Entitlement to interest for delayed payment of retirement benefits under statutory rules and provisions.

S. Vaidyanathan, J.

A retired Government official is sensitive to delay in drawing monetary benefits. And to avoid posthumous satisfaction of the pecuniary expectation of the superannuated public servant not unusual in Government', it has become necessary to issue directions, in several cases for early payment of those dues.-Krishna Iyer, J. in the case of State of Mysore v. C.R. Sheshadri and Ors, (1974) 1 LLJ 301.

2. The petitioner claiming himself to have suffered financially as well as psychologically on account of belated payment of retirement benefits, has filed this writ petition claiming interest, in respect of those belated payments. The Petitioner has received the gratuity, leave salary and pension commutation with a delay of 11 months, 12 months and 13 months respectively.

3. This writ petition has been filed seeking direction to the respondents to pay interest at the rate of 18% p.a. for the belated payment of the gratuity, leave salary and pension commutation within the time limit that may be fixed by this Court.

4. Facts :

The petitioner initially served as Conductor under the respondents corporation and after periodical promotion, he was promoted as Senior Grade Conductor and he retired from service with effect from 30.04.2010 and the petitioner claims 18% interest p.a. for the belated payment of the petitioner's retirement dues.

5. The contention of the petitioner is that the retirement benefits ought to have been paid on the date of retirement or at least, reasonably within a short period immediately after retirement. It is pointed out that as the payment was not made so, but made belatedly, the respondents are liable to pay interest.

6. The learned counsel for the petitioner relied upon the following provisions of law and the reported decisions and contended that if the payment is not duly made in accordance with the time prescribed, under the Law, then the petitioner is entitled to claim interest.

7. It is appropriate to consider those provisions and decisions. Pointing out that it is imperative for the respondents (a) to keep in mind the time schedule prescribed in the rules/instructions;

(b) to initiate various steps towards grant of retirement benefits well in advance prior to the date of retirement;

(c) to realize that there is liability even to pay compound interest and

(d) to pay interest even in the absence express provisions, the following decisions are relied upon:-

(i) In the case of Government of India vs. M. Deivasigamani, (2009) 3 MLJ 1, this Court has held as follows:-

"The contention of the appellant that as per the Government norms, interest can be paid only on Death-cum-Retirement Gratuity, in case of delay and the same cannot be awarded to any other retiral benefits, is not tenable, in view of the decision of the Supreme Court in S.K. Dua v. State of Haryana, (2008) 3 SCC 44."

(ii) In the decision in Uma Agrawal vs. State Of U.P. And Anr, (1999) 3 SCC 438, the Hon'ble Supreme Court held as under:-

"We have referred in sufficient detail to the Rules and instructions which prescribe the time-schedule for the various steps to be taken in regard to the payment of pension and other retiral benefits. This we have done to remind the various Governmental Departments of their duties in initiating various steps at least two years in advance of the date of retirement. If the Rules/instructions are followed strictly much of the litigation can be avoided and retired Government servants will not feel harassed because, afterall, grant of pension is not a bounty but a right of the Government servant. Government is obliged to follow the Rules mentioned in the earlier part of this order in letter and in spirit. Delay in settlement of retiral benefits is frustrating and must be avoided at all costs. Such delays are occurring ever in regard to family pensions for which too there is a prescribed procedure. This is