Employer must pay 8% interest on delayed retiral benefits caused by negligent pension calculations.

The petitioner, an Ayurvedic doctor employed by respondent No. 3 University, retired from service in 2010 and sought retiral benefits.

The judgment records her retirement date inconsistently: 31 August 2010 in the petition’s factual summary and 31 October 2010 in the Court’s discussion.

Pension was initially calculated without including her Non-Practicing Allowance (NPA).

After the petitioner sought correction, the University submitted revised calculations and corrected pension was paid.

The Court found that the process resulted in a 20-month delay.

The petitioner sought interest at 8% per annum on delayed retiral benefits; the petition was brought under Articles 226 and 227 of the Constitution.

1. Whether the petitioner was entitled to interest on the delayed disbursement of retiral benefits.

2. Whether respondent No. 3 University, rather than respondent Nos. 1 and 2, was liable to pay that interest.

Under Articles 226 and 227 of the Constitution, the High Court considered the petitioner’s claim for relief against the respondents.

The Court applied the principle that pension is a right, not a bounty, and that timely payment of retiral benefits is an obligation of the Government.

Relying on Dr. Uma Agrawal v. State of U.P. and Another, (1999) 3 SCC 438, it noted that the responsible authority must initiate payment in accordance with the prescribed departmental timelines.

The Court found that respondent No. 3’s failure to include the petitioner’s NPA in the pension calculation resulted in an erroneous initial payment and the need for revised papers.

It considered the University negligent in preparing and submitting the pension papers and attributed the delay and resulting financial loss to that failure.

On that basis, it granted the claimed 8% interest and placed liability on respondent No. 3, while absolving respondent Nos. 1 and 2.

Respondent No. 3 was directed to pay interest at 8% per annum for the late disbursement of the petitioner’s retiral benefits within six weeks of the order; respondent Nos. 1 and 2 were absolved of liability for interest.

The operative direction does not specify the precise date from which interest is to be calculated.