Case Note & Summary
The petitioner, Sri Shivananjappa, was an employee of ITI Limited, Bengaluru, who rendered service from 26.11.1975 until 30.11.2003, when he voluntarily retired. A retirement benefit of Rs.2,68,000/- was payable to him but was withheld by the respondents on account of a pending civil suit, O.S. No.8307/2003, in the City Civil Court. The petitioner filed W.P.No.11817/2006 seeking a mandamus for payment of the amount with interest. During the proceedings, the respondents submitted that the suit had been disposed of and the claim would be considered. The court disposed of the petition directing the respondents to process the release within six weeks. However, the amount was not paid within that period, leading to the filing of CCC No.727/2007 for contempt. Subsequently, the amount was paid on 27.11.2006. The petitioner then filed the present writ petition seeking interest on the delayed payment at 18% per annum for the period from December 2003 to November 2006, amounting to Rs.1,44,720/-. The respondents opposed the claim, arguing that the delay was due to the pending suit. The court considered the facts and held that the petitioner was entitled to interest for the period of delay, but at a reduced rate of 6% per annum instead of the claimed 18%. The court directed the respondents to pay interest at 6% per annum on the delayed amount of Rs.2,68,000/- for the period from December 2003 to November 2006, within four weeks.
Headnote
A) Service Law - Retirement Benefits - Interest on Delayed Payment - Withholding of retirement benefits due to pendency of civil suit - Petitioner voluntarily retired on 30.11.2003 but retirement benefit of Rs.2,68,000/- was paid only on 27.11.2006 after disposal of suit - Court held that the petitioner is entitled to interest for the period of delay from December 2003 to November 2006 - Interest awarded at 6% per annum on the delayed amount (Paras 1-4).
Issue of Consideration
Whether the petitioner is entitled to interest on the delayed payment of retirement benefits withheld due to a pending civil suit, and if so, at what rate.
Final Decision
The court allowed the writ petition in part, directing the respondents to pay interest at 6% per annum on the delayed amount of Rs.2,68,000/- for the period from December 2003 to November 2006, within four weeks from the date of receipt of a copy of the order.
Law Points
- Interest on delayed payment of retirement benefits
- Mandamus for payment of retirement benefits
- Withholding of benefits due to pending civil suit
- Rate of interest for delayed payment
Case Details
2017 LawText (KAR) (04) 26
Writ Petition No.6723/2010 (S-R)
Sri H. Mohan Kumar (for petitioner), Sri S.G. Hegde (for respondents)
The Chairman & Managing Director, ITI Limited and The Chief Manager - HR (ER & PR), ITI Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution of India seeking interest on delayed payment of retirement benefits.
Remedy Sought
Petitioner sought quashing of endorsement dated 17.04.2009 and direction to respondents to pay interest at 18% per annum on delayed payment of retirement benefits of Rs.2,68,000/- for the period from December 2003 to November 2006.
Filing Reason
Non-payment of interest on retirement benefits that were paid after a delay of about three years due to a pending civil suit.
Previous Decisions
Earlier, W.P.No.11817/2006 was filed for payment of retirement benefits, which was disposed of directing respondents to process release within six weeks. Subsequently, CCC No.727/2007 was filed for non-compliance, and the amount was paid on 27.11.2006.
Issues
Whether the petitioner is entitled to interest on the delayed payment of retirement benefits?
What is the appropriate rate of interest for the delayed payment?
Submissions/Arguments
Petitioner argued that the retirement benefit of Rs.2,68,000/- was withheld from December 2003 to November 2006 due to a pending civil suit, and after the suit was disposed of, the amount was paid only on 27.11.2006, and thus interest at 18% per annum should be paid for the delay.
Respondents contended that the delay was caused by the pendency of the civil suit and that the petitioner was not entitled to interest.
Ratio Decidendi
The court held that the petitioner is entitled to interest on the delayed payment of retirement benefits, but the rate of interest should be 6% per annum instead of the claimed 18%, as the delay was due to a pending civil suit and not entirely attributable to the respondents.
Judgment Excerpts
The petitioner rendered service in ITI Ltd., Bengaluru – 560 016 with effect from 26.11.1975 till 30.11.2003 i.e., the date on which he was relieved by accepting the offer of voluntary retirement from service.
As `2,68,000/- payable as retirement benefit was not paid, W.P.No.11817/2006 was filed asking for a mandamus against the respondents to pay the said amount with interest.
The petition is allowed in part. The respondents are directed to pay interest at 6% per annum on the delayed amount of `2,68,000/- for the period from December 2003 to November 2006, within four weeks from the date of receipt of a copy of this order.
Procedural History
The petitioner retired on 30.11.2003. Retirement benefit of Rs.2,68,000/- was not paid. W.P.No.11817/2006 was filed and disposed of directing respondents to process release within six weeks. CCC No.727/2007 was filed for non-compliance. The amount was paid on 27.11.2006. The present writ petition was filed on 17.04.2009 seeking interest on delayed payment.
Acts & Sections
- Constitution of India: Articles 226, 227
