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Salaries & Pensions Are Rightful Entitlements Of Government Employees; Appropriate Interest Must Be Paid For Delayed Payment: Supreme Court
Today, The Supreme Court observed that salaries and pensions are lawful entitlements of the government employees. So the government when they delay the payment of such salaries and pension, should pay the appropriate interest for the same. Public interest litigation filed by a former District and Sessions Judge was approved by the Andhra Pradesh High Court and directed the payment of the deferred salary for the months of March-April 2020 along with interest at a rate of 12 percent per annum and (ii) payment of the deferred pension at a roughly similar rate of interest for the month of March 2020. In an appeal before the Supreme Court, the State narrowed its appeal against the judgment of the High Court to a component of interest only. The State contended that the decision to suspend the payment of salaries and pensions had been made because of the dire financial condition which the State was in, as a result of the pandemic.
It was argued that the State had operated bonafide and there was no need to burden it with the obligation to pay the interest. Taking account of the claims posed by both parties, the bench comprising Justices DY Chandrachud and MR Shah observed: There is no exception to the direction of payment of deferred amounts of salaries and pensions. Salaries are due to the government employees for the services rendered by them. Salaries and pensions are rightful entitlements of government employees and they should be paid in accordance with the laws. Similarly, it is well established that the pension payment is for years of the previous service rendered to the State by the pensioners. Pensions are thus a matter of lawful entitlement acknowledged by the rules and regulations in place which govern the service of the State's employees.
The Court noted that the State Government had complied with the Court's orders to pay the unpaid dues in two tranches. The court also noted that the rate of 12% per annum set by the High Court should be reduced accordingly. Disposing of the appeal, the bench ordered that the Government of Andhra Pradesh must pay simple interest measured at a rate of 6 percent per annum on account of unpaid salaries and pensions instead of the interest rate of 12 percent per annum given by the high court over a period of 30 days.
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