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State Obliged To Pay Interest On Delayed Payment Of Gratuity, Pension: In Calcutta High Court

After ruling that it is a valuable right of a retired employee, the Calcutta High Court recently ordered the concerned Treasury Officer to pay interest for delayed payment of gratuity and arrear pension amount to an Assistant Teacher.

In the case of Pranesh Kumar Kar v. The State of West Bengal & Ors (W.P.A. 7576 of 2022), Honourable Justice Amrita Sinha observed that an employee has a statutory right to receive gratuity and pension upon retirement. If payment of the gratuity and pension is delayed, the retired employee is almost certainly entitled to interest.”

Facts of the case:

In this case, the petitioner was an Assistant Teacher who retired on October 31, 2020, and his complaint was that, despite the fact that the Pension Payment Order was issued on February 28, 2022, the gratuity and arrear pension amount was disbursed on March 11, 2022. As a result, he sought interest on the delayed payment of the gratuity and the arrear pension amount.

Taking note of the complaint, the Court stated that it is the State’s legal obligation to pay the gratuity and pension amounts on time. It was also stated that if the State failed to do so and released the amount after an unjustified delay, it is obligated to pay interest to the retired employee.

Court’s Findings:

The Court also stated that pension and gratuity are welfare provisions that aim to maintain the life of a retired employee and his or her dependents and are compensatory in nature.

“It is well established that a retired employee’s right to receive his retiral dues on the date of attaining superannuation is a valuable right that accrues in his favor on the date of attaining superannuation. Furthermore, gratuity and pension are no longer regarded as a gift to be bestowed by the State at its discretion “, the Court emphasized even more.

As a result, the Court ordered the concerned Treasury Officer to pay the writ petitioner interest at the rate of 5% per annum on the gratuity and arrear pension calculated on and from the due date until the date of actual payment, provided the delay was not caused by the petitioner. The Court also warned that the Treasury Officer would not be required to pay interest if the delay was caused by a lapse on the part of the teacher.

Payment was to be made within eight weeks of the order. In addition, the Court directed the concerned respondent authority to take appropriate legal action against the erring officer(s) responsible for the delay in releasing the petitioner’s retirement benefit.

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Judgement Reviewed By Manju Molakalapalli.

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