Retired employees are entitled to interest on retiral benefits delayed without justifiable cause.

The petitioner, Kamlesh Kumar Bhargava, retired from service on March 31, 2011, upon reaching the age of superannuation.

Despite completing all necessary formalities, his post-retiral dues were paid with significant delays: Group Insurance (GIS) was paid on January 15, 2014; Gratuity (90%) on May 18, 2012; salary differences on April 19, 2012; and pension differences across various dates in 2014 and 2015.

Crucially, the benefit of leave encashment was not granted until March 31, 2019.

The petitioner sought a direction for the payment of 12% interest per annum on these delayed amounts.

The State contended that the delay was not deliberate and they were not liable.

Whether a retired employee is entitled to interest on the delayed payment of post-retiral benefits when the delay is not attributable to the employee.

The court relied on the principle that retiral benefits are not a bounty but a right.

The court applied the precedent set by the Supreme Court in S.K. Dua v. State of Haryana & Another (AIR 2008 SC 1077), which held that a retired employee is entitled to interest on delayed retiral dues under Articles 14, 19, and 21 of the Constitution of India, even in the absence of specific statutory rules.

The court followed the Division Bench ruling in Lakhanlal Borasi v. State of M.P. & Ors. (W.A. No.1869/2018), and State of M.P. and others v. Ramji Das Agarwal (2013(1) MPLJ 53), which established that interest must be awarded if retiral dues are withheld without justifiable reason.

The court found that the petitioner was not responsible for the delay as he had completed all requisite formalities timely.

The court noted that there was no "justifiable reason" presented by the State for withholding the payments for several years.

Consequently, the respondents were held wholly responsible for the belated payments.

The court reasoned that a retired employee should not be made to suffer for the administrative lapses of the State and must be compensated for the delayed enjoyment of their rightful dues.

By applying the precedents cited in Lakhanlal Borasi, the court determined that the petitioner’s claim for interest was legally sound under constitutional and service law principles.

Specifically, for leave encashment, interest at 6% per annum was ordered from March 31, 2011, to March 31, 2019.

The court mandated compliance within three months; failure to comply within this period would trigger an enhanced interest rate of 12% per annum.