Punjab & Haryana High Court Orders 7.5% Interest to Retired Engineer for Delay in Pension Release; Reaffirms Two-Month Norm for Timely Payment

Case Name: Paramjit Singh Gill v. Punjab Water Supply and Sewerage Board & Others
Date of Judgment: October 31, 2025
Citation: CWP-32249-2025
Bench: Hon’ble Mr. Justice Harpreet Singh Brar

Held: The Punjab & Haryana High Court directed the Punjab Water Supply and Sewerage Board to pay 7.5% annual interest to a retired Sub-Divisional Engineer (SDE) for the inordinate delay in releasing his retiral dues. Justice Harpreet Singh Brar held that under the Full Bench ruling in A.S. Randhawa v. State of Punjab (1998 1 SCT 343) and the Supreme Court decision in S.K. Dua v. State of Haryana (2008) 3 SCC 44, pension and other retirement benefits must be disbursed within two months of retirement, and any delay beyond that period entitles the retiree to interest on the due amount.

Summary: The petitioner retired as a Sub-Divisional Engineer on 31.03.2015. Despite repeated representations and multiple court proceedings, his total retiral dues of ₹32,40,902 were paid piecemeal, with the last installment only credited on 10.01.2025. His claim for the 18-year and 24-year proficiency step-ups was withdrawn during hearing, confining the petition to interest on delayed payments.

Justice Brar observed that no disciplinary proceedings were pending at the time of retirement and that the department had shown “unjustified administrative delay” in settling legitimate claims of a retired officer. Referring to A.S. Randhawa and M. Padmanabhan Nair v. State of Kerala (1985) 1 SCC 429, the Court reiterated that delay exceeding two months in disbursement of retiral dues amounts to denial of the retiree’s right to timely use of his own money. The only effective remedy for such loss, it held, is payment of compensatory interest, generally at 12%, unless special circumstances warrant a lower rate.

Decision: Disposing of the writ petition in limine, the Court directed the respondents to calculate and pay interest at 7.5% per annum on delayed retiral dues from February 2017 until the date of actual payment. The amount is to be released within three months from the date of receiving the certified copy of the order.