Interest on Delayed Pension Is Not a Bounty, But a Right: Kerala High Court Rebukes Lakshadweep Administration for Withholding Pension Dues to Elderly Retirees

“The Tribunal rightly followed binding precedent and acted well within its jurisdiction – there is no legal infirmity in awarding interest on delayed pension to aged pensioners” - In a strongly-worded and precedent-backed judgment Kerala High Court dismissed a challenge brought by the Union Territory of Lakshadweep against the Central Administrative Tribunal’s direction to include Special Pay in pension fixation and to pay interest at 9% per annum on the delayed arrears to 152 retired employees. The Division Bench of Justices Sushrut Arvind Dharmadhikari and P. V. Balakrishnan declined to interfere under Article 227 of the Constitution, holding that the Tribunal had rightly acted on the basis of settled judicial pronouncements and that the petition was “bereft of merit and substance.”

The Court emphasized that the delay of over a decade in seeking relief does not eclipse the pensioners’ legal right, once the Tribunal has adjudicated the matter on merits. “Insofar as the delay in filing the Original Application is concerned, the same cannot be gone into at this stage, since the Tribunal itself has entertained the Original Application on merits,” the Court noted.

“Pensioners Are Octogenarians Suffering Ailments – They Deserve Dignity, Not Litigation”: High Court Orders 9% Interest Within Three Months

Tribunal’s order based on dismissal of SLP No. 18368/1995 upheld – High Court finds no reason to interfere when lawful benefits have been denied for years

The case arose from a long-standing dispute regarding the inclusion of “Special Pay” as part of Basic Pay for purposes of pension fixation for employees under the Lakshadweep administration. Relying on the final outcome in SLP No. 18368/1995—which had been dismissed by the Supreme Court—and prior Kerala High Court judgment in OP(CAT) No. 2379/2013, the CAT, Ernakulam Bench, had allowed the retirees’ application and ordered that revised pay and pension, including Special Pay, be paid with 9% interest on the arrears from the date of entitlement.

However, instead of fully complying, the Administration challenged the Tribunal’s directions before the High Court, citing two objections: first, that there was a delay of 11 years in initiating the proceedings, and second, that 9% interest was excessive, given that pension revision had already been granted as of 18 October 2025.

The High Court did not find these objections compelling.

“Delay cannot be raised at this stage when the Tribunal has already dealt with the matter on merits,” the Bench ruled, stating that procedural delay must not outweigh substantive justice, especially when the affected persons are elderly retirees facing health and financial hardships.

“The Petitioners Have Extended Benefits to All Respondents – Except the Interest They Still Owe”

The Court noted that even by the petitioners’ own admission, the entire pension revision had been implemented, and all the respondents had been extended the financial benefits due under the Tribunal’s ruling. The only relief still outstanding was interest on the delayed amount, which the Court held must be paid in full.

In a compassionate yet legally reasoned observation, the Bench recorded:

“The respondents are octogenarians, and most of them are suffering from various ailments. Therefore, at this stage, the benefits may be extended to them as early as possible.”

The Court rejected the argument that the interest awarded by the Tribunal should be reduced or waived, emphasizing that it served not as a penalty, but as compensation for undue delay in granting lawful dues.

“The Tribunal acted within its jurisdiction and granted reliefs in accordance with law. No legal infirmity exists in the impugned order.”

The judgment squarely reinforces that pension is not a gratuity, but a legal entitlement, and any administrative delay in disbursement of such entitlements justifies interest as compensation for denial of rights.

“Judicial Review Under Article 227 Cannot Be Used to Reopen Settled Legal Positions”

The High Court’s decision is also a notable reaffirmation of judicial restraint under Article 227 of the Constitution. The Court held that once the Tribunal has acted within the bounds of its jurisdiction, applied binding precedent, and granted reliefs legally, there is no warrant for High Court interference.

“When the Tribunal has acted within jurisdiction and followed binding judgments, there is no scope for interference under Article 227.”

This statement makes clear that Article 227 cannot serve as a forum for re-litigation, especially when the issue has already been settled by higher courts and reaffirmed in multiple precedents.

The Kerala High Court’s judgment marks a significant victory for pensioners’ rights and serves as a sharp rebuke to administrative inertia in implementing settled legal obligations. The decision also sends a clear message that courts will not tolerate avoidable litigation aimed at evading obligations to vulnerable and aged citizens.

The Lakshadweep Administration has now been directed to pay the outstanding interest at 9% per annum within three months from the receipt of the certified copy of the order. The Court did not award costs but made it clear that justice delayed cannot be justice denied, especially in matters of post-retirement entitlements.

Date of Decision: 06 November 2025