1984 (12) TMI 329 - SC - Indian Laws

Government employees entitled to interest for pension delays, court stresses accountability for timely payments

State of Kerala and ors. Versus M. Padmanabhan Nair

The Supreme Court emphasized that pension and gratuity are valuable rights of government employees, mandating interest payment for delays in disbursement. ... - Issues involved: Delay in settlement of pension and gratuity claims, liability for payment of interest on delayed payments, responsibility of government officials in issuing necessary documents.In the judgment, the Supreme Court emphasized that pension and gratuity are no longer discretionary benefits but are considered valuable rights of government employees. Any unjustifiable delay in disbursing these amounts should result in the payment of interest at the prevailing market rate until the actual payment is made. The Court highlighted the importance of timely payment of retirement dues, stressing that the process of obtaining necessary documents like the Last Pay Certificate (L.P.C.) and No Liability Certificate (N.L.C.) should be completed well in advance to ensure prompt payment to the retiring employee. The Court suggested that penal interest should start accruing after two months from the date of retirement to incentivize timely settlements.In the specific case before the Court, the respondent retired on 19.5.1973 but did not receive his pension and gratuity until 14.8.1975, more than two years and 3 months later. The delay was attributed to the failure of the Treasury Officer to provide the L.P.C. promptly, as required by Rule 186 of the Treasury Code. The Court held that the Treasury Officer was at fault for the delay, and the respondent was entitled to receive interest as compensation for the delayed payment. Although the respondent had initially claimed interest at 12 per cent per annum, the Court upheld the lower rate of 6 per cent per annum as decreed by the lower courts since the respondent did not contest this rate.Furthermore, the Court noted that while the State Government was ultimately responsible for the negligence of the District Treasury Officer in delaying the issuance of the L.P.C., the officer himself was not named as a party in the lawsuit. The Court suggested that the State Government should consider holding the erring official accountable for the delay, either by compensating the government for its losses or taking appropriate disciplinary action. Such measures would promote a sense of duty and accountability among government officials towards their responsibilities.In conclusion, the Court dismissed the petition, affirming the respondent's right to receive interest for the delayed pension and gratuity payments, and highlighting the need for timely and efficient processing of retirement dues to government employees.