Can't Approve MCD Not Paying Wages, Retiral Benefits To Its Employees; If They Default They Must Suffer Interest: Delhi High Court

The Delhi High Court has recently said that it can never be an approver to the Municipal Corporation of Delhi (MCD) not paying wages or retiral benefits to its employees.

A division bench comprising Justice C Hari Shankar and Justice Sudhir Kumar Jain that in case the civic body defaults in paying, it must “suffer interest”, emphasising that “there is no escape.”

“How the MCD manages its funds is its own affair, suffice it to state, however, that the court can never be an approver to the MCD not paying its employees their wages or retiral benefits. If they default in doing so, they must suffer interest. There is no escape,” the bench said.

Noting that survival of a “conscientious government servant” and his family, in the evening of their lives, is often dependent on their retiral benefits, the Court said:

“Expeditious and prompt disbursal of retiral benefits is, therefore, of the essence, and any unjustified delay in disbursal thereof must be met with a zero tolerance approach.”

The bench made the observations while dealing with MCD's plea against an order passed by the Central Administrative Tribunal directing it to pay retiral benefits to a man who worked as Assistant Municipal Secretary. He retired on May 31, 2019.

The impugned order had directing MCD to release payment of interest to the man on the delayed payment of gratuity at the GPF rate as well as other retiral benefits @12 % per annum from the due date.

The bench took exception to MCD's stand that it was facing extreme financial crisis and was not in a position to pay interest at the rate of 12% p.a. to the man.

“The contention is inherently unbelievable. It cannot be believed that the MCD does not have the funds to pay 12% interest to the respondent, as directed by the learned Tribunal. We are sanguine that the funds available with the MCD are far in excess of the interest which would be payable to the respondent @ 12% on his retiral arrears,” the court said.

The bench dismissed the plea and observed that the grounds put forth by the MCD to challenge the impugned order amounted to the civic body seeking the “imprimatur of the court” on their extracting work from their employees without paying their salaries and retiral benefits on time.

The Court said that the act was unthinkable in law, besides amounting to unfair labour practice.

Title: MUNICIPAL CORPORATION OF DELHI v. BIJENDER SINGH

Citation: 2024 LiveLaw (Del) 1216

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