Retired employees are entitled to interest for delayed payment of gratuity, and any delay in settlement and disbursement of retirement dues must be visited with the penalty of payment of interest.

JUDGMENT :

1. This application was initially dismissed by the writ Court on 19th March, 2014 on the ground of delay in filing of more than three years. The writ petitioner challenged the said dismissal order by filing an appeal being F.M.A. No. 2253 of 2014, Asok Kumar Hazra vs. State of West Bengal and Others. The said appeal was allowed with the observation that the writ petition was not delayed and ought not to have been dismissed at the threshold. With such observation the writ application was remanded for fresh hearing before the appropriate bench (Writ Court). Subsequently, this matter was mentioned before this Court and was taken up for hearing.

2. This writ application has been filed by the petitioner claiming interest for delayed payment of gratuity. The petitioner has stated in the writ application that gratuity was paid to him at a belated stage though he was entitled to get it on the date next to the date of his retirement.

3. The petitioner was a teacher of a Primary School who was appointed in the year 1980 and has retired on superannuation from service on December 31, 2010. He has stated that there was no impediment in paying the gratuity on the date next to his date of retirement as he submitted his pension booklet duly filled up to the appropriate authority much prior to his retirement.

4. The petitioner retired on 31.12.2010. The gratuity amount was paid to whom on December 31, 2011. The gratuity amount was Rs. 3,35,145.00.

5. He has affirmed the writ application on February 07, 2014 and has filed it on February 10, 2014. He has claimed interest at the rate of 18% per annum on the gratuity amount from the date next to his date of retirement till the date of actual payment.

6. The learned advocate has drawn my attention to a judgment reported in Atul Chandra Mahata vs. State of West Bengal and Others, (2004) 1 Cal. L.J. 191. The learned advocate has particularly referred to paragraph 7 of the said judgment wherein, inter alia, different observations made by the Supreme Court in the following five judgments were considered:

(i) R. Kapur vs. Director of Inspection, (1994) 6 SCC 489

(ii) Gorakpur University vs. Shila Prosad Nagendra and Others, (2001) 6 SCC 591

(iii) State of Kerala vs. M. Padmanavan Nair, (1985) AIR SC 356

(iv) Som Prokash Rekhi vs. Union of India, (1981) AIR SC 212

(v) S.N. Mahthur vs. Gorakpur University, 1996 (W) ESC 212

7. Based on the above judgments it has been observed that Gratuity and Provident Fund amount is a property in the hand of a retired employee and it is not a bounty and it cannot be withheld for any reason.

8. In the said judgment of this High Court the following decision of Supreme Court have also been considered:

(i) State of Gujarat vs. Umabhaj M. Patel, (2001) 3 SCC 314

(ii) Ex. Capt. R.S. Dhuli vs. Sate of Haryana and Others, (1998) 4 SCC 379

9. On the basis of the above two judgments it has been held that Provident fund and gratuity is a property in the hand of the employee concerned who has retired and denial of such will invite the penal consequences of interest.

(Emphasis mine)

10. The learned Advocate for the petitioner has relied on another judgment reported in State of Kerala and Others vs. M. Padmanabhan Nair, (1985) AIR SC 356, wherein it has been held that Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment. The necessity for prompt payment of the retirement dues to a Government servant immediately after his retirement cannot be over emphasised and it would not be unreasonable to direct that the liability to pay penal interest on these dues at the current market rate should commence at the expiry of two months from the date of retirement.

11. Referring to a j