+DA) for each completed year of service
rendered in DCCB, complying eligibility based on
last pay drawn (basic + DA) at DCCB at the time
of superannuation.
(ii) Leave Encashment:
Total eligibility shall be Max. 240 days (subject to
availability of leave to his credit) and
encashment based on gross salary last drawn in
PACS, proportionately, for the service rendered
in PACS, and at the rate of gross salary drawn in
DCCB, proportionately, for the service rendered
in DCCB.
(iii) Additional Compensation:
Keeping in view the long service of the Special
Category Assts. in the Coop. Credit System and
in view of the problems and time taken in settling
of matters of their terminal benefits, a sum of Rs.
1,50,000/- (Rs. one lakh and fifty thousand only
in addition to the computed amounts payable as
indicated at (i) and (ii) above, shall be paid as a
compensatory benefit to them. This commitment
2025:APHC:45848
10
of additional compensation shall be shared by
the DCCB and APCOB at Rs 75,000/- each.
This above additional compensation of Rs
1,50,000/- shall be paid only to the Special
Category Assts. who retired within five years
upon joining in the DCCBs.
2. The decadarised Paid Secretaries who joined in DCCBs as
Staff. Assts., under 5:4:1 quota and who are in service as on
01-03-2009 are eligible under the scheme, if this is
advantageous to them at the time of their retirement.
3. The SCAs who have completed 5 years of service in the
DCCB shall however be eligible for the terminal benefits as
per the SR of the DCCBs.
4. The services of Special Category Assts., for purposes like
seniority in DCCB, will be reckoned from their respective dates
of absorption in the DCCBS; however, any promotions
effected in the DCCBs prior to the date of this Mou, will not be
affected or jeopardized by this clause.
5. With the above settlement of retirement benefits, the
Unions/Associations representing Paid Secretaries/ Special
Category Assts: shall not make any other/additional demands,
pertaining to terminal benefits and they shall withdraw all court
cases filed by them pending in various courts, including
Labour Courts.
6. The DCCBs/APCOB Boards of Managements will be
requested to approve the above arrangement. The respective
PACS shall pay their share of the eligible amount in respect of
each Special Category Asst. through the DCCB concerned.
7. On approval by the Managements, the CEOs of DCCBs will
ensure implementation of the guidelines specified in this Mou,
Further, the DCOs will ensure that the PACS share in respect
of the terminal benefits of the Special Cat. Staff Assts. will be
remitted into the respective DCCBS………”
22. From the above, it appears that in order to settle the issues pertaining to
the terminal benefits, the above said Memorandum was articulated by the
respondent authorities. Further, it is incontrovertibly proved that all the
petitioners extended their service and have attained the age of superannuation
2025:APHC:45848
11
without any stigma or legal impediment. Therefore, the petitioners are certainly
entitled for their terminal benefits for their livelihood after retirement.
23. Admittedly, the respondents are liable to pay the statutory and mandatory
entitlement i.e., terminal benefits, gratuity, etc., of the employee in terms of the
provisions of Payment of Gratuity Act,1972., (hereinafter referred to as ‘Act’)
which is a legislation enacted with a laudable object of ensuring social security
to the working class. The relevant portion of Section 4 of the Act is extracted
hereunder:
“4. Payment of gratuity.-(1) Gratuity shall be payable to an
employee on the termination of his employment after he has rendered
continuous service for not less than five years,
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years
shall not be necessary where the termination of the employment of any
employee is due to death or disablement:
[Provided further that in the case of death of the employee,
gratuity payable to him shall be paid to his nominee or, if no nomination
has been made, to his heirs, and where any such nominees or heirs is
a minor, the share of such minor, shall be deposited with the controlling
authority who shall invest the same for the benefit of such minor in such
bank or other financial institution, as may be prescribed, until such
minor attains majority.]…………”
(2)………………”
(3)………………”
(4)………………”
(5)………………”
(6) Notwithstanding anything contained in sub-section (1),
(a) the gratuity of an employee, whose services have been
terminated for any act, wilful omission or negligence causing any
damage or loss to, or destruction of, property belonging to the employer
shall be forfeited to the extent of the damage or loss so caused;
b) the gratuity payable to an employee [may be wholly or partially
forfeited]—
2025:APHC:45848
12
(i) if the services of such employee have been terminated for his
riotous or disorderly conduct or any other act of violence on his part, or
(i) if the services of such employee have been terminated for any
act which constitutes an offence involving moral turpitude, provided
that such offence is committed by him in the course of his
employment……..”
