Interest on retirement benefits payable only from date of quashing charge memo, not retirement, during pending disciplinary proceedings.

(Order of the Court was made by N.SATHISH KUMAR, J.)

The appeal has been filed challenging the order of the learned Single Judge directing the authorities to pay 8% interest per annum by calculating the retirement benefits.

2.The writ petitioner was an employee in the appellant Department. He was permitted to retire from service on 31.07.2016 on attaining the age of superannuation. However, he was issued with a charge memo on 19.06.2017. The said charge memo was challenged before this Court in W.P.(MD)No.14657 of 2017 and this Court by an order dated 06.09.2021, quashed the said charge memo and directed the authorities to pay the retirement benefits and all other monetary benefits along with interest at the rate of 4%. However, that amount has not been paid. Therefore, the writ petitioner filed writ appeal, which has also come to be dismissed. Thereafter, contempt application has been filed.

In the contempt proceedings, the appellants have agreed to settle the entire dues within a period of one month. As the same has not been paid, once again, the writ petitioner has filed the writ petition seeking a direction from this Court to pay the retirement and other benefits with 18% interest. The learned Single Judge, after considering the materials and the submissions made on either side, directed the appellants to pay the benefits with interest at the rate of 8% per annum. Challenging the same, this writ appeal is filed by the Department.

3.The learned Additional Advocate General appearing for the appellants contended that the respondent’s retirement benefits could not be settled earlier due to the pendency of disciplinary proceedings. It was submitted that the charge memo was quashed only on 06.09.2021 and, therefore, interest, if any, can be computed only from that date and not from the date of retirement.

4.The learned counsel for the respondent submit that though the date of retirement is 31.07.2016, the GPF ,pension arrears and commutation has been paid belatedly. Hence, the appellants are liable to pay interest for the said belated payment.

5.We have heard the learned counsel appearing on either side and perused the entire materials placed on record.

6.It is not in dispute that the respondent was not allowed to retire in the normal course due to the initiation of disciplinary proceedings and issuance of the charge memo dated 19.06.2017. The said charge memo was ultimately quashed by this Court on 06.09.2021 in W.P. (MD)No.14657 of 2017. While quashing the said charges, the authorities were directed to pay interest to the belated payment at the rate of 4% per annum.

7. It is also relevant to note that GPF amount has been settled on 12.01.2017, Earned Leave Salary was also paid on 28.12.2018, selection grade pay was paid on 23.09.2019 and pension arrears has been paid on 15.06.2023. All the payments referred above, except pension arrears, have been paid prior to the orders of this Court directing payment of interest.

8.In our considered view, the entitlement to interest would arise only after the quashment of the charge memo, namely from 06.09.2021.

Until such time, the delay in settlement of retirement benefits cannot be termed as unjustified, as the disciplinary proceedings were pending. Therefore, the payments, which have been paid after 06.09.2021 only will carry interest.

9.Accordingly, the appellants are directed to pay interest as ordered by the learned Single Judge at the rate of 8% p.a., for the amounts, which have been paid to the respondent after 06.09.2021 within a period of two (2) months from the date of receipt of a copy of this order.

10.With the above direction, this writ appeal is disposed of.

Consequently, connected miscellaneous petition