Universities Must Ensure Full Payment of Pension Arrears and Statutory Interest on Delayed Group Insurance Benefits

The petitioner, a retired employee who superannuated on 31.01.2015, approached the High Court seeking the payment of residual arrears of pension arising from the 6th and 7th Pay Revision Schemes

He further claimed that Bhupendra Narayan Mandal University (B.N.M.U.) and Lalit Narayan Mithila University (L.N.M.U.) failed to pay the full statutory interest on his Group Insurance Scheme (GIS) funds.

Specifically, he alleged a shortfall of ₹44,320 in 6th Pay Revision arrears and contested the application of a lower interest rate (4.5% instead of 12.5%) on GIS dues by L.N.M.U.

The Universities contended that calculations were correct and interest had been paid as per applicable rates at the relevant time

1. Whether the petitioner is entitled to the alleged residual arrears of pension under the 6th and 7th Pay Revision Schemes

2. Whether the Universities are liable to pay compound interest at the rate of 12.5% on Group Insurance Scheme (GIS) dues in the event of delayed payment beyond the statutory period

Finance Department Resolution dated 13 July 1985, which mandates that all post-retiral payments, including Group Insurance, must be ensured within 15 days of an employee's superannuation

The principles of administrative accountability and transparency in financial calculations were also applied, requiring the University to provide a detailed statement of accounts where a dispute over quantum arises

The Court observed that while the petitioner alleged a specific shortfall in pension arrears, the University’s defense remained general, asserting that the petitioner's claims were based on assumptions.

To resolve this, the Court held that the University bears the burden of transparency; if no error is found, it must provide a formal statement of accounts to the petitioner to justify its calculations.

Regarding the Group Insurance, the Court noted a three-year delay in payment. Applying the 1985 Resolution, the Court found merit in the petitioner's argument that statutory interest (12.5%) should apply until the actual date of payment if such benefits were awarded to identically situated persons, overriding L.N.M.U.'s application of a lower 4.5% rate.

For the GIS interest, the Court directed the Universities to calculate and pay the difference if the 12.5% compound interest rate as per the 1985 Resolution is applicable and has been granted to others. Consequential monetary benefits must be released within the stipulated period upon verification.