LexCHIEF GENERAL MANAGER GUJARAT TELECOM CIRCLE, BHARAT SANCHAR NIGAM LTD. & ORS. versus MANILAL AMBALAL PATEL & ANR.
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1034
SUPREME COURT REPORTS
[2019] 4 S.C.R.
CHIEF GENERAL MANAGER GUJARAT TELECOM CIRCLE,
BHARAT SANCHAR NIGAM LTD. & ORS.
v.
MANILAL AMBALAL PATEL & ANR.
(Civil Appeal No.1681 of 2019)
MARCH 08, 2019
[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]
Service Law:
Commuted Value of Pension (CVP) – Delayed payment –
Interest for – Entitlement to the employee who was paid provisional
pension during pendency of vigilance/disciplinary case – Vigilance
clearance before the date of retirement – Application for CVP made
after over three years from the date of retirement – Claim for
interest on the CVP from the date of retirement – Denied by
Department/employer – Administrative Tribunal as well as High
Court directed grant of interest – On appeal, held: A claim for
interest with regard to CVP may lie when an application has been
made in time u/r. 13(1) of Commutation Rules and payment is
delayed – Question as to payment of interest would arise based on
the date of application and the reasonableness of the time taken in
processing it and the arbitrariness in a particular case in delaying
the matter – The employee was precluded from applying u/r. 13(1)
as he was not getting superannuation pension – He was getting a
provisional pension – He was not precluded from making
application u/r. 13(3) – In view of acceptance of provisional pen-
sion and failure to make application u/r. 13(3), the employee could
not have been granted interest on CVP from the date of retirement –
Central Civil Services (Commutation of Pension) Rules, 1981 –
rr. 4, 12, 13(1) and (3) – Central Civil Services (Pension) Rules,
1972 – rr. 9 and 69.
Allowing the appeal, the Court
HELD: 1. In the Central Civil Services (Commutation of
Pension) Rules, 1981 there is no provision which contemplates
payment of interest on delayed payment of Commuted Value of
[2019] 4 S.C.R. 1034
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Pension (CVP). Office Memorandum dated 05.10.1999 does not
contemplate the grant of interest, when CVP is paid belatedly.
But on the other hand, the order does not declare that no
interest shall be payable when CVP is paid belatedly. [Para 20]
[1048-G-H]
2. Commuted Value of Pension (CVP) is inter-linked with
pension. Pension is not a bounty. It is a legal as well as a
fundamental right of a Government servant to receive his
pension. It is not an act of grace by the employer but it is the
right of the Government servant who has put in the required
number of years of service. This is subject to Rule 9 of the
Central Civil Services (Pension) Rules, 1972 under which there
is power to withhold and recover part or whole of the pension. In
regard to pension, it is beyond dispute that for belated payment
of pension, interest can be ordered to be paid. [Para 21]
[1049-A-C]
3. Commutation of pension is nothing but payment of a
portion of the pension calculated on a formula provided in the
Rules, the result of which is that the employer will be absolved
from payment of the pension to the extent it is commuted and
the employee will receive the value of commuted pension in a
lump sum at one go. No doubt after a certain number of years (15
years) the full pension gets restored. Therefore, CVP flows out
of his right to receive pension. In fact, it is a part of his pension
which is paid in lump sum to the employee. It is entirely optional
for the officer to commute a part of his pension. [Paras 22 and 23]
[1049-C-E]
4. The Commutation Rules declare the categories of
pension which would qualify for commutation. Persons who fall in
Rule 12 of the Commutation Rules, without undergoing any
medical examination can apply for commutation, as provided in
Rule 13 of Commutation Rules, which includes a person who
receives superannuation pension. If such a person applies under
Rule 13 of Commutation Rules , well within the time, he is
indeed conferred a legal right under the Statutory Rules to
receive commuted pension. It does not lie in the mouth of
Government which is excepted to act as a model employer to sit
over the papers and delay the sanctioning or the payment of the
CHIEF GENERAL MANAGER GUJARAT TELECOM CIRCLE,
B.S.N.L. v. MANILAL AMBALAL PATEL
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SUPREME COURT REPORTS
[2019] 4 S.C.R.
CVP. Therefore in a case where Rule 13(3) of Commutation Rules
applies and the Government servant who is due to retire on
superannuation applies for getting CVP along with pension
papers, prior to the date of his retirement as provided aExcerpt shown. Read the full judgment & AI analysis in Lexace.