Pension And Other Retirement Benefits Valuable Right, Delay In Disbursement Must Be Compensated By State: Patna High Court

In a recent ruling, the Patna High Court has allowed a writ petition seeking payment of pension arrears of the petitioner’s late husband along with statutory and penal interest for the period between March, 2009 to June, 2017 from the Water Resources Department.

Background

The petitioner's late husband was appointed as a Correspondence Clerk in the Water Resources Department in 1968 and he retired in March 2009. However he received all his retiral dues, including pension and gratuity, only in 2017 i.e. after a delay of over 8 years. Being aggrieved by the delay in fixing the pension and non-payment of interest on the delayed amount, the petitioner moved the High Court praying for a writ of mandamus against the department.

The petitioner requested and demanded payment of arrears of pension totaling Rs. 10,07,033/- along with statutory and penal interest for the period of delay. It must be pointed out that the total amount of arrears was paid to the petitioner in 2019, but the statutory and penal interest was not calculated or paid.

The petitioner's counsel submitted that payment of arrears has already been made and the petitioner now sought relief only for the payment of interest on the arrears amount paid in 2019, citing that her late husband was seriously ill and no steps were taken during his lifetime, requesting sympathetic consideration.

While placing reliance on Satya Ranjan Das v. The State of West Bengal reported in (2007) 3 CLT 531, Justice Purnendu Singh pointed out that the right of the petitioner’s husband to get his retiral dues on the date of attaining superannuation is a valuable right and a legal duty is cast upon the concerned authorities to ensure that such right is not defeated.

“The respondent no. 2 by not taking into consideration the said fact are themselves responsible for delay in sanctioning the pension and gratuity to the husband of the petitioner,” Justice Singh said.

The bench finally held, “Pension and gratuity are welfare provisions aimed at maintaining the life of a retired employee and his/her dependents. This is compensatory in nature. The law on grant of interest on delayed payment of retiral benefit is no longer res integra. Reliance was placed on the judgement of the Apex Court in the case of State of Kerala v. M. Padmanabhan Nair reported in (1985) 1 SCC 429 and D.D. Tewari v. Uttar Haryana Bijli reported in (2014) 8 SCC 894 wherein it was held that when the employer delays the release of Pensionary benefits, it is bound to pay interest on account of the delay.

The principle that the disbursement of pension and other retirement benefits should not be treated as a matter of bounty but are valuable rights and property and any delay in settlement or disbursement thereof must be compensated with the penalty of payment of interest at the current market rate till actual payment to the employee.”

While allowing the writ petition, Justice Singh directed the employer to sanction interest on account of delayed payment as well as the penal interest for the period mentioned at the rate of 12 percent per annum.

Case Title: Munakiya Devi vs. The State Of Bihar and Ors Civil Writ Jurisdiction Case No.20378 of 2018

Citation: 2023 LiveLaw (Pat) 24

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