What did the High Court hold?

The High Court held that the rate of 9% per annum granted by the CAT for delayed pensionary benefits is reasonable and just. The court found no reason to interfere with the CAT's discretion.

The petitioner, a retired Joint Commissioner of Income Tax, was aggrieved by the Central Administrative Tribunal's order granting interest at 9% per annum on delayed pensionary benefits. He sought a direction to pay interest at 18% per annum.

What were the issues?

The primary issue was whether the rate of interest granted by the CAT on delayed pensionary benefits was adequate, with the petitioner seeking a higher rate.

Sri V L Lamadade vs The Union of India | Karnataka High Court 2016

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 6th DAY OF JANUARY, 2016

PRESENT

THE HON’BLE MR.JUSTICE MOHAN M. SHANTANAGOUDAR

AND

THE HON’BLE MR.JUSTICE K.N.PHANEENDRA

WRIT PETITION NO.39319/2015 (S-CAT)

BETWEEN :

Sri V.L. Lamadade Aged 67 years S/o late Laxman Retired Joint Commissioner of Income Tax R/o “Iswari Nivas” No.9, I Floor, Viviyani Road Frazer Town, Bangalore-560 005

...Petitioner

(By Sri Ranganath S. Jois, Advocate)

AND :

The Union of India Represented by its Secretary Ministry of Finance Department of Revenue Central Secretariat, North Block New Delhi-110 001

The Secretary Central Board of Direct Taxes Department of Revenue Central Secretariat, North Block New Delhi-110 001

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The Chief Commissioner of Income Tax Queen’s Road Central Revenue Building Bangalore-560 001

..Respondents

(By Sri Prabhuling K. Navadgi, ASGI for R1) (Sri M.V. Rao, Advocate for R2)

This writ petition is filed under Articles 226 & 227 of the Constitution of India praying to call for the records relating to the order dated:28.03.2015 made in O.A.No.879/2013 vide Annexure-A3 (in Annexure-B) peruse the same and set-aside the order to that extent as erroneous and unsustainable in Law.

This writ petition coming on for Preliminary Hearing this day, MOHAN M. SHANTANAGOUDAR, J., made the following:- O R D E R

The petitioner being aggrieved by the Order dated 28.3.2014 passed by the Central Administrative Tribunal (‘CAT’ for short) in O.A.No.849/2013, filed this writ petition. By the said order, the CAT has granted interest at the rate of 9% per annum on the delayed payment of pensionary benefits. Therefore, the petitioner herein prays for a direction to the respondents to pay

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the interest at the rate of 18% per annum on pensionary benefits instead of the interest at the rate of 9% per annum.

The interest at the rate of 18% per annum as claimed by the petitioner is virtually a commercial rate of interest. Generally, this Court imposes interest at the rate of 8% to 9% on the delayed payment of pensionary benefits. There cannot be any dispute that, the interest on the delayed payment is bound to be paid.

Under the facts and circumstances of this case, in our considered opinion, the reasonable rate of interest would be at the rate of 9% per annum as granted by the CAT. Since, we find that the discretion exercised by the CAT while granting interest at the rate of 9% per annum is just and proper and in accordance with law, no interference is called for.

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Hence, petition fails and accordingly, the same stands dismissed.

Sd/- JUDGE

*lb/-

SRI V L LAMADADE vs. THE UNION OF INDIA

What did the High Court hold?

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