Interest on Delay in Gratuity Payment CAT Case

This post covers Interest on Delay in Gratuity Payment CAT Case where court found delay unusual & was a case of Voluntary retirement. Hence no merit.

Delay in Gratuity – Education Department Payment (Renu Anand v. Union Territory Chandigarh)

Through this analysis, the author will try to understand the power of the courts with respect to adjudicating and deciding upon the delay by various authorities. This analysis will provide an in-depth assimilation of the extent of the power the courts enjoy in such cases. It will also highlight the importance of the extend and usualness of a delay that would form the prerequisite for merit for compensation.

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Facts

This OA has been filed by the applicant Renu Anand seeking interest on delayed payment of Gratuity, General Provident Fund and Pension. The applicant has also sought penalty/damages for delay in payment of her dues without valid justification. The facts of the case are not disputed. The applicant was appointed as Lecturer by the respondent department UT Administration on 17.08.1992 and she had been working continuously as such. After completion of more than 25 years of service, she sought voluntary retirement vide application dated 15.01.2018 (Annexure A-1). In the application, she stated that three months notice may be considered from 01.05.2018 and sought voluntary retirement till 31.07.2018. This request for voluntary requirement was accepted by the competent authority vide order dated 02.07.2018 (Annexure A-2) and she was voluntarily retired w.e.f. 31.07.2018. As the whole question in the case is whether there was delay in payment of her retiral dues and if so, whether the delay was on the part of the applicant or on the part of the department and whether there was any intentional or unusual delay, a few facts relating to payment of different retiral dues are relevant. These facts have been admitted by both the parties and are undisputed.

Also Read- T.R.Regunath vs The Managing Director on 25 September, 2018

These are given in the following paragraph. As regards pension papers, the applicant submitted her pension papers first time on 21.08.2018 (Annexure R-1) addressed to the Principal, Government Model Senior Secondary School, Sector 8, UT Chandigarh. The Principal forwarded the case to the District Education Officer on 18.10.2018 (Annexure R-2) This was returned to the Principal on 13.11.2018 (Annexure R-3) pointing out discrepancies in the case. After correction, the pension case was again sent to the District Education Officer on 06.12.2018 (Annexure R 4). The District Education Officer then forwarded the pension case to Director School Education, UT Chandigarh on 24.12.2018 (Annexure R-5). This was however returned to District Education Officer on 11.02.2019 (Annexure R-6) with the remarks that pay and qualifying service were not correctly mentioned. Also, it was pointed out that in the service book, the applicant was shown as officiating employee upto the date of her retirement. The relevant inputs were resubmitted to District Education Officer on 03.04.2019 (Annexure R-7). Subsequently, as pointed out by Accounts Wing, the pay of the applicant needed to be refixed as per order dated 11.06.2019 (Annexure R-8). The pension case, therefore, was returned to the Principal for making necessary corrections in the service book and the pension papers.

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The Principal, after making requisite corrections, forwarded the case to District Education Officer on 14.06.2019 (Annexure R-9). The District Education Officer forwarded the same to Director School Education on 17.06.2019 (Annexure R 10). The Director further forwarded the case to Accountant General (A&E), UT Chandigarh on 22.07.2019 (Annexure R-11). The Accountant General sanctioned the DCRG and pension vide order dated 04.09.2019 (Annexure R-12). Regarding GPF, the applicant submitted her final payment case on 03.12.2018. The Principal forwarded the same to District Education Officer on 06.12.2018 (Annexure R-14) who further forwarded the same to the Accountant General, UT on 19.12.2018. The same was sanctioned on 16.01.2019 (Annexure R 15). This order contained a condition at Sr. No. 4 to the following effect:- “A certificate to the effect that the subscriber has not drawn any refundable/non-refundable advance during the period from DOJ to DOR except, may be recorded on the bill before it is submitted to the Treasury”. The applicant submitted this certificate on 28.03.2019 (Annexure R-16). Immediately thereafter, the GPF bill was passed by the Treasury on 29.03.2019. 7. A perusal of the above shows that pension and DCRG were sanctioned on 04.09.2019, that is, about one year and one month after her voluntary retirement. The GPF payment was passed on 29.03.2019 – that is almost eight months after her retirement.

Also Read- “Delayed payment of gratuity will carry interest” – The Hindu

The counsel for the applicant argued that as per Punjab Civil Service Rules, the retiral dues are to be paid to the retirees on the date of their retirement and in case of any delay, the employer is bound to pay interest on the delay in payment. The counsel for the applicant also argued that it was the duty of the respondents to process her retiral dues in advance, especially as she had given voluntary retirement notice of over six months. The counsel for the applicant further argued that the delay is on the part of the respondent department and not on the part of the applicant. The applicant on her part submitted all the claims and she also fulfilled subsequent requirement immediately and there was no delay on her part. It was the respondent department which made mistakes or which led to discrepancies in her case requiring frequent corrections resulting in unusual delay in release of her retiral dues. As such, counsel for the applicant concluded that the respondent department is liable to pay interest on the delayed payment for which they were responsible. The respondent department, on the other hand, submitted that the applicant’s voluntary retirement was accepted vide order dated 02.07.2018. Thereafter, the applicant submitted her pension papers only on 21.08.2018. These papers were processed thereafter. Due to some discrepancies, these needed to be returned once for correction of the discrepancies and then again as pay and qualifying service were not correctly mentioned. Even these inputs were corrected by District Education Officer vide letter dated 03.04.2019. However, thereafter, the pay of the applicant needed to be corrected and as such, the pension case had to be again returned to the Principal, Government Model Senior Secondary School.

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These corrections were made in June 2019. The case was forwarded from Principal to District Education Officer and then to Director School Education and then finally to Accountant General on 22.07.2019 and the pension and the DCRG were sanctioned on 04.09.2019. Similarly, in case of GPF, the applicant herself submitted her papers after four months from the date of her retirement and the same could be processed only thereafter. The GPF was finally released on 29.03.2019. The counsel for the respondents therefore contended that the above facts and circumstances show that there was no deliberate or intentional delay on the part of the respondent authorities with regard to release of retiral dues to the applicant. The delay was also partly on the part of the applicant herself in submitting requisite documentation to the concerned authorities. As and when complete documents/formalities were available, necessary dues were promptly released. As such, the respondents’ counsel argued that this was not a fit case for approaching the Tribunal for grant of interest or for damages. He therefore concluded that the applicant is not entitled to any relief and the OA needs to be dismissed.

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Issues Involved

(a) Whether there was a delay in the payment and approval of pension after retirement?

Rules and Laws

This order contained a condition at Sr. No. 4 to the following effect:- “A certificate to the effect that the subscriber has not drawn any refundable/non-refundable advance during the period from DOJ to DOR except, may be recorded on the bill before it is submitted to the Treasury”.

Also Read- Release of Retiral Dues CAT Tribunal Chandigarh Bench

Findings of Court

The Hon’ble court held that considering the retirement being voluntary, the delay was not unusual and was as much as required, hence the court did not find merit in the case.

Conclusion

In conclusion, we can say that, in such cases where the core of the case focuses on the fact that the retirement taken was voluntary. Therefore there was no prior anticipation for the same. Hence the delay in approval was something which was usual and hence the case did not hold merit for compensation.

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This post is written by Aparna Tripathy.

For case specific advice, please contact Chandigarh Administrative Tribunal/Service Matter/Labour and Service/CAT/Legal Aid/Administrative/Senior/Service Employment Lawyers Advocates in Chandigarh Panchkula Mohali Kharar Derabassi Zirakpur etc.