23 March 2020


High Court of Calcutta

Sanjib Ratan Saha Vs. The Institute of Cost Accountant of India and Ors.




Retiral dues is an employee’s rightful claim and is not a bounty

The Petitioner retired as the Director (Finance) of the Institute of Cost Accountant of India, i.e. the respondent No. 1, on June 30, 2016. His grievance is that he has not been paid his retiral dues for a pretty long time. He has mentioned the various components of his retiral dues in the writ petition. He sent electronic mail on November 13, 2016 and subsequently on various dates to the respondent for releasing his retiral benefits. The Petitioner alleges that, in spite of the resolution adopted by the Council of the Institute the administration did not take any step for implementation of the resolution or for disbursing the retiral dues in favour of the Petitioner.

The law point is very well settled that, retiral dues of an employee is something which he has earned by dint of the service rendered to the employer during the whole of the service career. It is his rightful claim and is not a bounty. A retired employee is entitled to get the same, if the service rules provided for it, as of right. This benefit runs with the service condition and is one of the prizes of retirement which an employee may always legitimately expected.

The need to settle the retiral dues at an early date has been repeatedly emphasized by different Courts. An employee who puts in long years of service has not only a legitimate expectation but a definite right to get the retiral benefits disbursed in his favour at an early date. It is a right which has accrued in his favour and without any just cause no authority can not only deprive an ex-employee of those benefits but cannot even delay in disbursing the same. About four decades and a half ago the Supreme Court in the case of State of Mysore v. C.R. Sheshadri, observed that, a retired government official is sensitive to delay in drawing monetary benefits. And to avoid posthumous satisfaction of the pecuniary expectation of the superannuated public servant, it was becoming necessary to issue directions for early payment of the dues.

In the case of Dr. Uma Agarwal v. State of U.P. and Another, a three-judge bench of the Supreme Court found that, the retiral benefit was delayed by the department which was inexcusable. The Supreme Court observed that, grant of pension was not a bounty but a right of a government servant. Delay in settlement of retiral benefit is frustrating and must be avoided at all costs.

The Respondent No. 1, Institute is directed to pay interest at the rate of 9 per cent per annum on the remaining retiral benefits which were released on January 11, 2018. Such interest shall be calculated from August 1, 2016 giving respondents the benefit of a month after the petitioner's retirement as a reasonable period for disbursing the retiral benefits till the actual date of payment. Petition is allowed.


State of Mysore v. C.R. Sheshadri, reported in (1974) 1 LLJ 301 (SC), Dr. Uma Agarwal v. State of U.P. and Another, reported in MANU/SC/0184/1999
: AIR 1999 SC 1212

Tags : Retiral benefits Entitlement Delay

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