V.Selvaraju v. The Tamil Nadu State Transport Corporation (Kumbakonam) Limited

Madras HC9 Jan 2026WP(MD)/579/2026

Case brief

AI extract

What is this about?

Interest on belated retirement/terminal benefits; writ of mandamus under Article 226; Tamil Nadu State Transport Corporation (Kumbakonam) Ltd; driver retired 31.05.2024, benefits paid 02.12.2025; Provident Fund and earned leave encashment; 6% per annum interest from date of retirement till actual disbursement; reliance on S.K. Dua v. State of Haryana (2008) 3 SCC 44 and Division Bench common order dated 04.07.2014 in W.A.(MD)No.403 of 2010 batch; Madurai Bench of Madras High Court; B. Pugalendhi, J.

What did the court decide?

Direction to the respondent Transport Corporation to pay interest at 6% per annum on the belatedly paid retirement benefits, from the date of retirement (31.05.2024) till actual disbursement, within six months from receipt of the order; no costs. ¶¶40

V.Selvaraju Vs The Tamil Nadu State Transport… — 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 belated payment of terminal/retirement benefits, including Provident Fund and earned leave encashment. +1 more

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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 employee must be compensated by way of interest for the belated payment.

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Ratio / Principle

Interest on the belatedly paid retirement benefits is fixed at 6% per annum, payable from the date of retirement till the date of actual disbursement, and the Transport Corporation was directed to pay it within six months of receipt of the order.

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Detailed headnote1 paragraphs

Madurai Bench of Madras High Court (B. Pugalendhi, J.) | WP.(MD)No.579 of 2026 | 09.01.2026 — V.Selvaraju, who served as Driver (later Special Grade Driver) in the respondent Transport Corporation from 06.06.1999 and retired on 31.05.2024, received his retirement benefits only on 02.12.2025. His representation dated 12.12.2025 went unanswered, and he sought by writ of mandamus under Article 226 interest on the belated payment of terminal benefits including Provident Fund and earned leave encashment. Following the Supreme Court in S.K. Dua v. State of Haryana (2008) 3 SCC 44 and the common order dated 04.07.2014 of a Division Bench of the same Court in W.A.(MD)No.403 of 2010 batch, the Court held that an employer must settle retirement benefits without delay and must compensate belated settlement with interest, and disposed of the petition directing payment of interest at 6% per annum from the date of retirement till actual disbursement, within six months, with no costs. (Petitioner had prayed for 18% p.a.; the Court fixed the rate at 6%, consistent with its own earlier Division Bench order.)

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WP.(MD)No.579 of 2026

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED : 09.01.2026

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CORAM :

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THE HON`BLE MR.JUSTICE B.PUGALENDHI WP.(MD)No.579 of 2026

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V.Selvaraju ... Petitioner

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Vs.

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1.Tamil Nadu State Transport Corporation (Kumbakonam) Ltd rep. by its Managing Director Kumbakonam.

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2.The General Manager The Tamil Nadu State Transport Corporation (Kumbakonam) Ltd Trichy Region Trichy - 620 001.

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3.The General Manager The Tamil Nadu State Transport Corporation (Kumbakonam) Ltd Karur Region Karur -639 001.

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... Respondents

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Prayer : Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of Writ of Mandamus, to direct the respondents to pay the petitioner interest at the rate of 18% p.a. for the belated payment of terminal benefits including Provident Fund and Earned Leave encashment along with interest within a time frame fixed by this Court.

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

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WP.(MD)No.579 of 2026

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For Petitioner : Mr.D.Sivaraman

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For Respondents : Mr.S.C.Herold Singh Standing Counsel

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ORDER

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Seeking interest for the belated payment of terminal and pension

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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 06.06.1999 and retired from service as Special Grade Driver on 31.05.2024. However, the retirement benefits were settled to him only on 02.12.2025. Since the benefits have been settled belatedly, the respondents are liable to pay interest for the belated payment. Therefore, the petitioner gave a representation dated 12.12.2025 to the respondents, 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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WP.(MD)No.579 of 2026

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3.Mr.S.C.Herold Singh, learned Standing Counsel takes notice on behalf of the respondents and submits that the terminal benefits have been settled to the petitioner, however, belatedly.

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

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

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6.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

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

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WP.(MD)No.579 of 2026

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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 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

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

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WP.(MD)No.579 of 2026

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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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8.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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09.01.2026

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

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

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WP.(MD)No.579 of 2026

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1.Tamil Nadu State Transport Corporation (Kumbakonam) Ltd rep. by its Managing Director Kumbakonam.

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2.The General Manager The Tamil Nadu State Transport Corporation (Kumbakonam) Ltd Trichy Region Trichy - 620 001. 3.The General Manager The Tamil Nadu State Transport Corporation (Kumbakonam) Ltd Karur Region Karur -639 001.

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

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WP.(MD)No.579 of 2026

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B.PUGALENDHI,J

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gns

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WP.(MD)No.579 of 2026