Disposed

J.v.Chinna Servai v. The Management of Tamil Nadu State Transport Corporation (Madurai) Ltd.

Madras HC1 Dec 2025WP(MD)/34844/2025

Case brief

AI extract

What is this about?

A retired Transport Corporation conductor sought interest for belated settlement of his retirement benefits. The Court held the employer liable to compensate delay with interest and directed payment of 6% per annum from retirement till actual disbursement within six months.

What did the court decide?

Interest at 6% per annum from date of retirement till actual disbursement of retirement benefits, payable within six months.

J.v.Chinna Servai Vs The Management of Tamil… — Pension and Retirement Benefits | Madras HC (2025)

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W.P(MD)No.34844 of 2025

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 01.12.2025

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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W.P(MD)No.34844 of 2025

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J.V.Chinna Servai ... Petitioner

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1.The Management of Tamil Nadu State Transport Corporation (Madurai) Ltd, Madurai Region, Rep by its Managing Director, Madurai.

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2.The Administrator, Tamil Nadu State Transport Employees Pension Fund Trust, Thiruvalluvar Illam, Anna Salai, Chennai 2. ...Respondent

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PRAYER: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Mandamus, directing the respondents to pay the petitioner interest at the rate of 18 percent per annum, for the period of delay from 01.06.19 to 24.01.21, in paying the amounts paid towards his terminal and pension benefits

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https://www.mhc.tn.gov.in/judis

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namely EPF Employees Contribution, Gratuity, Encashment of Leaves and Commutated Value of Pension, within a time frame as may be fixed by this Court and without affecting his right to claim balance amounts towards those benefits and thus render justice.

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For Petitioner : Mr.S. Arunachalam For R1 : Mr.S.Ramachandra Pradeep Standing Counsel For R2 : Mr.S.C.Herold Singh Standing Counsel

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O R D E R

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Seeking interest for the belated payment of terminal and

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pension benefits, the petitioner has approached this Court.

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The case of the petitioner is that he joined as a

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Conductor in the respondent Transport Corporation on 05.05.1995 and retired from service as Special Grade Conductor on 31.05.2019. However, the retirement benefits were settled to him only on 25.01.2021. Since the benefits have been settled belatedly, the respondent is liable to pay interest for the belated payment. Therefore, the petitioner gave a representation dated 10.11.2025 to 2/8

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https://www.mhc.tn.gov.in/judis

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the respondent, however, the same did not evoke any response. Therefore, the petitioner has filed this writ petition for the above said relief.

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Mr.Mr.S.Ramachandra Pradeep and Mr.S.C.Herold

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Singh, learned Standing Counsel takes notice on behalf of the respondents and submit that the terminal benefits have been settled to the petitioner, however, belatedly.

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By consent of both the parties, the writ petition is

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taken up for final hearing at the admission stage itself.

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This Court paid its anxious consideration to the rival

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submissions made and also perused the materials placed on record.

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The employer is liable to settle the retirement benefits

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to its employees without any delay and in case, if it is settled belatedly, it has to be compensated by way of interest for the belated

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https://www.mhc.tn.gov.in/judis

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W.P(MD)No.34844 of 2025

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payment. In this regard, the Hon'ble Apex Court in S.K.Dua vs. State of Haryana reported in 2008 (3) SCC 44 , has held as follows:

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“14. In the circumstances, prima facie, we are of the view that the grievance voiced by the appellant appears to be well founded that he would be entitled to interest on such benefits. If there are statutory rules occupying the field, the appellant could claim payment of interest relying on such rules. If there are administrative instructions, guidelines or norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence of statutory rules, administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution. The submission of the learned counsel for the appellant, that retiral benefits are not in the nature of “bounty” is, in our opinion well founded and needs no authority in support thereof. In that view of the matter, in our considered opinion, the High Court was not right in dismissing the petition in living even without issuing notice to the respondents.”

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https://www.mhc.tn.gov.in/judis

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Following the same, in a similar issue, a Division

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Bench of this Court, in W.A.(MD)No.403 of 2010, etc. batch, vide

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common order dated 04.07.2014, has fixed the rate of interest at 6% per annum and held as under:-

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“5. ..... even though there is no provision in the Tamil Nadu State Transport Corporation Employees Pension Fund for payment of interest, cannot stand in the light of the law laid down by the Supreme Court in S.K.Dua v. State of Haryana and another, reported in (2008) 3 SCC 44. As a matter of fact, the Rules do not contemplate belated payment of retirement benefits. The Rules contemplate prompt payment. When the Rules contemplate prompt payment and not bleated payment, the Rules will not contain a provision for payment of interest. The Pension Fund which was created as a Trust by the Corporation was supposed to act in trust for the employees' benefit. If the Trust could not make payments within the time stipulated, then, irrespective of whether there is any provision for payment of interest or not, the Corporation is obliged to make payment.”

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https://www.mhc.tn.gov.in/judis

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Following the dictum laid down on this issue, the writ petition is disposed of with a direction to the respondent/Transport Corporation to pay interest for the belated payment of retirement benefits at the rate of 6% per annum from the date of retirement till the date of actual disbursement, within a period of six months from the date of receipt of a copy of this order. No costs.

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01.12.2025

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NCC: Yes/No Index:Yes/No Internet:Yes vrn

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