Timely disbursement of pension must be ensured by the State, with interest payable for delays; interest generally set at 12%, adjustable up to 18%.

HARPREET SINGH BRAR, J. (Oral)

1. The present writ petition has been filed under Article 226/227 of the Constitution of India with a prayer for issuance of an appropriate writ, order or directions especially in the nature of certiorari for quashing the impugned order dated 04.02.2021(Annexure P-4) passed by respondent whereby the claim of the petitioner has been rejected and further for issuance of a direction in the nature of mandamus directing the respondents to grant interest @ 18% on delayed payment of pension w.e.f. date of retirement i.e. 31.01.2011 till the release of pension i.e.26.07.2019.

2. Learned counsel for the petitioner however, submits that petitioner is entitled to the interest in terms of the judgment rendered by a Full Bench of this Court in A.J. Randhawa Supg. Engineer (Retd.) vs. State of Punjab 1998 (1) SCT 343 wherein it was opined that disbursement of pension and other benefits payable at retirement must be done in a timely manner. Any delay over a period of two months, qua the said disbursement PUNEET CHAWLA would entitle the retired employee to claim interest on the amount due.

Speaking through Justice N.K. Sodhi, the following was held:

“9. Since a Government employee on his retirement becomes immediately entitled to pension and other benefits in terms of the Pension Rules, a duty is simultaneously cast on the State to ensure the disbursement of pension and other benefits to the retirer in proper time. As to what is proper time will depend on the facts and circumstances of each case but normally it would not exceed two months from the date of retirement which time limit has been laid down by the Apex Court in M. Padmanabhan Nair's case (supra). If the State commits any default in the performance of its duty thereby denying to the retiree the benefit of the immediate use of his money, there is no gainsaying the fact that he gets a right to be compensated and, in our opinion, the only way to compensate him is to pay him interest for the period of delay on the amount as was due to him on the date of his retirement. Again, as to what should be the rate of interest, it should, in our view, be generally 12% unless the circumstances of a particular case warrant the payment of a higher rate which may extend to even 18%.”(emphasis added)

Reliance in this regard may also be placed on the judgments rendered by the Hon’ble Supreme Court in S.K. Dua vs. State of Haryana (2008) 3 SCC 44 and State of Kerala vs. M. Padmanabhan Nair (1985) 1 SCC 429.

3. Learned counsel for the respondents-Corporation, submits that the retiral dues have already been released to the petitioner after calculation on 04.09.2019.

4. At this stage, learned counsel for the petitioner wishes to withdraw the present petition with liberty to file a comprehensive representation with regard to his claim for grant of interest on the delayed disbursement of his pension/retiral benefits from the date of his retirement i.e. w.e.f. 31.01.2011, till the date of release of his pension i.e. 26.07.2019.

5. Learned counsel representing the respondents assures the Court that in case the petitioner moves a representation seeking payment of interest PUNEET CHAWLA on his retiral benefits, the same will be decided in accordance with law within a period of three months.

5. In view of the above, the present petition is disposed of. However, the petitioner will be at liberty to move a representation before the respondents seeking payment of interest on delayed disbursement of his pension/retiral benefits. In the event of the petitioner moving such a representation, the respondent shall decide the same within a period of three months from the date of receiving a certified copy of this order by passing a speaking order, after affording him an opportunity to b