State is liable for interest on retiral benefits delayed after retirement without justifiable cause.

The original petitioner, a daily wager, sought regularization and was granted benefits under Government Resolution (G.R.) dated 17.10.1988 by the Labour Court on 02.01.2009

The State challenged this award in Special Civil Application No. 1368 of 2010, which was eventually dismissed on 19.04.2017 with a direction to implement the award within six weeks

The differential amount of pay (Rs. 13,52,829/-) was paid to the petitioner in March 2019

The petitioner retired from service on 28.02.2019, but his retiral benefits—including pension, gratuity, and leave encashment—were only paid to his legal heirs in February 2026

The petitioner died during the pendency of the writ petition, which was subsequently pursued by his legal heirs seeking interest on the delayed payments

1. Whether the petitioners are entitled to interest on the delayed payment of differential salary arrears amounting to Rs. 13,52,829/-

2. Whether the petitioners are entitled to interest on the delayed payment of retiral benefits (pension, gratuity, and leave encashment)

The court exercised its jurisdiction under Article 226 of the Constitution of India

The court primarily relied on the legal principle established in D.D. Tewari (Dead) Through Legal Representatives vs. Uttar Haryana Bijli Vitran Vigam Limited & Ors. (2014) 8 SCC 894, which holds that if retiral benefits are withheld or delayed without justifiable reason, the State is liable to pay interest on such amounts

Regarding the interest on differential salary arrears, the court noted that the delay was not deliberate because the Labour Court's award was stayed by the High Court during the pendency of the State’s challenge from 2010 to 2017

the court observed that no request for interest was made when the implementation direction was issued in 2017

Regarding retiral dues, the court found no justifiable reason for the seven-year delay between the petitioner's retirement (February 2019) and the actual payment (February 2026)

Applying the ratio from D.D. Tewari, the court reasoned that the State is duty-bound to release retiral benefits within a reasonable time, and failure to do so necessitates the payment of interest to compensate for the delay

It held that while the petitioners are not entitled to interest on the differential salary arrears, they are entitled to interest on delayed retiral benefits

The court directed the respondents to pay 6% interest per annum on the arrears of pension, gratuity, and leave encashment from 01.03.2019 until the date of actual payment

The calculation must be completed by 30.04.2026, and payment must be made by 31.05.2026, failing which an additional penalty of Rs. 25,000/- shall be payable to the petitioners