Succession Certificate, gratuity, Benevolent Fund, Group Insurance and House Rent Allowance Are Not Tarka

2019 P L C (C.S.) 1467
[Lahore High Court (Multan Bench)]

SHABAZ WALI KHAN and others
Versus
GOVERNMENT OF PAKISTAN, ESTABLISHMENTDIVISION REGIONAL BOARD FEDERAL EMPLOYEES

Through this petition, the petitioners – being the legal heirs of deceased Wali Khan – has impugned the orders / letters dated 24.12.2010, 09.05.2011 and 27.10.2011, whereby alleged claims – being alleged entitlement of the deceased – regarding payments of Gratuity, Federal Employees Benevolent Fund, Group Insurance Fund and House
Rent Allowance (“Claims”) were denied, being not payable in view of the applicable rules and regulations. The petitioners, aggrieved of the refusal to pay above-noted claims, filed instant petition.
2. In essence, the petitioners seek a declaration that the above noted claims shall be declared and treated as ‘Tarka’ being part of the estate of deceased and ordered to be paid accordingly. Whether such claims are heritable – as Tarka – is the sole question involved in this petition. Learned Counsel for the petitioner has submitted that claims raised but refused may be treated and construed as ‘Tarka’ in view of the law laid down in “Mst. Ameeran Khatoon v. Mst. Shamim Akhtar and others (2005 SCMR 512), Mirza Muhammad Amin and others v. Government of Pakistan” (PLD 1982 FSC 143), “Muhammad Mumtaz v. Mst. Umra Bevi” (1999 CLC 806) and “Mst. Riffat Yasmeen v. Hassan Din and another” (2014 CLC 126).3. The facts of the case are straightforward. Petitioner’s father joined Pakistan Atomic Energy Commission (‘PAEC’) on 20.06.1978, who exercised option of grant of Leave Preparatory to Retirement (LPR) w.e.f. 10.11.2009 to 09.11.2010, before his retirement, due on 10.11.2010. Petitioners’ father died on 28.12.2009, during (LPR), leaving behind two sons, – over the age of 21 years – and four married daughters.
4. The respondents Nos.2 and 3 submitted report and para-wise comments, wherein entitlement was denied on the premise that neither said claim can be construed as ‘Tarka’ nor payable in view of applicable rules and regulations. It transpired from the report and para-wise comments that following payments were paid by respondent No.2, after the death of petitioner’s father, in discharge of its liability. The petitioners have not disclosed factum of these payments in the petition. Details of the payments made are as under; i. Compensation grant (death package) amounting to Rs.800,000/- vide PAEC Islamabad O.M. No.Estt-VI-26 (119) 2011 (compensation) dated 18-01.2011.
ii. Group term Insurance claim amounting to Rs.360,000/- vide PAEC, Islamabad O.M.No.GPF-24276, dated 18.05.2011. iii. Final payment of GPF amounting to Rs.283,426/- vide PAEC, Islamabad O.M. No.GPF-24236, dated 2.2.2011.
5. In order to appreciate the controversy, it is expedient to highlight the objections raised by the respondents Nos.2 and 3 qua alleged claim, which objections, raised in para-wise comments, are reproduced hereunder as; a) As regards the case of FEBF and G.I claims; it does not relate to the answering respondents as its final payment was to be made by the respondent No.1. However, request of thepetitioners with respect to the said dues was forwarded to the concerned division government of Pakistan but the same was regretted vide letter dated 09.05.2011.
b) So far as the case of House Rent Allowance is concerned, it needs to be examined in the light of compensation package made applicable for the employees of NCA w.e.f. 01.07.2005 and accommodation allocation Rules, 2002 (AAR, 2002), which were applicable to the employees of PAEC at the time of death of the father of the petitioners Basically the said compensation package was introduced to provide assistance and shelter to the widow and minor children of the deceased employee. A combined perusal of the aforesaid package and AAR, 2002 makes it clear that the petitioners, being major adults and independent, do not fall within the definition of “family” of the employee as defined in rule 2(f) of AAR,2002 and, as such, are not entitled to the House Rent Allowance. Rule 2(f) of AAR, 2002 is as under:- “family” means spouse, legitimate children and step children of a Government servant residing with him and wholly dependent upon him and includes his parents, real unmarried sisters and minor brothers, if residing with him and dependent upon him; Rule-3(j) of the NCA, AAR, 2010, made applicable for the employees of NCA w.e.f. 30.04.2012, also contains the same definition of the family of an employee.
