After Nearly 10-Month Delay, Madras HC Orders 6% Interest On Retired TN Transport Worker’s Dues, Excluding Earned-Leave Salary

The petitioner, a retired Senior Tradesman Level-5 of the Tamil Nadu State Transport Corporation, retired on 31 May 2025.

His retirement benefits were disbursed on 11 March 2026.

After his representation seeking interest for the delay, including on earned leave salary, received no response, he filed a writ petition seeking interest at 6% per annum from retirement until payment.

The respondents confirmed that the benefits had been paid, but opposed interest on earned leave salary.

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court held that an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions, and, even in their absence, may rely on Articles 14, 19 and 21 of the Constitution; retiral benefits are not a bounty.

The Madras High Court Division Bench, in W.A.(MD) No. 403 of 2010 and connected matters, held that delayed retirement benefits may attract interest at 6% per annum even where the pension fund rules contain no express interest provision, because the rules contemplate prompt payment.

The Court applied these principles to the admitted delay between the petitioner’s retirement and payment of his benefits.

It held that the employer was obliged to settle retirement benefits without delay and compensate the employee by interest when payment was delayed; the absence of an express interest provision did not defeat that entitlement.

However, it excluded earned leave salary from the benefits on which interest would be payable, consistent with the respondents’ objection.

Payment was directed within three months from receipt of the order.

No costs were awarded.