Court Orders 9% Interest on Delayed Payments, Mandates Strict Adherence to Pension Rules
In a significant ruling, the Punjab and Haryana High Court has held that delays in the payment of retiral benefits, such as gratuity, leave encashment, and provident fund, should not be attributed to employees when procedural lapses occur on the part of the employer. The court emphasized the mandatory compliance with the Punjab Civil Services Rules for timely disbursal of such benefits.
The case, titled Jasbir Singh v. State of Punjab, was presided over by Justice Sudeepti Sharma. The petitioner, Jasbir Singh, challenged the denial of interest on delayed payment of his retiral benefits. The court found that the delay was due to the employer's failure to adhere to the prescribed timelines and procedures under the Punjab Civil Services Rules, Volume II.
The court reiterated that pension and gratuity are not bounties but vested rights of employees, underscoring that any culpable delay in their disbursement must be penalized with interest at the current market rate. The judgment drew on precedents from the Supreme Court of India, which have consistently held that employees are entitled to timely settlement of their retiral benefits.
The court directed that interest at the rate of 9% per annum be awarded to the petitioner for the delay in payment. It further mandated that the Chief Secretaries of Punjab, Haryana, and Chandigarh issue circulars to ensure strict adherence to procedural rules and to fix responsibility on erring officers. This move aims to curb litigation arising from such delays.
Bottom Line :
Retiral Benefits - Delay in payment of gratuity, leave encashment, and provident fund due to non-compliance of procedural rules by the employer - Held, such delay cannot be attributed to the employee; employer is duty-bound to adhere to timelines prescribed under Punjab Civil Services Rules for timely disbursal of benefits.
Statutory provision(s): Punjab Civil Services Rules, Volume II, Chapter IX, Rule 9.1, Rule 9.2, Rule 9.3, Rule 9.4, Rule 9.5
Jasbir Singh v. State of Punjab, (Punjab And Haryana) : Law Finder Doc id # 2963893
