Retirement dues and interest: delayed pension and gratuity attract liability when administrative lapse causes unjustified payment delay.
Pension and gratuity are treated as enforceable retirement rights, not a bounty, so culpable delay in releasing them can attract liability to pay interest. The note states that the retiree was not to blame for the delay in obtaining the last pay certificate, because the treasury authorities bore the duty to issue it under the Treasury Code; payment more than two years after retirement was therefore unjustified. It also notes that enhancement of the interest rate was improper in the absence of cross-objections by the beneficiary, so the award at 6 per cent per annum was sustained and the challenge failed.
Issues: (i) Whether interest was payable on delayed disbursement of pension and gratuity to a retiring government servant and whether the delay could be attributed to the retiree for non-production of the last pay certificate. (ii) Whether the rate of interest awarded could be enhanced in the absence of cross-objections by the respondent.
Issue (i): Whether interest was payable on delayed disbursement of pension and gratuity to a retiring government servant and whether the delay could be attributed to the retiree for non-production of the last pay certificate.
Analysis: Pension and gratuity were held to be valuable rights and not a bounty, and culpable delay in paying retirement dues was treated as attracting liability to pay interest. The Court accepted that the duty to issue the last pay certificate rested on the treasury authorities under Rule 186 of the Treasury Code, and the retiree could not be blamed for administrative delay in obtaining the certificate. Since the retirement dues were paid more than two years after retirement, the delay was found unjustified.
Conclusion: Interest on the delayed pension and gratuity was rightly awarded, and the claim was held maintainable against the State.
Issue (ii): Whether the rate of interest awarded could be enhanced in the absence of cross-objections by the respondent.
Analysis: The respondent had accepted the decree at 6 per cent per annum and had not filed cross-objections in the High Court. In those circumstances, enhancement of the awarded rate was held improper.
Conclusion: The rate of interest was not enhanced and the award at 6 per cent per annum was sustained.
Final Conclusion: The challenge failed, and the decree granting interest for delayed settlement of retirement dues was left undisturbed.
Ratio Decidendi: Pension and gratuity are enforceable retirement rights, and when payment is culpably delayed due to administrative lapse, the retiree is entitled to interest from the period of unreasonable delay; enhancement of relief cannot be granted absent appropriate challenge by the beneficiary.
TaxTMI 
AI Drafter ✕
TaxTMI 
