Q: I retired as an assistant teacher of a high school on June 1, 1997. It took several years for the authorities to issue my pension payment order (PPO) in accordance with the revised pay scale. The PPO was issued in October 2001 and the death-cum-retirement gratuity was paid in December the same year. In view of the delay in releasing my pension, I filed a writ petition claiming interest on it. On November 18, 2004, the high court directed the pension sanctioning authority to pay interest at the rate of five per cent from the date of retirement up to the date of payment, but made it clear that my claim for interest at a higher rate would be decided at the time of final hearing. Eventually, the writ petition was heard by the Lok Adalat. It ruled that “the retirement benefits will be paid to the claimant / petitioner and the amount will be reckoned with 12 per cent interest from the date of issue of PPO to the actual date of disbursement”. I feel it was wrong to substitute the date of retirement with the date of issue of PPO. Issuing of PPO is a departmental process and can take any length of time. It is regrettable that the Lok Adalat has not taken this into consideration. Is there anything I can do now to claim interest from the date of retirement?

Bela Ghosh Dastidar

A: There are numerous judicial pronouncements to the effect that pension is not a bounty or largesse to be doled out by employers but a valuable right of property and any unjustified delay in distributing it must be compensated by payment of interest. The usual practice of courts in such cases is to grant interest at the rate of 12 per cent per annum to be paid from the date when the pension becomes due. The high court referred your case to a Lok Adalat whose decision on interest payment appears to be correct as far as the “rate” is concerned, but not so its “date”.

Though the object of a Lok Adalat is to facilitate and promote justice, the proceedings before it are deemed to be judicial proceedings. Its award is, for all practical purposes, to be treated as an order of the court. Section 21(2) of the Legal Services Authorities Act specifically provides that the Adalat’s award “shall be final and binding on all parties” before it and “no appeal shall lie to any court against the award”. The reason for not providing for an appeal is that generally the award is arrived at only with the consent of the parties.

In your case, however, it is apparent that the award was not passed with your consent. There appears to be an irregularity in the passing of the order as correctly pointed out by you. Moreover, Section 20(4) of the Act enjoins the Lok Adalat to act with utmost expedition and be guided by the principles of justice, equality, fair play and “other legal principles”. Clearly, the award in your case is not in accordance with the established legal principles. Firstly, at the very ad-interim stage, the high court had directed payment of five per cent interest “from the date of retirement”. Presumably, at some later point of time, the court felt that it was appropriate that the rate of interest could be decided before the Lok Adalat. Thus, the Lok Adalat ought not to have altered the date from which the interest was to be reckoned. Second, in a judgment [reported in 1987(Supp) SCC 56] on the question of the date from which the employee should be paid interest on the pension and gratuity due to him, the Supreme Court held that the employee was to be awarded interest from the date of his superannuation and not from the date of institution of the writ petition. Thus even though there is no provision for a statutory appeal, you could seek justice by applying to the high court, invoking its power of “superintendence” over the Lok Adalat under the provisions of Article 227 of the Constitution, challenging the manner in which the award was made contrary to well-established legal principles.