Case Note & Summary
The case arose from a judgment of the Andhra Pradesh High Court concerning the deferment of salaries and pensions by the State Government due to the financial impact of the COVID-19 pandemic. The State issued Government Orders (GOMs) No. 26 and No. 37 in March and April 2020, respectively, to defer payments to various categories of employees and pensioners. A writ petition was filed by a former District and Sessions Judge, asserting that salaries and pensions are a matter of right and should not be deferred. The High Court ruled in favor of the petition, stating that the deferment was unlawful and directed the State to pay the deferred amounts along with interest at 12% per annum. The State appealed to the Supreme Court, challenging only the interest component. The Supreme Court upheld the High Court's findings regarding the entitlement to salaries and pensions, emphasizing that these payments are essential to the right to life and property. However, the Court modified the interest rate from 12% to 6% per annum, acknowledging the State's financial difficulties while ensuring timely payment to employees and pensioners. The Court directed the State to pay the modified interest within thirty days, specifically for certain categories of employees as per the original GOMs. The appeal was disposed of without costs.
Headnote
A) Constitutional Law - Right to Life and Property - Payment of Salaries and Pensions - Article 21 and Article 300A of the Constitution - The court held that salaries and pensions are intrinsic to the right to life and property, and cannot be deferred without legal backing. The High Court's direction for payment of deferred salaries and pensions was upheld, emphasizing the entitlement of employees and pensioners (Paras 8-9). B) Administrative Law - Deferment of Payments - Government Orders and Legal Authority - The court found that the State could not defer salaries and pensions through a government order without following legal procedures. The High Court's ruling was affirmed, directing payment of dues with interest (Paras 8-9). C) Interest on Deferred Payments - Modification of Interest Rate - The court modified the interest rate from 12% to 6% per annum on deferred salaries and pensions, recognizing the financial constraints faced by the State due to the pandemic while ensuring that employees and pensioners receive their rightful dues (Paras 15-16).
Issue of Consideration
Whether the State Government was liable to pay interest on deferred salaries and pensions during the COVID-19 pandemic.
Final Decision
The Supreme Court modified the interest rate on deferred salaries and pensions from 12% to 6% per annum, directing the State to pay within thirty days, specifically for categories 3, 4, 5, and 6 of GOMs No 26 dated 31 March 2020.
Law Points
- deferment of salaries
- pensions
- right to life
- right to property
- interest on delayed payments
- administrative orders
- public interest litigation
