Interest on delayed GPF settlement remains payable beyond six months until the actual date of payment

The applicant is the 85-year-old mother and sole legal heir of Late Dr. T.J. Jaisankar, a Professor at JIPMER who died in harness on 23.06.2022

The deceased was unmarried and had joined service prior to 01.01.2004, making his estate eligible for benefits under the CCS (Pension) Rules and GPF (Central Services) Rules

While Death Gratuity and Leave Encashment were settled by February 2023, the General Provident Fund (GPF) disbursement was delayed until 21.02.2024, following a legal notice from the applicant

The respondents initially withheld GPF citing a nomination made by the deceased in favor of the "Faculty of the Skin Department/Dean Academic" rather than a family member

Upon payment, the respondents sought a refund of Rs. 1,14,171/-, contending that under Rule 11(4) of the GPF Rules, interest is only payable for a maximum of six months post-death, and the three months of interest paid beyond that period was an overpayment

The applicant approached the Tribunal seeking interest for the entire period of delay and challenging the refund order

1. Whether the applicant, as the sole legal heir, was entitled to the GPF amount notwithstanding a nomination in favor of a non-family entity

2. Whether the respondents are liable to pay interest on the GPF balance for the entire period of delay beyond the initial six months until the date of actual disbursement

The court primarily applied Rules 2(c), 5, 11(4), and 33 of the General Provident Fund (Central Services) Rules, 1960. Rule 5 mandates that a subscriber with a family must nominate only family members

Rule 33(i)(b) stipulates that if a nomination is made in favor of a non-family member, the fund becomes payable to the family members in equal shares

Regarding interest, the court relied on the Note under Rule 11(4) and the DoPPW’s O.M. dated 16.01.2017, which permits interest beyond six months subject to administrative approval and investigation into the delay

The principle from Gorakhpur University v. Dr. Shitla Prasad Nagendra, establishing that terminal benefits are property rights and delays must be penalized with interest

Bolla Malathi v. B. Suguna, confirming that a nominee is merely a hand to receive payment and does not override legal succession

The Tribunal observed that under GPF Rule 5, the deceased’s nomination of a university department was invalid as it bypassed the "family" (the mother)

Per Rule 33, the respondents had a statutory obligation to disburse the GPF to the applicant immediately upon the subscriber's death, regardless of the invalid nomination

The court rejected the respondents' argument that interest is strictly capped at six months. It clarified that Rule 11(4) and the 2017 O.M. provide a mechanism for authorizing interest beyond six months where the delay is administrative

The Tribunal found that the delay was entirely attributable to JIPMER’s misinterpretation of nomination rules and failure to process the claim despite having disbursed other death benefits earlier

Consequently, the respondents could not invoke the six-month limit to penalize the applicant for their own procedural lethargy

The order dated 03.07.2024 seeking refund of "excess" interest was effectively set aside. The respondents were directed to calculate and pay the remaining interest (at applicable GPF rates) within two months, after adjusting any interest already disbursed

The claim for family pension was dismissed as not pressed by the applicant