Interest On Wrongly Withheld Gratuity Should Be Recovered From Erring Officer's Salary: Allahabad High Court

The Allahabad High Court has directed that where an employee is found to have been entitled to gratuity that was wrongly withheld and paid only later along with interest, the interest component shall be recovered from the salary of the officer who wrongly rejected the claim. It further held that proceedings shall be initiated against the erring officer even after his retirement, where the service rules so permit.Justice Siddharth Nandan held,“the State Authorities shall recover the said interest component, from the salary of the officer concerned, who is found to have wrongly rejected the claim of the petitioner; and initiate proceedings against the said employee, even if he has retired, if the applicable service Rules, permits such proceedings and as per law.”Petitioner was a teacher in a State-aided institution and was denied gratuity after taking voluntary retirement. Petitioner availed voluntary retirement with effect from 31st August, 2019, at the age of 55. Though her pension of Rs. 37,150 per month was sanctioned and paid, and her General Provident Fund was released, the retirement gratuity was not paid to her, and interest on the GPF was paid only up to 30th August, 2019.Petitioner approached the High Court release gratuity of Rs. 14,34,362 along with interest. Petitioner relied on Fundamental Rule 56(e) of the Financial Handbook and a Government Order dated 31st July, 2001, to argue that a government servant permitted to retire is entitled to retiral dues including gratuity, even where the retirement is voluntary.The Court held that pension and gratuity are not a bounty but a valuable right earned through long service, amounting to “property” protected under Article 300-A of the Constitution. It held,..“once he is permitted to retire, prior to the age of 60 years, he/she is entitled to gratuity, in view of Fundamental Rule 56(e) of the Financial Handbook, even if it is a voluntary retirement. The State Government is also bound by its Government Order dated 31.07.2001; and it cannot insist on the requirement of specifically submitting the option, for availing the gratuity…”Further, the Court held that interest on delayed retiral dues can be claimed even in the absence of statutory rules, under Part-III of the Constitution. It directed payment of 8% interest on the delayed gratuity from 31st August, 2019, and provided that if the amount was not paid within two months, 12% interest would apply, to be recovered from the salary of the disbursing authority. It further granted 7.9% interest on the GPF amount of Rs. 24,71,728 from 1st September, 2019 to 31st January, 2020, quantified at Rs. 73,121.Allowing the petition, the Court directed that the gratuity be calculated as per the Gratuity Rules and paid within two months. The Court added that the where gratuity claim was found genuine yet denied, the interest on the delayed payment shall be recovered from the office who denied such claim, even if they have retired. Case Title: Smt. Meenu v. State of U.P. and 4 OthersClick Here To Read/Download Order

Interest On Wrongly Withheld Gratuity Should Be Recovered From Erring Officer's Salary: Allahabad High Court

Upasna Agrawal

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Upasna Agrawal

Interest On Wrongly Withheld Gratuity Should Be Recovered From Erring Officer's Salary: Allahabad High Court

Upasna Agrawal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Upasna Agrawal

This is a premium content
Available exclusively to
Our subscribers