In Kerala State Road Transport Corporation v. Varghese, (2003) 12 SCC 293, observing that recovery after retirement amounts to cut from retiral dues and causes irreparable loss and injury to a retired employee, as retirement dues are the only source of livelihood. Apex Court in the case of Ram Dayal Rai v. Jharkhand State Electricity Board, (2005) 3 SCC 501, held that even 5% cut out from the total amount of pension payable to the appellant was an irreparable loss and injury. Court in this case while dealing with a recovery due to overstay in official accommodation, had held:
“If the petitioner’s benefit is cut at 5% out of the total amount of pension payable to the appellant, the appellant will suffer an irreparable loss and injury since, after retirement, the pensionary benefit is the only amount available to eke out a livelihood for the retired employees of the Government.”
Similarly, recovery of an amount from the dues of deceased employee to which his widow is entitled, on the ground that he was paid an excess amount due to wrong fixation of pay cannot be justified after his death. Moreover, in the absence of any finding forthcoming that deceased employee was wrongly benefited for his representation and fraud, no such amount already paid is liable to be recovered. Savitri Pathak v. State of U.P., 2018 (2) AWC 3056.
Interest on delayed payment on retiral dues has been upheld time and again in a catena of decisions. In Shamal Chand Tiwari v. State of U.P.¸(W.P. No. 34804 of 2004) decided on 06.12.2005 it was held: “Now the question comes about entitlement of the petitioner for interest on delayed payment of retiral benefits. Since the date of retirement is known to the respondents well in advance, there is no reason for them not to make arrangement for payment of retiral benefits to the petitioner well in advance so that as soon as the employee retires, his retiral benefits are paid on the date of retirement or within reasonable time thereafter. Inaction and inordinate delay in payment of retiral benefits is nothing but culpable delay warranting liability of interest on such dues. In the case of State of Kerala v. M. Padnaban Nair, 1985 (1) SLR 750, the Hon’ble Supreme Court held as under:
“Since the date of retirement of every Government Servant is very much known in advance we fail to appreciate why the process collecting the requisite information and issuance of these two documents should not be completed at least a week before the date of retirement so that the payment of gratuity amount could be made to the Government Servant on the date he retires or on the following day and pension at the expiry of the following months. The necessity for prompt payment of the retirement dues to a Government Servant immediately after his retirement cannot be overemphasized and it would not be unreasonable to direct that the liability to pay penal interest on these dues at the current market rate should commence at the expiry of two months from the date of retirement.” Dr. Chandrakant Sharma v. Vice Chancellor, 2017 (1) ESC 128.
In Anant R. Kulkarni v. Y.P. Education Society, 2013 (138) FLR 168 (SC), the Hon’ble Apex Court considered the question as to whether continuation of departmental enquiry is permissible against a retired employee, wherein it was held that enquiry against a retired employee is subject to the statutory rules, which governs the terms and conditions of his service. If the inquiry was initiated while the delinquent employee was in service, it would continue even after his retirement but, nature of punishment would be limited to certain extent and accordingly, punishment of dismissal or removal of the employee from service cannot be imposed on the retired employee. The Hon’ble Supreme Court has categorically ruled that in the absence of any statutory power conferred on the management, to hold a fresh enquiry after the retirement, no such enquiry against the employee could be conducted. In the aforesaid decision, the Apex Court has decided the issue thus:
“Thus, it is evident from the above, that the relevant rules governing the service conditions of an employee are the determining factors as to whether and in what manner the domestic enquiry can be held against an employee who stood retired after reaching the age of superannuation. Generally, if the enquiry has been initiated while the delinquent employee was in service, it would continue even after his retirement, but nature of punishment would change. The punishment of dismissal/removal from service would not be imposed. S. Andiyannan v. Joint Registrar, Co-operative Societies, 2015 (146) FLR 1079 (FB).