Karnataka High Court
Sri Umesh S/O Mahadevbhat Airsangh vs The Management Of Nwkrtc on 10 February, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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WP No. 100432 of 2025
C/W WP No. 100427 of 2025
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 10TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO.100432 OF 2025 (S-KSRTC)
C/W. WRIT PETITION NO. 100427 OF 2025
IN W.P.NO.100432/2025:
BETWEEN:
SRI SUBHAS S/O. TIRAKAPPA MULE,
AGE: 63 YEARS,
OCCUPATION: RETIRED
TECHNICAL ASSISTANT,
R/O: H NO 67 R M LOHIYA NAGAR,
GOKUL ROAD, HUBBALLI 580 030.
TALUK: HUBBALLINAGAR,
DIST: DHARWAD.
...PETITIONER
(BY SRI RAVI HEGDE, ADVOCATE)
Digitally signed by
VISHAL NINGAPPA
PATTIHAL
Location: High
Court of Karnataka,
AND:
Dharwad Bench,
Dharwad
THE MANAGEMENT OF NWKRTC,
REGIONAL WORK SHOP,
REPRESENTED BY ITS WORK
MANAGER GOKUL ROAD,
HUBBALLI,
DIST: DHARWAD - 580 030.
...RESPONDENT
(BY SRI PRASHANT HOSAMANI, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO, WRIT OF
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WP No. 100432 of 2025
C/W WP No. 100427 of 2025
MANDAMUS IN POSITIVE NATURE, DIRECTING THE
RESPONDENT TO PAY THE INTEREST AT 12% P.A. ON THE
BELATED PAYMENT OF LEAVE ENCASHMENT BENEFIT, BY FIXING
OUTER LIMIT AND ETC.,
IN W.P.NO.100427/2025:
BETWEEN:
SRI UMESH
S/O. MAHADEVBHAT AIRSANGH,
AGE: 63 YEARS,
OCCUPATION: RETIRED CONDUCTOR,
R/O: DESHPANDENAGAR,
HUBBALLI - 580 029,
TALUK: HUBBALLI,
DIST: DHARWAD.
...PETITIONER
(BY SRI RAVI HEGDE, ADVOCATE)
AND:
THE MANAGEMENT OF NWKRTC,
HUBBALLI RURAL DIVISION,
REPRESENTED BY ITS DIVISIONAL
CONTROLLER, 4TH FLOOR CITY BUS TERMINAL,
C.B.T. HUBBALLI - 580 020,
TQ: HUBBALLINAGAR,
DIST: DARWAD.
...RESPONDENT
(BY SRI PRASHANT HOSAMANI, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO, WRIT OF
MANDAMUS IN POSITIVE NATURE, DIRECTING THE
RESPONDENT TO PAY THE INTEREST AT 12% P.A. ON THE
BELATED PAYMENT OF LEAVE ENCASHMENT BENEFIT, BY FIXING
OUTER LIMIT, AND ETC.,
THESE WRIT PETITIONS, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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WP No. 100432 of 2025
C/W WP No. 100427 of 2025
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)
1. The petitioner in both these petitions are before
this Court seeking a direction by issuance of a writ in the
nature of mandamus directing the respondents to pay
interest at 12% p.a. on the delayed payment of terminal
benefits, which were leave encashment.
2. Learned counsel for the petitioners submits that
the Coordinate Benches of this Court had passed the orders
directing payment of 6% p.a. and 9% p.a. to be the interest
on delayed payment. Therefore, it would suffice for this
Court to quote those orders and pass necessary orders qua
the prayers of the present petitioners. The Coordinate
Bench in Writ Petition No.101519/2024 and connected
cases, disposed on 24th June 2024 has held as follows:
"7. Learned counsel relies upon the following
judgments:
1) The Hon'ble Apex Court in
the case of Vijay L Mehrotra Vs.
State of U.P. and Others reported in
2000 II LLJ 253,
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2) The Co-ordinate Bench of this
Court in the case of Bhalachandra
Krishnaji Kale Vs. Karnataka
State Road Transport Corporation
and Others reported in 1999 (81)
Karnataka High Court 330.
3) The Division Bench of this
Court in the case of Shankaragouda
Vs. The President and Others in
W.A.No.100420/2023 (S-R) dated
07.12.2022.
8. Thus, relying upon the aforesaid
judgments, learned counsel for the petitioners
submits that the respondent-corporation be directed
to pay the interest on delayed payment of amount
towards leave encashment.
9. In response, learned counsel for the
respondent-corporation submits that the delay in
payment of amount was on account of intervening
Covid-19 pandemic period. He submits that most of
the petitioners retired in and around the Covid-19
pandemic period when there was nation-wide lock
down and the respondent- corporation was also
undergoing financial constraints. Therefore, he
submits that though the respondent- corporation has
manage to pay the leave encashment amount, the
delay in payment of the same was for bona-fide and
justifiable reason which has to be kept in mind while
interest being claimed by the petitioners.