24. A plain reading of Section 4 (1) of the Act would ascertain that once an
employee has rendered continuous services for not less than five years on his
superannuation or retirement, he/she shall be entitled to get gratuity except in
the circumstances enunciated in Section 4 (1) (a) of the Act. Coming to the
case on hand, admittedly even as per the version of the respondents also, all
the petitioners were superannuated without any legal impediments or stigma.
25. Hence, under any circumstances, Section (6) (a) (b) of the Act would not
be attracted. In other words, the action of the respondents' withholding of
gratuity is not permissible under any circumstances. In fact, the right to receive
gratuity is a statutory right; the respondent authorities cannot take it away
except through the procedure enunciated under the law.
26. It is also apt to note the relevant portion of Section 7 of the Act, which
reads as under:-
7. Determination of the amount of gratuity.- (1) A person
who is eligible for payment of gratuity under this Act or any
person authorised, in writing to act on his behalf shall send a
written application to the employer, within such time and in such
form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the employer shall,
whether an application referred to in sub-section (1) has been
made or not, determine the amount of gratuity and give notice in
writing to the person to whom the gratuity is payable and also to
the controlling authority specifying the amount of gratuity so
determined.
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[(3) The employer shall arrange to pay the amount of gratuity
within thirty days from the date it becomes payable to the person
to whom the gratuity is payable.
(3A) If the amount of gratuity payable under sub-section (3) is
not paid by the employer within the period specified in subsection (3), the employer shall pay, from the date on which the
gratuity becomes payable to the date on which it is paid, simple
interest at such rate, not exceeding the rate notified by the
Central Government from time to time for repayment of long-term
deposits, as that Government may, by notification specify:
Provided that no such interest shall be payable if the delay in
the payment is due to the fault of the employee and the employer
has obtained permission in writing from the controlling authority
for the delayed payment on this ground.]
27. A perusal of the above statutory provision clearly reveals that if the
employer fails to pay the gratuity amount within thirty days from the date it
becomes payable to the person, then the interest from that date would also
become payable. However, such interest shall not exceed the rate notified by
the Central Government from time to time. In light of the above statutory
provisions, and taking into consideration the existing facts in the present batch
of cases, this Court, without any hesitation, unequivocally rules that the
petitioners’ right to interest on delayed payment is statutory in nature and not
subject to the discretion of the respondent authorities.
28. In this context, it is apposite to note the dictum of the Hon’ble Supreme
Court in H. Gangahanume Gowda Vs. Karnataka Agro Industries Corpn.
Ltd.1
, while interpreting Section 7 of the Act in its vivid terms, held that there is
a clear mandate in the provisions of Section 7 to the employer for payment of
1
(2003) 3 SCC 40
2025:APHC:45848
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gratuity within time and is entitled to the interest on the delayed payment of
gratuity. The Hon’ble Supreme Court in the recent case between Gagan Bihari
Pristy Vs. Pradip Port Trust & Ors2
(decided on 03.03.2025), while accessing
the rate of interest on the delayed payment of gratuity, held that where an
employee retires and has to receive gratuity amount belatedly, without having
any excuse for delay, the interest would be payable as per the notification issued
by the Central Government and accordingly, the Hon’ble Supreme Court has
awarded interest @ 10% per annum on the delayed payment of the gratuity
amount.
29. When the employees are entitled to the statutory entitlements, the same
cannot be deprived, unless there is any legal impediment, especially in the
event of lapse of time prescribed under the statutory framework.
30. The Constitutional Bench of the Hon’ble Supreme Court in Deokinandan
Prasad Vs. State of Bihar & Anr.
3
, had held as follows:-
“………33. Having due regard to the above decisions,
we are of the opinion that the right of the petitioner to receive
pension is property under Article 31(1) and by a mere
executive order the State had no power to withhold the same.
