Unjustified Inordinate Delay in Releasing Retiral Benefits Entitles Legal Heirs to 18% Annual Interest

Late Kashinath Jaiswal, the petitioner's father, was a Junior Divisional Clerk at Nagar Panchayat, Ramanujganj. Following a series of dismissals and reinstatements, he was compulsorily retired on 20.07.2001

The Collector set aside this retirement on 08.02.2002; however, a subsequent appeal by the respondent was stayed and eventually dismissed for want of prosecution in 2017

The employee retired on 30.06.2008 and died in 2011, followed by his wife in 2021

Retiral dues (pension, gratuity, leave encashment) were only paid to the legal heirs in March 2025/2026 after the High Court intervened during the pendency of this writ petition

The petitioner sought interest on the delayed payments and arrears of salary for the period 20.07.2001 to 30.06.2008

1. Whether the legal heirs are entitled to interest on the retiral benefits paid after a delay of approximately 16 years and 8 months.

2. Whether the petitioner is entitled to arrears of wages/salary for the period between the setting aside of compulsory retirement and the actual date of retirement on the basis of the "no work no pay" principle.

The Court primarily applied the principle that retiral benefits must be paid on the date of retirement or soon thereafter, as established by the Hon’ble Supreme Court in Vijay L. Mehrotra v. State of U.P. & Others (2001) 9 SCC 687, which granted 18% interest for unjustified delays

It further relied on Punarad Prasad Baghel v. State of CG & Others (WPS No. 5231/2011), affirming that where apathy and negligence are palpable, a higher interest rate of 18% is warranted

Regarding wages, the Court applied the "no work no pay" doctrine, placing the burden of proof on the employee to show they were prevented from joining duty

The Court observed that the retiral dues were paid only after a delay of nearly 17 years, which it termed "completely unjustified" and a result of departmental negligence

Following the precedent in Vijay L. Mehrotra, the Court held that the petitioner should not suffer for the state's apathy

Conversely, regarding the claim for salary arrears (2001–2008), the Court found that although the Collector had set aside the compulsory retirement, the late employee had failed to demonstrate that he actively attempted to join duty or challenged the respondent's alleged refusal to permit him to work

A respondent resolution indicated the employee was absent without intimation after February 2002; thus, the "no work no pay" principle was rightly invoked to denies wages for that period

The Court directed the respondents to pay simple interest @ 18% per annum on the pension, gratuity, and leave encashment from the date of retirement (30.06.2008) until the date of actual payment, to be disbursed within four months