Government will have to pay interest on delay in pension or salaries of employees : SC

New Delhi : The Supreme Court has said in a judgment that government employees are entitled to their salary and pension. If the government delays the payment of salaries and pensions of employees, the government may be directed to pay salaries and pensions with a reasonable interest rate.

The Andhra Pradesh High Court allowed a PIL filed by a former District and Sessions Judge. It mandates payment of deferred salary of March-April 2020 at 12% interest per annum, and payment of pending pension for the month of March 2020, with the same interest rate.

The state government, in a challenge to the High Court’s decision, confined itself to the interest rate issue only. The state argued that the state had decided to postpone the payment of salaries and pensions because the state had found itself in precarious financial condition due to the epidemic. In such a situation, it would not be right to give the state the obligation to pay interest.

A bench of Justice DY Chandrachud said in the judgment that the instructions given for payment of delayed portions of salary and pension are not clear. Employees receive salary due to service in the state. In other words, government employees are entitled to salary and it is payable according to law. Similarly, it is also decided that pension is paid for the last several years of service rendered by the pensioners to the state.

Therefore, getting pension is a matter of right of employees by the rules and regulations of the service of the State Government employees. While disposing of the appeal, the bench directed that the payment of interest should not be done to punish the government. It is true that the government has delayed the payment of pension, so it will have to pay its interest. We direct that instead of the interest rate of 12 percent per annum, the Government of Andhra Pradesh will pay simple interest at the rate of 6 per cent per annum of salary and pension over a period of 30 days.

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