10. Learned counsel for the respondent-
corporation relies upon the Government Order No.AE
211 PEN 2021, Bengaluru dated 22.02.2022 passed
by the State Government providing revision payment
of interest on the delayed payment of Dearness
allowance, gratuity and the leave encashment. He
submits that by virtue of the said Government Order
the interest that was payable on the delayed
payment of the aforesaid amount at 8% per annum
has been revised and reduced to 5.4%. Thus, he
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submits that in the instant case as well the interest
be paid at 5.4% per annum, instead of 12% per
annum as claimed.
11. Heard and perused the records.
12. Since there is no dispute with regard to the
entitlement of the petitioners for amounts towards leave
encashment and also there is no dispute that the
respondent-corporation having been paid the leave
encashment amount, the only issue require to be considered
is the claim of the petitioners for payment of interest at the
rate of 12% per annum for delayed payment.
13. As already noted above, admittedly there
is delay in payment of leave encashment amount to
the petitioners which even according to the circular
issued by the respondent-corporation in the year
1998 ought to have been paid on the date of
retirement. The judgments relied upon by the
counsel for the petitioners consistently hold that the
employer is liable to pay interest on the amounts
payable to the employees on their retirement and the
said judgments also specifically refer to the liability
to pay the interest on the delayed payment of leave
encashment amount.
14. Learned counsel for the petitioner insist
that in the case of Vijay L Mehrotra (supra), the
Hon'ble Apex Court has awarded interest at the rate
of 18% and in the case of Bhalachandra Krishnaji
Kale (supra), the Co- ordinate Bench of this Court
has awarded interest at the rate of 14% and in the
case of Shankaragouda (supra), the Division Bench
of this Court has awarded interest at the rate of 9%.
Therefore, he submits that the interest payable is to
be considered on these lines.
15. There is no dispute of the fact that
though the petitioners are entitle for the payment of
interest, there is no specific provision provided with
regard to rate of interest. The aforesaid judgments
also do not refer to any provision based on which
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these interest rates at 18%, 14% and 9% have been
fixed and paid. The Government Order relied upon by
the learned counsel for the respondent-corporation
refers to revision of interest rate from 8% and 5.4%
payable on the delayed payment of retirement
benefits.
16. The reasons assigned by the learned
counsel for the respondent-corporation for delayed
payment also should be born in mind which is Covid-
19 pandemic period where there was nation - wide
lockdown. The said reason appears to be acceptable
and in the light of the Government Order referred to
above, this Court is inclined to accept the submission
made by the learned counsel for the respondent-
corporation with regard to rate of interest.
17. This Court is therefore of the considered
view that the respondent-corporation be directed to
pay the interest at the rate of 6% per annum for the
delayed period of payment of leave encashment
amount.
18. It is made clear that the respondent-
corporation shall pay the said interest at 6% per
annum within a period of eight week from the date of
receipt of certified copy of this order.
19. It is further made clear that if in the
event of any further delay on the part of respondent-
corporation in paying the interest as directed above,
in such an event respondent-corporation shall be
liable to pay interest at the rate of 9% instead of 6%
per annum for the delayed period."
3. The Coordinate Bench directs payment of 6%
p.a. interest on delayed payment on terminal benefits which
was leave encashment in the said case as well. In the
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subsequent judgment, another Coordinate Bench in Writ
Petition No.107292/2024 had passed the following order:
"12. I have given my thoughtful consideration
to the submissions put forth by learned counsel for
both parties. This Court is concerned with only the
interest for the delayed payment of leave
encashment benefit whether the interest has to be
paid at 14% per annum as sought for by the
petitioner in the petition and whether it requires to
be reduced to 6% per annum as awarded by the Co-
ordinate Bench of this Court and 9% per annum as
awarded by the Co-ordinate Bench of this Court in
other petition hereinabove stated supra. Two Co-
ordinate Bench judgments have held 9% per
annum in the earlier judgment in
W.P.No.100157/2024 and 6% per annum in the case
of W.P.No.101519/2024 and connected matters in
the later judgment of my esteemed brother, the
interest component came to be reduced to 6% per
annum based on the Government circular and
considering the submissions with regard to COVID-
2019 pandemic and financial crunch and constraint.
However, in the said judgment it was ordered that
interest to be paid at 6% per annum within a period
of eight weeks, failing which the interest would be
incurred at 9% per annum for the delayed period. It
is now brought to the notice of this Court that the
said order has not been complied by the respondents
and interest at the rate of 6% per annum has not
been paid, thereby the interest would now have to
be paid at 9% per annum.
