The Madurai Bench of the Madras High Court dismissed the Corporation's writ appeal. The court held that statutory rules mandate interest for delayed settlement of terminal benefits, finding the delay to be the Corporation's fault.
The writ appeal was dismissed; the order directing payment of interest was upheld.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 04.03.2014
CORAM : THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN and THE HONOURABLE MS.JUSTICE V.M.VELUMANI
Writ Appeal (MD) No.216 of 2014
The Commissioner, Madurai Corporation, Madurai ... Appellant/Respondent Vs. R.Venkatramani ... Respondent/Petitioner
Writ Appeal is filed under Clause 15 of the Letters Patent against the order dated 15.03.2011 made in W.P.(MD)No.11068 of 2010 on the file of this Court.
Prayer in WP(MD). 11068/ 2010 :
praying for issuance a Writ of Mandamus to settle Petitioner terminal benefits and pension arrears in total to the tune of Rs. 7,55,691/- with interest at the rate of 12% until payment.
For Appellant : Mr.M.Jothi Basu For Respondent : Mr.R.Murali
JUDGMENT
(Judgment of the Court was delivered by V.RAMASUBRAMANIAN,J. )
The Madurai City Municipal Corporation has come up with the above writ appeal challenging an order passed by the learned Judge directing the settlement of the entire terminal benefits and pensionary arrears to the writ petitioner within a period of six weeks with interest at 9%.
2.There is no dispute about the fact that the respondent retired on reaching the age of superannuation on 28.02.2009. There is also no dispute about the fact that the service benefits were settled only on 07.01.2011. In other words, the retirement benefits were settled upon the first respondent only after a period about 16 months. Therefore, the learned Judge was compelled to direct payment of interest on the amount at 9% per annum. Aggrieved by the award of interest, the Corporation has come up with the above writ appeal.
3.The main ground on which the Corporation has challenged the order of the learned Judge is that there are 3700 employees working in the Corporation and that nearly about 100 employees attain superannuation every year. The appellant claims that they are spending about Rs.140 Crores towards salary for the employees and for payment of retirement benefits. Therefore, the appellant claims that the learned Judge ought not to have awarded interest.
4.But we are hardly convinced with the reasons stated by the appellant. Even the statutory rules issued in exercise of the powers
2
conferred by the proviso to Article 309 of the Constitution in respect of Government servants prescribe the award of interest upon belated settlement of terminal benefits such as gratuity. The service benefits to which an employee is entitled are not mere bounties. They are payable in terms of the statutory rules and the rules stipulate that the papers for settlement of service benefits will have to be prepared in advance and circulated at least 3 to 6 months before the intended date of retirement. Therefore, failure to settle the terminal benefits immediately upon retirement, automatically, invites the consequence of award of interest. Hence, we see no legally valid grounds to interfere with the impugned order of the learned Judge. Therefore, the writ appeal is dismissed. No costs. Consequently, connected miscellaneous petition is closed.
sd/Assistant Registrar (RTI) /True copy/ Sub Assistant Registrar sms To The Commissioner, Madurai Corporation, Madurai. Writ Appeal (MD) No.216 of 2014 04.03.2014 rg.19.03.2014 2p/2c.
1 issue framed by the court
Whether a High Court is justified in directing the award of interest on delayed settlement of pension and terminal benefits to a retired employee.
1 provisions across 1 enactments
The Commissioner, Madurai Corporation, Madurai
R.Venkatramani
V.Ramasubramanian
V.M.Velumani
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court