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2026 Supreme(Online)(Mad) 42624
IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. Asha, J
Daisynathan – Appellant
Versus
Tamil Nadu State Transport Corporation – Respondent
Writ Petition
For the Appellants/Petitioners: R.Krishnaswamy
For the Respondents: Kavya
State entities must pay interest at 6% per annum on terminal benefits and wage revision arrears for employees who passed away in harness, calculated from the date of death until actual disbursement.
Headnote:The petitioner sought a Writ of Mandamus under Article 226 of the Constitution of India, directing the respondent to pay 12% interest on the delayed disbursement of terminal benefits (PF, Gratuity, and Earned Leave salary) owed to her late husband, who died in harness. Additionally, the petitioner claimed arrears arising from a wage revision settlement dated 24.08.2022. The respondent admitted the delay and consented to pay interest at a rate of 6% per annum on all admissible amounts. The primary issue concerns the entitlement of interest on terminal benefits and arrears due to a deceased employee upon delayed settlement by a state corporation. The Court relied on established principles that terminal benefits are deferred wages and that any significant delay in disbursement attracts interest. The court held that the respondent is liable to compensate the petitioner for the period between the date of death and the actual date of disbursement at a reasonable interest rate. The court directed the respondent to pay interest at the rate of 6% per annum for the belated payment of terminal benefits and the applicable arrears arising from the wage settlement within six weeks.
| Table of Content |
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| 1. failure to settle terminal benefits timely following death in harness. (Para 1 , 2) |
| 2. court mandated interest on delayed terminal benefits at 6% per annum. (Para 3 , 4 , 5) |
ORDER
This Writ Petition has been filed for the following reliefs:-
“Writ petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Mandamus 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 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 23.10.1993 and he died in harness on 08.06.2021. 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 08.06.2021, 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 18.02.2026 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 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.