13. The aspect of interest on the delayed
payment has been a subject matter which has
been discussed way back by the Hon'ble Apex
Court in the case of State of Kerala vs.
M.Padmanabhan Nair by the Hon'ble Apex
Court on 17.12.1984, whereby the interest was
awarded at 12% per annum and that was also on
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the leave encashment and on retiremental benefits
and pension benefits. The Hon'ble Apex Court in
the case of Sashilata Verma vs. State of Bihar
and others, reported in (2005) 12 SC 197, dealt
with a similar matter with regard to interest on
delayed payment on leave encashment benefit. While
dealing with the same, the Hon'ble Apex Court
ordered 12% interest on the delayed payment of
amount on leave encashment to be paid
subsequently. In another judgment reported in the
case of Jagdish Prasad Saini and others vs.
State of Rajasthan and others, reported in
2022 SCC Online 1298, the Hon'ble Apex Court
dealing with a similar situation, on interest on the
delayed payment of leave encashment benefit
ordered 10% interest from the date of their
entitlement till the date of payment.
14. Therefore, in my humble opinion the
leave encashment or terminal benefits or pensionary
benefits are the amount which is the legally entitled
amount of the employee which ought to have been
released and disbursed as on date of the retirement
and if there is any delayed payment, the same
having remained with the respondent corporation
and having earned interest which had accrued to the
interest of the respondent-corporation, necessarily
should go to the benefit of the employee and cannot
be denied to the petitioner/employee. Under the
circumstances, keeping in mind the judgment
rendered by my esteemed brother, stated supra and
judgments of a Co-ordinate Bench of this Court, it
would be in the interest of the party, namely the
petitioner to be legally entitled to a reasonable
interest stipulated hereinabove by the Hon'ble Apex
Court.
15. Coming to the aspect of the ground
urged by learned counsel for respondent-corporation
with regard to COVID-2019 pandemic and the
financial crunch, I am of the opinion that the
COVID-2019 pandemic came to an end in the early
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2022. We are in the end of 2024. Therefore there
was no harm or restraint or constraint for the
respondent- corporation to have paid the interest for
the delayed period towards leave encashment
pursuant to the year 2022. Admittedly, in this case
interest is not paid, so also in the judgment rendered
by the Co-ordinate Bench of this Court, wherein the
benefit was given to the petitioner by reducing
interest to 6% per annum, taking into
consideration the order of the State Government on
the basis of COVID-2019 pandemic, has also not
been availed and made use of by the respondent
corporation.
16. It is also relevant to mention that even
after the petitioner having made a representation to
the respondent corporation on 11.11.2024, interest
on belated leave encashment has not been paid, be it
whatever percentage, which by itself shows the
conduct and intent of the respondent corporation.
Under the circumstances, having not availed the
benefit which was granted by the Co-ordinate Bench
of this Court, I do not find any need to extend the
same benefit to the respondent-corporation. Under
the circumstances, I pass the following:
ORDER
i) The petition is partly allowed.
ii) A writ of mandamus is issued
directing the respondent-
corporation to pay interest at the
rate of 9% per annum on the
belated payment towards leave
encashment benefit on the basis of
the representation submitted by
the petitioner from the date of
retirement till the actual date of
payment made by the respondent
corporation.
iii) This amount shall be paid within a
period of eight weeks from the
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date of receipt of a copy of this
order.
iv) If the said amount is not paid
within a period of eight weeks at
the rate of 9% per annum, the
interest would have to be paid at
12% per annum thereafter."
4. The Coordinate Bench in Writ Petition
No.101519/2024 and connected cases directs payment of
6% p.a. as interest towards delayed payment of leave
encashment. The subsequent Coordinate Bench in W.P.
No.107292/2024 noticing the fact that, the Corporation is
not even paid the said amount imposes 9% p.a. interest.
Therefore, learned counsel for the petitioners submits that
the interest in the cases at hand should be at 12% p.a.
5. In the light of the order passed by the
Coordinate Bench granting interest at 9% p.a., I deem it
appropriate to follow the suit, the petitions deserve to
succeed with the following directions:
(i) Interest on delayed payment at 9% p.a. be
paid to the present petitioners in both these
cases from the date it fell due till the date
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of payment within eight weeks from the
date of receipt of a copy of this order.
(ii) In the event the Corporation would not pay
the amount within eight weeks from the
date of receipt of a copy of this order, the
petitioners would become entitled to
interest at 12% p.a. from the date it fell
due till the date of payment.
(iii) Even then, if the Corporation would not
comply with the order of 12% p.a., the
interest would be at 18% p.a. from the
date it fell due till the date of payment
apart from Rs.1,000/- as cost, day on day
basis till the interest reaches the doors of
the petitioners in both the cases.
Ordered accordingly.
Sd/-
(M.NAGAPRASANNA)
JUDGE
VNP/CT-ASC
