Retired Transport Conductor To Get 6% Interest On Delayed Provident Fund, Madras HC Orders

In brief

The question

Whether the petitioner was entitled to interest on the delayed payment of his provident fund from the date of retirement until actual disbursement.

The court held

The Court disposed of the writ petition and directed the respondent Corporation to pay interest on the belated retirement benefits at 6% per annum, calculated from the petitioner’s retirement date until actual disbursement, within six months of receiving a copy of the order.

It also directed

No costs were awarded.

01Facts

The petitioner, a Conductor employed by the respondent Transport Corporation, retired on 30 June 2019.

He claimed that his provident fund was paid only on 31 March 2026 and sought interest for the delay; his representation dated 22 June 2026 received no response.

p. 2 · ¶ 2

The respondent stated that the petitioner’s terminal benefits had been settled in December 2019.

p. 2 · ¶ 4

The petitioner sought a writ of mandamus directing payment of interest at 6% per annum from retirement until actual disbursement.

p. 1

02Issues

i.Whether the petitioner was entitled to interest on the delayed payment of his provident fund from the date of retirement until actual disbursement.

p. 2 · ¶ 2–3 · p. 3 · ¶ 7

ii.Whether interest should be paid at 6% per annum, and within what period.

pp. 4–5 · ¶ 8–9

03Law Applied

Under S.K. Dua v. State of Haryana, (2008) 3 SCC 44, an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions; even absent such provisions, a claim may be founded on Articles 14, 19 and 21 of the Constitution, since retiral benefits are not a bounty.

pp. 3–4 · ¶ 7

The Court also relied on the Madras High Court Division Bench’s common order dated 4 July 2014 in W.A.(MD) No. 403 of 2010 and connected matters, which fixed interest at 6% per annum and held that the absence of an express interest provision does not excuse delayed payment where the rules contemplate prompt settlement.

p. 4 · ¶ 8

04Reasoning

Applying S.K. Dua and the Division Bench decision, the Court reasoned that retirement benefits must be paid without delay and that delayed payment should be compensated by interest, notwithstanding the absence of a specific interest provision in the pension fund rules.

pp. 3–4 · ¶ 7–8

It therefore granted interest at the rate of 6% per annum.

p. 5 · ¶ 9

The judgment records the petitioner’s assertion that the provident fund was paid in March 2026 and the respondent’s statement that terminal benefits were settled in December 2019, but does not reconcile the discrepancy.

p. 2 · ¶ 2, 4