c) For the purpose of pension and gratuity, PAEC is following the rules of the Federal government according to which the sons of the deceased employees who have attained the age of 21 years and the married daughters shall not be entitled to the pension and gratuity. Vide relevant extracts of the rules on the subject.
d) In case a civil servant dies, or is declared permanently incapacitated for further service by a Medical Board, while in service, a lump sum-payment equal to leave pay upto 180 days out of the leave at his credit will be made to his ‘family’ as defined for the purpose of family pension or as the case may be, to the civil servant. It is evident that the sons of the deceased employees who have attained the age of 21 years and the married daughters have not been included in the definition of ‘family’ under the pension rules.”
6. Respondent No.1 also filed para-wise comments, wherein claims of Benevolent Fund and Group Insurance were rejected in view of the provisions of Federal Employees Benevolent Funds and Group Insurance Act-II of 1969 (“Act of 1969”), particularly section 2(5) of Act of 1969, wherein the expression family was defined. The precise submission was that claim of Benevolent Fund and Group Insurance could not be treated as heritable – Tarka – in view of judgment reported as “Federal Government of Pakistan v. Public-at-Large” (PLD 1991 SC 731).
7. Arguments heard. Available record perused.
8. The claims raised are primarily denied on two-counts, which are; i. being contrary to the provisions of the Act of 1969 and the Rules and Regulations applicable qua the case of the petitioner’s father.
ii. The claims raised were not heritable – Tarka – Hence, not to be paid to the legal heirs as part of estate of the deceased.
9. Learned counsel for the petitioner has placed reliance and repeatedly referred to Mst. Ameeran Khatoon’s case (supra), it is therefore, apt to review the same. In Mst. Ameeran Khatoon’s case, the Hon’ble Supreme Court has relied upon the reasoning/ratio of the law laid down in case reported as “Federal Government of Pakistan v. Public-At-Large” (PLD 1991 SC 731), wherein Benevolent Fund and Group Insurance, in terms of the provisions of Act of 1969, were not declared and treated as ‘Tarka’. No reasoning/ground was discussed or elucidated in Mst. Ameeran Khatoon’s case, to support the decision taken, rather the ratio/reasoning in the case of “Federal Government of Pakistan v. Public-At-Large” (supra) was referred and relied upon. In view of the above, most respectfully, it is observed that no law has been enunciated in Mst. Ameeran Khatoon’s case, supra, having binding effect in terms of
Article 189 of the Constitution of Islamic Republic of Pakistan, 1973. Reference is made to the judgments reported as “Muhammad Tariq Badar and another v. National Bank of Pakistan and others” (2013 SCMR 314) and “Khan Gul Khan and others v. Daraz Khan” (2010 SCMR 539). A similar issue came up for hearing in case; In Re: Succession of the Assets Securities, Properties and Accounts of late Javed Iqbal Ghaznavi (PLD 2010 Karachi 153), wherein it was held as:
8. In the case reported in PLD 1991 Supreme Court 731 the five member bench of the Shariat Appellate Court while discussing entitlement of benevolent fund held that had the employee reached his age of superannuation and thereafter died, nothing would have become payable from the Benevolent Fund and therefore such a benefit which does not translate into a debt of the deceased employee against the employer cannot form part of the estate of the deceased so as to become distributable among all his heirs.
9. In the case reported in 2005 SCMR 512 the Division Bench of the honourable Supreme Court while recognizing the principle laid down by the five member bench of the Shariat Appellate Bench of the Supreme Court in the case of Federal Government of Pakistan v. Public-at-Large reported in PLD 1991 Supreme Court 731, mistakenly interpreted it conversely which appears to be typographical error as service benefits granted towards Benevolent Fund or Group Insurance were not treated as heritable benefits in terms of the principle laid down in PLD 1991 Supreme Court 731.
12. Thus any financial benefit which an employee can claim from his employer in his lifetime and have also become payable in his lifetime is to be treated as an absolute right of the employee and if any benefit or any part of it remains unpaid during his lifetime when the same becomes heritable and is to be distributed amongst all his heirs. However, a service benefit, which has not fallen due to an employee in the lifetime of an employee and being a grant or concession on the part of the employer, then whatever amount that become payable after the death of the employee is to be distributed only to those members of his family who are entitled for the same as per the rules and regulations of service. It is the discretion of the employer to make rules and regulations in relation to any grant or concession that is intended to give an employee or after his death to any member of his family.
