Case Note & Summary
The petitioner, S. Shahul Hammed, was employed as a Conductor with the Tamil Nadu State Transport Corporation Tirunelveli Ltd. and retired from service on 31.03.2023. His terminal benefits, including Provident Fund, Gratuity, Earned Leave and Medical Leave salary, surrender leave salary, and other retirement dues, were not settled immediately after retirement, resulting in an abnormal delay. Aggrieved by the delay, the petitioner filed a writ petition under Article 226 of the Constitution of India seeking a Writ of Mandamus directing the respondents to pay interest at 6% per annum on the belated payment from the date of retirement until the actual date of payment. The respondent Corporation and the Employees Pension Trust were arrayed as parties. The petitioner contended that the delayed settlement of retirement benefits warranted interest. The respondents did not file any counter affidavit opposing the claim. The core legal issue before the Madras High Court, Madurai Bench, was whether the petitioner was entitled to interest on the belated payment of retirement benefits. The Court observed that the issue was no longer res integra and had been decided in several earlier writ petitions, notably in C. Murugan v. Tamil Nadu State Transport Corporation (Tirunelveli) Ltd., decided on 07.03.2023 in W.P.(MD)No.4866 of 2023, where similar relief was granted. Following that precedent, the Court held that the petitioner was entitled to interest at 6% per annum on the belated payment. Accordingly, the writ petition was allowed, and the respondents were directed to pay interest at 6% per annum on the delayed retirement benefits from the date of retirement (31.03.2023) to the actual date of payment. The judgment thus reaffirms the principle that an employee is entitled to reasonable interest on delayed payment of terminal benefits.
Headnote
A) Service Law - Retirement Benefits - Entitlement to Interest on Delayed Payment - Constitution of India, 1950, Article 226 - The petitioner, a retired conductor, sought interest for belated settlement of provident fund, gratuity, and other benefits. The Court, noting that the issue was already settled in earlier decisions, allowed the petition. Held that the petitioner is entitled to interest at 6% per annum on the belated payment from the date of retirement until actual payment. (Paras 3-5).
Issue of Consideration
Whether the petitioner is entitled to interest on belated payment of retirement benefits?
Final Decision
Writ petition allowed. Respondents directed to pay interest at 6% per annum on belated payment of retirement benefits from date of retirement to actual date of payment.
Law Points
- Employees are entitled to interest on belated payment of retirement benefits at 6% per annum
- Following precedent
- writ of mandamus can be issued for interest on delayed terminal benefits
- Belated settlement of retirement dues attracts interest liability
