Unjustified delay in concluding disciplinary proceedings entitles retired employees to interest on retiral benefits under equity.

Late Shri R.J. Agrawal, an Executive Engineer in the Water Resources Department, was suspended in October 1994 following allegations of financial irregularities

He was reinstated in May 1995 and subsequently retired on July 31, 1995, while a departmental inquiry was still pending

The inquiry remained inconclusive for over 23 years until it was formally closed by the State on March 8, 2019, on administrative grounds due to the efflux of time

Following the death of the employee, the State terminated the proceedings as void in 2023 and released the retiral benefits to his legal heirs (the respondents)

The respondents filed a writ petition seeking interest on the nearly three-decade delay in payment

A Single Judge allowed the petition, directing the State to pay 9% interest per annum

The State preferred this intra-court appeal challenging the interest award.

1. Whether the State is liable to pay interest on retiral benefits when the delay is attributed to a pending departmental inquiry under statutory rules

2. Whether the Court can award interest on delayed pensionary dues in the absence of an express statutory provision in the Pension Rules

Rule 64(c) of the Chhattisgarh Civil Services (Pension) Rules, 1976, which mandates that gratuity shall not be paid until the conclusion of departmental or judicial proceedings

General Administration Department Circular dated 03.03.2012, stating that disciplinary proceedings terminate upon a government servant's death

The court relied on the established service jurisprudence principle that pension and retiral benefits are not a "bounty" but an enforceable right earned through service

The appellants cited K.C. Kaushik v. State of Haryana (2024 INSC 803) to argue against interest without statutory backing

the Court upheld the exercise of equitable jurisdiction under Article 226

The Court observed that while Rule 64(c) permits withholding benefits during an inquiry, such an inquiry cannot be prolonged indefinitely.

In this case, the 23-year delay was deemed "extraordinarily long" and "unjustified"

The Court reasoned that administrative inefficiency or delays in completing departmental proceedings must not operate to the detriment of a retired employee or their family

Regarding the lack of a specific statutory provision for interest, the Court held that the power to award interest in writ jurisdiction flows from principles of equity, fairness, and justice, especially when the State retains money that lawfully belongs to a citizen

The Court concluded that the grant of interest is a recognized remedy to compensate for the deprivation of funds over several decades

The Court held that the inordinate delay in concluding the inquiry and releasing dues necessitated compensatory interest.

The State was directed to compute and release interest at the rate of 9% per annum on the delayed retiral/service dues within the period stipulated by the Single Judge