Delayed payment of retiral benefits warrants the payment of interest to the retiree.

Headnote:
Interest - Retiral Benefits - The court directed the respondent to pay simple interest at the rate of 18 per cent from the date of retirement till the date of payments.
Fact of the Case:

The appellant retired from service on 31st August, 1997, and most of the retiral benefits were paid long after her retirement.
Finding of the Court:

The court found that there was no reason or justification for the delayed payments and directed the respondent to pay simple interest at the rate of 18 per cent from the date of retirement till the date of payments.
Issues: Delay in payment of retiral benefits and entitlement to interest.
Ratio Decidendi: The court held that in the case of an employee retiring after rendering service, all retiral benefits should be paid on the date of retirement or soon thereafter, and directed the payment of interest due to the delayed payments.
Final Decision: The appeal was allowed to the extent that the respondent was directed to pay simple interest at the rate of 18 per cent from the date of retirement till the date of payments.

Judgement Key Points

Certainly. Based on the provided legal document, here are the key points summarized:

The case involves a dispute over delayed payment of retiral benefits to a retired employee (!) [1000349330002].
The appellant retired from service on a specified date and received most of her benefits well after her retirement date (!) [1000349330001].
The benefits paid included G.P.F., G.I.S., encashment of leave, arrears of pay, gratuity, and commuted pension, with specific amounts and dates of payment recorded (!) (!) (!) (!) (!) (!) (!) (!) .
The court observed that there was no justification for the delay in disbursing the benefits and emphasized that such payments should be made promptly, ideally on or soon after the retirement date [1000349330002].
Due to the unjustified delay, the court directed the respondent to pay simple interest at 18% per annum from the date of retirement until the actual payment date (!) [1000349330003].
The court's primary issue was the delay in payment of retiral benefits and the employee's entitlement to interest on delayed payments [judgement_subject].
The final order allowed the appeal to the extent that the respondent was required to pay the interest, with the payment to be made within a specified period (!) (!) .
The legal basis for the interest award was grounded in principles that require timely payment of retirement benefits and the entitlement to interest in case of delay [judgement_act_referred].

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JUDGMENT :- Special leave granted limited to the question of granting of interest.

2. The appellant retired from service on 31st August, 1997. From the response filed by the respondent, it is clear that most of the payments of the retiral benefits to her were made long after she retired on 31st August, 1997. The details of the payments so made are as under :

Sl. No. Particulars Amount paid Date

i) G.P.F. 90% Rs. 1,80,899.00 27-11-1997

ii) G.P.F. 10% Rs. 20,751.00 25-04-1998

iii) G.I.S. Rs. 13,379.00 27-02-1998

iv) Encashment of leave Rs. 41,358.00 27-09-1998

v) Arrears of pay Rs. 15,495.00 27-09-1998

vi) Gratuity Rs. 1,09,753.00 05-12-1998

vii) Commuted pension Rs. 20,484.00 05-12-1998

viii) Detained amount Rs. 45,000.00 05-11-1999

3. In case of an employee retiring after having rendered service, it is expected that all the payment of the retiral benefits should be paid on the date of retirement or soon thereafter if for some unforeseen circumstances the payments could not be made on the date of retirement.

4. In this case, there is absolutely no reason or justification for not making the payments for months together. We, therefore, direct the respondent to pay to the appellant within 12 weeks from today simple interest at the rate of 18 per cent with effect from the date of her retirement, i.e., 31st August, 1997 till the date of payments.

5. The appeal is allowed to the above extent.

Order accordingly.

FOR CITATION: AIR 2000 SC 3513(2)

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2000 Supreme(SC) 229

SUPREME COURT OF INDIAB.N. KIRPAL AND S. RAJENDRA BABU, JJ.Vijay L. Mehrotra, Appellant VERSUSState of U.P. and others, Respondents.Civil Appeal No. 687 of 2000, D/- 31-1-2000.

Delayed payment of retiral benefits warrants the payment of interest to the retiree.

SUPREME COURT OF INDIA
B.N. KIRPAL AND S. RAJENDRA BABU, JJ.
Vijay L. Mehrotra, Appellant
VERSUS
State of U.P. and others, Respondents.
Civil Appeal No. 687 of 2000,
D/- 31-1-2000.