Simplified Explanation of the Judgment
This case involved a retired bank employee who sought interest on delayed payment of his post-retirement dues, including provident fund (PF) balance and gratuity. The petitioner had joined service with a nationalized bank in 1977 but was removed from service in 2007 after disciplinary proceedings. His removal was upheld in departmental appeal, review, and subsequently by the High Court in earlier litigation, including dismissal of his Letters Patent Appeal (LPA).
After removal, several staff loans remained outstanding against him, such as overdraft, housing loan, cooperative loan, and education loan. Despite these liabilities, the petitioner did not authorize the bank to adjust his dues from his retirement benefits until 2012. On 24 February 2012, he finally submitted the necessary authorization, seeking release of his terminal dues.
Following this, the bank released:
- Gratuity amount of ₹3,50,000 on 30 March 2012.
- PF balance of ₹19,26,199 (after adjusting a PF withdrawal loan of ₹1,78,602), along with interest up to 14 May 2012. The PF was paid on 15 May 2012.
However, an overdraft loan amount still remained unpaid.
The petitioner approached the Court seeking two main reliefs:
- Interest on the gratuity (₹3,50,000) and PF balance (₹21,04,801 including adjusted loan) for the period 01 March 2010 to the date of actual payment (March–May 2012).
- Refund of interest charged on his staff loan, amounting to about ₹92,500, which was liquidated using the terminal dues.
The petitioner relied on earlier writ petitions he had filed. In one such case (CWJC No. 14194 of 2014), the Court had clarified that interest on delayed dues would depend on the outcome of his LPA, which ultimately went against him. He also submitted representations to the bank, but his claim for interest was rejected by a reasoned order in February 2014.
The bank argued that the delay was not due to its fault but because of the petitioner’s own inaction. He failed to authorize adjustment of his outstanding loans from retirement benefits for nearly five years after his removal. Only after he submitted the required authorization in 2012 were his dues processed and released promptly.
The Court accepted this argument. It held that the delayed payment of post-retirement dues was attributable to the petitioner, not the bank. Since the bank released the dues soon after receiving the authorization, there was no laches on its part. Thus, there was no basis to award interest.
The Court also noted that the petitioner’s claim had already been considered and rejected by the bank in 2014. Still, if any residual amount was genuinely due, he was free to file a fresh representation with the General Manager, HR, who must verify the facts and dispose of the representation.
Accordingly, the writ petition was disposed of without granting interest.
Significance or Implication of the Judgment
For employees: This case shows that interest on delayed retirement benefits will not be awarded if the delay is due to the employee’s own actions, such as failing to complete necessary formalities or not authorizing deductions.
For banks and employers: The judgment confirms that once authorization and other formalities are completed, retirement dues must be released without delay. However, where delay is attributable to the employee, the institution cannot be penalized with interest liability.
For legal practitioners: The decision underscores the importance of tracing the cause of delay in service benefit cases. If delay is institution-driven, interest may be ordered; if employee-driven, courts are unlikely to intervene.
Legal Issue(s) Decided and the Court’s Decision
- Whether the petitioner was entitled to statutory interest on delayed payment of PF and gratuity?
➝ No. The delay was caused by the petitioner’s own failure to authorize adjustment of loans until 2012, not by the bank. - Whether interest charged on staff loan adjusted from retirement dues should be refunded?
➝ No. The Court found no irregularity since the petitioner himself delayed repayment of loans. - What recourse remains for the petitioner?
➝ He may approach the General Manager, HR, if he believes any residual dues remain unpaid, and the bank must verify and decide.
Judgments Referred by Parties
- CWJC No. 4667 of 2009 (challenging removal order, dismissed)
- LPA against dismissal of removal order (also dismissed)
- CWJC No. 14194 of 2014 (regarding post-retirement dues; interest subject to outcome of LPA)
Case Title
CWJC No. 15113 of 2018 — Patna High Court (Bank Retirement Dues and Interest Claim)
Case Number
Civil Writ Jurisdiction Case No. 15113 of 2018
Citation(s)
2021(2) PLJR 146
Coram and Names of Judges
Hon’ble Mr. Justice Ashutosh Kumar
Names of Advocates and who they appeared for
- For the Petitioner: None present at final hearing
- For the Respondents (Bank): Mr. Nishi Nath Ojha, Advocate
Link to Judgment
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