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K.Madasamy v. The Managing Director

Madras HC3 Feb 2026WP(MD)/2704/2026

Case brief

AI extract

What is this about?

Belated payment of retirement/terminal benefits - interest at 6% per annum - gratuity, provident fund, leave salary - Tamil Nadu State Transport Corporation (Thirunelveli) Limited - writ of mandamus under Article 226 - delay of 18 months - retirement on 31.05.2024 - S.K.Dua vs. State of Haryana (2008) 3 SCC 44 - Division Bench common order dated 04.07.2014 in W.A.(MD)No.403 of 2010 batch - payment within six months - no costs.

What did the court decide?

Direction to the respondent/Transport Corporation to pay interest at 6% per annum for the belated payment of retirement benefits from the date of retirement till the date of actual disbursement, within six months from receipt of a copy of the order; no costs. ¶37

K.Madasamy 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 respondent is liable to pay interest for the belated payment (delay of 18 months) of the petitioner's terminal and pension benefits, and at what rate and from what date.

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Court's answer

The employer is liable to settle retirement benefits without any delay, and if the benefits are settled belatedly, the employee must 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 order in W.A.(MD)No.403 of 2010 batch, the writ petition is disposed of directing the respondent/Transport Corporation to pay interest for the belated payment of retirement benefits at 6% per annum from the date of retirement till the date of actual disbursement, within six months from receipt of a copy of the order, with no costs.

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Detailed headnote1 paragraphs

Madras High Court, Madurai Bench (B.Pugalendhi, J.), W.P(MD)No.2704 of 2026, decided 03.02.2026: A retired Special Grade Driver of Tamil Nadu State Transport Corporation (Thirunelveli) Limited, whose retirement benefits (gratuity, provident fund and leave salary) were settled 18 months after his retirement on 31.05.2024, sought a writ of mandamus under Article 226 for interest on the belated payment. Holding that an employer must settle retirement benefits without delay and that belated settlement must be compensated with interest, and following S.K.Dua vs. 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 etc. batch, the Court disposed of the writ petition directing the Corporation to pay interest at 6% per annum from the date of retirement till the date of actual disbursement, within six months from receipt of a copy of the order. No costs.

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W.P(MD)No.2704 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 03.02.2026

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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W.P(MD)No.2704 of 2026

K.Madasamy

... Petitioner

Vs.

The Managing Director, Tamil Nadu State Transport Corporation (Thirunelveli) Limited, 23/2, Kattaboman Nagar, Thirunelveli-627 011. ...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, to direct the respondent to pay interest at the rate of 6% per annum to petitioner for the belated payment of Gratuity, Provident fund 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 : Ms.D.Ramya For Respondent : Mr.D.Jebaraj, Standing Counsel

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

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ORDER

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W.P(MD)No.2704 of 2026

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Seeking interest for the belated payment of terminal and pension benefits, the petitioner has approached this Court.

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2.The case of the petitioner is that he joined as a Driver in the respondent Transport Corporation on 16.04.1988 and retired from service as Special Grade Driver on 31.05.2024. However, the retirement benefits were settled to him with the delay of 18 months. 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 09.01.2026 to 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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3.Mr.D.Jebaraj, learned Standing Counsel takes notice on behalf of the respondent and submits that the terminal benefits have been settled to the petitioner, however, belatedly.

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

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W.P(MD)No.2704 of 2026

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4.This Court paid its anxious consideration to the rival submissions

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made and also perused the materials placed on record.

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5.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

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(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

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

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W.P(MD)No.2704 of 2026

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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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6.Following the same, in a similar issue, a Division Bench of 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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https://www.mhc.tn.gov.in/judis

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W.P(MD)No.2704 of 2026

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7.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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03.02.2026

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NCC: Yes/No Index:Yes/No Internet:Yes gns

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The Managing Director, Tamil Nadu State Transport Corporation (Thirunelveli) Limited, 23/2, Kattaboman Nagar, Thirunelveli-627 011.

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

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