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Palaniappan P v. The Managing Director

Madras HC22 Jan 2026WP(MD)/1462/2026

Case brief

AI extract

What is this about?

Belated/delayed payment of retirement and terminal benefits — interest at 6% per annum; writ of mandamus under Article 226; Tamil Nadu State Transport Corporation (Kumbakonam) Ltd.; Checking Inspector; provident fund, gratuity, encashment of leave; S.K. Dua v. State of Haryana (2008) 3 SCC 44 (followed); W.A.(MD)No.403 of 2010 batch, common order dated 04.07.2014 (followed); writ disposed of at admission stage by consent; interest directed from 01.06.2024 till actual disbursement; six-month compliance period; no costs.

What did the court decide?

Interest at 6% per annum on the belated payment of retirement benefits, from 01.06.2024 till the date of actual disbursement, payable within a period of six months from the date of receipt of a copy of the order; no costs. ¶46

Palaniappan P Vs The Managing Director — Writ and Judicial Review | Madras HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner, who retired on 31.07.2024 but whose Provident Fund, Gratuity and Encashment of leave were settled only on 02.12.2025, is entitled to interest at 6% per annum on the belated payment of his terminal benefits (gratuity, provident fund, EL surrender and leave salary).

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Court's answer

The employer is liable to settle retirement benefits to its employees without any delay, and where the benefits are settled belatedly, the delay has to be compensated by way of interest for the belated payment.

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Ratio / Principle

Following the dictum in S.K. Dua v. State of Haryana and the Division Bench common order dated 04.07.2014 in W.A.(MD)No.403 of 2010 batch, 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 01.06.2024 till the date of actual disbursement, within a period of six months from the date of receipt of a copy of the order; no costs.

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Detailed headnote1 paragraphs

Madras High Court (Madurai Bench), B. Pugalendhi, J. — Writ petition under Article 226 of the Constitution of India by P. Palaniappan, a retired Checking Inspector of Tamil Nadu State Transport Corporation (Kumbakonam) Ltd., seeking a mandamus to direct payment of interest at 6% per annum on the belated payment of his terminal benefits, namely gratuity, provident fund, EL surrender and leave salary. The petitioner joined service on 22.07.1994 and retired on 31.07.2024, but his Provident Fund, Gratuity and Encashment of leave were settled only on 02.12.2025; his representation dated 10.12.2025 drew no response. Taken up for final hearing at the admission stage by consent, the Court held that the employer is liable to settle retirement benefits without delay and that belated settlement must be compensated by way of interest, following S.K. Dua v. State of Haryana, (2008) 3 SCC 44, and the Division Bench common order dated 04.07.2014 in W.A.(MD)No.403 of 2010 batch, which fixed interest at 6% per annum. The writ petition was disposed of with a direction to the respondent Corporation to pay interest at 6% per annum from 01.06.2024 till the date of actual disbursement, within six months from receipt of a copy of the order. No costs.

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WP(MD)No.1462 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 22.01.2026

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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WP(MD)No.1462 of 2026

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P.Palaniappan ... Petitioner

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The Managing Director, Tamil Nadu State Transport Corporation (Kumbakonam) Ltd, Railway Station New Road, Kumbakonam.

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...Respondent

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PRAYER: Writ Petition filed under Article 226 of the Constitution of India, to issue a writ of mandamus directing the respondent to pay the interest at the rate of 6% per annum to the petitioner for the belated payment of gratuity, provident fund, EL surrender and leave salary from the date of retirement to the date of actual payment within a time frame as may be fixed by this court.

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For Petitioner : Mrs.D.Ramya

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For Respondent : Mr.K.Ramaiah, Standing Counsel

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

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WP(MD)No.1462 of 2026

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ORDER

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This writ petition is filed for a Mandamus, directing the respondent to pay interest to the petitioner at the rate of 6% per annum for the belated payment of terminal benefits from the date of his retirement till the actual payment, within the time stipulated by this Court.

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2.The case of the petitioner is that the petitioner joined as a Checking Inspector in the respondent Transport Corporation on 22.07.1994. After completion of 30 years of service, he retired from service on 31.07.2024. However, the retirement benefits, namely, Provident Fund, Gratuity and Encashment of leave was settled only on 02.12.2025. 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 10.12.2025 to the respondents, however, the same did not evoke any response. Therefore, the petitioner has filed this writ petition.

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

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WP(MD)No.1462 of 2026

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3.The learned counsel for the petitioner submits that in similar

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writ petitions, this Court has ordered for payment of interest at the rate of 6% p.a. for the belated payment of retirement benefits and therefore, the petitioner is also entitled for the same relief.

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It is reported on behalf of the respondents that the terminal

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benefits have been settled to the petitioner on 02.12.2025.

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By consent of both the parties, the writ petition is taken up for final hearing at the admission stage itself.

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6.This Court paid its anxious consideration to the rival submissions made and also perused the materials placed on record.

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7.The employer is liable to settle the retirement benefits 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 payment. In this regard, the Hon'ble Apex Court in S.K.Dua vs. State of

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

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WP(MD)No.1462 of 2026

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Haryana

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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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8.Following the same, in a similar issue, a Division Bench of

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

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WP(MD)No.1462 of 2026

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this Court, in W.A.(MD)No.403 of 2010, etc. batch, vide 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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9.Following the dictum laid down on this issue, the writ

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

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WP(MD)No.1462 of 2026

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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 01.06.2024 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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22.01.2026

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NCC: Yes/No Index:Yes/No

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DSK

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The Managing Director, Tamil Nadu State Transport Corporation (Kumbakonam) Ltd, Railway Station New Road, Kumbakonam.

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