Balkrishna Mudaliar vs. Union Of INDIA And Anr

Held

The Court held that the petitioner is not entitled to interest on delayed payment of pension and retiral benefits. The Court reasoned that while Rule 68 of the Central Civil Services (Pension) Rules, 1972, provides for payment of interest in cases of delayed gratuity due to administrative lapses, the decision to grant such interest rests with the Secretary of the Administrative Ministry or Department. The Court noted that the petitioner's situation was distinct from the cases cited, as he had suffered an order of compulsory retirement, which was subsequently quashed. However, the Court found that pending litigation between the parties cannot be construed as an administrative lapse on the employer's part. Furthermore, the Court stated that interest on delayed payment of gratuity can only be granted if a finding is recorded that the punishment of compulsory retirement was illegal and that this illegality prevented the petitioner from discharging his duties. No such finding was recorded. Therefore, the Court concluded that it could not issue a direction for payment of interest in the present proceedings, given the statutory provision under Rule 68(2) which vests discretion in the Secretary.

Facts

The petitioner, Mr. Balakrishnan Mudaliar, a former driver in the office of the Commissioner, CGST & Central Excise, Thane, filed a writ petition before the Bombay High Court. This followed the dismissal of his Original Application No. 210/280 of 2020 by the Central Administrative Tribunal, Mumbai Bench. The Tribunal had declined his prayers for pension and other retiral benefits with interest. The petitioner sought directions for the release of accrued pension and dues along with appropriate interest, calculated as per prevalent scales and rules. The core of the dispute revolves around the entitlement to interest on delayed payment of retiral benefits.

Key Issues

1. Whether the petitioner is entitled to interest on delayed payment of pension and other retiral benefits, considering the provisions of Rule 68 of the Central Civil Services (Pension) Rules, 1972 and the principle of equity? The petitioner argued that Rule 68 mandates payment of interest if gratuity payment is delayed due to administrative lapses. He relied on this Court's decision in "Narayan Pundalik Pathade v. Municipal Corporation of Greater Mumbai & Anr." where interest was granted. He also cited "Alok Shanker Pandey v. Union of India & Ors." for the principle that employees deprived of pensionary benefits are entitled to interest in equity. The petitioner contended that there was no plausible explanation for the employer's delay in paying benefits after the High Court's decision in Writ Petition No. 6368 of 2013 became final. The respondents argued that pending litigation cannot be construed as an administrative lapse on the employer's part. They emphasized that under Rule 68(2), the discretion to grant interest on delayed payment of gratuity lies with the Secretary of the Administrative Ministry or Department, based on the facts and circumstances. They submitted that interest can only be granted if a finding is recorded that the compulsory retirement was illegal and caused the delay.