Interest is payable on retiral benefits delayed due to disciplinary proceedings upon ultimate exoneration.

The applicant, a retired Office Superintendent from the North Central Railway, retired from service on 28.02.2014

Upon retirement, the respondents withheld his retiral dues—comprising gratuity (Rs. 7,63,950), commutation of pension (Rs. 4,55,259), leave encashment (Rs. 4,39,850), and outstanding salary (Rs. 43,000)—due to pending disciplinary proceedings

Although the applicant was subsequently exonerated of the charges, the retiral dues were only released and paid on 23.07.2018, representing a delay of over four years

The applicant filed the instant application under Section 19 of the Administrative Tribunals Act, 1985, seeking interest on these delayed payments

Whether the applicant is entitled to interest on the delayed disbursement of retiral dues in instances where the delay was occasioned by disciplinary proceedings that resulted in exoneration

The Tribunal primarily relied on the precedent established by the Hon'ble Supreme Court in State of Kerala Others v. M. Padmanabhan Nair (1985) 1 SCC 429, which held that pension and gratuity are no longer a bounty but are earned by rendering service; consequently, any culpable delay in settlement must be visited with a penalty of interest

The Tribunal further considered the decision of the Hon’ble High Court in Shivkumari Dubey v. State of M.P. and others (2004) SCC online MP 21 regarding the right to interest on delayed retiral benefits

The Tribunal noted that there was no factual dispute regarding the four-year delay between the applicant’s retirement date (28.02.2014) and the date of actual payment (23.07.2018)

It reasoned that because the applicant was ultimately exonerated by the Railway Board, the delay in payment could not be attributed to any fault of the employee

Since the disciplinary proceedings ended in discharge, the withholding of funds became unjustified retrospectively

Applying the principle that retiral dues are property earned through service rather than a "bounty," the Tribunal concluded that the administration is legally obligated to compensate the employee for the loss of use of those funds during the period of delay

It held that the applicant is entitled to interest on the delayed payments of Gratuity, Commutation of Pension, Leave Encashment, and salary

The respondents were directed to pay interest at the rate applicable to the General Provident Fund (GPF), calculated from the date the payments became due until the date of actual disbursement

No order as to costs was made