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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
PRADEEP SINGH YERUR, J
Manohar Narayan Pawar – Appellant
Versus
Division Controller, Nwkrtc, Chikkodi Division – Respondent
| Table of Content |
|---|
| 1. delay in payment of leave encashment. (Para 1 , 2 , 3) |
| 2. arguments for entitlement to interest. (Para 4 , 5 , 6 , 7) |
| 3. respondent's financial constraints during pandemic. (Para 8 , 9 , 10) |
| 4. judicial perspective on interest entitlement. (Para 11 , 12 , 13 , 14 , 15) |
| 5. final order on interest payment. (Para 16) |
ORDER :
PRADEEP SINGH YERUR, J.
This petition is filed by the petitioners seeking a writ of mandamus for a direction to the respondent to pay interest at the rate of 10% per annum on the belated payment of leave encashment benefit as per the request made in the representations dated 18.11.2024 02.12.2024, 04.12.2024, 05.12.2024 and 06.12.2024.
2. Petitioners were appointed as conductors in the respondent-Corporation. After serving the Corporation for more than 25 to 30 years, they all retired from service on the dates mentioned in the petition. Immediately after the retirement, the terminal benefits i.e., leave encashment benefits were not paid. The respondent belatedly paid leave encashment benefit by way of cheque and no interest was paid on the said amount. It is contended by learned counsel for the petitioners that as per the Circular No.58 dated 09.07.1998
Retired employees are entitled to interest on delayed leave encashment payments, and the court can enforce reasonable interest rates despite the employer's financial constraints.
Employees are entitled to interest on delayed payment of leave encashment benefits, which must be paid promptly. In case of delays, interest at rates established by previous judgments may be enforced....
Retiral dues are property under Article 300A; unexplained delays in payment warrant interest at 6% per annum, with penal compensation for further delays.
The duty to pay terminal benefits on the date of retirement and the serious prejudice caused by belated disbursement justified the payment of interest on the belated payment.
Court awards 6% interest on belated retirement benefits based on bank deposit rates.
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