Entitlement to interest on belated government payments of retiral benefits when unjustifiably delayed.

ORDER

The petitioner has approached this Court seeking sanction of interest on the belated payment of a sum of Rs.20,19,578/- towards encashment of Earned Leave/Private Affairs for the period from 01.06.2016 to 22.09.2019, and also on a sum of Rs.10,000/- towards the Government’s contribution to the Special Provident Fund for the said period.

2. The petitioner, while serving as Additional Technical Director of Technical Education, was placed under suspension on allegations of misconduct. The petitioner challenged the order of suspension before this Court in W.P. No.20584 of 2016. This Court, by order dated 12.07.2016, observing that the impugned order of suspension dated 31.05.2016 was issued on the eve of the petitioner’s superannuation, directed the first respondent to commence and complete the enquiry proceedings as expeditiously as possible, preferably within a period of four (4) months from the date of receipt of a copy of the order.

3. Though the petitioner was placed under suspension, he was entitled to encashment of Earned Leave/Private Affairs. Non-payment of the said benefits compelled the petitioner to file W.P. No.36512 of 2016. By order dated 19.10.2016, this Court directed the Director of Technical Education, Guindy, Chennai, to consider the petitioner’s representation regarding payment of the Special Provident Fund and encashment of Earned Leave/Private Affairs standing to his credit as on 31.05.2016, within a period of three (3) weeks from the date of receipt of a copy of the order.

4. Though the order was passed on 19.10.2016, the sum of Rs.20,19,578/- towards encashment of Earned Leave/Private Affairs was paid only on 22.09.2019.

5. The order passed in W.P. No.36512 of 2016 was challenged before the Hon’ble Supreme Court in SLP (C) No.27192 of 2018. The said SLP was dismissed with a direction to conclude the enquiry within three months, failing which the amount representing encashment of Earned Leave was to be released to the respondent within two weeks thereafter.

6. Instead of releasing the amount towards encashment of Earned Leave, the respondents filed a miscellaneous application seeking extension of time to conclude the enquiry. The said application was also dismissed on 22.04.2019. The payment of the amount towards encashment of Earned Leave/Private Affairs was withheld solely on the ground that the petitioner was under suspension pending enquiry.

7. Despite the directions issued by this Court as well as by the Hon’ble Supreme Court, the respondents did not take effective steps to conclude the enquiry. On the contrary, the petitioner was permitted to retire from service, and thereafter the amount towards encashment of Earned Leave was paid only on 22.09.2019. The petitioner was entitled to encashment of Earned Leave with effect from 01.06.2016, and the delay in payment is wholly attributable to the respondents. Under the guise of conducting an enquiry, the respondents failed to release the amount when it became due. As a result, the petitioner has suffered monetary loss on account of the belated payment and is therefore entitled to interest on the delayed disbursement.

8. The Hon’ble Supreme Court in S.K. Dua v. State of Haryana held that retiral benefits are not in the nature of a bounty, and an employee is entitled to receive such benefits as a matter of right immediately upon superannuation, unless they are withheld by way of punishment in accordance with law. It was observed that, where there is delay, the employee would be entitled to interest, particularly if statutory rules govern the field.

9. A Division Bench of this Court, in Dr. S.L. Loganathan v. Tamil Nadu Agricultural University (W.P. No.39320 of 2005, dated 12.05.2011), held that belated payment of pensionary benefits, including encashment of earned leave, would entitle the employee to interest, and in that case directed payment of interest at 12% per annum.

10. In the light of the