Nirmal Kumar Nandi vs Allahabad Bank and Others

Jayanta Kumar Biswas, J.—The petitioner in this WP under Article 226 dated August 13, 2008 is seeking a mandamus commanding Allahabad Bank to pay him interest for delay in payment of his leave encashment benefit. The petitioner was working in Allahabad Bank. He retired from the services of the bank on December 31, 1999 (WP p.26). By a letter dated January 4, 2000 (WP p. 19) the bank informed him that his privilege leave balance was ninety-nine days.

Mr. Sarbadhikari appearing for the bank submits that though the other retirement benefits were paid within a few months from the date of retirement, payment for encashment of ninety-nine days'' privilege leave could not be made for the reasons that the petitioner did not accept the bank''s calculation of his balance leave and then did not respond to the bank''s letter dated October 25, 2000 (WP p.20) asking him to intimate the mode of payment.

Admittedly, payment for encashment of ninety-nine days'' privilege leave was made only on March 17, 2005 (WP para. 14). Mr. Sarbadhikari has submitted that after accepting the payment made on March 17, 2005 the petitioner brought this WP only on August 13, 2008. According to him, the delay created some right of the bank to refuse interest.

The bank did not dispute that the petitioner was entitled to payment for encashment of ninety-nine days'' privilege leave. Nothing prevented it from making the payment for ninety-nine days at the time it paid the other elements of the retirement benefits. No law entitled it to withhold the payment until the petitioner accepted its calculation of his balance encashable leave and intimated the mode of payment.

Hence it is evident that the bank withheld the payment without any valid reason. It became liable to pay interest for withholding the amount wrongfully. There is no merit in the contention concerning delay. First, even in the face of the delay this Court exercised discretion in favour of entertaining the WP. Secondly, there is nothing to show that the delay has caused any irretrievable prejudice to the bank.

On the contrary it goes without saying that the delay provided the bank an opportunity to utilise the amount payable for interest and earn profit. Hence I find no reason to dismiss the WP on the grounds of delay that did not change the bank''s position in any manner whatsoever. In my opinion, an order directing the bank to pay 8% p.a. interest will be fair and reasonable. For these reasons, I allow the WP and issue a mandamus commanding the bank to pay the petitioner 8% p.a. interest on the leave encashment amount for the period from December 31, 1999 to March 17, 2005, within four weeks from the date this order is served. No costs. Certified xerox.