Employees are entitled to interest on delayed payment of retirement benefits as these benefits are not a bounty, and such entitlement is protected under the fundamental rights guaranteed by the Constitution of India.

PRAYER:

Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Mandamus, to direct the respondents to pay the petitioner interest at the rate 18% per annum, for the period of delay from 01.06.2024 to 01.12.2025 in paying the amounts paid towards his terminal benefits namely EPF Employees' Contribution, Gratuity and Encashment of Leaves/Already Surrendered Earned Leaves, within a time frame as may be fixed by this Court and without affecting his right to claim balance amounts towards those benefits.

ORDER

Seeking interest for the belated payment of terminal and pension benefits, the petitioner has approached this Court.

2.The case of the petitioner is that he joined as a Conductor in the respondent Transport Corporation on 01.01.1997 and retired from service as Special Grade Conductor Level-4 on 31.05.2024. However, the retirement benefits were settled to him only on 02.12.2025. Since the benefits have been settled belatedly, the respondent is liable to pay interest for the belated payment. Therefore, the petitioner gave a representation dated 05.12.2025 to the respondent, however, the same did not evoke any response. Therefore, the petitioner has filed this writ petition for the above said relief.

3.Mr.D.Jebaraj, learned Standing Counsel takes notice on behalf of the respondent and submits that the terminal benefits have been settled to the petitioner, however, belatedly.

4.By consent of both the parties, the writ petition is taken up for final hearing at the admission stage itself.

5.This Court paid its anxious consideration to the rival submissions made and also perused the materials placed on record.

6.The employer is liable to settle the retirement benefits to its employees without any delay and in case, if it is settled belatedly, it has to be compensated by way of interest for the belated payment. In this regard, the Hon'ble Apex Court in S.K. Dua vs. State of Haryana reported in 2008 (3) SCC 44, has held as follows:

“14. In the circumstances, prima facie, we are of the view that the grievance voiced by the appellant appears to be well founded that he would be entitled to interest on such benefits. If there are statutory rules occupying the field, the appellant could claim payment of interest relying on such rules. If there are administrative instructions, guidelines or norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence of statutory rules, administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. The submission of the learned counsel for the appellant, that retiral benefits are not in the nature of “bounty” is, in our opinion well founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in living even without issuing notice to the respondents.”

7.Following the same, in a similar issue, a Division Bench of this Court, in W.A.(MD)No.403 of 2010, etc. batch, vide common order dated 04.07.2014, has fixed the rate of interest at 6% per annum and held as under:-

“5. ..... even though there is no provision in the Tamil Nadu State Transport Corporation Employees Pension Fund for payment of interest, cannot stand in the light of the law laid down by the Supreme Court in S.K.Dua v. State of Haryana and another, reported in (2008) 3 SCC 44. As a matter of fact, the Rules do not contemplate belated payment of reti