Last Updated on September 6, 2024 by Satish Mishra

Post covers Denial of Retirement Benefits by High Court case wherein department withheld amount without any reason and refused to pay interest when it was released. Even though the law is settled on this issue but we see on many occasions government departments being indulged into such practice.

Even poor financial condition of state can also not be a ground for not paying interest on amount withheld as dictated by High Court Chandigarh.

Denial of Retirement Benefits Service Matter

This post is a summary of judgment wherein the claim raised by the petitioner in the present writ petition is that he retired on 30.04.2015, but his pensionary benefits were not released within a reasonable time after retirement and therefore, he is entitled to grant of interest on the delayed release of the pensionary benefits. The court held that in the absence of any valid ground, the petitioner is entitled to grant of interest @ 9% per annum. the present writ petition is allowed. The respondents are directed to calculate the interest @ 9% per annum on the delayed payments, which have been made to the petitioner.

Judgment digest

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Date of decision: – 22.01.2020

Petitioner:

Nek Singh

Respondents:

State of Punjab and others

Argued by: 

For the Petitioner: Mr. Karan Garg, Advocate

For the Respondents: Mr. Mehardeep Singh, Additional Advocate General, Punjab.

Mr. Karan Garg, Advocate

Quorum: 

HON’BLE MR. JUSTICE HARSIMRAN SINGH SETHI

Facts and evidence presented by both parties.

The claim raised by the petitioner in the present writ petition is that he retired on 30.04.2015, but his pensionary benefits were not released within a reasonable time after retirement and therefore, he is entitled to grant of interest on the delayed release of the pensionary benefits. As per the averments made in the writ petition, the petitioner was appointed as a Junior Assistant on 05.11.1975 in the Municipal Council, Patran. He kept on working on the said post for 40 years and retired on attaining the age of superannuation on 30.04.2015. After the 1 of 8 retirements of the petitioner, though, there was no valid justification with the respondents, still, the pensionary benefits of the petitioner were not released within a reasonable time after the retirement. According to the averments made in para No.4, a total sum of Rs.4 lakhs was paid to vide letter dated 21.08.2015 (Annexure P-2) and that too in three installments. After the retirement, the respondents have calculated the amount for which the petitioner was entitled, and the total amount of gratuity and leave encashment for which petitioner was entitled was calculated as `10,35,117/-. As the remaining amount of more than `6,00,000/- was not released to the petitioner, he served the respondents a legal notice dated 08.10.2015 (Annexure P-4). In pursuance of the direction issued by this Court, respondents released the remaining amount of Rs.6,35,117/- by 06.05.2016. After the release of the said amount, the petitioner raised a claim for the grant of interest on the delayed release of the pensionary benefits, which claim was declined by the respondents, and therefore, the petitioner filed the present writ petition claiming the interest on the delayed release of the pensionary benefits. The fact that an amount of `4,00,000/- was released up to 21.08.2015 in three installments is admitted. Respondents have further admitted that the remaining amount was released by 06.05.2016 and that too in installments. The only justification given for the delayed release of the pensionary benefits is the financial constraints, which were being faced by the Municipal Council, Patran. The question of law in respect of grant of interest on the delayed payment of retiral benefits has already been settled by the Full Bench of this Court in A.S. Randhawa Vs. state of Punjab and others, 1997(3) SCT 468, wherein, it has been held that the amount for which an employee becomes entitled on account of retiral benefits, is to be released within a reasonable time and reasonable time fixed by the Full Bench of this Court is two months from the date of retirement. This Court in A.S. Randhawa’s (supra) has further held that in case, retiral benefits have been retained by the respondents for more than two months and that too without any justifiable reason, the employee will be entitled to interest. The relevant paragraph of the said judgment is as under: – “Since a government employee on his retirement becomes immediately entitled to pension and other benefits in terms of the Pension Rules, a duty is simultaneously cast on the State to ensure the disbursement of pension and other benefits to the retirer in proper time. As to what is proper time will depend on the facts and circumstances of each case but normally it would not exceed two months from the date of retirement which time limit has been laid down by the Apex Court in M. Padmanabhan Nair’s case (supra). If 6 of 8 the State commits any default in the performance of its duty thereby denying to the retiree the benefit of the immediate use of his money, there is no gainsaying the fact that he gets a right to be compensated and, in our opinion, the only way to compensate him is to pay him interest for the period of delay on the amount as was due to him on the date of his retirement.” In the present writ petition as well, there was no valid justification with the respondents to withhold the pensionary benefits of the petitioner up to 06.05.2016 though he retired on 30.04.2015. A claim of the petitioner is squarely covered for the grant of interest.

Judgment:

In the absence of any valid ground, the petitioner is entitled to grant of interest @ 9% per annum. the present writ petition is allowed. The respondents are directed to calculate the interest @ 9% per annum on the delayed payments, which have been made to the petitioner. The interest shall be calculated from the day when the petitioner became entitled to the release of the amount till the actual payment were released to her. Let the calculation be done within two months from the date of receipt of a certified copy of this order and the actual payment shall be released to the petitioner within one month thereafter. As the petitioner has been forced to approach this Court for the release of his genuine claim, he will also be entitled to the costs, which are assessed @ `15,000/-, to be paid by the respondents along with the payment of interest.

Supreme Court has also said Denial of pension is continuing wrong & court can’t be oblivious of difficulties of retired employee.

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