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M.Saravanasamy, v. The Management of

Writ Petition (Madurai Bench, Madras High Court) – Delayed payment of retirement/terminal benefits

Madras HC2 Feb 2026WP(MD)/2611/2026

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Case brief

AI extract

What is this about?

Interest on belated retirement/terminal benefits; Tamilnadu State Transport Corporation (Thirunelveli) Ltd.; Tamil Nadu State Transport Employees' Pension Fund Trust; Writ of Mandamus under Article 226; 6% per annum interest awarded in place of 18% sought; 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; decided 02.02.2026 by B. Pugalendhi J.; R1 counsel conceded benefits were settled belatedly.

What did the court decide?

Respondents directed to pay interest at 6% per annum for the belated payment of the petitioner's retirement/terminal benefits, within six months from the date of receipt of a copy of the order; no costs. ¶7

M.Saravanasamy, Vs The Management of — Writ and Judicial Review | Madras HC (2026)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner is entitled to interest for the period of delay from 01.06.2024 to 01.12.2025 in payment of his terminal and pension benefits (EPF Employee's Contribution, Gratuity, Encashment of Leaves and Commutated value of pension). +1 more

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Court's answer

The employer is liable to settle the retirement benefits to its employees without any delay.

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Ratio / Principle

If retirement benefits are settled belatedly, the delay has to be compensated by way of interest for the belated payment.

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Key takeaways

The writ petition is allowed with a direction to the respondents to pay interest for the belated payment of the petitioner's retirement/terminal benefits.ratio¶7
Interest for the belated payment is fixed at 6% per annum, payable within a period of six months from the date of receipt of a copy of the order.ratio¶7

Detailed headnote1 paragraphs

Writ Petition (Madurai Bench, Madras High Court) — Delayed payment of retirement/terminal benefits — Petitioner, a Special Grade Conductor who retired on 31.05.2024 after 27 years of service, had his EPF Employee's Contribution, Gratuity, Encashment of Leaves and Commutated value of pension settled only on 02.12.2025; his representation dated 15.12.2025 for interest went unconsidered — Held: the employer is liable to settle retirement benefits without delay, and belated settlement must be compensated by 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 6% per annum), the writ petition was allowed with a direction to the respondents (Transport Corporation and Pension Fund Trust) to pay interest at 6% p.a. within six months — No costs. (Petitioner had sought 18% p.a.)

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WP(MD). No.2611 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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Dated : 02.02.2026

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CORAM

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THE HONOURABLE MR. JUSTICE B.PUGALENDHI

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WP(MD)No.2611 of 2026

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M.Saravanasamy ... Petitioner

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The Management of Tamilnadu State Transport Corporation (Thirunelveli) Ltd.,

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Thirunelveli Region, Rep. by its General Manager, Thirunelveli.

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The Administrator, Tamil Nadu State Transport Employees' Pension Fund Trust,

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Thiruvalluvar Illam, Anna Salai, Chennai – 2. ... Respondents

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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% per annum, for the period of delay from 01.06.2024 to 01.12.2025 in paying the amounts paid towards his terminal and pension benefits, namely, EPF Employee's Contribution, Gratuity, Encashment of Leaves and Commutated value of

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pension, within a time frame as may be fixed by this Court and without affecting his right to claim balance amounts towards those benefits.

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For Petitioner : Mr.S.Arunachalam For R1 : Mr.D.Jebaraj, Standing Counsel For R2 : Mr.SC.Herold Singh, Standing Counsel

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ORDER

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The petitioner was appointed as a Conductor in the Transport Corporation on 25.09.1997 and after rendering 27 years of service, he retired from service as Special Grade Conductor on 31.05.2024. However, the terminal benefits, namely, EPF Employee's Contribution, Gratuity, Encashment of Leaves and Commutated value of pension, due to the petitioner were settled only on 02.12.2025. Seeking interest for the belated payment, the petitioner gave a representation to the respondents on 15.12.2025, however, it was not considered by the respondents. Therefore, the petitioner has filed this writ petition for the above said relief.

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Mr.D.Jebaraj, learned Standing Counsel, who takes notice on

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behalf of the 1^st respondent, submits 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 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 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 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

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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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Following the same, in a similar issue, a Division Bench of this

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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

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(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 writ petition

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is allowed with a direction to the respondents to pay interest, for the belated payment of retirement/terminal benefits of the petitioner, at the rate of 6% p.a., within a period of six months from the date of receipt of a copy of this order. No costs.

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02.02.2026

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ogy

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Index : Yes / No. Internet: Yes / No. NCC : Yes / No.

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B.PUGALENDHI, J.

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