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G.Shunmugavel v. The Managing Director

Madras HC28 Jan 2026WP(MD)/1982/2026

Case brief

AI extract

What is this about?

Petitioner sought mandamus for payment of interest on belatedly settled retirement benefits. Court applied Supreme Court precedent affirming employee right to interest for delayed statutory payments and directed respondent to pay 6% annual interest within six months.

What did the court decide?

Direction to respondent to pay interest at 6% per annum from date of retirement to date of actual disbursement within six months.

G.Shunmugavel Vs The Managing Director — Pension and Retirement Benefits | Madras HC (2026)

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W.P(MD)No.1982 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 28.01.2026

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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W.P(MD)No.1982 of 2026

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G.Shunmugavel ... Petitioner

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The Managing Director, State Express Transport Corporation Ltd. Thiruvalluvar Illam, Pallavan Salai, Chennai-600 002. ...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 interest at the rate of 6 percent 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 Honble Court and pass such further or other orders as this Court.

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For Petitioner : Mrs.D.Ramya, For Respondent : Mr.S.C.Herold Singh Standing Counsel

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

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W.P(MD)No.1982 of 2026

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O R D E R

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This writ petition is filed for a Mandamus, directing the respondents to pay interest to the petitioner at the rate of 6% per annum, for the period of delay from the date of retirement till the date of actual disbursement in paying the terminal benefits, within the time stipulated by this Court.

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The case of the petitioner is that he joined as a Driver in the respondent Transport Corporation on 02.10.2000 and he retired from service on 31.05.2024. However, the retirement benefits, namely, Provident Fund, Gratuity and encashment of leave were settled to him 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 to the respondent on 16.12.2025, 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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https://www.mhc.tn.gov.in/judis

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W.P(MD)No.1982 of 2026

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Mr.S.C.Herold Singh, learned Standing Counsel takes notice for the respondent and submits that the retirement benefits have been settled to this 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 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 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

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

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W.P(MD)No.1982 of 2026

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

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W.P(MD)No.1982 of 2026

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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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Following the dictum laid down on this issue, the

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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

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

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W.P(MD)No.1982 of 2026

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period of six months from the date of receipt of a copy of this order. No costs.

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28.01.2026

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

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

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W.P(MD)No.1982 of 2026

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The Managing Director, State Express Transport Corporation Ltd. Thiruvalluvar Illam, Pallavan Salai, Chennai-600 002.

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

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W.P(MD)No.1982 of 2026

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B.PUGALENDHI, J.

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vrn

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Order made in W.P(MD)No.1982 of 2026

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28.01.2026 (1/2)

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

G.Shunmugavel v. The Managing Director

Case brief

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G.Shunmugavel v. The Managing Director

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