Where Rule 45A of the Tamil Nadu Pension Rules, 1978 prescribes interest for belated settlement of DCRG, can a court grant a higher rate of interest by exercise of discretion?

Judgment (Judgment of the Court was delivered by S.M.Subramaniam J.) State preferred the present appeal under Clause XV of the Letters Patent challenging the writ order dated 20.08.2025 in W.P.No.31218 of 2025.

With the consent of the parties, the writ appeal is taken up for final hearing at the admission stage itself.

The respondent preferred a writ of Mandamus to disburse the Death- cum-Retirement Gratuity (In short 'DCRG') amounts due to her deceased husband Mr.K.Shanmugam. The husband of the respondent served as Forest Guard and retired from service on 31.05.2017. He died on 20.05.2024. There was an administrative delay in settling the DCRG. The delay in settlement of DCRG has not been denied by the State. However, the State would submit that there is no intentional delay on the part of the department. While authorising the payment of DCRG amount of Rs.2,44,294/-, it has been erroneously despatched by the Accountant General to the District Forest Officer, Nilgiris North Division under whom the pensioner never served. Since authorisation was given to an incompetent authority, the authorisation was sent back to the Accountant General of Tamil Nadu for revised sanction, who passed an order in the name of appropriate authority. On account the said administrative delay, DCRG was not settled within a period of two months as mandated under Rule 45A of the Tamil Nadu Pension Rules, 1978. However, the State settled the DCRG along with interest as per Rule 45A of the Tamil Nadu Pension Rules.

Learned counsel for the respondent would oppose by stating that the Writ Court granted 18% interest for the delayed settlement. Thus, the respondent is entitled for the said interest. There was enormous delay in settling the DCRG due to a mistake committed by the Department and therefore, the respondent shall be paid 18% interest. In support of his contention, he relied on the judgment of the Hon’ble Supreme Court in the case of D.D.Tewari (Dead) Through Legal Representatives -vs- Uttar Haryana Bijli Vitran Nigam Limited and Others reported in (2014) 8 SCC 894, wherein the Supreme Court has granted interest at the rate of 18% per annum from the date the amount falls due to the deceased employee. Relying on the said judgment, the learned counsel for the respondent would submit that the Writ Court has rightly granted 18% interest, which is to be settled in favour of the respondent.

This Court considered the rival submissions made on behalf of the parties to the lis.

Admittedly, there was a delay in settling the DCRG in favour of the legal heirs of the deceased employee. The delay occurred on account of the fact that the original authorisation was forwarded to an incompetent authority. Thus, the authorisation was returned back to the Accountant General for issuance of correct order. Fresh orders were issued thereafter, which resulted in causing delay in settling the DCRG in favour of the respondent. However, the Government admitted the fact that as per Rule 45A of Tamil Nadu Pension Rules, the respondent is entitled for interest for belated settlement of DCRG. They have issued G.O.(D) No.75, Environment, Climate Change and Forests (FR.2(i) Department) dated 13.04.2026, wherein the DCRG due to the deceased employee along with the interest from the date of retirement is calculated and settled in favour of the respondent.

Regarding the claim of the respondent for grant of interest at 18%, this Court is of the considered view that the facts dealt with by the Apex Court in the case of D.D.Tewari (Dead) Through Legal Representatives -vs- Uttar Haryana Bijli Vitran Nigam Limited and Others reported in (2014) 8 SCC 894 cited supra, cannot be relied on in the present case. In the said case, the Supreme Court has considered the issues in a broader way and in the present case, Rule 45A of the Tamil Nadu Pension Rules, 1978 in clear terms stipulates that a retired employee is entitled for interest for belated settlement of DCRG. When there is a specific provision for payment of interest for belated settlement of DCRG. The said interest alone is to be paid to the pensioner. The High Court enhancing the interest by exercise of its discretion would result in financial loss to the State Exchequer and it will open a pandora’s box, wherein many such pensioners may claim interest at 18%. When the Statute contemplates a particular interest rate for belated settlement of DCRG, the said interest alone is to be granted by the Courts in order to maintain consistency in payment of interest for delayed settlement of DCRG. Therefore, granting by exercise of discretion by the High Court is not desirable and in a case where there is delay in settling the DCRG, the Government Department is bound to pay interest as admissible under the relevant provisions of the Act or under Section 45A of the Tamil Nadu Pension Rules, 1978, as the case may be.

In view of the above factual and legal position, grant of 18% interest by the Writ Court from the date of retirement till the date of payment alone is set aside. In respect of the settlement of DCRG, payment of interest as admissible under Rule 45A of the Tamil Nadu Pension Rules is concerned, the Government has already settled the same in favour of the same vide G.O. (D) No.75, Environment, Climate Change and Forests (FR.2(i) Department) dated 13.04.2026. With the above observations, the writ appeal is partly allowed. No costs. Consequently, connected miscellaneous petition is closed. (S.M.S.,J.) (N.S.,J.) 22-07-2026 Index: Yes Speaking order Neutral Citation: Yes KST To

The Accountant General Of Tamil Nadu Office Of The Accountant General, Anna Salai, Teynampet, Chennai-600 018

The Treasury Officer Sub-Treasury, Tirupattur, Tirupattur District. S.M.SUBRAMANIAM J. AND N.SENTHILKUMAR J. KST AND CMP NO. 17529 OF 2026 22-07-2026