IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 26^TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MRS JUSTICE K.S.HEMALEKHA WRIT PETITION NO. 101696 OF 2026 (S-KSRTC)

BETWEEN:

SRI. BALACHANDRA S/O. CHANRANTAYYA HIREMATH, AGE. 68 YEARS, OCC. RETIRED TRAFFIC CONTROLLER, R/O. NEAR INDIAN BANK, KALASAPUR ROAD, GADAG-582103, TALUK AND DISTRICT. GADAG.

…PETITIONER (BY SRI. VINAYKUMAR BHAT, ADVOCATE)

AND:

THE MANAGEMENT OF NWKRTC GADAG DIVISION, REPRESENTED BY ITS DIVISIONAL CONTROLLER, GADAG DIVISION, GADAG-582103.

…RESPONDENT (BY SRI. MADANMOHAN M.KHANNUR, ADVOCATE)

MANJANNA E THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF Digitally signed by MANJANNA E Location: HIGH COURT MANDAMUS OF POSITIVE NATURE, DIRECTING THE RESPONDENT TO OF KARNATAKA DHARWAD BENCH Date: 2026.02.27 PAY THE INTEREST AT THE RATE OF 12% P.A. ON THE BELATED

17:05:34 +0530 PAYMENT OF TERMINAL BENEFIT I.E. LEAVE ENCASHMENT BENEFIT, BY FIXING OUTER LIMIT; AND ETC.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA

ORAL ORDER

Sri Madanmohan M. Khannur, learned counsel accepts notice for respondents.

2. The petitioner has retired from services of the respondent-Corporation on 30.10.2017 on attaining the age of superannuation. The leave encashment payable to the petitioner was not released on the date of retirement and was paid only on 04.10.2018 after a delay of about 8 months without payment of any interest.

3. Learned counsel on both sides submits that, the issue involved in this matter is a squarely covered by the decision of this Court in the case of Sri Yallappa Vs. The Management of NWKRTC1, wherein this Court has held at paragraph Nos.7 and 8 as under:

“7. The Circular dated 09.07.1998 [Annexure-A] clearly prescribes the procedure and entitlement relating to the payment of terminal benefits to retiring employees of the Corporation.

1 W.P.No.100338/2026 C/w W.P.No.100572/2026 disposed of on 02.02.2026

The terminal benefits covered under the circular including leave encashment and other retrial settlement benefits payable on retirement. The circular unequivocally mandates that the terminal benefits shall be paid on the retirement itself, and the responsibility to ensure timely settlement is cast upon the concerned administrative and divisional authorities of the corporation. Though, the circular mandates timely payment, it does not expressly provide for the rate of interest in cases of delayed payment. The said question fell for consideration before this Court in the case of Yallappa S/o. Ramappa Alagawadi Vs. The Management of NWKRTC, WP No.106898/2025 D.D.15.12.2025 while considering the interest on delayed payment of leave encashment. Considering the various judgments of the Apex Court, it is held at paragraph No.16 as under;

“16. In the totality of the aforesaid circumstance, this Court cannot accede to the prayer of interest at punitive or elevated rates such as 9% or 10%, at the same time, denial of interest altogether would be manifestly unjust and contrary to settled law. The balance must be stuck between the right of employees to be compensated for delay and the financial realities confronting a Public Corporation sustained by public funds. Wherefore, I deem it appropriate to direct payment of interest by the Corporation on every delayed payment of leave encashment

not at 10%, not at 9%, not at 7% and not even at 5.48% as is projected by the Corporation, but at 6% per annum, which would be just and equitable and legally sustainable, which aligns with various factors viz., the judgment of the Apex Court, several judgments of the coordinate benches, the judgments of the Division Bench of High Courts of Madras and Delhi, prevailing bank interest rates and the financial condition of the respondent- Corporation. To ensure compliance and prevent further delay, it is necessary to stipulate that failure to make payment w