Employee entitled to interest on retiral benefits illegally deducted by the employer
In a landmark judgment, the Jharkhand High Court mandates restitution with interest for retired police officer, Syed Mohammad Jahangir, after his acquittal from criminal charges.
News Report:
In a significant ruling, the Jharkhand High Court has directed the State to pay interest on Rs. 4 lakhs that was illegally deducted from the retiral benefits of Syed Mohammad Jahangir, a former police officer acquitted of criminal charges. The court ordered that the amount be refunded with an interest rate of 6% per annum from the date of deduction until the date of refund, with a provision for enhanced interest at 9% per annum if payment is delayed beyond six weeks.
The judgment, delivered by Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar, addresses the unjust enrichment principle, which mandates restitution with interest when funds are retained without legal justification. The court emphasized that unjust enrichment occurs when a party retains money without the right, necessitating restitution with interest to remedy the injustice.
The case stems from a 1997 incident involving the death of Ranjan Kumar Sinha, for which Jahangir was initially convicted under Section 304-A of the Indian Penal Code. The conviction was later reduced to Section 323/34 IPC, and eventually, Jahangir was acquitted in 2022. Despite the acquittal, Rs. 4 lakhs was deducted from his retiral benefits as compensation to the deceased's widow, following a directive by the Jharkhand government.
Upon appeal, the Jharkhand High Court quashed the recovery order, highlighting the absence of any departmental proceedings against Jahangir for recovering the compensation. The court referred to precedents from the Supreme Court, including cases like Union of India v. Tata Chemicals Ltd. and Enviro-Legal Action v. Union of India, underscoring the obligation to refund money received without right, accompanied by interest.
The court criticized the learned Single Judge for not granting interest on the refunded amount in the initial writ petition and clarified that interest is a normal relief in restitution cases. The judgment stipulates that the interest payment should be sourced from the salary of the erring officers responsible for the deduction, ensuring accountability and adherence to legal standards.
This ruling not only provides relief to Jahangir but also sets a precedent for similar cases, reinforcing the doctrine of restitution and unjust enrichment principles. Legal experts view this as a pivotal step in safeguarding employees' rights and ensuring justice in cases of illegal deductions from retiral benefits.
With this decision, the Jharkhand High Court has reaffirmed the importance of legal accountability and the need for remedial action when public authorities commit errors affecting individuals' financial entitlements.
Syed Mohammad Jahangir v. State of Jharkhand, (Jharkhand)(DB) : Law Finder Doc Id # 2779772
