Facts
The applicant, a retired Assistant Commissioner of Income Tax, superannuated on 30.09.2019
Source reference: p. 3Upon retirement, he opted for a Fixed Medical Allowance (FMA) of ₹1,000 per month starting 01.10.2019
Source reference: p. 3However, the respondents failed to disburse the monthly allowance for 57 months, finally paying a lump sum of ₹57,000 on 01.08.2024
Source reference: p. 4The respondents contended that the delay was due to the applicant only submitting a representation in December 2023 and bureaucratic processing times between the Zonal Accounts Office and the Drawing Officer
Source reference: p. 5The applicant approached the Tribunal seeking 12% interest on the delayed payment
Source reference: p. 2Issues
1. Whether the applicant is entitled to interest on the delayed payment of Fixed Medical Allowance (FMA) in the absence of specific statutory rules providing for such interest
Source reference: p. 6, para. 72. Whether the delay in disbursement was attributable to the respondents or the applicant's failure to follow up earlier
Source reference: p. 8, para. 8Law Applied
legal principle established by the Hon’ble Supreme Court in S.K. Dua v. State of Haryana (2008) 3 SCC 44, which holds that even in the absence of statutory rules or administrative instructions, an employee can claim interest on delayed retiral benefits under Part III of the Constitution, specifically relying on Articles 14, 19, and 21
Source reference: p. 6, para. 7; p. 10, para. 8doctrine that retirement benefits are not a bounty but a right, and unexplained delays in their disbursement warrant compensation via interest.
Source reference: no citationReasoning
The Tribunal rejected the respondents' argument that the lack of a specific rule for interest on FMA barred the claim. It observed that FMA constitutes a component of retirement/pensionary benefits which the respondents were "duty bound" to pay automatically alongside the pension
Source reference: p. 6, para. 7; p. 8, para. 10The Tribunal found no rule placing the burden on a retiree to file separate applications to trigger such payments
Source reference: p. 8, para. 10While the respondents claimed the delay was "inadvertent" and caused by the applicant’s late representation in 2023, the Tribunal held that the Department erred in not granting the FMA from the date of retirement in 2019
Source reference: p. 6, para. 7Applying the S.K. Dua precedent, the Tribunal determined that the 57-month delay was unexplained and attributable solely to the respondents, necessitating the award of interest to meet the ends of justice
Source reference: p. 9, para. 10Holding
The Tribunal partly allowed the Original Application, holding that the applicant is entitled to interest despite the absence of a specific FMA interest rule
The respondents were directed to compute and disburse simple annual interest at the rate of 6% on the delayed monthly payments within 12 weeks. Failure to comply within the stipulated period would result in the application of the GPF rate of interest on the amount due.
Source reference: p. 9Original Court PDF
MANJUNATH I PUJARvsREVENUE
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