Administrative delay in settling retiral benefits mandates 6% interest from the day after retirement.

The applicant, a Railway employee who ultimately served as a Hospital Attendant, retired on superannuation on 31 August 2015.

His pensionary and retiral benefits were paid on 12 January 2016, approximately four months after retirement.

The delay arose, according to the respondents, because the applicant’s unauthorised absence from 24 March/29 March 2003 to 28 January 2007 had not been regularised; the period was converted into leave without pay only after the applicant’s post-retirement representation dated 22 December 2015.

In an earlier O.A. No. 777 of 2016, the Tribunal directed the respondents to consider his representation.

In compliance, the competent authority passed a reasoned order dated 4 October 2016 rejecting interest on the ground that no provision existed for such payment.

The applicant also claimed salary and consequential service benefits for the period from 29 March 2003 to 28 January 2007, contending that he had continued to perform duties after medical decategorisation; the respondents maintained that he was unauthorisedly absent and had joined as Hospital Attendant only on 29 January 2007.

Whether the applicant was entitled to interest on the retiral benefits paid after his retirement, notwithstanding the respondents’ contention that the delay resulted from regularisation of his absence and procedural processing

Whether the order dated 4 October 2016 rejecting the applicant’s claim for interest was liable to be set aside

Whether the period from 24 March/29 March 2003 to 28 January 2007 was required to be treated as qualifying service with consequential salary and service benefits

The Tribunal applied the Government of India pension rules requiring the Head of Office to initiate pension proceedings two years before retirement, complete scrutiny of service records not later than eight months before retirement, and determine qualifying service in advance of retirement.

It further relied on the Government of India instruction below S.R. 199, under which orders regarding the counting of extraordinary leave, breaks in service, or other periods for pension must ordinarily be obtained when the relevant occasion arises and recorded in the service book, rather than postponed until after retirement.

The Tribunal relied on State of Kerala v. M. Padmanabhan Nair, 1985 AIR 356, holding that pension and gratuity are valuable rights and that culpable delay in their settlement attracts interest; A.S. Randhawa v. State of Punjab, (1997) 3 SCC 405, holding that unjustified delay in payment of retirement benefits makes the employer liable for compensatory or penal interest; and H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40, recognising interest on delayed retiral benefits as mandatory where the delay is not attributable to the employee.

The Tribunal found that the respondents failed to process the applicant’s pension papers in a timely manner.

Although the applicant’s absence required regularisation, the applicable rules placed the responsibility on the administration to examine the service record, determine qualifying service, and obtain the necessary orders before retirement.

In the present case, regularisation was undertaken only after the applicant’s representation dated 22 December 2015, and the PPO was issued on 30 December 2015, followed by payment of retiral dues on 12 January 2016.

The Tribunal held that this post-retirement regularisation and the ensuing administrative processing did not constitute a valid legal justification for withholding the benefits beyond retirement.

Applying the cited Supreme Court authorities, it concluded that the delay was attributable to the respondents and that the applicant was entitled to interest despite the rejection order dated 4 October 2016.

The respondents were directed to release any outstanding retiral dues and, if those dues had already been paid, to pay interest at 6% per annum on all retiral benefits from the day after the applicant’s superannuation until the date of actual payment.

If gratuity had also been paid belatedly, penal interest was directed to be paid in accordance with the applicable Government rules.

The application was disposed of without an order as to costs, and all pending miscellaneous applications, if any, were also disposed of.