13. Thus benefits such as special retirement benefits, special compensation group insurance under term insurance policy and group insurance under provident fund policy benefits definable as grant and concession on the part of employee and payable after the death of the employee cannot be treated as heritable by all heirs of the employee but are to be distributed to those who are entitled to it under the rules and regulations of service provided by the employer ..
10. In terms of the law laid down in Federal Government of Pakistan v. Public-at-Large (PLD 1991 SC 731), it is clear that only such benefits are inheritable that become receivable by the deceased during his lifetime, i.e. payable to employee before his death. And such service benefit, as given by an employer as grant/compensation, in lieu of death of an employee and made payable to a nominee or family – as defined under the relevant rules and regulations-such grant or compensation, by its very nature, is not heritable and cannot be treated as Tarka – estate of the deceased. In these circumstances, Benevolent Fund and Group Insurance cannot be treated as heritable, being a specie of grant / compensation accrued after the death of an employee. The denial of claim regarding Benevolent Fund and Group Insurance is in accordance with the law.
11. The claim regarding House Rent Allowance when examined in the context of applicable rules, i.e. Accommodation Allocation Rule, 2002 (Rules of 2002) is also]= found not heritable – as Tarka. The controversy that petitioners are not entitled to claim said allowance, in view of definition of the expression “family” as provided therein in terms of Rule 2(f), is not subject matter of this petition. In view of the principle laid down, it is evident that payment of house rent allowance is in the nature of compensation – intended to provide assistance and shelter to the widow and the minor children of the deceased employees – hence not heritable – as Tarka. The petitioners are not entitled to claim house rent allowance as Tarka. In short, the respondents have correctly denied this claim to the petitioners, which claim otherwise does not fall with the definition of expression ‘family’ in terms of Rule 2(f).
12. It was argued by the learned counsel for respondents Nos.2 and 3 that, on merits, the claim of gratuity was declined in view of Rule 9.26 of pension-cum-gratuity scheme 1954, followed by the department of (PAEC), which read as; 9.26.–when the amount of gratuity becomes payable to the family of the government servant, the payment is made according to the following procedure:- a) the amount of gratuity is paid to the nominee of the nominees in accordance with the specified share
(b) where a valid nomination was not in existence or the full amount was not covered by the nomination, the amount of gratuity will be paid in equal shares to the members of the family with the exception of sons, unmarried daughters, grandsons and granddaughters who have attained the age of 21 years and married daughters and granddaughters whose husbands are alive. The share of widow / widows and children of a deceased son will, however, be limited to that as would have been admissible to the son, had he not died.
13. It is clear and evident that gratuity is also in the nature of a compensation/grant, which becomes payable after the incidence of death. Therefore, in wake of the principle discussed in Federal Government of Pakistan v. Public-At-Large (PLD 1991 SC 731), and lately followed in Re: Succession of the Assets Securities, Properties and Accounts of late Javed Iqbal Ghaznavi (PLD 2010 Karachi 153) and Zaheer Abbas v. Pir Asif and 6 others (2011 CLC 1528) and Liaquat Ali v. Mst. Huma Faiz and another (PLD 2018 Sindh 251) claim of gratuity is not heritable – as Tarka. The judgments referred by learned counsel for the petitioner and relevant to the controversy involved are mentioned and discussed.
14. Upon perusal of the record, it transpired that claim regarding leave encashment was not denied by the department, not in the orders/letters impugned through this petition. Without commenting on the merits of the said claim – not subject matter of the letters/orders impugned here – the petitioners are directed to approach and raise said claim before the respondent No.2 who shall examine the same and take decision in accordance with law and judicial pronouncements.
15. The respondents have questioned the maintainability of the petition on the premise that Employees Service Regulations of 2007 are non-statutory. The objection is not sustainable in view of the controversy raised, directions sought and questions involved, i.e. relating to the interpretation of the law.
16. In the circumstances, the claims in respect of gratuity, Benevolent Fund, Group Insurance and House Rent Allowance were rightly declined and no declaration to treat/construe said claims as Tarka -heritable-can be made in view of the law laid down in Federal Government of Pakistan v. Public-a-Large (PLD 1991 SC 731) and the judgments referred and discussed above. The claim regarding leave enmeshment may be raised before the respondent No.2.
17. This petition to the extent of claims regarding payment of gratuity, Benevolent Fund, Group Insurance and House Rent Allowance is without any merit and same is, therefore, dismissed.

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