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2003 Supreme(Pat) 1007
PATNA HIGH COURT
Ravi S.Dhavan and Shashank Kr.Singh JJ.
Ram Sumer Ahair
Versus
Union Of India
Civil Writ Jurisdiction Case No. 2396 of 2003 ;
Decided On : SEPTEMBER 12, 2003
The principle of equity dictates that interest is due to a person entitled to receive payment, regardless of culpability for the delay.
Headnote:
DELAYED PAYMENTS - RETIRAL BENEFITS - The court held that the petitioner is entitled to interest on delayed payments of retiral benefits at the rate of 12 per cent, emphasizing the equitable principle that interest is due to a person entitled to receive payment, regardless of culpability for the delay.
Fact of the Case:
The petitioner retired in 1988 and did not receive interest on delayed retiral benefits. The Central Administrative Tribunal denied the claim for interest, citing lack of culpability for the delay.
Finding of the Court:
The court found that the petitioner is entitled to interest on delayed payments at the rate of 12 per cent, and corrected the Tribunal's error in denying the claim for interest based on culpability.
Issues: Delayed payments of retiral benefits, entitlement to interest, Tribunal's error in denying interest claim
Ratio Decidendi: The principle of equity dictates that interest is due to a person entitled to receive payment, regardless of culpability for the delay. The court relied on the Interest Act, 1978 and a Supreme Court case to establish the entitlement to interest on delayed payments.
Final Decision: The petition succeeded with a cost of Rs. 1000/-
1. The only issue in this matter is that of the delayed payments of retiral benefits when the petitioner had retired in the year 1988, no interest was paid. That payments were delayed. On this there is no issue between the petitioner and the Union of India.
2. The fact that interest was not given i as a relief by the Central Administrative Tribunal was on the ground that there was no culpability. Payment of interest which is due to a person who is entitled to receive the payment, the principle does not rest that there has been any semblance of culpability to withhold it. The principle is equitable. Interest itself rests on equity. Whoever may have delayed it and for whatever reason it might have been delayed, if payment is to be made to a man entitled to receive it then the demand to pay it with interest cannot be resisted, unless the law prohibits such a demand, which it does not. The accounts of the petitioner showed arrears; due pension, provident fund and delayed payments. The petitioner claimed interest at the rate of 18 per cent. There is no occasion for the Court to change this rate. The Interest Act, 1978 says at the prevailing rate. In that case it would have to be calculated year to year as interest was permissible on provident fund and pension amounts. A Supreme Court case mentions the payment of delayed retiral benefits and arrears at the rate of 12 per cent. (1985) 1 S.C.C. 429, State of Kerala & Ors. V/s. M. Padmanabhan Nair.
3. Thus, in this matter it will be only just and equitable that the petitioner is paid interest on his delayed payments at the rate of 12 per cent.
4. The Tribunal was clearly in error, a manifest error, to defeat the claim of interI est on the ground of culpability. To that extent the order of the Tribunal is corrected by a writ of certiorari.
5. This petition succeeds with cost at Rs. 1000/-
