Case Note & Summary
The dispute arose from non-payment of surrender leave encashment to a retired employee of the Tamil Nadu State Transport Corporation. The petitioner, T. Sreenivasan, had worked as a Special Grade Tradesman with the respondent management and retired from service on 28 February 2023. During his tenure, he had surrendered 135 days of earned leave, but the corresponding salary was not disbursed. Even after retirement, and despite submitting a representation to the respondent on 3 January 2025, the amount remained unpaid, compelling him to approach the Madurai Bench of the Madras High Court under Article 226 of the Constitution seeking a writ of mandamus for payment along with interest at 18% per annum. The legal issue centered on whether a retired employee is entitled to timely payment of surrender leave salary and whether interest may be awarded for the delay. The petitioner contended that the withheld amount was a terminal benefit rightfully due. The respondent, represented through standing counsel, did not contest the petitioner's entitlement but possibly sought time for compliance. The court, after hearing both sides and perusing the record, found that the surrender leave salary had indeed not been paid and the representation had not been acted upon. While the petitioner had claimed interest at 18%, the court considered 6% per annum to be reasonable and in line with settled principles governing delayed payment of employment dues. Accordingly, the court disposed of the writ petition by directing the respondent to release the eligible surrender leave salary together with interest at 6% per annum from the due date until the date of actual payment. This was to be carried out within twelve weeks from the receipt of the order copy. No costs were imposed.
Headnote
A) Service Law - Surrender Leave Encashment - Retired Employee Entitled to Timely Payment and Interest - Constitution of India, 1950, Article 226 - The writ petitioner, a retired Special Grade Tradesman, sought mandamus for disbursement of surrender leave salary that remained unpaid despite a representation after retirement. The court, upon hearing both sides, directed the respondent transport corporation to release the eligible amount with interest at 6% per annum from the due date till disbursement within twelve weeks. Held that non-payment of terminal benefits without justification warrants judicial intervention under Article 226 to secure the employee's rights with compensation for delay. (Paras 2-4)
Issue of Consideration
Whether a retired employee is entitled to timely disbursement of surrender leave salary and interest for delayed payment?
Final Decision
The writ petition was disposed of with directions. The respondent was directed to release the eligible surrender leave salary to the petitioner with interest at the rate of 6% per annum from the due date till the date of disbursement, within twelve weeks from the receipt of the order copy. There was no order as to costs.
Law Points
- surrender leave salary must be paid to retired employee
- interest at 6% per annum from due date till disbursement for delayed payment of employment dues
