An employee can claim interest on delayed retirement benefits payments. Kerala HC
A significant ruling was rendered in the case of WA of 2023 by the Kerala High Court, which was presided over by Justices Anu Sivaraman and C. Pratheep Kumar. The question whether recipients (employee) of delayed retirement benefits are entitled to interest was covered by the ruling.
The Kerala High Court rendered a groundbreaking decision in P.V.NANDAKUMAR NANDAKUMAR vs. STATE OF KERALA, Case No.: WA No. OF 2023, on the claimant’s right to interest on postponed retirement benefits in cases where the employer has not imposed any adverse liability on him (employee).
A significant ruling was rendered in the case of WA of 2(employee ) 023 by the Kerala High Court, which was presided over by Justices Anu Sivaraman and C. Pratheep Kumar. The question of whether recipients of delayed retirement benefits are entitled to interest was covered by the March 4th, 2024, ruling.
The retired executive engineer who filed the writ petition, P.V. Nandakumar, sought interest on the amount of his retirement payments that had been delayed. Mr. Nandakumar contended, through counsel Varun C. Vijay and Divya Chandran, that the single judge’s dismissal of his writ petition was unfair because it was not practical to pursue further remedies in his case.
In a detailed judgment, Justice Anu Sivaraman emphasized the appellant’s contention, stating, “The rejection of the writ petition on the ground that the appellant ought to have approached other authorities or filed a suit for realization of interest cannot be accepted.”
The Court emphasized the particular facts of the case, namely that Mr. Nandakumar was not found liable within the allotted time frame. Referencing prior judicial rulings, like the ruling in S. K. Dua v. State of Haryana and another [2008 KHC 4047], the court emphasized the relevance of constitutional provisions in these situations.
The justices stated that “an employee may claim interest under Part III of the Constitution relying on Articles 14, 19, and 21 even in the absence of statutory rules, administrative instructions, or guidelines.”
The argument made by respondents 2 through 5—represented by attorneys Sri Georgie Johny and Sri Saigy Jacob Palatty, SR.GP—was also discussed by the court. The respondents argued that the Water Authority’s financial issues caused the delay in paying out retirement benefits. The court, however, determined that this defense was inadequate to deny Mr. Nandakumar his legitimate claim to interest.
In its decision, the court ordered that the amount of delayed compulsory retirement gratuity (DCRG) that Mr. Nandakumar had received be calculated and interest paid at the rate of seven percent annually.
The order stipulated that the interest had to be paid no later than four months after a copy of the decision was received. The officers in charge of the delay were also told to reimburse the Water Authority for the interest.
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