Delayed gratuity and interest claim fails where withholding followed an administrative circular and continued unauthorised quarter occupation.

Interest was not payable on delayed death-cum-retirement gratuity where the retired employee continued in unauthorised occupation of the allotted quarter for more than two years and payment was withheld under an administrative circular until possession was surrendered. The delay was treated as flowing from the employee's failure to vacate and the governing circular, not from any administrative lapse. In that situation, the legal basis for awarding interest on the delayed gratuity payment did not survive, and no interest was due.

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Issues: Whether interest was payable on delayed release of death-cum-retirement gratuity where the retired employee remained in unauthorised occupation of the quarter and the delay occurred pursuant to an administrative circular.

Analysis: The respondent remained in unauthorised occupation of the allotted quarter for more than two years, and the administration had issued a circular directing that death-cum-retirement gratuity not be paid until possession was surrendered. The delay in payment was, therefore, attributable to the circular and not to any administrative lapse. In such circumstances, the basis for directing payment of interest did not survive.

Conclusion: The respondent was not entitled to interest on the delayed gratuity payment.

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