.:Interletssa:.

THE employer must pay a reasonable interest if a payment, due to the employee, is made late, the Bombay High Court has held.
Whether the service contract of the employee provides for payment of interest is immaterial, said the division bench of Justices Anoop Mohta and CL Pangarkar.
Petitioner Yuvraj N Rodye was working with the Maharashtra State Electricity Board since 1975. In 1989, Mr Royde became entitled for arrears of salary from August 1975 onwards.
However, for no justifiable reason, the payment was delayed. It was only in September 1994 that he was told to collect his dues. He received the amount, but applied for getting interest for the period of delay. But MSEB refused his request, stating that the service rules did not provide for such payment.
He moved the Nagpur bench of the High Court seeking interest at the rate of 16% on the total payment. The High Court, in the decision pronounced on Thursday, held that Mr Rodye was entitled to get the interest. “There was no justification to take such a long time for fixing arrears,” the court said.
Whether the delay was intentional or not was immaterial, the HC said, adding: “Employees can’t be allowed to suffer because of inaction on the part of the employer.” However, the court found the 16% interestdemand unreasonable. It directed that the petitioner be paid interest at the rate of 8% from the due date of payment of arrears.