Prior service in a predecessor transport corporation counts toward pension and gratuity benefits.

The writ petitioner served in Cholan Roadways Corporation Limited from 27 April 1984 to 15 February 1989 and later in successor Transport Corporations until retiring on 31 July 2018.

He sought revision of his pension and gratuity to include the earlier service, with interest at 12% per annum.

The Single Judge directed that the earlier service be counted, relying on Rules 16(3) and 16(e) of the Tamil Nadu State Transport Corporation Employees Pension Fund Trust Rules, a Board resolution, and an earlier decision of the High Court.

The Corporation appealed only against the award of interest at 12% per annum, seeking reduction to 6%.

Whether the Single Judge’s direction to count the petitioner’s earlier service for pension and gratuity required interference.

Whether interest on the arrears of revised pensionary and gratuity benefits should be reduced from 12% to 6% per annum.

The Single Judge’s substantive direction was based on Rule 16(3) and Rule 16(e) of the Tamil Nadu State Transport Corporation Employees Pension Fund Trust Rules, the Corporation Board’s resolution dated 8 August 2019, and the High Court’s earlier decision in W.P.(MD) No. 5905 of 2013 dated 5 December 2013.

The appellate judgment did not set out a separate statutory rule or precedent governing the rate of interest; it modified that rate having regard to the facts and circumstances of the case.

The Court found that the petitioner’s service in Cholan Roadways Corporation was undisputed, that the earlier service had been counted for Provident Fund purposes, and that the Board had resolved to count it for pension and gratuity.

It therefore left undisturbed the direction to include that service when revising the benefits.

However, on the Corporation’s limited challenge to interest, the Court considered 12% per annum excessive in the circumstances and reduced the rate to 6% per annum.

The Corporation was directed to revise and settle the benefits by counting the petitioner’s service from 27 April 1984 to 15 February 1989 and pay the consequential amounts within twelve weeks of receiving a copy of the judgment.

There was no order as to costs.