Delayed payment of post-retiral benefits attracts interest from retirement until payment in full.

The petitioner served Bidhan Chandra Krishi Viswavidyalaya (BCKV) in various posts, including Mess Employee, Junior Assistant, Senior Assistant and Junior Superintendent. He superannuated on 31 March 2021.

Although pension was released during the pendency of the writ petition, his gratuity and leave salary were paid only on 27 March 2026, approximately five years after retirement.

The petitioner contended that the delay was not attributable to him and claimed interest on the delayed post-retiral benefits, relying on prayer “B” of the writ petition.

The State submitted that the petitioner’s promotion had not been within the department’s knowledge or approved by it, and that time was required to verify the promotion and consequential entitlements.

1. Whether the petitioner was entitled to interest on the delayed payment of gratuity and leave salary despite the respondents’ contention that the delay resulted from verification of his promotion.

2. If so, what rate and period of interest should apply to the delayed post-retiral benefits.

The Court applied the principle that retiral benefits, including pension and gratuity, are legally payable upon retirement and that unjustified delay in their payment entitles the employee to compensatory interest.

Relying on D.D. Tewari (Dead) v. Uttar Haryana Bijli Vitran Nigam Ltd., (2014) 8 SCC 894, the Court recognised entitlement to interest on delayed pensionary benefits and gratuity from the date of entitlement until actual payment.

It further relied on Dr. A. Selvaraj v. C.B.M. College, (2022) 4 SCC 627, wherein the Supreme Court directed payment of interest on delayed retirement benefits from the date of retirement until actual payment, while leaving open recovery from the person ultimately responsible for the delay.

The petitioner’s retirement on 31 March 2021 and the payment of gratuity and leave salary only on 27 March 2026 were undisputed, establishing substantial delay in disbursement of retiral dues.

The Court held that the respondents’ explanation concerning verification of the petitioner’s promotion did not defeat the petitioner’s entitlement to interest, particularly when the delay was not attributable to him.

Following D.D. Tewari and Dr. A. Selvaraj, the Court treated interest as the appropriate remedy for withholding or delayed payment of retirement benefits.

Although the petitioner claimed 12% interest, the Court considered the circumstances and granted interest at the moderated rate of 6% per annum from the date of retirement until full payment.

The payment was directed to be made within four weeks.

Initially, the State Government was directed to provide the necessary funds through the University, and BCKV was directed to release the amount to the petitioner.