In a recent ruling, the Kerala High Court issued a ground-breaking verdict on the issue of entitlement to interest on delayed retirement benefits.
The petitioner, PV Nandakumar, a retired executive engineer, had initiated a writ petition seeking interest on the belated disbursement of his retirement benefits. His advocates contended that the rejection of his petition by the Single Judge was unjust, given the impracticality of pursuing alternative remedies in his case.
The respondents argued that financial constraints faced by the Water Authority contributed to the delay in disbursing retirement benefits. Nonetheless, the court deemed this defence inadequate to deny Nandakumar his rightful entitlement to interest.
In an exhaustive analysis, Justice Anu Sivaraman emphasised the petitioner’s stance, stating that dismissing the writ petition on the premise that the petitioner should have sought redressal from other authorities or filed a lawsuit for interest recovery is untenable.
The Court further illuminated the particular circumstances of the case, where no culpability had been assigned to Nandakumar within the specified timeframe. Drawing on legal precedents, notably the case of S. K. Dua v. State of Haryana and another, 2008, the court underscored the relevance of constitutional provisions in such matters.
It emphasised that even in the absence of statutory regulations, administrative directives, or guidelines, an employee can assert interest claims under Part III of the Constitution, relying on Articles 14, 19 and 21.
In its verdict, the court ordered the calculation and payment of interest at a rate of seven per cent per annum on the Delayed Compulsory Retirement Gratuity (DCRG) amount disbursed to Nandakumar. The judgment stipulated that the interest must be remitted within four months from the date of receiving the judgment’s copy.
Furthermore, the Water Authority was instructed to recover the interest from the officers responsible for the delay.
