Petitioner sought belated payment interest at 18%p.a. on retirement benefits. Court directed respondents to pay interest at 6%p.a. within twelve weeks, relying on precedent that such interest compensates for lost opportunity rather than acts as penalty.
Respondents directed to pay interest at 6% per annum on belated benefits within twelve weeks.
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.
W.P(MD)No.4896 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 07.03.2023
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
W.P(MD)No.4896 of 2023
S.Seenivasan ... Petitioner
Vs.
Tamil Nadu State Transport Corporation (Madurai) Ltd., Virudhunagar Region, Virudhunagar.
3.The Administrator, Tamil Nadu State Transport Corporation Employees Pension Fund Trust, Thiruvalluvar Illam, Pallavan Salai, Chennai-2. ... Respondents
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 settle the belated payment interest at the rate of 18% per annum on the delayed payment of Retirement Benefits such as Provident Fund Rs.15,85,745/-, Gratuity Rs.11,38,320, Leave Salary Rs.4,99,171/- and Commutation Rs. 8,97,131/- Leave Salary Rs.4,99,171/- and Commutation Rs.8,97,131/- from the date of retirement on 31.05.2020 till the date of settlement on 01.12.2022.
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W.P(MD)No.4896 of 2023
For Petitioner : Mr.S.Govindan
For Respondents : Mr.S.Gladsonmicheal Rajadurai Standing Counsel for R1 & R2 : Mr.S.C.Herold Singh Standing Counsel for R3
ORDER
Heard the learned counsel on either side.
annum on the belated settlement of the petition mentioned benefits to the petitioner within a period of twelve weeks from the date of receipt of a copy of this order.
“7.Be we do not agree, as the payment of interest on delayed settlement of terminal benefits cannot be thought to be by way of penalty. It is actually for compensating the employees for the depreciation in the value of money and also for the opportunity lost by them in not being able to invest such amount in whatever from they wanted to. The concept of payment of interest can be traced to the common law of contracts. It is based upon the principle of “unjust enrichment” and
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W.P(MD)No.4896 of 2023
also on the principle of “opportunity lost” for a person whose money is retained even unintentionally by somebody else. Hence, the second contention is also rejected.”
07.03.2023
Index : Yes / No Internet : Yes/ No rmi
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W.P(MD)No.4896 of 2023
G.R.SWAMINATHAN, J.
rmi
W.P(MD)No.4896 of 2023
07.03.2023
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2 issues framed by the court
Whether interest at 18% or a lower rate should be awarded on delayed settlement of retirement benefits including commutation.
Whether interest on the commutation component of retirement benefits should be granted when it was argued otherwise.
Colour shows how this judgement treated each authority
The Managing Director Vs. A.Thambi Raj (W.A.(MD)No.403 of 2010)Relied on¶25
S.Seenivasan
The Managing Director, Tamil Nadu State Transport Corporation (Madurai) Ltd.
The General Manager, Tamil Nadu State Transport Corporation (Madurai) Ltd.
The Administrator, Tamil Nadu State Transport Corporation Employees Pension Fund Trust
G.R.Swaminathan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
