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Govt liable to pay interest on delayed pensionary dues: HC

March 31, 2019 07:27 AM

COURTESY TOI MARCH 31

Govt liable to pay interest on delayed pensionary dues: HC
Says Financial Crunch No Reason To Hold Back Benefits
Ajay.Sura@timesgroup.com

Chandigarh:

The Punjab and Haryana high court has held that the state government is liable to pay interest on delayed payment of pensionary benefits to its employees, even in the absence of any rules on this and even when there is financial crunch.


Explaining the importance of timely release of pensionary benefits to employees, the court, in an order released last week, held: “Once the department knows that the employee is going to retire, all efforts should have been made to ensure that payments are made at the earliest. A retired employee, who has no other source of income, is totally dependent upon the benefits which the employee gets and in case those benefits are not released in time, the employee is unable to live with dignity”.

On liability to pay interest in case of delay in such benefits, the HC observed that once the amount has been used by departments as the same was lying with them while they were trying to complete the process of release, the employee will be entitled to interest. The court held that financial crunch was no reason to hold back pensionary benefits meant for an employee.

Justice Harsimran Singh Sethi passed these orders while deciding a bunch of petitions filed by retired employees against the Punjab government.

The petitioners, in this case, were working in various departments of Punjab government. They were, however, not given pensionary benefits after their superannuation for more than one or two years. In some cases, benefits were released, but interest was not paid on the delayed amount. The state justified the delay by citing financial crunch.

Advocate Vikas Chatrath, counsel appearing for one of the petitioners, submitted before the high court that once there was delay in releasing the amount, the petitioner was entitled to interest on the delayed amount. Chatrath argued that only objection taken by the state is that the delay was not intentional or willful but was procedural, which is not enough to save the interest.

After hearing all parties, the high court held that petitioners were entitled to interest at the rate of 9% per annum from the date the said amount became due to the actual date of disbursement. Directions have also been issued to release the amount within a month of making calculations

 
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