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.

ORDER :

Pradeep Singh Yerur, J.

This petition is filed by the petitioner seeking a writ of mandamus for a direction to the respondent to pay interest at the rate of 12% per annum on the belated payment of leave encashment benefit as per the request made in the representation dated 13.12.2024.

2. Petitioner was appointed as Technical Assistant in the respondent-Corporation in the year 1990. After serving the Corporation for more than 33 years, he retired from service with effect from 30.06.2023. Immediately after the retirement, the terminal benefits i.e., leave encashment benefit was not paid. The respondent belatedly paid leave encashment benefit by way of cheque dated 23.05.2024 after lapse of 11 months and no interest was paid on the said amount. It is contended by learned counsel for the petitioner that as per the Circular No.58 dated 09.07.1998, the terminal benefits and all other benefits are required to be paid as on date of retirement itself and the same does not indicate the consequences for non-payment of the said benefits belatedly.

3. This being the state of affairs, the petitioner approached the respondent-Corporation requesting for payment of interest for the delayed period with regard to leave encashment benefit. The representation came to be made on the 13.12.2024 claiming interest at the rate of 12% per annum. The representation was served on the respondent, however, no reply was given and no payment was made towards interest on the belated leave encashment benefit. Hence, being aggrieved by the non-payment of interest for the delayed period, petitioner is before this Court.

4. It is the contention of learned counsel for the petitioner that the question of the petitioner having been employed in the respondent-Corporation, having put in 33 years of service and having retired from service on the date mentioned hereinabove are all not disputed, so also the payment of terminal benefits i.e., leave encashment benefit paid by the respondent-Corporation. It is the vehement contention of learned counsel for the petitioner that it is the onerous duty of the respondent-Corporation to bid farewell to the employee having served for more than 33 years in the organization in a respectful manner by relieving him by making payment of all benefits pension, salary, terminal benefits, other benefits including leave encashment as on the date of his retirement. But in the present case, no doubt the other benefits of salary, gratuity and other benefits have been paid, but the leave encashment benefit was paid belatedly but the interest for delayed payment has not been paid till date despite giving representation to the respondent- Corporation.

5. He further contends that there is no justifiable grounds on behalf of respondent-Corporation to withhold the interest on leave encashment benefit which is rightfully entitled to the petitioner. It is further contended that this amount of leave encashment, though it is paid belatedly, the interest amount towards the said leave encashment has not been paid. Therefore, the amount which was due to the petitioner and liable to be paid as on the date of retirement was admittedly lying with the respondent-Corporation fetching interest which has gone to the benefit of the Corporation. Therefore, the interest component would have to be paid for the delayed payment of the leave encashment to the petitioner.

6. Learned counsel for the petitioner relies on the following judgments in support of his case.

i) Judgment of this Court in W.A.No.5022/1998 decided on 27.01.1999;

ii) Order of this Court in W.P.No.100157/2024 decid