Calcutta High Court affirms retirees’ entitlement to interest on delayed gratuity, leave salary, and provident fund payments at 6% p.a., directing higher interest for further delay and serving as binding authority on subordinate courts.
Summary
| Category | Data |
|---|---|
| Case Name | WPA/18393/2025 of CHANDAN DAS Vs STATE OF WEST BENGAL AND ORS. |
| CNR | WBCHCA0371462025 |
| Date of Registration | 08-08-2025 |
| Decision Date | 26-08-2025 |
| Disposal Nature | DISPOSED |
| Judgment Author | Hon’ble Justice Aniruddha Roy |
| Court | Calcutta High Court |
| Bench | Single Judge |
| Precedent Value | Binding Authority |
| Overrules / Affirms | Affirms |
| Type of Law | Service / Administrative Law |
| Questions of Law |
Whether a retired employee is entitled to gratuity and leave salary with interest on delayed payment, and interest on partial provident fund disbursement at statutory rates. |
| Ratio Decidendi |
|
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Calcutta High Court jurisdiction |
| Persuasive For | Other High Courts |
What’s New / What Lawyers Should Note
- The High Court will grant interest at 6% per annum on delayed gratuity and leave salary from the date of retirement until actual payment.
- Partial provident fund disbursement attracts interest at 6% per annum from the statutory due date until payment.
- If the statutory body fails to make payment within three months of the order, interest on the outstanding provident fund balance rises to 8% per annum.
- Writ jurisdiction can be invoked to enforce prompt compliance by statutory employers with retirement benefit obligations.
Summary of Legal Reasoning
- Entitlement as Statutory Right: The court observed that gratuity, leave salary, and provident fund benefits are statutory entitlements, the non-payment of which attracts interest as part of the right itself.
- Interest Calculation: It held that interest at 6% p.a. runs from the date the benefits fell due—retirement date for gratuity and leave salary, and April 1, 2025 for the unpaid provident fund portion.
- Enhanced Rate for Non-Compliance: To ensure prompt payment, a default rate of 8% p.a. was imposed on the unpaid provident fund amount if the statutory body failed to comply within three months.
- Exercise of Writ Jurisdiction: The High Court, under its constitutional supervisory power, directed the employer to pay both principal and interest within a specified timeframe, underlining its role in enforcing statutory mandates against public bodies.
Factual Background
Chandan Das retired from the Calcutta State Transport Corporation on March 31, 2025. By April 29, 2025, he received only 20% of his provident fund (Rs. 7,95,000), while his gratuity and leave salary remained unpaid. He filed WPA 18393/2025 seeking release of all post-retirement dues. The High Court directed payment of gratuity and leave salary with interest, and the balance provident fund with interest, within three months.
Alert Indicators
- Precedent Followed – The decision reaffirms existing principles regarding statutory entitlement to interest on delayed disbursement of retirement benefits.