Retired Employee Should Not Suffer: Supreme Court In Late Payment Case

The Supreme Court Friday directed a Coimbatore-based college to pay interest on the delayed payment of retirement benefits to an associate professor, saying the retired employee should not be made to suffer for no fault of his.

The apex court said interest be paid on the delayed payment, subject to the final decision that may be taken by the government on the objections to the enquiry report in the matter, and it will be open for the college to recover the same from the person who is held responsible for the delay.

A bench of Justices M R Shah and B V Nagarathna delivered its verdict on an appeal filed by the retired associate professor against the October last year order of the Madras High Court which had disposed of his plea observing that it is ultimately for the government to take an appropriate decision in the matter based on the enquiry report.

“The management/trustees/college are hereby directed to pay the interest on the delayed payment of retirement benefits to the appellant, from the date of retirement till the actual payment was made, subject to the final decision that may be taken by the government on the objections to the enquiry report that may be filed by the former secretary and/or the college and it will be open for the college/ management/trustees to recover the same from the person, who, ultimately is held to be responsible for the delay,” the bench said.

The top court said that as there was a delay in making the payment of retirement benefits and settling the dues for which the appellant is not at all responsible, he is entitled to interest on the delayed payment.

“Even the division bench of the high court has observed in the impugned judgment and order that the appellant is entitled to the interest on the delayed payment,” it said.

It noted that the division bench of high court was informed that the government has conducted an enquiry and fastened liability on the college and a former secretary of the college was allegedly responsible for delay in disbursement of terminal benefits to the retired employee.

The apex court also noted it was pointed out to the high court that the former secretary was unwell and therefore, he could not file objections to the enquiry report.

It said there is an “inter se dispute” between the secretary, management and the government as to who is responsible for the delay in making the payment.

“In that view of the matter, subject to the further final order that may be passed by the government, the college/management is first liable to pay the interest on the delayed payment of retirement dues subject to the final decision, which may be taken by the government, after hearing the management and the former secretary,” it said.

“However, because of the inter se dispute between the management, secretary and the government on who is responsible for the delay in making the payment and/or settling the dues, the retired employee should not be made to suffer for no fault of his,” the bench said, while setting aside the high court order which had denied interest on delayed payment of retirement benefits.

It said payment of interest on delayed payment of retirement benefits be made within six weeks.

The associate professor had retired from the college, which is an aided college, in June 2011 and there was a delay in paying the retirement benefits to him despite several correspondences.

He had filed a petition before the high court and during the hearing, it was told that entire terminal benefits have been settled.

Thereafter, the issue remained was regarding interest on the delayed payment of pensionary benefits.

The petitioner had urged the single judge of the high court that action be taken against the erring officers for the delay and he be paid the interest on the delay in payment of retiral benefits.

The single judge had disposed of the plea in July 2020 and asked the associate professor to make a representation to the Director of Collegiate Education to take appropriate action against the erring officers.

Later, he had filed an appeal before the division bench of high court.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)