ups_00751 — Delayed final settlement dues of an employee or his/her heir if employee had died, is entitled for payment of interest, even if there is no statutory rules for claiming interest on the kept back final settlement dues

Delayed final settlement dues of an employee or his/her heir if employee had died, is entitled for payment of interest, even if there is no statutory rules for claiming interest on the kept back final settlement dues — Title: O.A. No. 744 of 2012 - Delayed Final Settlement Dues and Interest Entitlement Short Context: The document discusses a case where an applicant seeks payment of interest on delayed final settle... — Facts: The Applicant is the daughter of one Smt. Kamla Bhatia, a Nursing Sister at the time of her death on 25-12-2003 and the Applicant is the sole nominee for receiving final settlement dues. At the time of death of her mother, the Applicant was only 15 years old. The final settlement dues of the Applicant's mother under various heads such as Gratuity, Leave Encashment, CGHS, enhanced Family Pension, normal Family Pension and withheld amount were sent to PAO by Letter, dated 21-7-2004. The Respondents released all the amounts except family pension. Hence she filed O.A. No. 900 of 2010 before the Principal Bench, which was disposed of by ordering the Respondents to consider and decide her representations, dated 23-1-2007 and 26-2-2010 treating the OA also as her representation. That was replied by the Respondents informing her that there is no such rule which entitled her to interest on terminal benefits. Hence she now filed the present application assailing that speaking order and praying for issuance of direction to Respondents to pay her compound interest at the rate of 18% on the amount of gratuity, GPF, Leave Encashment, Death Link Insurance, Arrears of Family Pension (total amount around ₹ 19 lakhs) paid to her belatedly for the period of delay with effect from 29-12-2003. On hearing both sides, the Tribunal held that admittedly the pension paper after completion of the formalities were sent to PAO vide Letter, dated 21-7-2004. "Inspite of completing the formalities, the Respondents did not release the benefits due to her till attaining the age of maturity, rather they should have taken extra care, precaution and interest in securing such benefits to her expeditiously". As per Rule 77 of CCS (Pension) Rules, 1972, on the death of Government servant, the Respondents at the Head Office should ascertain the final settlement dues and also the nominated person to disburse the final settlement dues. Rule 77 (3) provides that when only the child or children survived, the claim is to be submitted in Form 14. Rule 78 (3) provides for determination of qualifying service and emoluments to be disbursed within a month after death. Rule 83 provides for the family pension becomes payable from the day of death of the Government servant to his nominated family members. Thus the Applicant becomes eligible for receiving family pension on the date of death of Kamala Bhatia on 29-12-2003. In terms of Government order, dated 25-8-1994, DCRG should be paid within three months from the date of retirement to dependants of the deceased Government servant. The said OM, dated 25-8-1994 is reproduced in the judgment. In case the retiral benefits of a retiree / deceased are not settled within 30 days without sufficient cause, the recipient is entitled for interest as per G.I., OM, dated 5-10-1999. The said OM is reproduced. Regarding delay in submitting the final settlement formalities by the Applicant, the department cannot be blamed. But here the Applicant submitted the pension papers on 21-7-2004. The Respondents can take only 30 days thereafter. Hence the Applicant is entitled for interest on the kept back amount from 21-8-2004 till the payment of dues. In the case of S.K. Dua v. State of Haryana and others [ 2008 (1) Scale 284 ], it was held that the Applicant could claim payment of interest relying on such rules, if there are administrative instructions, guidelines or norms, prescribed for the purpose. Even if there is no administrative instructions or norms, the employee or his nominee can claim interest under Part II of the Constitution of Articles 14, 19 and 21 of the Constitution. The Paras. 8, 9 and 11 of the said judgment are reproduced for clarity. Delhi High Court in two decisions namely, Government of NCT of Delhi v. S.K. Srivastava [ WP (C) 1186 of 2012 ] decided on 29-2-2012 and Delhi Police v. Balwant Singh [ WP (C) 1127 of 2012 decided on 13-3-2012 held that the issue of interest on delayed payment of retiral benefits dues is no longer debatable. Interest on delayed payment of final settlement dues is allowable.