Employers must timely process and pay retiral benefits, with interest owed for delays established by court precedent.

ANIRUDDHA ROY,J :

1. The petitioner retired from the services of Calcutta Tramways Company (1978) Ltd. (in short, “CTC”) now known as West Bengal Transport Corporation (in short, “WBTC”) with effect from July 31, 2019 upon attaining the age of superannuation. The petitioner was paid his retiral benefits which included a sum of Rs.25,24,986.99 towards Provident Fund (in short PF). The petitioner is claiming interest on this sum for delayed payment thereof. The petitioner was paid an additional sum of Rs.2,00,000/- (rupees two lakhs) towards gratuity on March 12, 2021 in view of the gratuity amount having increased due to increase in salary arising out of revision of pay. The gratuity amount was computed initially on the basis of unrevised salary and the additional amount was the difference in computation on the unrevised salary and that on the basis of revised salary.

2. The revision of pay and allowance was made applicable by virtue of a notification issued by the Government of West Bengal, Finance Department, Audit Branch on September 25, 2019. The revision of pay and allowance which resulted in increase in the gratuity amount as aforesaid, therefore, came into effect only on September 25, 2019 i.e. subsequent to the petitioner’s retirement which took place on July 31, 2019. The notification had a retrospective effect on the salary of the petitioner which he was receiving prior to his retirement. The effect of such enhancement has been duly given to the petitioner by paying the additional amount. However, the petitioner cannot be granted any interest on the additional sum towards gratuity as there was no delay attributable to CTC between August 1, 2019 and September 24, 2019, as the notification was not there. The petitioner, therefore, is entitled to interest on the additional sum on account of gratuity from February, 2020 i.e. the date on which the notification came into effect till actual payment i.e. March 12, 2021. The petitioner, however, is entitled to interest on the aforesaid sum of Rs. 25,24,986.99 from August 1, 2019 till December 4, 2019 for delay in making payment thereof.

3. The issue of payment of interest for delay in paying the retiral benefits have been considered by the Hon’ble Supreme Court in a recent judgment reported in (2022) 4 SCC 627 (Dr. A. Selvaraj v. CBM College & Ors.). In the instant case, there is no fault on the part of the petitioner for the delay in paying the retiral benefits as it was the obligation of the employer to process the payment of retiral benefits and pay the same within one month from the date of the petitioner’s retirement. Since the payment was not made within one month, the interest will date back to the date immediately succeeding the date of the petitioner’s retirement.

4. In the aforesaid facts and circumstances, the respondents are directed to pay interest to the petitioner at the rate of 6% per annum of Rs.25,24,986.99 from August 1, 2019 till December 4, 2019. The respondents shall also pay interest on the sum of Rs.2,00,000/- at the rate of 6% per annum from February, 2020 till March 12, 2021. The interest has to be paid within a period of three months from date, failing which interest on the two separate amounts as aforesaid i.e. Rs. 25,24,986.99 and Rs.2,00,000/- will stand increased to 10% per annum being the rate of interest payable at the present under the Payment of Gratuity Act, 1972 for delay in paying the money on such account.

5. The rate of interest allowed is fair and reasonable and is at the rate allowed by the Hon’ble Supreme Court in a recent judgment reported in (2021) 11 SCC 543 ( State of Andhra Pradesh and another V. Dinavahi Lakshmi Kameswari ).

6. The appropriate State authority is also directed to disburse and release the fund in favour of the respondent nos. 2 to 5 positively within a period of five weeks from the date of communication of this order to enable the respondent nos. 2 to 5 to pay the petitioner in turn within the time frame mentioned a