Retired employee should not be made to suffer for no fault of his if there is dispute between Management, Secretary & Govt. on who is responsible for delay in settling dues: SC

Read Judgment: Dr. A. Selvaraj V. C.b. M. College And Ors. 

Pankaj Bajpai

New Delhi, March 7, 2022: While hearing a case of delay in payment of pensionary benefits of a retired Associate Professor of a Coimbatore College, the Supreme Court has opined that as there was a delay in making the payment of retirement benefits and settling the dues for which the employee (appellant) was not at all responsible, he was entitled to the interest on the delayed payment.

A Division Bench of Justice M.R. Shah and Justice B.V. Nagarathna observed that 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.

Going by the background of the case, Dr. A. Selvaraj (Appellant), an Associate Professor of Chemistry, retired from C.B.M. College, Coimbatore (first respondent) and the institution in which he was serving is an aided college. Since there was delay in payment of retirement/ pensionary benefits, despite various correspondences and the representations, the appellant approached the High Court. 

However, during the pendency of the writ petition the entire terminal benefits were settled. Therefore, it was requested on behalf of the appellant before the Single Judge that the action be taken against the erring officers for the delay caused in settling his dues and that he be paid interest on the delay in payment of retiral benefits. The Single Judge directed the Director of Collegiate Education to take appropriate action against the erring officers who had delayed in settlement of the payment in time, after hearing the aggrieved persons as expeditiously as possible. However, as no order was passed in respect of the interest on the delayed payment of the retirement benefits, the appellant appealed before the Division Bench. 

The Division Bench observed that one C.M. Ramaraj, the former Secretary of the College was responsible for the delay in disbursement of terminal benefits to the appellant. Thereafter the Division Bench observed that it is ultimately for the Government to take an appropriate decision based on the enquiry report. Hence, the present appeal was filed. 

After considering the submissions, the Top Court found that the Division Bench of the High Court observed that the appellant was entitled to the interest on the delayed payment.

However, there was an inter se dispute between the Secretary, Management and the Government as to who is responsible for the delay in making the payment to the appellant and therefore, he had been denied the interest on delayed payment though entitled to, added the Court. 

Speaking for the Bench, Justice Shah noted that as such pursuant to the interim order dated August 9, 2021, the Government did conduct an enquiry and fastened the liability on the college and observed that the former Secretary, C.M. Ramaraj was responsible for the delay in disbursal of the terminal benefits to the appellant. 

In that view of the matter, subject to the further final order that may be passed by the Government, the College/Management was first liable to pay the interest on the delayed payment of retirement dues subject to the final decision, which might be taken by the Government, after hearing the Management and the former Secretary, added the Bench. 

The Apex Court therefore quashed the order passed by the High Court denying the interest on delayed payment of retirement benefits to the appellant. 

The Top Court also directed the Management / Trustees / College 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. The Court also stated that 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.