State Obliged To Pay Interest On Delayed Payment Of Gratuity, Pension: Calcutta High Court Orders Action Against Erring Officers

The Calcutta High Court has recently directed the concerned Treasury Officer to pay interest for delayed payment of gratuity and arrear pension amount to an Assistant Teacher, after opining that it is a valuable right of a retired employee. 

Justice Amrita Sinha observed, 

"An employee has a statutory right to receive gratuity and pension upon retirement. If payment of such gratuity and pension is delayed the retired employee is surely entitled to get some interest for such delayed payment."

In the instant case, the petitioner was an Assistant Teacher who retired from service on October 31, 2020 and his grievance was that although the Pension Payment Order was issued on February 28, 2022 however the gratuity and arrear pension amount was disbursed on March 11, 2022. Accordingly, he claimed interest on delayed payment of the gratuity and arrear pension amount.

Taking cognisance of the grievance raised, the Court observed that it is the bounden duty of the State to disburse the gratuity and pension amount on the due date. It was further opined that if the State has failed to do so and has released such amount after unexplained delay, it is obliged to pay interest to the retired employee.

The Court also remarked that pension and gratuity are welfare provisions aimed at maintaining the life of a retired employee and his/her dependents and that it is compensatory in nature.

"It is settled law that the right of a retired employee to get his retiral dues on the date of attaining superannuation is a valuable right which accrues in his favour on the date of his attaining superannuation. Further, gratuity and pension are no more considered to be a bounty to be handed out by the State at its whim", the Court underscored further. 

Accordingly, the Court directed the concerned Treasury Officer to pay interest to the writ petitioner at the rate of 5% per annum on the gratuity and arrear pension calculated on and from the due date till the date of actual payment, provided the delay caused was not attributable to the petitioner. The Court further cautioned that the Treasury Officer shall not be obliged to pay interest if the delay was caused on account of any lapse on the part of the teacher.

Such payment was ordered to be made within 8 weeks of the order. Pertinently, the Court ordered the concerned respondent authority to take appropriate steps in accordance with law against the erring officer(s) for whose fault there has been delay in releasing the retirement benefit to the petitioner.

Case Title: Pranesh Kumar Kar v. The State of West Bengal & Ors

Case Citation: 2022 LiveLaw (Cal) 221

Related Reads: 

Salaries & Pensions Are Rightful Entitlements Of Government Employees; Appropriate Interest Must Be Paid For Delayed Payment: Supreme Court

Interest On Delayed Payment Of Gratuity Mandatory, Not Discretionary: Gujarat High Court Reiterates

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