Friday, 26 June 2020

Whether government is liable to pay interest to government servant on gratuity if there is delay in payment of gratuity?

In State of U.P. and others v. Dhirendra Pal Singh, MANU/SC/1479/2016 : 2016(4) UPLBEC 2881, the Apex Court relying upon State of Kerala and others v. M. Padmanabhan Nair, MANU/SC/0296/1984 : (1985) 1 SCC 429, held that the pension and gratuity are no longer bounty to be distributed by the Government to its employees but rather valuable rights in their hands and any culpable delay in distribution thereof must visit with penalty with interest.

19. In Y.K. Singla v. Punjab National Bank and others, MANU/SC/1109/2012 : (2013) 3 SCC 472, the Apex Court, after discussing the issue relating to interest payable on the amount of gratuity not paid within time, directed that interest at the rate of 8% per annum shall be paid on the amount of gratuity.

20. In view of the above decision, as there was no justification on the part of the respondents for withholding the payment of 90% of the enhanced gratuity admissible to the petitioner, we are of the opinion that the petitioner is entitle to be compensated for the loss by way of payment of interest. Accordingly, the communications dated 6.9.2012 and 13.12.2012 (Annexures 5 and 7 to the writ petition) stand quashed and the respondents are directed to pay 90% of the enhanced gratuity to the petitioner with interest at the rate of 8% per annum from the date the enhanced gratuity became due and payable i.e. 4th November, 2010 till the date of its payment.

Civil Misc. Writ Petition No. 937 of 2013

Decided On: 23.10.2017

 Radhey Shyam Chaubey  Vs.  High Court of Judicature and Ors.

Hon'ble Judges/Coram:
Pankaj Mithal and Irshad Ali, JJ.

Citation: 2018 (3) AWC 2521.
Read full judgment here: Click here
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