Court Upholds Rights of Retired Professor: Orders Interest on Delayed Gratuity Payment.


05 July 2024 Unpaid salary/bonus/gratuity >> Workplace/ Professional Related  

In a landmark decision concerning Dr. Raisa Parveen v/s The Principal, Satyawati College Morning (Delhi University) & Others reinforcing the rights of retired employees, a recent writ petition led to a ruling that mandates the payment of interest on delayed retirement gratuity for a former assistant professor. The case, which underscores the importance of timely disbursement of retirement benefits, brings attention to the legal protections afforded under the Payment of Gratuity Act, 1972.

The petitioner, who served as an Assistant Professor in the Department of Urdu at a college from July 22, 2008, until her retirement on October 31, 2021, sought relief from the court after her retirement gratuity was not paid on time. Although she received her gratuity amount in two installments in 2023, she argued that the delay warranted compensation in the form of interest. The college, in a short affidavit, acknowledged the payment of Rs. 3,64,507 but attributed the delay to procedural approvals required from the university and the government's notification regarding gratuity for New Pension Scheme (NPS) subscribers. The college maintained that it could not be held responsible for the holdup.

 

 

However, the petitioner’s counsel emphasized that retirement benefits are not merely discretionary payments but are legal entitlements that must be dispensed promptly. Citing past judgments, the counsel argued that any undue delay in payment should result in interest being awarded to the retiree. The court agreed, referencing a series of Supreme Court rulings that have established pension and gratuity as valuable rights that must be protected.

The court noted that retirement benefits should not be treated as bounties from the state but as rights that employees earn through their years of service. In previous judgments, the Supreme Court has held that any unjustified delay in the payment of such benefits must be penalized with interest at the prevailing market rate until the actual payment is made.

In this instance, the court ruled in favor of the petitioner, directing the college to pay simple interest at a rate of 8% per annum on the delayed gratuity amount. The ruling emphasizes the responsibility of educational institutions to ensure timely disbursement of retirement benefits and to adhere to legal obligations regarding employee entitlements.

The college has been ordered to make this payment within six weeks, marking a significant victory for the retired professor and reinforcing the legal principle that retirees should not suffer financially due to administrative delays. This ruling is not just a win for the petitioner but serves as a crucial reminder of the rights of all employees regarding their retirement benefits, setting a precedent for future cases where delays in payment could lead to legal action.

  

Payment of Gratuity Act, 1972