Similarly, the said claim is also property under Article 19(1) (f)
and it is not saved by sub-article (5) of Article 19. Therefore, it
follows that the order, dated June 12, 1968, denying the
petitioner right to receive pension affects the fundamental right
of the petitioner under Articles 19(1) (f) and 31(1) of the
Constitution, and as such the writ petition under Article 32 is
maintainable. It may be that under the Pension Act (Act 23 of
1871) there is a bar against a civil court entertaining any suit
relating to the matters mentioned therein. That does not stand
2 S.L.P. (C) No.20740 of 2022
3
(1971) 2 SCC 330
2025:APHC:45848
15
in the way of writ of mandamus being issued to the State to
properly consider the claim of the petitioner for payment of
pension according to law.……”
31. Further, in D.S Nakara & Ors. Vs. Union of India, the Hon’ble Supreme
Court, while referring to the Deokinandan Prasad case in the course of
interpreting the pensionary rights and entitlements of the Government servants,
had categorically held as under:-
“……20. The antequated notion of pension being a
bounty, a gratuitous payment depending upon the sweet will
or grace of the employer not claimable as a right and,
therefore, no right to pension can be enforced through Court
has been swept under the carpet by the decision of the
Constitution Bench in Deokinandan Prasad v. State of Bihar
wherein this Court authoritatively ruled that pension is a right
and the payment of it does not depend upon the discretion of
the Government but is governed by the rules and a
government servant coming within those rules is entitled to
claim pension. It was further held that the grant of pension
does not depend upon anyone's discretion. It is only for the
purpose of quantifying the amount having regard to service
and other allied matters that it may be necessary for the
authority to pass an order to that effect but the right to receive
pension flows to the officer not because of any such order but
by virtue of the rules. This view was reaffirmed in State of
Punjab V. Iqbal Singh………
29. Summing up it can be said with confidence that
pension is not only compensation for loyal service rendered in
the past, but pension also has a broader significance, in that it
is a measure of socio-economic justice which inheres
economic security in the fall of life when physical and mental
prowess is ebbing corresponding to aging process and,
therefore, one is required to fall back on savings. One such
saving in kind is when you give your best in the hey-day of life
to your employer, in days of invalidity, economic security by
way of periodical payment is assured. The term has been
judicially defined as a stated allowance or stipend made in
consideration of past service or a surrender of rights or
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16
emoluments to one retired from service. Thus the pension
payable to a government employee is earned by rendering
long and efficient service and therefore can be said to be a
deferred portion of the compensation for service rendered. In
one sentence one can say that the most practical raison d'etre
for pension is the inability to provide for oneself due to old age.
One may live and avoid unemployment but not senility and
penury if there is nothing to fall back upon……”
32. In the case of Sudhir Chandra Sarkar Vs. Tata Iron and Steel Co. Ltd.4
,
the Apex Court had held that:-
“18. For centuries the courts swung in favour of the view
that pension is either a bounty or a gratuitous payment for loyal
service rendered depending upon the sweet will or grace of
the employer not claimable as a right and therefore, no right
to pension can be enforced through court. This view held the
field and a suit to recover pension was held not maintainable.
With the modern notions of social justice and social security,
concept of pension underwent a radical change and it is now
well-settled that pension is a right and payment of it does not
depend upon the discretion of the employer, nor can it be
denied at the sweet will or fancy of the employer.”
33. Very recently, the Apex Court in State of Uttar Pradesh Vs. Dinesh
Kumar Sharma5
, in its unequivocal words, stated that pension is not a charity
or a bounty and an employee is entitled to receive his pension. Hence, in view
of catena of judgments, the law is well settled without any iota of doubt.
34. Coming to the aspect of financial incapacity/poor financial conditions as
stated by the 3
rd respondent PACS for non-releasing of their share towards
terminal benefits after utilising the services of the petitioners, it is relevant to
4
(1984) 3 SCC 369
5
(2025) SCC OnLine SC 596
2025:APHC:45848
17
note the case of Kapila Hingorani Vs. State of Bihar, wherein, the Hon’ble
Supreme Court at para 34 held as follows:
“…….The State may not be liable in relation to the day to
day functioning of the Companies, but its liability would arise
on its failure to perform the constitutional duties and functions
by the public sector undertakings, as in relation thereto the
State's constitutional obligations The State acts in a fiduciary
capacity. The failure on the part of the State in a case of this
nature must also be viewed from the angle that the statutory
authorities have failed and/or neglected to enforce the social
welfare legislations enacted in this behalf e.g. Payment of
Wages Act. Minimum Wages Act etc Such welfare activities as
adumbrated in Part IV of the Constitution of India indisputably
would cast a duty upon the State being a welfare State and its
statutory authorities to do all things which they are statutorily
obligated to perform…….”
35. In view of the above stated legal position, the respondents 1, 3 & 4, being
the 'State' within the meaning of Article 12 of the Constitution of India coupled
with the fact that specific terms and conditions in Memorandum of Intent dated
11.01.2013, the said respondents 1, 3 & 4, are bound to release the terminal
benefits to the petitioner. A mere financial incapacity or paucity of funds cannot
be a valid defence for non-fulfilment of such statutory obligations, more
particularly, when the employees rendered their services, as such, they are
entitled to terminal benefits under law.
