Supreme Court Decision – Government Pays Interest on Government Employees Salary and Pension Delay

The Supreme Court has ruled that government employees are entitled to their salaries and pensions. If the government delays the payment of employees ’wages and pensions, the government may be directed to pay salaries and pensions with reasonable interest rates. The PIL, filed by a former District and Sessions Judge, was allowed by the Andhra Pradesh High Court in which the deferred salary of March-April 2020 was allowed to be paid at an annual interest rate of 12 per cent and equal interest rate in March. Asked to pay 2020 pending pension.

The State Government, in its challenge to the High Court decision, is confined to the interest rate issue. The state argued that the state had decided to postpone salary and pension payments because the state was in an uncertain financial state due to the epidemic. In such a situation, it is not right to give the state the responsibility to pay interest.

Justice DY Chandrachud said that his instructions to pay the salary and pension parts late in the judgment were not clear. Employees receive salaries due to service in the state. In other words, government employees are entitled to a salary and are paid by law. Similarly, pensioners are also determined to pay pensions for the past several years of service rendered to the state.

Order of simple interest at the rate of six per cent per annum
Therefore, receiving the pension is a matter of right of the employees as per the rules and regulations of the State Government Employees Service. In disposing of the appeal, the tribunal directed that the government should not pay interest to punish the government. It is true that the government has delayed paying the pension, so it has to pay its interest. We direct that the Government of Andhra Pradesh pay simple interest at the rate of 6 per cent annual salary and pension rate for a period of 30 days, instead of 12 per cent per annum.

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