This post talks about pension case in Punjab Haryana High Court Chandigarh where it is held amount need to be released within 2 months from retirement else interest to be paid.
The following article analyses a case revolving around pensionary benefits. The case was petitioned by one Satpal Singh (petitioner) against the State of Punjab and Others (Respondents) in the High Court of Punjab and Haryana on the 16th of February 2021. This case was presided over by the Hon’ble Justice Harsimran Singh Sethi.
This analysis may be helpful to those seeking the remedies for unpaid pension and the conditions to claim interest on delayed pensionary payments.
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The facts of the case are as follows:
Mr. Satpal Singh the petitioner filed a writ petition claiming that his entire pension amount had not been paid and seeking a direction from the court to the respondents, to pay the pending amount of the pensionary benefits and the subsequent interest due on the pending amount. As per the averments, the petitioner was entitled for a sum of Rs. 11,05,005/-, out of which, Rs. 6,53,938/- was paid and an amount of Rs. 4,51,067/- was still due.
The Respondents in response filed that the individual responsible for payment of the pensionary benefits, that is, Respondent No. 4-Executive Officer, Nagar Council, Mullanpur Dakha, District Ludhiana, states that the petitioner was entitle to a sum of Rs. 10,54,148/- and the same has already been paid to him. The reply as given in para 4 of the 1 of 5 written statement is as under:-
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“4. That para no. 4 of the writ petition is admitted as correct to the extent that petitioner after his superannuation was entitled to get the pension and all pensionary benefits under the regulations governing his conditions of service from the answering respondent, but it is wrong and denied that till date that the petitioner has not been released his pensionary benefits i.e GPF, Leave Encashment and Gratuity etc. rest of the para is also wrong and denied being false and frivolous. It is worth to mention here that, the amount of Gratuity, Leave Encashment and PPF had already been paid by the answering respondent No.4 to the petitioner from time to time. Answering respondent paid total amount of Rs.9,88,788/- to the petitioner, detail of demand drafts by which, said payment was paid to the petitioner by the answering respondent No.4. Hence, as the balance/due shown by the petitioner in the present petition amounting to Rs.4,51,067/- is wrong and baseless and the said amount was not payable by the answering respondent 2 of 5 No.4 to the petitioner as per law and the petitioner has been wrongly claiming the said amount from the answering respondent on the basis of wrong facts and calculations.”
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The respondents in this case attached proof which showcased that the benefits owed to the petitioner were truly different from those claimed by the petitioner and they had been paid in full albeit over a period of time.
The Counsel for the petitioner further argued that regardless of the benefits due to the petitioner being paid in full, the amount was paid after a delay, therefore the petitioner is entitled for interest on the delayed payment of the pensionary benefits.
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Findings of the Court:
The court found that the chart produced by Respondent No.4 which had evidence to support their statements in the reply quoted above, made it clear that the amount due to the petitioner had been paid in full. In particular, on the date of retirement of the petitioner only Rs. 1,50,000/- was paid to him and rest of the total amount of Rs. 10,54,148/- was paid to petitioner starting from March 2016 onwards till September 2020. However, the court also noted that nothing had been mentioned in the reply so as to justify the said delay in releasing of the pensionary benefits. In the absence of any justification given by the respondents, the court held that it has to be held that the delay is to be attributed to the respondents.
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The court then referred to the principle set by the Full Bench of the High Court of Punjab and Haryana in A.S. Randhawa Vs. State of Punjab and others, 1997(3) SCT 468, an employee is entitled for the release of the pensionary benefits within a reasonable time of his/her retirement and the reasonable time fixed by the Hon’ble Full Bench in the aforementioned case of A.S. Randhawa’s case is two months after the retirement and in case of default, it has been held that the employee needs to be compensated by the award of interest. The relevant paragraph of said judgment is as under:-
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“Since a government employee on his retirement becomes immediately entitled to pension and other benefits in 3 of 5 terms of the Pension Rules, a duty is simultaneously cast on the State to ensure the disbursement of pension and other benefits to the petitioner 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 front the date of retirement which time limit has been laid down by the Apex Court in M. Padmanabhan Nair’s case (supra). If 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.”
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In referencing the previously set parameters to the documents presented by the respondents the Court observed that the delay in releasing the amount except an amount of Rs. 1,50,000/- released on 31.03.2015, is more than two months from the date of retirement of the petitioner. The case of the petitioner is squarely covered for the grant of interest on the amount, which has been released to the petitioner thereafter.
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Further, a Coordinate Bench of the High Court of Punjab and Haryana in of J.S. Cheema Vs. State of Haryana, 2014(13) RCR (Civil) 355, has held that where an amount for which an employee was entitled, has been retained and used by the respondents, employee will be entitled for the interest. The relevant paragraph of J.S. Cheema’s case (supra) is as under: –
“The jurisprudential basis for grant of interest is the fact that one person’s money has been used by somebody else. It is in that sense rent for the usage of money. If the user is compounded by any negligence on the part of the person with whom the money is lying it may result in higher rate because then it can also include the component of damages (in the form of interest). In the circumstances, even if there is no negligence 4 of 5 on the part of the State it cannot be denied that money which rightly belonged to the petitioner was in the custody of the State and was being used by it.”
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In the light of the precedent said by the cases mentioned above the Court held that the amount paid starting from 2nd June 2016 (the delayed payable amount which has been referred to in this article), is retained by the department without valid justification, thus, the petitioner is owed interest on the said delayed release of the pensionary benefits.
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Conclusion:
The writ petition was allowed. The claim of the petitioner for the grant of interest on delayed release of payment is allowed. The petitioner is held entitled for the interest @ 9% per annum from the date, the amount became due till the same is released except the amount of Rs. 1,50,000/-, which was released to him on 31.03.2015. Let the amount of interest for which the petitioner becomes entitled under this order be calculated by the respondents within a period of one month from the receipt of certified copy of this order and the amount so calculated shall be paid to the petitioner within a period of 15 days thereafter.
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For case specific advice, please contact best/top/expert Service Matter lawyers Advocates in Chandigarh Panchkula Mohali Kharar Derabassi Zirakpur of Punjab Haryana High Court.
This post written by Nankee Arora.
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