Is Interest Payable on Delayed Salary Payments by State Authorities? Clarification on a Government Employee’s Right under Service Jurisprudence

The High Court reaffirms that government employees are entitled to interest on delayed salary payments, specifying a 5% per annum rate in cases of administrative delay. This judgment upholds the established legal position and is binding on subordinate courts and government administrative authorities in Himachal Pradesh.

 

Summary

Category Data
Case Name CWP/8090/2024 of PREETA CHAUHAN Vs STATE OF HP AND OTHERS CNR HPHC010366132024
Date of Registration 09-08-2024
Decision Date 31-10-2025
Disposal Nature Disposed Off
Judgment Author Ms. Justice Jyotsna Rewal Dua
Court High Court of Himachal Pradesh
Precedent Value Binding within the jurisdiction of the Himachal Pradesh High Court
Type of Law Service Law / Administrative Law
Questions of Law Whether a government employee is entitled to interest for delayed salary payment by state authorities?
Ratio Decidendi

The court held that when a government employee’s salary is withheld without justification, and is only released pursuant to court intervention, the employee is entitled to interest for the delayed period. The interest compensates for the deprivation of timely salary. The court specified a rate of 5% per annum, payable from the date salary was due till the date of actual release. Administrative authorities must ensure timely payments or compensate for delays.

Facts as Summarised by the Court

The petitioner sought directions regarding verification of service book, forwarding of Annual Confidential Report, consideration for promotion to PGT, release of withheld salary from May 2022 to 16.12.2022, and action against officials responsible for the delay. During pendency, most grievances were redressed except for interest on delayed salary. The salary was ultimately released only after court orders.

Practical Impact

Category Impact
Binding On All subordinate courts and state authorities in Himachal Pradesh
Persuasive For Other High Courts dealing with similar issues under service law

What’s New / What Lawyers Should Note

  • The court explicitly quantifies interest at 5% per annum for delayed salary payments by government authorities.
  • Administrative delays leading to withholding of salary entitle the employee to compensation by way of interest.
  • Lawyers representing government employees may cite this as binding precedent within Himachal Pradesh for claims of interest on delayed pay.
  • The judgment emphasizes accountability of state authorities in discharging timely salary obligations.

Summary of Legal Reasoning

  • The court acknowledged that the petitioner’s salary from May 2022 to 16.12.2022 was withheld and only released after judicial intervention.
  • Relying on the principle that salaries are legally due when earned, and that deprivation merits compensation, the court found substance in the petitioner’s claim for interest.
  • The court ordered respondents to pay 5% per annum as interest for the delayed period, calculated from the due date until actual release.
  • The reasoned conclusion stressed state accountability for administrative lapses resulting in financial loss to employees.

Arguments by the Parties

Petitioner

  • Sought directions for verification of service documents, consideration for promotion, release of withheld salary with interest, and departmental action against erring officials.
  • At hearing, confined surviving grievance to entitlement to interest on the delayed salary payment.

Respondents

  • No substantive opposition recorded regarding entitlement to interest once the delay was established and salary released after court order.

Factual Background

The petitioner, a government employee, sought various directions including verification of service records, forwarding of her Annual Confidential Report for promotion consideration, and release of her salary withheld from May 2022 to 16.12.2022, along with penal interest. During the petition’s pendency, most grievances were addressed except the claim for interest on delayed payment. The salary was released only after the court’s intervention.

Statutory Analysis

The judgment refers to principles of service law concerning entitlement to timely salary by government employees. It applies general jurisprudence that delayed payment of legally due salary by the state warrants compensation in the form of interest. No specific statutory provision was interpreted or “read down.”

Dissenting / Concurring Opinion Summary

No dissenting or concurring opinions recorded in this single-judge decision.

Procedural Innovations

No new procedural precedents or innovations recorded in the judgment.

Alert Indicators

  • ✔ Precedent Followed – Existing principle of awarding interest on delayed salary payment is reaffirmed.

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