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2026 Supreme(Online)(Mad) 42620
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. Asha, J
Indumathi – Appellant
Versus
Tamil Nadu State Transport Corporation (Coimbatore) Ltd. – Respondent
Writ petition
For the Appellants/Petitioners: R. Krishnaswamy
For the Respondents: Kavya
A legal heir of a deceased employee is entitled to receive interest at a rate of 6% per annum on the delayed disbursement of terminal benefits and wage revision arrears as a matter of equity.
Headnote:The petitioner sought interest on the belated payment of terminal benefits and arrears arising from a wage revision settlement following the death of her husband while in service. The court examined the claim for interest on delayed payments of Provident Fund, Gratuity, and Earned Leave Salary, alongside arrears due under an Industrial Disputes Act Settlement. The central issue was whether the legal heir of a deceased employee is entitled to interest for the delay in disbursement of terminal benefits and revision arrears. Relying on the respondent's fair submission, the court observed that interest is an equitable entitlement in cases of delayed settlement of service benefits. The court directed the respondent to pay interest at the rate of 6% per annum for the belated payment, effective from the date of the employee's death until the date of actual disbursement, to be settled within six weeks.
| Table of Content |
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| 1. claim for interest on delayed terminal benefits and wage arrears following an employee's death. (Para 1 , 2) |
| 2. court’s power to award interest at 6% per annum on delayed service payments based on employer's consent. (Para 3 , 4 , 5) |
ORDER
This Writ Petition has been filed for the following reliefs:-
“directing the Respondent to pay her interest at the rate of 12 percentage per annum for the belated payment of the petitioners husbands terminal benefits namely PF, Gratuity and Earned Leave salary, to pay her the surrender leave salary and to pay her the STERBS amounts, together with interest at the rate of 12 percentage per annum and to pay her the arrears of difference in Gratuity and arrears of difference in earned leave salary as per the 12(3) wage revision settlement dated 24.08.2022 with interest at the rate of 12 percentage per annum, within a specified time frame as may be fixed by this Honble Court, Award Costs and thus render justice”.
2. The case of the petitioner is that her husband had joined the respondent Transport Corporation on 16.02.1992 and he died in harness on 20.05.2021. However, the terminal benefits have been settled to the petitioner only on 16.10.2023 and no interest has been paid for the delayed period. That apart, the petitioner’s husband passed away on 20.05.2021, prior to the wage settlement entered into under Section 12(3) of the Industrial Disputes Act, 1947, dated 24.08.2022, which was given retrospective effect from 01.09.2019. As per the said settlement, the petitioner’s late husband was entitled to revision of pay and consequential terminal benefits such as gratuity and earned leave salary with effect from 01.09.2019. However, the said benefits have not been extended to the petitioner. In this regard, the petitioner submitted a representation dated 21.01.2026 to the respondent. Since the same was not considered, the present writ petition has been filed.
3. The learned Standing Counsel for the respondent would fairly submit that they are willing to pay the interest at the rate of 6% per annum for the belated payment of the eligible and admissible amount.
4. Heard the learned counsel for both sides and perused the materials available on record.
5. In view of the above submission of the learned Standing Counsel, this Court deems it appropriate to direct the respondent to pay interest at the rate of 6% per annum for the belated payment of the terminal benefits such as Gratuity, Provident Fund, Earned Leave Salary, Surrender Leaver Salary, STERBS amounts and the applicable arrears of difference in Gratuity and earned leave salary as per 12(3) Wage Settlement from the date of the death of the petitioner’s husband till the date of actual disbursement to the petitioner within a period of six weeks from the date of receipt of a copy of this order.
6. Accordingly, the Writ Petition is disposed of. No costs.
