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P.Kannan v. The Management of

Madras HC9 Feb 2026WP(MD)/3501/2026

Case brief

AI extract

What is this about?

Interest on belated/delayed payment of retirement benefits; gratuity; EPF employee's contribution; encashment of leave; Tamilnadu State Transport Corporation (Kumbakonam) Ltd., Karur Region; mandamus under Article 226; S.K. Dua v. State of Haryana (2008) 3 SCC 44; W.A.(MD)No.403 of 2010 batch, common order dated 04.07.2014; interest at 6% per annum; six-month compliance period; Madurai Bench of Madras High Court; B. Pugalendhi, J.; decided 09.02.2026.

What did the court decide?

Respondent directed to pay interest at 6% per annum for the belated payment of the petitioner's retirement benefits, within a period of six months from the date of receipt of a copy of the order; no costs. ¶37

P.Kannan 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, whose retirement benefits (EPF Employee's Contribution, Gratuity and Encashment of leave) were settled belatedly, is entitled to interest for the period of delay from 01.07.2024 to 01.12.2025, and if so, at what rate.

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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 must be compensated by payment of interest.

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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 allowed: the respondent is directed to pay interest at 6% per annum for the belated payment of the petitioner's retirement benefits, 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. — WP(MD) No.3501 of 2026, decided 09.02.2026. A Tradesman of Tamilnadu State Transport Corporation (Kumbakonam) Ltd., Karur Region, who retired on 30.06.2024 after 35 years of service, found his retirement benefits (EPF Employee's Contribution, Gratuity and Encashment of leave) settled belatedly; his representation dated 15.12.2025 seeking interest went unanswered, and he sought mandamus for interest at 18% p.a. for the delay from 01.07.2024 to 01.12.2025. Held: an employer must settle retirement benefits without delay, and belated settlement must be compensated by interest — even absent any provision for interest in the Pension Fund rules — 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 the rate at 6% per annum. Writ allowed: respondent directed to pay interest at 6% p.a. within six months; no costs.

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WP(MD). No.3501 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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Dated : 09.02.2026

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CORAM

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THE HONOURABLE MR. JUSTICE B.PUGALENDHI

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WP(MD)No.3501 of 2026

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P.Kannan ... Petitioner

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

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Karur Region, Rep. by its General Manager, Karur. ... Respondent

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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 respondent to pay the petitioner interest at the rate of 18% per annum, for the period of delay from 01.07.2024 to 01.12.2025, in paying the amounts paid towards his terminal benefits, namely, EPF Employee's Contribution, Gratuity and Encashment of leave 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

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

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WP(MD). No.3501 of 2026

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For Respondent : Mr.SC.Herold Singh Standing Counsel

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ORDER

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The petitioner was appointed as a Tradesman in the Transport Corporation on 08.11.1989 and after rendering 35 years of service, he retired from service on 30.06.2024. However, the retirement benefits, namely, EPF Employee's Contribution, Gratuity and Encashment of leave, due to the petitioner were settled belatedly. Seeking interest for the belated payment of retirement benefits, the petitioner gave a representation to the respondent on 15.12.2025, however, it was not considered by the respondent. Therefore, the petitioner has filed this writ petition for the above said relief.

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Mr.SC.Herold Singh, learned Standing Counsel, who takes notice on behalf of the respondent, submits that the retirement benefits, have been settled to the petitioner, however, belatedly.

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

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WP(MD). No.3501 of 2026

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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 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

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

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WP(MD). No.3501 of 2026

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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 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,

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

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WP(MD). No.3501 of 2026

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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 is allowed with a direction to the respondent to pay interest, for the belated payment of retirement 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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09.02.2026

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

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

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WP(MD). No.3501 of 2026

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B.PUGALENDHI, J.