Dr Subhash Chander vs State Of Punjab & Ors.

SANDEEP MOUDGIL, J (ORAL)

The jurisdiction of this Court has been invoked under Articles 226/227 of the Constitution of India seeking issuance of appropriate directions to the respondents to pay interest at the rate of 18% per annum on the delayed release of the petitioner's retiral benefits and for initiation of appropriate action against the officials responsible for such delay.

The petitioner joined the Animal Husbandry Department, Punjab as a Veterinary Officer on 28.09.1987. During the course of service, he earned promotions to the posts of Senior Veterinary Officer, Joint Director and thereafter Director. He attained the age of superannuation and retired from service on 31.12.2022. Prior to his retirement, the requisite pension papers were submitted on 11.10.2022 for processing of his pension case.

The record further shows that the pension case was forwarded by the Administrative Department to the office of the Accountant General on 27.12.2022. The retiral benefits were thereafter released on different dates, namely, the General Provident Fund on 16.02.2023, leave encashment on 26.02.2023, Group Insurance benefits on 30.06.2023, and gratuity along with pensionary benefits on 01.11.2023.

Following the release of the retiral benefits, the petitioner submitted a representation dated 07.08.2024 to the competent authorities seeking payment of interest on account of the delay in disbursement of the retiral dues. Along with the representation, the petitioner furnished the particulars of the amounts released and the dates on which the respective benefits had been paid.

Since no decision came to be taken on the representation submitted by the petitioner claiming interest on the delayed release of the retiral benefits, the present writ petition has been instituted seeking appropriate directions in that regard.

Learned counsel for the petitioner submits that the retiral benefits admittedly came to be released after the petitioner had retired from service and that there was an inordinate delay in the disbursement of the various retiral dues. It is contended that the delay is wholly attributable to the respondents and cannot be attributed to any act or omission on the part of the petitioner.

It is further contended that retiral benefits become payable immediately upon retirement and that an employee cannot be deprived of the use of such amounts on account of administrative delay. Consequently, where the payment of retiral dues is made belatedly without any justifiable reason, the employee becomes entitled to interest by way of compensation for the period of delay.

Learned counsel further submits that the petitioner had submitted a detailed representation claiming interest on the delayed payment of the retiral dues. However, despite the lapse of considerable time, the respondents neither took any decision on the said representation nor communicated any reason for withholding the claim. It is argued that such inaction is arbitrary and has compelled the petitioner to invoke the extraordinary writ jurisdiction of this Court for redressal of his grievance.

It is, thus, contended that once the respondents have themselves released the retiral benefits after the dates on which they became due, the petitioner cannot be denied compensation for the period during which he was deprived of the use of his legitimate dues. Learned counsel submits that in the absence of any justification for the delay, the respondents are liable to compensate the petitioner by payment of interest on the delayed disbursement of the retiral benefits from the dates they became payable till their actual release.

Learned State counsel submits that the petitioner is not entitled to the relief claimed, as the delay in processing the pension case is attributable to the petitioner himself. It is contended that, while functioning as Head of the Department, the petitioner was responsible for initiating and forwarding his own pension case within the prescribed time, but the pension papers were submitted only about two and a half months prior to his retirement instead of the stipulated six to eight months. Consequently, the petitioner cannot claim interest for a delay occasioned by his own default.

It is further submitted that the respondents processed the pension case with due promptitude and forwarded the same to the competent authorities in accordance with the prescribed procedure. The time consumed thereafter was on account of objections raised by the office of the Accountant General, Punjab, which were duly complied with before issuance of the Pension Payment Order. It is, thus, contended that no delay is attributable to the answering respondents.

Learned State counsel further submits that the retiral benefits were released immediately upon completion of the requisite procedural formalities, verification and statutory clearances. It is contended that the release of pensionary benefits, gratuity and other dues was dependent upon completion of the prescribed process and fulfilment of the requirements raised by the competent authorities.

On the strength of the aforesaid submissions, learned State counsel contends that the petitioner has failed to make out any case warranting interference by this Court in exercise of its writ jurisdiction. It is, accordingly, prayed that the present writ petition, being devoid of merit, be dismissed.

I have heard learned counsel for the parties and have perused the pleadings as well as the documents placed on record.

The facts giving rise to the present petition are largely undisputed. It is an admitted position that the petitioner's retiral benefits, namely, General Provident Fund, leave encashment, Group Insurance benefits, gratuity and pension, were released on different dates after his retirement. The only issue which, therefore, falls for consideration is whether the petitioner is entitled to interest on account of the delayed release of the aforesaid retiral benefits.

