A.S. Patel vs State Of Madhya Pradesh And Others

Sujoy Paul, J

The petitioner in this case is only interested in getting the amount of interest on delayed payment of certain dues. The short point involved in this case is whether petitioner, who retired on attaining the age superannuation on 31.01.2015 is entitled to get interest on belated payment of dues relating to arrears of Sixth Pay Commission, gratuity, arrears on pension, arrears on DA and leave encashment.

Learned counsel for the petitioner fairly submits that respondents have paid the aforesaid amounts belatedly. The due dates and the dates when amounts aforesaid have been paid are mentioned in a chart Annexure P/5. The delay in making payment is solely attributable to the respondents. Thus, petitioner is entitled to get interest on belated payment. He prayed for grant of 18% interest in view of order of the Supreme Court reported in 2001 9 SCC 687 (Vijay L. Mehrotra vs. State of U.P. and others) . He has also placed reliance on a recent judgment of the Supreme Court in Cr.A. No.1698/2022 (Dr. A. Selvaraj vs. C.B.M. College and others) decided on 4th March, 2022.

Shri Ritwik Parashar, Learned Government Advocate submits that State is a formal party.

Shri Tabrez Sheikh, learned counsel for the respondent Nos.2 and 3 submits that this Court by order dated 01.09.2022 permitted the petitioner to point out whether there exists any provision for grant of interest. Shri Sheikh by taking this Court to the reply filed on behalf of respondent Nos.2 and 3 submits that the payment of pension depends on the fund received by respondent Nos.2 and 3 from the State Government. The Self Financial Pension Scheme of the University came into being on 11.09.2015, which is evident from order dated 14.10.2015 (Annexure R/1). Thus, the University cannot be blamed for belated payment. The reason for delayed payment are justifiable. There are sizable number of similarly situated employees, who have not received any interest on delayed payment of certain dues.

The parties confined their arguments to the extent indicated above.

I have heard the parties at length and perused the record.

This is trite that retiral dues of an employee are not bounty. The same are earned by rendering long services. The pension and retiral dues must be paid on due date and with quite promptitude. If there is a delay in making payments and same is not attributable to the employee, employee deserves the benefit of interest. The curtains are drown on this aspect way back in (1994) 2 SCC 240

(Union of India vs. Justice S.S. Sandhawalia (retd.) and others), the relevant para reads as under:-

"4. ..... Once it is established that an amount legally due to a party was not paid to it, the party responsible for withholding the same must pay interest at a rate considered reasonable by the Court."

(Emphasis supplied)

The same principal was followed by this Court in 2013 (1) MPLJ 53 (State of M.P. and others vs. Ramji Das Agarwal).

In the recent judgment, in Dr. A. Selvaraj (supra) , the Apex Court opined as under:-

"However, because of the inter se dispute between the Management, Secretary and the Government on who is responsible for the delay in making the payment and/or settling the dues, the retired employee should not be made to suffer for no fault of his."

(Emphasis supplied)

In para-5 of this judgment, the Apex Court directed the respondent to pay the interest.

In view of aforesaid judgment, there is no cavil of doubt that the petitioner is entitled to get interest on delayed payment. Moreso, when respondents have not disputed the contents of chart (Annexure P/5) while filing return and not averred that petitioner is responsible for the delay in making aforesaid payments.

The ancillary question is about rate of interest. A careful reading of order of Supreme Court in Vijay L. Mehrotra (supra) shows that no principle of law is laid down that 18% interest should be granted.

In the facts and circumstances of the case, in the opinion of this Court, the petitioner is entitled to get 6% interest on delayed payment. The said interest shall be calculated on the basis of chart Annexure P/5 because correctness of Annexure P/5 was not disputed while filing reply. The interest amount @ 6% on each of the head shall be calculated by respondent Nos.2 and 3 and interest amount arising thereupon shall be paid to the petitioner within 90 days from the date of production of copy of this order. It is made clear that since Pension Scheme is made applicable w.e.f. 14.10.2015, interest on arrears of pension be counted from November, 2015 only.

Petition is allowed to the extent indicated above.