High Court of Calcutta

Sanjib Kumar Das Vs. The Durgapur Projects Limited and Ors.

MANU/WB/0412/2021

21.06.2021

Service

An employee has a right to claim interest on delayed payment of retirement benefits

The writ Petitioner joined Durgapur Projects Limited, a Government of West Bengal Enterprise, on August 18, 1980. Durgapur Projects Limited is a State under Article 12 of the Constitution of India, 1950. The Petitioner has alleged that, the delay on the part of the employer in paying the retirement benefits along with leave encashment, etc. entitles the Petitioner to claim interest on all retiral benefits on account of delayed payment.

The Petitioner retired from service on January 31, 2019. The gratuity and leave encashment were released on August 13, 2020. The Petitioner made a representation for payment of interest on account of such delayed payment. The representation of the Petitioner was not responded to. Aggrieved, the Petitioner has moved present Court under Article 226 of the Constitution of India and prayed for interest on delayed payment of gratuity and leave encashment.

The Hon'ble Apex Court has already held in S.K. Dua vs. State of Haryana and Anr. that, an employee had a right under Articles 14, 19 and 21 of the Constitution of India to claim interest on delayed payment of retirement benefits. Leave encashment is also a retirement benefit, which is granted to an employee in lieu of service rendered. All retirement benefits are paid in recognition of the sincere and long drawn service rendered by an employee to the employer. It is neither a charity nor gratis granted by an employer.

In Union of India v. Tarsem Singh, the Apex Court held that, in spite of delay in filing an application for grant of interest on gratuity and order retirement benefits, the delay would not be fatal and shall not take away the claim of the Petitioner in getting interest on delayed payment.

The Respondents are directed to pay 6% interest on the gratuity as also the leave encashment benefits. Such payment shall be made under separate heads for gratuity and leave encashment, payable from the next day of the date of superannuation up to the date of payment. Writ petition is disposed of.

Tags : Gratuity Interest Entitlement

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