Municipalities Cannot Withhold Pensionary Benefits on Grounds of Financial Stringency.

The petitioner, a former cashier of the Taherpur Notified Area Authority (TNAA), retired on 30 June 2013.

A Pension Payment Order (PPO) was issued on 8 November 2013, but the TNAA stopped paying his pension, which remained outstanding from September 2025.

The TNAA cited lack of funds but produced no material demonstrating its financial position or showing that it had sought assistance from the State.

The State submitted that 40% of the total pensionary claim relating to the TNAA had been disbursed.

Whether the TNAA could withhold or delay the petitioner’s pension on the ground of financial stringency

Whether the petitioner was entitled to interest on delayed pension payments and to directions for payment of current pension

Sections 67, 71 and 72 of the West Bengal Municipal Act, 1993 permit a municipality to maintain its own fund, seek financial assistance from the State and take loans.

The Court treated pension as a deferred benefit payable after retirement and held that financial stringency did not justify withholding or delaying it; a retired employee should not be deprived of the means of livelihood represented by pension and should be compensated for delay.

The TNAA asserted that it lacked funds but did not substantiate that claim or show that it had pursued the statutory means of obtaining financial assistance.

In those circumstances, and given the PPO and the character of pension as a deferred retirement benefit, the TNAA could not rely on financial stringency to withhold payment.

The Court therefore required payment of the arrears and current benefits, with interest to compensate the petitioner for the delay.

Respondents 2 and 3 were directed to ensure compliance by taking up the matter with the TNAA.

The petitioner was awarded interest at 8% per annum on delayed pension from the date each amount became outstanding until actual payment.