Government must pay appropriate interest for delayed payment : SC

New Delhi : The Supreme Court observed that salaries and pensions are rightful entitlements of Government employees and the Government which has delayed the payment of salaries and pensions should be directed to pay interest at an appropriate rate.

The Supreme Court has said in a judgement 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, pension is paid for the last several years of service rendered by the pensioners to the state.