2014 (8) TMI 1202 - SC - Indian Laws

Interest on delayed payment of pension and gratuity amount - retiral benefits of the appellant were withheld by the respondents on the alleged ground that some amount was due to the employer - disciplinary proceedings were not pending against the appellant on the date of his retirement - HELD THAT - It is an undisputed fact that the appellant retired from service on attaining the age of superannuation on 31-10-2006 and the order of the learned Single Judge after adverting to the relevant facts and the legal position has given a direction to the respondent employer to pay the erroneously withheld pensionary benefits and the gratuity amount to the legal representatives of the deceased employee without awarding interest for which the appellant is legally entitled, therefore, this Court has to exercise its appellate jurisdiction as there is a miscarriage of justice in denying the interest to be paid or payable by the employer from the date of the entitlement of the deceased employee till the date of payment. Interest is awarded at the rate of 9% on the delayed payment of pension and gratuity amount from the date of entitlement till the date of the actual payment - appeal allowed.

Summary

Issues:
1. Delayed payment of pension and gratuity amount.
2. Withholding of retiral benefits by the respondents.
3. Appeal for interest on delayed payments by the appellant.
4. Legal grounds challenging the judgment of the Division Bench.

Analysis:
1. The appellant, a former employee, sought interest on delayed pension and gratuity payments. The High Court initially denied interest, prompting the appellant to appeal to the Supreme Court for the interest rightfully due to him.

2. The appellant was wrongly accused of negligence in his service, leading to the withholding of his retiral benefits by the respondents. However, no disciplinary proceedings were pending against him at the time of retirement, making the withholding unjustified.

3. The Single Judge's order favored the appellant, directing the release of withheld gratuity without interest. The appellant contested this decision, citing legal precedent that pension and gratuity are valuable rights, not mere bounties, warranting interest on delayed payments. The Division Bench upheld the Single Judge's decision, prompting the appellant to challenge it in the Supreme Court.

4. The Supreme Court acknowledged the legal principle that delayed payment of pension and gratuity should attract interest. It found a miscarriage of justice in denying interest to the appellant and exercised its appellate jurisdiction to award 9% interest on the delayed payments. The Court emphasized the importance of timely payment of retiral benefits and directed the respondents to pay the interest within six weeks, failing which a higher interest rate of 18% per annum would apply.

This detailed analysis encapsulates the key issues and the Supreme Court's comprehensive judgment, ensuring a thorough understanding of the legal proceedings and outcomes.