The submission of the learned State counsel that the petitioner had submitted his pension papers only about two and a half months prior to his retirement and not six to eight months in advance, therefore disentitling him to interest on delayed payment of retiral dues, is devoid of merit. The prescription regarding submission of pension papers before the date of superannuation is intended to ensure timely settlement of pensionary claims and is directory in nature insofar as the rights of a retiring employee are concerned. The respondents have failed to point out any statutory provision which postpones the petitioner's entitlement to retiral benefits or absolves the employer of its obligation to release the same within a reasonable time merely because the pension papers were not submitted within the prescribed period. In fact, the stand taken in the written statement itself reveals that after receipt of the pension papers, the matter remained pending owing to objections raised by the office of the Accountant General and other administrative formalities. Therefore, the respondents cannot seek to shift the burden of their own administrative delays upon the petitioner so as to defeat his legitimate claim for interest.

The explanation furnished by the respondents that the delay occurred on account of objections raised by the office of the Accountant General and completion of departmental formalities does not advance their case. The respondents themselves admit that the pension case remained under process owing to objections raised by the office of the Accountant General and other procedural formalities. Such circumstances only indicate that the delay occurred during the administrative processing of the petitioner's pension case and cannot be attributed to any omission on the part of the petitioner. Once the retiral benefits had become payable, it was incumbent upon the respondents to ensure their timely disbursement.

This Court is of the view that administrative procedures, inter-departmental correspondence, verification of records or scrutiny by different authorities are matters entirely within the domain of the employer and cannot be permitted to operate to the prejudice of a retired employee. Any delay occasioned on account of such internal administrative processes cannot constitute a valid defence to deny compensation for the belated release of retiral benefits. The aforesaid view stands fortified by the judgment of the Hon'ble Supreme Court in “Vijay L. Mehrotra v. State of U.P.”, (2001) 9 SCC 687, wherein it was emphasized that retiral benefits are required to be settled with promptitude and avoidable administrative delay cannot be permitted to prejudice the rights of a retired employee.

It also cannot be overlooked that retiral benefits constitute the financial security of a Government servant after cessation of service. Such benefits are intended to ensure financial stability to a retired employee who no longer receives a regular monthly salary and is expected to sustain himself from the amounts earned during the course of his service. Every employee legitimately expects that these benefits would be made available immediately upon their becoming due. Any unwarranted delay in their release not only deprives the retiree of the beneficial use of his own money but also defeats the very purpose for which pensionary and other retiral benefits are envisaged.

The respondents cannot, therefore, escape their liability merely because the principal retiral benefits have subsequently been released. Subsequent payment of the principal amount does not obliterate the prejudice suffered by a retired employee during the period he remained deprived of the use of the amounts legitimately due to him. The financial loss occasioned by such deprivation continues till the dues are actually released and deserves to be adequately compensated. To hold otherwise would permit the employer to retain amounts lawfully payable to a retired employee without any corresponding consequence merely because the principal amount has eventually been released.

The aforesaid principle also finds support from the judgment of the Supreme Court in “State of Kerala and others v. M. Padmanabhan Nair”, (1985) 1 SCC 429, wherein it was held that pension and gratuity are valuable rights and culpable delay in settlement thereof must ordinarily be compensated by payment of interest. The liability to pay interest, thus, arises as a necessary consequence of the employer's failure to ensure timely disbursement of the retiral benefits. The principle enunciated therein squarely governs the controversy involved in the present case.

Applying the aforesaid principle to the facts of the present case, this Court finds that the respondents have failed to furnish any legally sustainable explanation for the delayed release of the petitioner's retiral benefits. The plea that the petitioner had submitted his pension papers only about two and a half months prior to his retirement does not absolve the respondents of their obligation to ensure timely settlement of the retiral benefits, particularly when the delay admittedly continued during the administrative processing of the pension case after it had entered the official channel. The petitioner, therefore, cannot be made to suffer for delays occurring within the administrative machinery of the respondents.

In view of the findings recorded hereinabove, the respondents have failed to justify the delayed release of the petitioner's retiral benefits. The petitioner is, consequently, entitled to be compensated by way of interest on the delayed disbursement thereof.

Accordingly, the present writ petition is allowed. The respondents are directed to calculate and release interest at the rate of 9% per annum on all the delayed retiral benefits payable to the petitioner, computed from the date each retiral benefit became due till the date of its actual realization. The aforesaid exercise shall be completed within a period of eight weeks from the date of receipt of a certified copy of this order.

Pending applications, if any, stands disposed of.