Pay 6% interest for late leave encashment: Karnataka HC to Road Transport Corporation
BENGALURU: The Karnataka High Court directed the North West Karnataka Road Transport Corporation to pay 6 percent interest per annum on the delayed payment of leave encashment for retired employees within 12 weeks.
The petitioners have all been granted leave encashment with a certain delay ranging from 10 to 25 months. They moved the court seeking directions to pay interest on the delayed payment.
Allowing in part a batch of petitions filed by Yallappa and several others, Justice M Nagaprasanna passed the order. The court noted that in the event the Corporation would not pay the said amount within 12 weeks, the petitioners would become entitled to interest at 9 percent per annum, from the date the payment fell due till the date of its payment.
Referring to the financial crisis being faced by the corporation after Covid-19 and also the interest sought by the petitioners, the court noted that a balance must be struck between the right of employees to be compensated for delay and the financial realities confronting a public corporation sustained by public funds.