Liability for interest on delayed wage revision arrears ceases upon company closure and settlement through government assistance.

The applicant, Late S. K. Sharma, a Deputy Manager at Bharat Pumps and Compressors Ltd. (BPCL), retired on January 31, 1998.

BPCL was a sick industry under BIFR/BRPSE and attained profitability in 2005-06.

Consequently, an office order dated July 20, 2008, implemented a 1997 pay revision effective from January 1, 1997, for eligible retirees on a pro-rata basis.

The applicant sought arrears for the period from January 1, 1997, to January 31, 1998.

The respondents initially rejected the claim based on a lack of funds and a policy to disburse only 25% of Profit Before Tax (PBT) chronologically by year.

During the pendency of the litigation, BPCL was ordered to close, and through a government grant, an amount of ₹67,337 was paid to the applicant’s widow on September 7, 2021.

The applicant's legal heirs continued the suit seeking 18% interest on the delayed payment.

1. Whether the applicant is entitled to interest on the delayed payment of pay revision arrears where the delay was attributed to the specialized financial status and subsequent closure of a Public Sector Enterprise.

2. Whether the Tribunal should grant further relief after the principal amount of arrears has been settled via a one-time government financial assistance package.

Section 19 of the Administrative Tribunal Act, 1985.

Department of Public Enterprises (DPE) O.M. dated June 25, 1999, which mandates that wage revisions in Public Sector Enterprises must be met through internal resources without government subvention and are subject to the "capacity to pay".

Precedent from OA No. 1549/2010, which held that interest on delayed payments is not warranted when a company is closed and dues are settled via a fixed one-time grant.

The Tribunal observed that BPCL's delay in payment was not arbitrary but governed by the financial constraints of a sick industry undergoing revival under BIFR and BRPSE.

The court noted that the 1997 wage revision was approved in 2008 with specific conditions that arrears be paid from only 25% of PBT.

Since the company eventually failed and was closed by the Government of India, the final settlement of arrears was made possible only through a one-time financial assistance grant.

The Tribunal reasoned that since the company no longer has its own resources or existence, and the principal amount was accepted by the legal heirs, the demand for interest cannot be sustained.

It distinguished the applicant's cited precedents (e.g., Dr. A Selvaraj vs. CBM College) by emphasizing that BPCL had no internal funds and was essentially defunct.

The court found that because the principal arrears of ₹67,337 had already been paid to the applicant's widow and the company (BPCL) has been closed with all dues settled through a finite government grant, the claim for interest is not maintainable.

Any interim orders were discharged.