36. The Hon'ble Apex Court also reiterated the above principles in the dictum
of Haryana State Minor Irrigation Tubewells Corporation and others Vs.
G.S. Uppal. The relevant para of the said judgment reads as under:-
“…..34. Thus, the Corporation cannot put forth financial
loss as a ground only with regard to a limited category of
2025:APHC:45848
18
employees it cannot be said that the Corporation is financially
sound insofar as granting of revised pay scales to other
employees is concerned, but finds financial constraints only
when it comes to dealing with the respondents who are
similarly placed in the same category. Having regard to the
well-reasoned judgment of the Division Bench upholding the
judgment and order of the learned Single Judge, we are of the
view that the impugned judgment warrants no interference
inasmuch as no illegality, infirmity or error of jurisdiction could
be shown before us……”
37. Before parting with this case, it is relevant to note that all the petitioners
are septuagenarians, octogenarians, and nonagenarians. Owing to their old
age, they are naturally more vulnerable to health problems and other
unforeseen issues. It is indeed unfortunate that the age old traditional, moral,
cultural values of showing respect and extending dignity to the senior citizens
are gradually declining with time in our modern society. The very notion of the
family itself is deteriorating as people tend to give greater importance to
financial affairs rather than the human values and emotional connections.
38. This Court has come across numerous claims by the senior citizens
under various statutes, wherein, they seek to assert their rightful entitlement to
terminal benefits during the final phase of their lives. It is pertinent to note that
in the instant case, the respondents had extracted work from the petitioners
during their tenure of service. Despite the lapse of more than 14 years from the
age of superannuation of the petitioners and also in the absence of any legal
impediments, the respondents have not paid the terminal benefits. This act of
the respondents shirking their statutory obligation to release the terminal
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19
benefits due, which also equally amounts to violation of the petitioners’ statutory
and constitutional rights under the vistas of Article 21 of the Constitution of India.
39. It has been consistently held by the authoritative Constitutional Benches
of the Apex Court right from Deoki Nandan Prasad and D.S Nakara cases as
also in catena of judgments delivered by this Court and other Hon’ble High
Courts that the pension and terminal benefits payable to the employees upon
superannuation age is a property under Article 300-A of the Constitution of India
and it form an integral part of right to livelihood guaranteed under Article 21 of
the Constitution of India. Any deprivation, even of a portion of such amount,
cannot be countenanced, except in accordance with law.
40. In fact, the respondents 1, 3 and 4 fall within the ambit of Article 12 of the
Constitution of India. The 2nd respondent being the State of Andhra Pradesh
exercises the supervisory authority as well as direct control over the other
respondents. Viewed from any perspective, the contention of the 1st respondent
DCCB that the 3rd respondent did not pay its share of the amounts towards the
terminal benefits of the petitioners is legally untenable and also liable to be
depreciated in view of the undisputed fact that all the petitioners are in twilight
of their lives.
Conclusion:
41. In the light of above facts and circumstances involved in the lis, more
particularly, taking note of the fact that the petitioners herein are
septuagenarians, octogenarians, and nonagenarians, coupled with the wellsettled legal principles articulated by the Apex Court right from 1970’s onwards,
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20
this Court is of the view that both DCCB and PACS are jointly and severally
liable to pay the amount towards terminal benefits of the petitioners.
Accordingly, the writ petitions are disposed of in the following terms:-
(i) The respondent Nos.1 & 4 DCCB is hereby directed to
release the total terminal benefits such as gratuity amount,
leave encashment and other entitlements due to the
petitioners or to their family members, with an interest @
10 % from the date on which said amount became payable
till the date of actual payment, after verifying the relevant
documents such as Family Member Certificate, etc., within
a period of eight (8) weeks, from the date of receipt of copy
of this Order.
(ii) However, it is open to the respondent Nos.1 & 4 DCCB to
recover appropriate amounts towards terminal benefits of
the petitioners from respondent No.3 PACS, if so advised.
(iii) The respondents 1, 3 and 4 are also directed to pay costs
of Rs.10,000/- each to the petitioners towards the cost of
writ petitions.
42. As a sequel, all pending applications shall stand closed.
_______________________________
JUSTICE MAHESWARA RAO KUNCHEAM
Date:31.10.2025
GVK
2025:APHC:45848
21
02
THE HON’BLE SRI JUSTICE MAHESWARA RAO KUNCHEAM
WRIT PETITION Nos.8465, 8675, 8878 & 9772 of 2016
Date:31.10.2025
GVK
2025:APHC:45848
