1. Retired government employee not paid retiral benefits despite High Court orders — Contempt proceedings initiated. (Para 3 )
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2000 Supreme(SC) 1631
SUPREME COURT OF INDIA
D.P.Mohapatra : M.B.Shah
Bal Kishore Mody
Versus
Arun Kumar Singh
Case No. : 5815 of 2000
Date of Decision : 10/10/00
Important Points
Employees are entitled to interest on delayed retiral benefits from the date of submission of pension papers until the date of actual payment if the delay is attributable to the state.
Subject
Service Law - Pension and Retiral Benefits
Act Referred
Headnote
(A) Service Law - Retiral Benefits - Delay in payment - Interest - Delay in payment of pensionary benefits after retirement entitles the employee to interest on such amounts from the date the pension papers were submitted until the date of actual payment. (Para 5)
(B) Contempt Proceedings - When the state admits delay in compliance and agrees to pay interest, the court may dispense with further action in the contempt proceedings. (Para 4)
Facts of the case:
An employee retired and submitted pension papers on the specified date, but retiral benefits were not paid for several years, necessitating legal recourse. Despite a High Court order directing the release of pension, gratuity, and leave encashment within three days, the payments were further delayed. The state subsequently agreed to pay interest on the delayed amount and take action against the responsible officers.
Findings of Court:
The court found that the retiral benefits were delayed significantly from the date of submission of papers. Consequently, the respondent is liable to pay interest on the retiral benefits from the date of submission of papers until the date of actual payment.
Issues: Whether the appellant is entitled to interest on the delayed payment of retiral benefits and whether the contempt proceedings should continue given the state's agreement to pay interest.
Ratio Decidendi: The court ruled that in cases of undue delay in the payment of retiral benefits, interest should be awarded to the employee from the date of submission of pension papers until the date of payment, quantified at 15% per annum in this instance, to compensate for the delay.
Result: The appeal is disposed of accordingly and the High Courts judgment shall stand modified to the aforesaid extent.
(B) Contempt Proceedings - When the state admits delay in compliance and agrees to pay interest, the court may dispense with further action in the contempt proceedings. (Para 4)
Facts of the case:
An employee retired and submitted pension papers on the specified date, but retiral benefits were not paid for several years, necessitating legal recourse. Despite a High Court order directing the release of pension, gratuity, and leave encashment within three days, the payments were further delayed. The state subsequently agreed to pay interest on the delayed amount and take action against the responsible officers.
Findings of Court:
The court found that the retiral benefits were delayed significantly from the date of submission of papers. Consequently, the respondent is liable to pay interest on the retiral benefits from the date of submission of papers until the date of actual payment.
Issues: Whether the appellant is entitled to interest on the delayed payment of retiral benefits and whether the contempt proceedings should continue given the state's agreement to pay interest.
Ratio Decidendi: The court ruled that in cases of undue delay in the payment of retiral benefits, interest should be awarded to the employee from the date of submission of pension papers until the date of payment, quantified at 15% per annum in this instance, to compensate for the delay.
Result: The appeal is disposed of accordingly and the High Courts judgment shall stand modified to the aforesaid extent.
Legal Category Hierarchy
- administrative law
- practice and procedure
Table of Contents
2. Respondent state counsel submitted the state would pay interest within one month and take action against erring officers. (Para 4 )
3. Court considered the delay in payment and counsel's submission, deciding no further contempt action was needed. (Para 4 , 5 )
4. Delayed payment of retiral benefits warrants interest at 15% per annum from the date of application. (Para 5 )
5. Directed payment of interest at 15% per annum from date of pension papers until payment, plus costs. (Para 5 )
6. What is the rate of interest payable for delayed retiral benefits?
The court ordered interest at 15% per annum from the date of submission of pension papers until actual payment. (Para 5 )
7. When does interest on delayed retiral benefits commence?
Interest commences from the date of submission of pension papers, i.e., the date the employee applied for retirement benefits. (Para 5 )
8. Can contempt proceedings be disposed with monetary compensation?
Yes, the court may dispose of contempt proceedings by directing payment of interest and costs instead of further action. (Para 4 , 5 )
(1) LEAVE granted.
(2) HEARD the learned Counsel for the parties.
(3) THIS appeal is filed against the judgement and order, dated 17.5.1999 passed by the High Court of Patna in contempt proceedings numbered as M.J.C. No.3493/1998. The grievance of the appellant is that despite the fact that the appellant retired on 31.12.1995 and submitted pension papers on 15.1.1996, the appellant was not paid his retiral benefits for years together and for that purpose, he was required to approach the High Court. Despite the High Courts order some officers of the State Government delayed the payment of pensionary benefits. As there was breach of the order passed by the High Court, aforesaid contempt proceedings were initiated and finally by the impugned order, the contempt proceedings were disposed of by the High Court by observing that the authorities shall release the full amount towards pension, gratuity and leave encashment as sanctioned and payment order issued by the Accountant General within three days from the date of the appearance of the appellant before the concerned Treasury Officer. The Court has further observed that in case of non-compliance of the order, it would be open to the appellant to bring the aforesaid facts to the notice of the Court to take appropriate action against the erring officer including the Treasury Officer and/or I/C Headmaster of the school. The Court has also kept the question open with regard to the grievance of the appellant for wrong calculation of the provident fund and interest thereon. It has been pointed out that in spite of the order of the High Court to make the payment within three days from 17.5.1999, the amount was released after a long time.
(4) AT the time of the hearing of the matter, considering the delay in making payment of retiral benefits, learned Counsel appearing on behalf of the respondent -State submitted that this Court may pass appropriate orders giving direction to pay interest on the said amount and the State Government would pay the same within one month from the date of the order. He further submitted that appropriate action would be taken against the concerned officer/s who delayed the payment of retiral benefits. In this view of the matter, we do not propose to take any further action in this contempt proceedings.
(5) HENCE, it is directed that the respondents shall pay interest on the retiral benefits from 15.1.1996 till the date of payment at the rate of 15 per cent per annum. With regard to G.P.F. payment, no further interest is required to be paid as the amount is already released with interest. The appeal is disposed of accordingly and the High Courts judgment shall stand modified to the aforesaid extent. The respondent is directed to pay to the appellant, costs quantified at Rs.5000/-.
