Case Note & Summary
The petitioner, State Bank of India, challenged the order of the Central Administrative Tribunal (CAT), Nagpur, dated 03/05/2013, which directed the bank to pay interest at 12% per annum on the delayed payment of retiral benefits to respondent No.1, a retired railway employee, from 23/07/1998 until actual payment. The respondent No.1 had retired from railway service, but his retiral dues were paid belatedly in December 2011. He filed an original application before the CAT seeking interest on the delayed payment. The Railways contended that they had deposited the amount with the bank, and the delay was caused by the bank in releasing the funds. The CAT, after finding that the retiral dues were paid belatedly, directed all parties including the Railways, State Bank of India, and the Chief Manager, Centralised Pension Processing Centre, to pay interest at 12% per annum. The State Bank of India alone challenged this order by way of a writ petition before the High Court. The High Court, after hearing the parties, observed that the delay was clearly attributable to the bank, as the Railways had deposited the amount with the bank, but the bank failed to release it to the employee in time. The court found no merit in the bank's challenge and dismissed the writ petition, thereby upholding the CAT order. The court did not interfere with the rate of interest or the period for which it was awarded.
Headnote
A) Service Law - Retiral Benefits - Interest on Delayed Payment - Liability of Bank - The petitioner bank challenged the order of the Central Administrative Tribunal directing it to pay interest at 12% per annum on delayed retiral benefits to a retired railway employee from 23/07/1998 till actual payment - The court held that since the delay was attributable to the bank in releasing the dues despite the Railways depositing the amount, the bank was liable to pay interest - The writ petition was dismissed (Paras 1-4).
Issue of Consideration
Whether the State Bank of India is liable to pay interest on delayed payment of retiral benefits to a retired railway employee when the delay was caused by the bank despite timely deposit of funds by the Railways.
Final Decision
The High Court dismissed the writ petition, upholding the order of the Central Administrative Tribunal directing the State Bank of India to pay interest at 12% per annum on the delayed payment of retiral benefits to respondent No.1 from 23/07/1998 till actual payment.
Law Points
- Interest on delayed payment of retiral benefits
- Liability of bank for delay in disbursement
- Rate of interest for delayed pension
Case Details
2017 LawText (BOM) (03) 149
Writ Petition No. 3418 of 2013
Smt. Vasanti A Naik, V.M. Deshpande
Mr. M. Anilkumar for petitioner, Mr. M.M. Meshram for respondent No.1, Mr. Nitin Lambat for respondent No.2
Chaityaram Koche (Dead) through L.R. Smt. Baru Bai Koche, Union of India, Chief Manager, Centralised Pension Processing Centre, Central Administrative Tribunal
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Nature of Litigation
Writ petition challenging order of Central Administrative Tribunal directing payment of interest on delayed retiral benefits.
Remedy Sought
Petitioner (State Bank of India) sought quashing of CAT order directing it to pay interest at 12% per annum on delayed retiral benefits.
Filing Reason
The bank was directed by CAT to pay interest on delayed retiral benefits to a retired railway employee, which the bank challenged.
Previous Decisions
Central Administrative Tribunal, Nagpur, by order dated 03/05/2013, directed the petitioner and other respondents to pay interest at 12% per annum from 23/07/1998 till actual payment.
Issues
Whether the State Bank of India is liable to pay interest on delayed payment of retiral benefits when the delay was caused by the bank despite timely deposit by the Railways.
Submissions/Arguments
Petitioner (State Bank of India) argued that the delay was not attributable to it.
Respondent No.1 (retired employee) sought interest on delayed payment.
Railways contended that they deposited the amount with the bank and the delay was on the part of the bank.
Ratio Decidendi
The delay in payment of retiral benefits was attributable to the bank, as the Railways had deposited the amount with the bank, but the bank failed to release it in time. Therefore, the bank is liable to pay interest on the delayed payment.
Judgment Excerpts
By this writ petition, the petitioner challenges the order of the Central Administrative Tribunal, Nagpur dated 03/05/2013 directing the petitioner to pay interest on the delayed payment of retiral benefits to the respondent No.1 at the rate of 12% per annum from 23/07/1998 till the payment is actually made.
After finding that the retiral dues were paid to the respondent No.1 belatedly in December, 2011, the tribunal directed all the parties i.e. Railways, State Bank of India and the Chief Manager, Centralised Pension Processing Centre to pay interest to the respondent No.1 at 12% per annum from 23/07/1998 till the payment is actually made.
Procedural History
Respondent No.1, a retired railway employee, filed an original application before the Central Administrative Tribunal, Nagpur, seeking interest on delayed payment of retiral benefits. The CAT, by order dated 03/05/2013, directed the Railways, State Bank of India, and the Chief Manager, Centralised Pension Processing Centre to pay interest at 12% per annum from 23/07/1998 till actual payment. The State Bank of India challenged this order by filing Writ Petition No. 3418 of 2013 before the High Court of Bombay at Nagpur. The High Court dismissed the writ petition on 21/03/2017.
Acts & Sections
- State Bank of India Act, 1955:
