Facts
The petitioner, a Special Grade Conductor, voluntarily retired from the respondent Transport Corporation on 31 December 2024. His retirement benefits were disbursed on 11 March 2026.
Source reference: p. 2, para. 2After his representation seeking interest for the delay received no response, he filed a writ petition seeking interest at 6% per annum on the delayed payment of gratuity, provident fund and pension commutation.
Source reference: p. 2, para. 2The respondents confirmed that the benefits had been paid on 11 March 2026.
Source reference: p. 3, para. 4Issues
Whether the petitioner was entitled to interest on retirement benefits paid after a delay, despite the absence of a specific provision for interest in the applicable pension fund rules.
Source reference: pp. 3–5, paras. 7–8If so, what rate and period of interest should apply?
Source reference: p. 5, para. 9Law Applied
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; even in their absence, such a claim may be founded on Articles 14, 19 and 21 of the Constitution, and retiral benefits are not a bounty.
Source reference: pp. 3–4, para. 7Following that principle, a Division Bench of the Madras High Court in W.A.(MD) No. 403 of 2010 and connected matters (common order dated 4 July 2014) held that where the rules contemplate prompt payment, the absence of an express interest provision does not relieve the Corporation of its obligation to compensate for delayed payment; it fixed interest at 6% per annum.
Source reference: pp. 4–5, para. 8Reasoning
The Court found that the petitioner’s retirement benefits were paid only on 11 March 2026, although he had retired on 31 December 2024.
Source reference: p. 2, para. 2; p. 3, para. 4Applying S.K. Dua and the Division Bench decision, it held that delayed payment of retirement benefits warranted compensation by way of interest, notwithstanding the absence of an express interest provision in the pension fund rules.
Source reference: pp. 3–5, paras. 7–8It therefore applied the 6% rate adopted by the Division Bench to the eligible benefits disbursed belatedly.
Source reference: p. 5, para. 9Holding
The Court disposed of the writ petition and directed the respondents to pay interest at 6% per annum on the eligible retirement benefits that were disbursed belatedly, calculated from 1 January 2025 until the date of actual disbursement.
Payment was to be made within six months from receipt of a copy of the order; no costs were awarded.
Source reference: p. 5, para. 9Original Court PDF
C.SamuthurakkanivsThe Managing Director
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