Precarious Financial Condition No Ground To Delay Pensionary Benefits To Superannuated Govt Employee: Allahabad HC

The Allahabad High Court has observed that the Precarious financial condition of a corporation can not be a ground to delay payment of pensionary benefits that are due to superannuated employees.

The Bench of Justice Irshad Ali made this observation on a plea filed by one Shiv Kumar Bahadur Singh who sought direction upon the Government authorities to make payment of him a full amount of gratuity to along with interest in view of the amended provisions of Section 4 of Payment of Gratuity Act, 1972.

Essentially, the petitioner is a Class III Government employee. The opposite parties admitted to making payment of the complete amount of gratuity and also paid Rs.19,200/- in the month of May, 2021, but, as per the counsel for the petitioner, since then, the remaining amount of Rs.3.06 lacs and statutory interest accrued thereon was still due.

It was next submitted that the opposite party had indicated a condition that due to the precarious financial condition of the corporation, payment to the petitioner would be made in the future whenever the funds are available.

The counsel for the petitioner submitted that the gratuity amount of an employee like the petitioner is not a bounty to be distributed at the sweet will of the employer and that the petitioner has a vested right to be paid his gratuity amount within a reasonable time from the date of superannuation.

On the other hand, the counsel for the opposite parties reiterated the fact that while the corporation admits its liability towards payment of pensionary benefits of the petitioner, the same can not be paid instantly in view of the precarious financial condition of the corporation whenever the funds are available with the corporation.

Having heard the counsel for the petitioners, the Court observed that it is settled law that the pensionary benefits are not a bounty to be distributed at the sweet will of the employer. In this regard, the Court referred to the case of D.S. Nakara versus Union of India AIR 1983 Supreme Court Cases 130.

Similarly, the Court also referred to the case of Kapila Hingorani versus the State of Bihar (2003) 6 SCC 1, wherein the Supreme Court had held that the precarious financial condition of the employer is not a valid ground for delaying or not making payment of pensionary benefits of a superannuated employee

In view of the aforesaid facts, the opposite parties were directed to make payment of the outstanding gratuity amount of the petitioners within a period of four months and that grant of interest to the petitioner be also considered by the opposite parties within the same time period. Consequently, the writ petition was allowed at the admission stage itself.

Case Title : Shiv Kumar Bahadur Singh v. State Of U.P. Thru. Prin. Secy.Dairy Development And Others
Citation:2022 LiveLaw (AB) 109

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