KSRTC Must Pay All Pending Retiral Dues Including Terminal Leave Surrender Salary Within 3 Months: Kerala High Court. - 2025-08-13

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Kerala High Court Orders KSRTC to Clear All Pending Retirement Benefits Within Three Months

Kochi: In a significant ruling providing relief to numerous retired employees, a Division Bench of the Kerala High Court has directed the Kerala State Road Transport Corporation (KSRTC) to clear all outstanding retirement benefits, including terminal leave surrender salary, within three months. The judgment, delivered by Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M., addresses a batch of writ appeals filed by the financially strained transport corporation.

Case Background

The case stems from a series of writ petitions filed by former KSRTC employees who had retired from service but had not received their full retiral benefits, such as Death-cum-Retirement Gratuity (DCRG), Commuted Value of Pension (CVP), monthly pension, and Terminal Leave Surrender Salary.

A single judge had initially ordered the KSRTC to disburse these dues within three months. Citing a "severe financial crisis," the KSRTC filed review petitions, requesting a two-year extension. The single judge modified the order, directing an immediate payment of ₹1 lakh to each pensioner, the restoration of a corpus fund for pension disbursal, and payments to be made in order of retirement priority, with exceptions for emergencies. The KSRTC then challenged this modified order through the present intra-court appeals.

Arguments in Court

During the appeal proceedings, the KSRTC, represented by Advocate Deepu Thankan, informed the court that it had already paid a substantial portion of the dues, including DCRG, CVP, and monthly pensions, to most of the retired employees. However, the corporation acknowledged that payments for Terminal Leave Surrender Salary were still outstanding and requested a reasonable timeframe to clear them.

Counsel for the retired employees (respondents) largely confirmed the receipt of major benefits but pointed out that some former employees were yet to receive their DCRG, CVP, and monthly pension. They agreed to a reasonable extension for the payment of the terminal leave surrender salary, provided all other dues were settled promptly for the remaining individuals.

Court's Final Directions

The Division Bench, after hearing both parties, disposed of the appeals by issuing a set of clear and time-bound directives to the KSRTC. The court balanced the corporation's financial difficulties with the fundamental rights of its former employees to their hard-earned benefits.

The key directions from the judgment are:

1. Verification and Payment of Pending Dues: The KSRTC must verify and ensure that all retired employees (respondents in the appeals) who have not yet received their DCRG, CVP, and monthly pension are paid in full within three months.

2. Settlement of Terminal Leave Surrender Salary: The entire outstanding amount for Terminal Leave Surrender Salary must be paid to all respondents "as expeditiously as possible, preferably within three months" from the date of the judgment.

3. Corpus Fund Contribution: The court noted its earlier interim order that allowed KSRTC to earmark 5% of its daily collection for a corpus fund to meet these liabilities. The judgment stated that the question of continuing this practice would be "left open to be considered in appropriate proceedings."

The court's order ensures a definitive timeline for the final settlement of all dues, bringing a long-awaited resolution for the retired employees who have been awaiting their rightful payments.