Madras High Court
M.Chitrambalam vs The Managing Director on 8 March, 2021
W.P.No.5428 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 08.03.2021
CORAM
THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN
W.P.No.5428 of 2021
M.Chitrambalam ... Petitioner
-vs-
1. The Managing Director,
Tamil Nadu State Transport Corporation
(Villupuram) Ltd.,
Vazhuthareddy,
Villupuram - 605 602.
2. The General Manager,
Tamil Nadu State Transport Corporation
(Villupuram) Ltd.,
Kancheepuram Division,
Karaipettai,
Kancheepuram - 631 552.
3. The Administrator,
Tamil Nadu State Transport Corporation,
Employees Post Retirement Welfare Fund Scheme,
Thiruvalluvar House, Pallavan Salai,
Chennai - 600 002. ... Respondents
Writ Petition filed under Article 226 of Constitution of India praying
for the issuance of a Writ of Mandamus, directing the respondents to
pay the interest amount for delayed payment and as per the Wages
Settlement No.C1/036966/2017 dated 04.01.2018 to pay difference in
gratuity, difference in surrender leave amount and difference in
commutation amount with 9% interest per annum, as per the
petitioner's representation dated 11.03.2020.
For Petitioner : Mr.R.Anbalagan
For Respondents : Mr.C.S.K.Sathish
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W.P.No.5428 of 2021
ORDER
Petitioner herein, who retired from the services of the
Respondent Corporation on reaching the age of superannuation, has
come up with the above Writ Petition seeking a direction to the
respondents to pay interest amounts for delayed payment and as per
the Wages Settlement No.C1/036966/2017 dated 04.01.2018 to pay
difference in Gratuity, Surrender Leave Salary and Commutation of
Pension amount with 9% interest per annum, as per his representation
dated 11.03.2020.
2. Mr.C.S.K.Sathish, learned counsel takes notice on behalf of
the respondents. By consent of both parties, the writ petition is taken
up for final disposal at the admission stage itself.
3. It is an accepted position of law that, Gratuity and Pension
are not bounties. The concern expressed by the Hon'ble Supreme
Court that, retirement dues must be paid in time, is reflected in the
case of Dr.Uma Agarwal vs. State of U.P., reported in (1999) 3
SCC 438, relevant portion of which, reads as under:
“5.We have referred in sufficient detail to
the Rules and instructions which prescribe the
time-schedule for the various steps to be taken in
regard to the payment of pension and other retiral
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W.P.No.5428 of 2021
benefits. This we have done to remind the various
governmental departments of their duties in
initiating various steps at least two years in
advance of the date of retirement. If the
Rules/instructions are followed strictly, much
of the litigation can be avoided and retired
government servants will not feel harassed
because after all, grant of pension is not a
bounty but a right of the government servant.
The Government is obliged to follow the Rules
mentioned in the earlier part of this order in
letter and in spirit. Delay in settlement of
retiral benefits is frustrating and must be
avoided at all costs. Such delays are occurring
even in regard to family pensions for which
too there is a prescribed procedure. This is
indeed unfortunate. In cases where a retired
government servant claims interest for
delayed payment, the court can certainly
keep in mind the time-schedule prescribed in
the Rules/instructions apart from other
relevant factors applicable to each case."
4. To understand the need for timely payment of retirement
dues, it is appropriate to consider the time limit prescribed under
Section 4 of the Payment of Gratuity Act, 1972, which reads as under:
“4.Payment of gratuity:
(1) Gratuity shall be payable to an
employee on the termination of his employment
after he has rendered continuous service for not
less than five years,
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to
accident or disease;
Provided that the completion of continuous
service of five years shall not be necessary where
the termination of the employment of any
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W.P.No.5428 of 2021
employee is due to death or disablement:
Provided further that in the case of death of
the employee, gratuity payable to him shall be
paid to his nominee or, if no nomination has been
made, to the heirs.
Explanation.- For the purposes of this
section, disablement means such disablement as
incapacitates an employee for the work which he
was capable of performing before the accident or
disease resulting in such disablement.
(2) to (6) ....”
5. Rule 45-A of the Tamil Nadu Pension Rules, 1978
provides that, interest shall be payable on the belated payment
beyond a period of two months from the date of retirement of a
Government Servant.
6. A Division Bench of this Court in the case of Government
of Tamil Nadu vs. M.Deivasigamani, reported in 2009 (3) MLJ 01,
has held that, an employee is entitled to interest on belated payment
of pension and other retiral benefits, even in the absence of statutory
rules/administrative instructions or guidelines and that, he can claim
interest under Part III of the Constitution of India, relying on Articles
14, 19 and 21 of the Constitution of India.
7. In similar circumstances, the First Bench of this Court has
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W.P.No.5428 of 2021
rendered a judgment dated 12.06.2015 in W.A.(MD) Nos.383 to
457 of 2015, issuing direction to the Transport Corporation to settle
the terminal benefits of its employees in equal monthly instalments
and to pay 6% interest on the terminal benefits payable to the
employees.
8. Therefore, from the above decision, it is amply clear that,
belated payment of retirement benefits attract interest, which is to be
paid by the employer, beyond the period prescribed by the statutory
rules.
9. Coming to the cases on hand, learned counsel appearing
for the Respondent submitted that, the Respondent Corporation has to
satisfy the present working class as well as the retired employees with
the meagre amount allotted by the Government, on account of
shortage of funds and therefore, this Court may consider imposing a
lesser rate of interest on belated payment of retirement dues.
10. Taking note of the said submission and considering the fact
that, the entire world is shaken by the sudden impact of COVID-19
pandemic and that, there is financial crisis all over the world, this
Court has to see the balance of convenience of the parties in the
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W.P.No.5428 of 2021
interest of justice, as such abnoxious situation did not prevail when
the aforesaid judgment was passed by the Hon'ble Division Bench of
this Court.
11. Thus, in view of the above and following the judgments
passed by the Division Bench of this Court, this Court feels it
appropriate to issue the following directions:
(i) Respondent is directed to pay
interest @ 4% per annum to the Petitioner for
the belated payment of Gratuity, Surrender Leave
Salary and Commutation of Pension amount that
are yet to be settled, in twelve equal monthly
instalments, commencing 01.05.2021.
(ii) In case of delay in making instalments
within the time stipulated supra, with reference to
the judgment of the Division Bench of this Court
(supra), interest payable for the period of
delay shall be at 6% per annum.
12. It is made clear that, the aforesaid direction to pay
interest for the belated payment of terminal benefits will not preclude
the employees to question the computation of any of the terminal
benefits, if the same is paid less than the amount to which, he/she is
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W.P.No.5428 of 2021
entitled to receive and the retired employees will be entitled to claim
interest on the same at the rates, as held by the Division Bench of
this Court (supra).
The Writ Petition is disposed of accordingly. No costs.
08.03.2021
Index : Yes/No
Speaking Order : Yes/No
rsi
To:
1. The Managing Director,
Tamil Nadu State Transport Corporation
(Villupuram) Ltd.,
Vazhuthareddy,
Villupuram - 605 602.
2. The General Manager,
Tamil Nadu State Transport Corporation
(Villupuram) Ltd.,
Kancheepuram Division,
Karaipettai,
Kancheepuram - 631 552.
3. The Administrator,
Tamil Nadu State Transport Corporation,
Employees Post Retirement Welfare Fund Scheme,
Thiruvalluvar House, Pallavan Salai,
Chennai - 600 002.
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W.P.No.5428 of 2021
S.VAIDYANATHAN, J.
rsi
W.P.No.5428 of 2021
08.03.2021
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