Madras High Court· 22 July 2026

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?

5. Gudalur Forest Division, Gudalur, The Nilgiris District, Sub-Treasury, Tirupattur, Tirupattur District v. Page 1 of 8

2026:MHC:3072 · WA No. 2018 of 2026
Coram: Justice S.M.Subramaniam · Justice N.Senthilkumar

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Answer

No. Rule 45A of the Tamil Nadu Pension Rules, 1978 in clear terms stipulates that a retired employee is entitled to interest for belated settlement of DCRG, and when a specific provision fixes the rate, that interest alone is to be paid to the pensioner; the High Court enhancing it by exercise of discretion would cause financial loss to the State Exchequer and open a pandora's box of similar claims, so the statutory rate alone is to be granted to maintain consistency.

Headnote

Tamil Nadu Pension Rules, 1978 — Rule 45A — Death-cum-Retirement Gratuity — Interest for belated settlement — Tamil Nadu Pension Rules, 1978 — Rule 45A — Statutory rate of interest — No judicial discretion to enhance — Held: Where Rule 45A of the Tamil Nadu Pension Rules, 1978 stipulates a specific rate of interest for belated settlement of DCRG, that rate alone is payable to the pensioner, and the High Court cannot enhance it by exercise of discretion. (¶7) Tamil Nadu Pension Rules, 1978 — Rule 45A — DCRG delay — Financial implications of judicial enhancement — Held further: Enhancement of the statutory interest rate by the High Court would cause financial loss to the State Exchequer and open the door to similar claims by other pensioners, undermining consistency in payment of interest for delayed DCRG settlement. (¶7) Tamil Nadu Pension Rules, 1978 — Rule 45A — Distinguishing precedent — Applicability of D.D.Tewari — Held further: The ruling in D.D.Tewari (Dead) v. Uttar Haryana Bijli Vitran Nigam Limited, (2014) 8 SCC 894, granting 18% interest, considered the issue in a broader context and cannot be relied upon where a specific statutory provision like Rule 45A governs the rate of interest for delayed DCRG settlement; the Writ Court's grant of 18% interest is set aside, and the writ appeal is partly allowed. (¶7, 8)

In the Court's own words

Paragraph 7Regarding 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.

Acts & Sections

Rule 45A, Tamil Nadu Pension Rules, 1978

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Also decided in this judgment

Does the ruling in D.D.Tewari (Dead) v. Uttar Haryana Bijli Vitran Nigam Limited, (2014) 8 SCC 894, granting 18% interest, apply where a specific statutory provision governs the interest rate for delayed DCRG settlement?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections