Delay in settlement of pension: HC imposes interest penalty

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Underscoring that pensioner or retiree benefits become the principal source of sustenance to an employee after his retirement, the High Court has ruled that delay in settlement and disbursement of pension has to be visited with the penalty of payment of interest.

Disposing off a petition filed by the former Chief General Manager, J&K State Power Development Corporation, Abdul Rashid Makroo who had superannuated in 2014, a bench of Justice Ali Muhammad Magrey directed the authorities to release the pension and the retiree benefits in his favour.

The law, the court said, is well settled with regard to pension or retiree benefits. “The payment whereof is not a bounty being paid to the employee concerned, but these are paid in recognition of the service rendered by an employee to his employer,” the court said.

The court held that the purpose for grant of such benefits is to ensure the employee is in a position to sustain himself. “Besides, any delay in settlement and disbursement of pension has to be visited with the penalty of payment of interest at the current market rates till actual payment is made,” the court said.

The court held that the liability to pay penal interest on these dues at the current market rates commences at the expiry of two months from the date of retirement.

Pointing out that the delay of depriving in the case was clearly attributed to the authorities concerned, the court said it entitles the petitioner to interest on the dues at the current market rates which would commence at the expiry of two months from the date of retirement.

The court directed for the release of the pensioner and retiree benefits along with arrears with interest @ 6 percent per annum in favour of Makroo.  The court said the same shall commence at the expiry of two months from the date of Makroo’s retirement in accordance with the rules which are applicable to the employees of the Government of J&K.

“The respondents shall pass orders, in this behalf, within a period of two months from the date copy of this order is served on them,” the court said.

Makroo had retired in 2014. However after his superannuation, the corporation failed to settle all his post retirement benefits.

In his petition, he had stated that while the corporation released some post-retirement benefits in the shape of gratuity, leave salary and GPF accumulations in his favour as per the Jammu and Kashmir Civil Service Rules, they failed to release the pensioner benefits to which he was legally entitled as per the rules pertaining to the other Government employees of the erstwhile State being followed in the Corporation.