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Employee Entitled To Interest On Retirement Benefits For Unjustifiable Delay On Part Of Employer: Punjab And Haryana High Court
rajesh kumar
15 May 2024 6:45 AM GMT
The Punjab and Haryana High Court bench of Justice Namit Kumar held that where there is an inordinate delay in retirement benefits and the delay is not justifiable, the employee will be entitled to interest. It held that an employee will be entitled to the interest on an amount which was retained by the employer without any valid justification. Brief Facts: The Petitioner,...
The Punjab and Haryana High Court bench of Justice Namit Kumar held that where there is an inordinate delay in retirement benefits and the delay is not justifiable, the employee will be entitled to interest. It held that an employee will be entitled to the interest on an amount which was retained by the employer without any valid justification.
Brief Facts:
The Petitioner, initially employed as a Clerk/Junior in Municipal Corporation, Abohar, served from 29.10.1993 to 11.09.2014 and 06.11.2014 to 17.03.2016, subsequently being posted as a Junior Assistant at Goniana Mandi, District Bathinda. Upon reaching the superannuation age, the Petitioner retired on 31.10.2022. Despite repeated representations, the department failed to release the Petitioner's retiral dues. Feeling aggrieved, he approached the Punjab and Haryana High Court (“High Court”) and filed a writ petition.
The department argued that post the Petitioner's retirement, all pensionary and retirement benefits, totaling Rs. 18,32,817/- including medical allowance, were disbursed. The disbursement occurred via four separate cheques.
The Petitioner contended that due to the delayed release of retiral dues, he was entitled to interest on the amount.
Observations by the High Court:
The High Court noted that the Petitioner, having retired from service, had no pending departmental or criminal proceedings against him either before or after retirement. Therefore, it held that it was imperative that the retiral benefits due to the Petitioner be released within a reasonable timeframe post-retirement.
Examining the response submitted by the department, it noted that although the retiral dues were eventually disbursed to the Petitioner, this action was marred by a significant delay. The High Court noted that no satisfactory explanation was provided for the failure to release these dues promptly upon retirement or within a reasonable period thereafter.
The High Court referred to its decision in A.S. Randhawa Vs. State of Punjab and others (1997(3) S.C.T. 468). It noted that when there exists an unwarranted delay in disbursing benefits without justifiable cause, the affected employee is entitled to interest on the withheld amount. The duty incumbent upon the state to ensure the timely disbursement of pension and other benefits to retirees, with the usual timeframe not exceeding two months from the date of retirement.
Therefore, the High Court instructed the department to pay interest at a rate of 6% per annum to the Petitioner, calculated from January 1, 2023 (two months following the Petitioner's retirement), until the actual date of payment.
Case Title: Hira Lal Karakara vs State of Punjab and others
Case Number: CWP-602-2023
Advocate for the Petitioner: Ms. Suman Kumari, Advocate for Ms. Snigdha Sood, Advocate for the Petitioner.
Advocate for the Respondent: Ms. Arundhati Kulshreshtha, A.A.G., Punjab. Mr. Rohit Singla, Advocate for respondent No.2. Mr. Aditya Pratap Duggal, Advocate for respondent No.3.
