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X.Arul Xavier v. The Management of

Madras HC9 Jan 2026WP(MD)/638/2026

Case brief

AI extract

What is this about?

Belated/delayed payment of retirement and terminal benefits; interest on delayed EPF contribution, gratuity, leave encashment; TNSTC Tirunelveli (Nagercoil Region) employee retired 31.07.2024, benefits settled 02.12.2025; S.K. Dua v. State of Haryana 2008 (3) SCC 44; Articles 14, 19, 21 and Part III of the Constitution; W.A.(MD)No.403 of 2010 batch, common order dated 04.07.2014; interest fixed at 6% per annum from date of retirement till actual disbursement; writ of mandamus under Article 226; petition disposed within six months; no costs; Madurai Bench, judge B. Pugalendhi.

What did the court decide?

Direction to the respondent 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.

X.Arul Xavier 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 respondent Transport Corporation is liable to pay interest to the petitioner for the belated settlement of his terminal/retirement benefits, and at what rate and from which date.

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Court's answer

The employer is liable to settle retirement benefits without delay; where settlement is belated, the delay must be compensated by way of interest for the belated payment.

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Ratio / Principle

Following the dictum of S.K. Dua v. State of Haryana and the Division Bench common order of 04.07.2014, the respondent must 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.

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Detailed headnote1 paragraphs

Writ Petition (Madurai Bench, Madras High Court), decided 09.01.2026 by B. Pugalendhi J. A retired employee of Tamil Nadu State Transport Corporation (Tirunelveli) Ltd., Nagercoil Region, who retired as Non-ITI Helper on 31.07.2024 but whose terminal benefits (EPF employee's contribution, gratuity and leave encashment) were settled only on 02.12.2025, sought a mandamus for interest at 18% p.a. on the delayed payment. The Court held that an employer must settle retirement benefits without delay and that belated settlement must be compensated by way of interest, citing S.K. Dua v. State of Haryana, 2008 (3) SCC 44 (interest claimable even absent statutory rules, under Articles 14, 19 and 21 read with Part III), and a Division Bench common order dated 04.07.2014 in W.A.(MD)No.403 of 2010 et seq. fixing 6% per annum. Following that dictum, the Court directed payment of interest at 6% per annum from the date of retirement till the date of actual disbursement, within six months, and disposed of the writ petition with no costs.

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WP.(MD)No.638 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

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WP.(MD)No.638 of 2026

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X.Arul Xavier ... Petitioner

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Vs.

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The Management of Tamil Nadu State Transport Corporation (Tirunelveli) Ltd Nagercoil Region rep. by its General Manager Nagercoil. ... Respondent

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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 respondent to pay the petitioner interest at the rate of 18% p.a. from the period of delay from 01.08.2024 to 01.12.2025 in paying the amounts paid towards his terminal benefits, namely, EPF Employee's Contribution, Gratuity and Encashment of leaves/already surrendered Earned Leaves within a time frame fixed by this Court.

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For Petitioner : Mr.S.Arunachalam

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For Respondent : Mr.D.Jebaraj Standing Counsel

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

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WP.(MD)No.638 of 2026

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ORDER

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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 01.11.1992 and retired from service as Non-ITI Helper on 31.07.2024. However, the retirement benefits 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 dated 04.12.2025 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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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 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

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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

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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 (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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WP.(MD)No.638 of 2026

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8.Following the dictum laid down on this issue, the writ petition

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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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To The Management of Tamil Nadu State Transport Corporation (Tirunelveli) Ltd Nagercoil Region rep. by its General Manager Nagercoil.

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

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