Referring to the salaries and pensions of government employees as “rightful entitlements”, the Supreme Court has ruled that in case of any delays in their payment, the employees should be paid along with interest.
Since the employees are paid salaries for the services they render, it is rightful entitlement under the law. In the same way, pension is paid to retired employees for the services rendered by them to the country in the past.
The Andhra Pradesh High Court had earlier directed the payment of deferred salary for the months of March-April 2020 together with interest at the rate of 12 per cent per annum and payment of deferred pension for the month of March 2020 with the same rate of interest.
The Andhra Pradesh (AP) government had approached the Supreme Court regarding the ‘interest’ part of the High Court judgement. The AP government argued that salaries and pensions were deferred because of the delicate financial condition of AP’s economy following the pandemic-induced challenges and pressures. Therefore, the state government should not be pressurised to pay interest.
The appeal was disposed and it was directed that instead of the 12 per cent per annum interest rate awarded by the High Court, the AP government will have to pay simple interest at the rate of six per cent per annum within 30 days.