Chennai: Courts exercising their discretion to enhance interest on belated pension settlements will open a Pandora’s Box as many pensioners would line up to claim higher interest and cause loss to the state exchequer, said the Madras high court.“ The rule 45A of the Tamil Nadu Pension Rules, 1978, in clear terms stipulates that a retired employee is entitled for interest for belated settlement of death-cum-retirement gratuity (DCRG). When there is a specific provision for payment of interest for delays, the said interest alone is to be paid to the pensioner,” said the division bench comprising judges SM Subramaniam and N Senthilkumar.The bench partly allowed the appeal against the order of the writ court which granted 18% interest on belated payment of DCRG to the family members of deceased forest guard K Shanmugam, citing delay in settlement due to administrative lapse.
CJP Jantar Mantar Protest Updates
Shanmugam retired in 2017 and died in 2024, and the family members were eligible for DCRG of Rs 2.4 lakh. However, since the amount was by mistake despatched by Accountant General to the Nilgiris North District Forest Officer. It caused an unintentional delay, and the sum was settled along with the interest stipulated under pension rules.However, Shanmugam’s wife approached the Madras high court seeking higher interest since the DCRG was delayed beyond two months as per provision. The writ court ordered the state to pay 18% interest on the withheld amount for the delayed months.The state appealed against the order and the division bench, before whom the matter came up for hearing, said, “ when the statute contemplates a particular interest rate for belated settlement of DCRG, the said interest alone is to be granted by the courts in order to maintain consistency in payment of interest for delayed settlement of DCRG. Therefore, granting by exercise of discretion by the high court is not desirable,” the bench said.Since the state informed the court that the family has been given with DCRG with the stipulated interest for the delayed period, the court set aside the grant of 18% interest ordered by the court, payable from the date of retirement till the date of payment.
