Madras High Court Social Security and Pensions Employment and Labour Law

Retired Transport Driver Gets 6% Interest On Benefits Paid 16 Months Late, But Not Earned-Leave Salary: Madras HC

C.John Inbharaj,v.The Government of Tamilnadu

By LawLens Team · Editorial and Research TeamDecided October 30, 2026Published 4 November 2026 at 6:01 pm IST2 min read

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In brief

The question

Whether the petitioner was entitled to interest on retirement benefits paid belatedly, despite the absence of a specific provision for interest.

The court held

The Court disposed of the writ petition and directed the respondents to pay interest at 6% per annum on eligible retirement benefits, excluding earned-leave salary, from the date of retirement until actual disbursement.

It also directed

Payment was ordered within three months from receipt of a copy of the order; no costs were awarded.

01Facts

The petitioner, a retired Special Grade Driver employed by the Tamil Nadu State Transport Corporation, retired on 30 July 2024.

pp. 3–4

His retirement benefits were paid on 2 December 2025.

pp. 3–4

After his representation seeking interest for the delay received no response, he filed this writ petition seeking interest at 6% per annum on delayed retirement benefits, including earned-leave salary.

pp. 3–4

The Corporation reported that the benefits had been paid and opposed interest on earned-leave salary.

p. 4

02Issues

i.Whether the petitioner was entitled to interest on retirement benefits paid belatedly, despite the absence of a specific provision for interest.

pp. 5–7

ii.Whether interest was payable on delayed earned-leave salary.

p. 4, 7

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.

p. 5

Following that principle, a Division Bench of the Madras High Court held that where the rules contemplate prompt payment, the Corporation remains obliged to compensate employees for belated payment, notwithstanding the absence of an express interest provision.

pp. 6–7

The Court applied a rate of 6% per annum.

p. 6

04Reasoning

The respondents had settled the petitioner’s retirement benefits only on 2 December 2025, despite his retirement on 30 July 2024.

pp. 3–4

Applying S.K. Dua and the Division Bench ruling, the Court held that delayed payment of eligible retirement benefits warranted interest at 6% per annum.

pp. 5–7

It excluded earned-leave salary from the interest award.

p. 7