Retired Government Doctor Gets 6% Interest On 2016–22 Pension Arrears After Madras HC Finds Department Failed To Pursue Proceedings

The respondent’s retirement benefits were withheld while criminal and departmental proceedings were pending.

After his acquittal on appeal, the disciplinary proceedings were dropped and he was permitted to retire on 27 July 2016, without prejudice to proceedings under Rule 9(2) of the Tamil Nadu Pension Rules, 1975.

No effective steps were taken under that rule, and pensionary arrears were paid on 27 September 2022.

On the respondent’s writ petition, the Single Judge directed the State to examine whether the delay was justified and whether interest was payable.

The State appealed, contending that the benefits had been paid when the respondent became eligible and that no interest was due.

The Court considered Rule 9(2) of the Tamil Nadu Pension Rules, 1975, under which departmental proceedings may continue after retirement in the circumstances described by the rule.

It also applied the principle that interest may be awarded where delayed payment of retirement benefits is attributable to the Government and lacks plausible justification.

The judgment cited no precedent and did not identify a statutory rate of interest; the 6% rate was applied by reference to the interest already paid for delayed payment of DCRG.

The Single Judge’s order directed an inquiry into the reasons for delay; it did not mandate payment of interest at 18%, and the respondent could not derive that rate from his own prayer.

The Court accepted that withholding benefits while the respondent was under suspension at superannuation was justified.

However, after he was permitted to retire on 27 July 2016, no effective steps were taken to proceed against him under Rule 9(2), and the pensionary arrears were not paid until 27 September 2022.

The Court therefore found the outright denial of interest unreasonable and concluded that the delay was attributable in part to the appellants and in part to the respondent.

It fixed interest at 6%, consistent with the rate paid on delayed DCRG.

The appellants were directed to pay the respondent interest at 6% on the delayed pensionary benefits for the period from 27 July 2016 to 27 September 2022.

The Dean, Stanley Medical College, was directed to make payment within six weeks of receiving the judgment.

The connected civil miscellaneous petition was closed, with no order as to costs.