Karnataka HC Orders 6% Interest on Delayed Leave Encashment for 56 Retired NWKRTC Workers, Rising to 9% if Unpaid Within 8 Weeks

The petitioners, employees or legal representatives of former employees of the North Western Karnataka Road Transport Corporation (NWKRTC), sought a mandamus directing the Corporation to pay interest at 12% per annum on delayed leave-encashment benefits and to fix an outer time limit for payment.

They relied on a Coordinate Bench decision in W.P. No. 101625 of 2024 and connected matters, in which interest had been directed at 6% per annum, increasing to 9% if not paid within eight weeks.

The Corporation’s counsel submitted that it was ready to pay interest at 6% per annum for the delayed period.

The Court followed the Coordinate Bench’s order in W.P. No. 101625 of 2024 and connected matters, which directed the Corporation to pay interest at 6% per annum for the period of delay in paying leave-encashment benefits, with the rate increasing to 9% per annum if payment was not made within eight weeks of receipt of the certified copy of that order.

The petition was brought under Articles 226 and 227 of the Constitution of India.

The Court considered the issue settled by the Coordinate Bench’s decision, which had already prescribed the applicable interest rate and a deadline for payment.

The Corporation’s counsel confirmed its readiness to pay interest at 6% per annum for the period of delay.

Applying that precedent, the Court did not grant the petitioners’ requested 12% rate; it instead directed payment on the same terms, including an increased rate for failure to meet the deadline.

If payment is not made within that period, interest is payable at 9% per annum.