Interest at gpf rates
Querist :
Anonymous
(Querist) 28 January 2024
This query is : Resolved
I am a retired Central Government employee. My gratuity and commutation value of pension were withheld for a long period because of the pending disciplinary proceedings. The proceedings have since been quashed and set aside by the CAT and the decisions have been upheld by the High Court.
In a separate proceedings the High Court had ordered the payment of gratuity and commutation amount with interest at "GPF Rates". Union of India had filed an SLP. The Supreme Court dismissed the Petition.
The Competent Authority has issued sanctioned the payment if interest, but simple interest as applicable to GPF deposits.
However, according to the GPF Rules (Rule 11) interest is required to be compounded annually.
11. Interest -(1) Subject to the provisions of sub-rule (5), Government shall pay to
the credit of the account of a subscriber interest at such rate as may be determined for
each year according to the method of calculation prescribed from time to time by the
Government of India.
Is the Government is justified in sanctioning only simple interest without adding interest annually?
If the action is wrong, what is the remedy? Is it in filing an Implementation Petition or Original Application before the CAT?
kavksatyanarayana
(Expert) 28 January 2024
If payment of gratuity is delayed beyond its permissible period, interest at the rate of interest rate applicable to GPF deposits from time to time is required to be paid along with gratuity. In every case of delayed payment of gratuity shall be considered by the Secretary of the Administrative Ministry/Department and if the delay is due to administrative delay, the Secretary of the Administrative Ministry/Department will sanction payment of interest. In all cases where interest has been sanctioned by the Secretary of the Administrative Ministry/Department, such ministry/Department shall fix the responsibility and take disciplinary action against the government servant or servants who are found responsible for the delay in the payment of gratuity.
T. Kalaiselvan, Advocate
(Expert) 29 January 2024
The compounding factor of the interest shall be applicable for the accumulation of the PF amount.
The interest now to be paid as per high court order is to be paid with GPF interest rates and not by the PF modes for accumulated amount.
Therefore the PF department is directed to pay the arrears of PF amount along with the interest at the prevailing rate by which the PF department is giving to the members of the fund.
Sudhir Kumar, Advocate
(Expert) 30 January 2024
GPF rate is compounding interest. Decision of deptt appears wrong.
Querist :
Anonymous
(Querist) 25 March 2024
But the question is whether the remedy could be pursued by filing an Implementation Petition/Application or once again, an Original Application needs to be filed.
