Case Law Details
State of Andhra Pradesh and Another Vs Dinavahi Lakshmi Kameswari (Supreme Court of India)
Conclusion: Salaries and pensions were rightful entitlements of Government employees and the Government which had delayed the payment of salaries and pensions should be directed to pay interest at an appropriate rate which was 6% instead of 12%.
Held: A writ petition under Article 226 of the Constitution was filed before the High Court by a former District and Sessions Judge. The grievance was that salaries and pensions were due as a matter of right to employees and, as the case may be, to former employees who had served the State. Consequently, a direction was sought in the petition to the State Government to pay the outstanding salaries and pensions which had remained due. Andhra Pradesh High Court had allowed a Public Interest Litigation filed by a former District and Sessions Judge and directed the (i) payment of the deferred salary for the months of March-April 2020 together with interest at the rate of 12% per annum and (ii) payment of deferred pension for the month of March 2020 with a similar rate of interest. In appeal before the Apex Court, the State Government restricted its challenge against the High Court judgment only to the component of interest. It was held that the direction for the payment of the deferred portions of the salaries and pensions was unexceptionable. Salaries were due to the employees of the State for services rendered. Salaries in other words constitute the rightful entitlement of the employees and were payable in accordance with law. Likewise, it was well settled that the payment of pension was for years of past service rendered by the pensioners to the State. Pensions were hence a matter of a rightful entitlement recognized by the applicable rules and regulations which govern the service of the employees of the State. The State Government had complied with the directions of this Court for the payment of the outstanding dues in two tranches. Insofar as the interest was concerned, the rate of 12% per annum which had been fixed by the High Court should be suitably scaled down. The award of interest was on account of the action of the Government which was contrary to law, therefore, the payment of interest could not be used as a means to penalize the State Government. There could be no gainsaying the fact that the Government which had delayed the payment of salaries and pensions should be directed to pay interest at an appropriate rate. In substitution of the interest rate of 12% per annum which had been awarded by the High Court, the Government of Andhra Pradesh shall pay simple interest computed at the rate of 6% per annum on account of deferred salaries and pensions within a period of thirty days from today. Interest shall be paid to all pensioners of the State at the rate of 6% per annum on the deferred portion, for the period of delay.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
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