WP/33785/2024 of R.PERIYASAMY Vs UNION OF INDIA on 26 October 2026

COMMON ORDER

The present Writ Petitions have been filed seeking issuance of a Writ of Mandamus, directing the respondents to pay interest at the rate of 9% per annum on the difference in Dearness Allowance payable to the petitioners from 10.02.2010 till the date of realisation, in terms of the directions issued by the Hon'ble Supreme Court of India in Union of India v. P.N. Natarajan, reported in (2010) 12 SCC 405.

2. The learned counsel appearing for the petitioners would submit that, under the Food Corporation of India Act, the petitioners are entitled to the IDA pay scale and terminal benefits. In this regard, a dispute arose between the Union of India and the employees of the Food Corporation of India, which was ultimately decided by the Hon'ble Supreme Court in P.N. Natarajan's case (cited supra). In the said judgment, the Hon'ble Supreme Court directed the Food Corporation of India to release the amounts payable to all the employees who had exercised their options in terms of Section 12-A(4)(a) and (b), read with Section 12-A (4-C) of the Food Corporation of India Act.

2.1. The learned counsel would further contend that, despite the direction issued by the Hon'ble Supreme Court, the respondents failed to settle the difference in Dearness Allowance within the stipulated period and disbursed the amount to the petitioners only on 28.11.2019. The Hon'ble Supreme Court had directed the respondents to settle the amount within a period of three months from the date of the judgment, namely, 10.02.2010. It was further directed that, in the event of delay in payment, the respondents would be liable to pay interest at the rate of 9% per annum. However, in the present case, the amount was settled only on 28.11.2019, much beyond the period stipulated by the Hon'ble Supreme Court. Therefore, the petitioners are entitled to interest at the rate of 9% per annum in terms of the directions issued by the Hon'ble Supreme Court.

3. Per contra, the said contentions were stoutly opposed by the learned Senior Panel Counsel appearing for the respondents and would submit that, immediately after the judgment of the Hon'ble Supreme Court, the respondents issued a notification dated 15.10.2010, calling upon similarly placed employees to submit their claims and representations. However, the petitioners did not submit any claim pursuant to the said notification. Subsequently, pursuant to the order passed by this Court in W.P.Nos.35827 of 2015 etc. batch, dated 01.10.2018, the respondents decided to settle the amounts payable to all similarly placed employees. Therefore, the delay in settling the amounts was not attributable to any fault on the part of the respondents but was occasioned by the petitioners' failure to exercise their option by submitting their claims in response to the notification dated 15.10.2010. Hence, the petitioners cannot claim interest by relying upon the judgment of the Hon'ble Supreme Court.

3.1. Alternatively, the learned Senior Panel Counsel would rely upon the judgment of the Division Bench of this Court in W.A.No.219 of 2020, wherein interest was directed to be paid only from 01.01.2016. Therefore, even if this Court were to conclude that the petitioners are entitled to interest, such interest ought to be restricted to the period commencing from 01.01.2016. Hence, he prayed for dismissal of the present Writ Petitions.

4. I have given my anxious consideration to the submissions made by the learned counsel appearing on either side.

5. There is no serious dispute with regard to the entitlement of the petitioners to the IDA pay scale in the Food Corporation of India. It is an admitted fact that, in P.N. Natarajan's case (cited supra), the Hon'ble Supreme Court held that any memorandum of settlement should not adversely affect the options exercised by the employees of the Food Corporation of India in terms of Section 12-A(4)(a) and (b), read with Section 12-A (4-C) of the Food Corporation of India Act. For ready reference, the relevant paragraphs of the judgment of the Hon'ble Supreme Court in P.N. Natarajan's case (cited supra)

are extracted hereunder:- “21. Even if the memorandum of settlement is held applicable to other employees of the Corporation, the same cannot adversely affect the option exercised by the private respondents in terms of Sections 12-A(4)(a) and (b) read with Section 12-A(4-C) of the Act. It has neither been suggested on behalf of the appellants nor can it be laid down as a proposition of law that the bipartite settlement arrived at between the Unions of the employees and the management of the Corporation could take away the right acquired by the respondents as a sequel to exercise of option in terms of Section 12-A(4)(b).

22. The judgment on which reliance has been placed by Shri Srivastava has no bearing on the issue raised in these appeals because in that case the Court was not called upon to decide whether the Central Government can pass an order or issue a directive adversely affecting the statutory option exercised by the employees.

23. In the result, the appeals are dismissed. Each of the private respondents shall get costs of Rs. 10,000 from the appellants.

24. Since the appeals have been dismissed, the authorities concerned are directed to release the amount payable to the respondents and other similarly situated persons within a period of three months from today, else they shall have to pay interest @ 9% per annum from the date of this order.”

6. According to the ratio laid down in the above judgment, the Hon'ble Supreme Court directed the respondents to settle the amounts payable not only to the petitioners therein but also to all similarly placed employees within a period of three months. In the present case, admittedly, the amounts payable to the petitioners were not disbursed within the period of three months stipulated by the Hon'ble Supreme Court. The amounts were ultimately disbursed to the petitioners only on 28.11.2019.

7. Though the petitioners seek interest in terms of the directions issued by the Hon'ble Supreme Court from May 2010, the learned Senior Panel Counsel appearing for the respondents has drawn the attention of this Court to the notification dated 15.10.2010, whereby the respondents called upon the employees who had opted for the IDA pay scale in the Food Corporation of India to submit their claims or representations. Relying upon the said notification, the learned Senior Panel Counsel would contend that, since the petitioners did not submit their claims, they are not entitled to interest.

8. The learned counsel for the petitioners would further submit that, subsequent to the judgment of the Hon'ble Supreme Court, a batch of Writ Petitions came to be filed before this Court in W.P.Nos.35827 of 2015 etc. batch. By an order dated 01.10.2018, the learned Single Judge extended the benefit to all similarly placed employees, irrespective of whether they had submitted any claim or representation. It was only pursuant to the said order that the respondents decided to disburse the amounts payable to all similarly placed employees. Therefore, the petitioners contend that their entitlement to interest cannot be defeated merely on the ground that they had not submitted individual claims or representations.

9. The point that arises for consideration is whether the petitioners are entitled to interest on the delayed payment and, if so, the period from which such interest is payable.

10. In the present case, as rightly contended by the learned counsel for the petitioners, the Hon'ble Supreme Court had directed the respondents to settle the amounts payable to all similarly placed employees within a period of three months. Admittedly, the amounts payable to the petitioners were not settled within the stipulated period. Though the learned Senior Panel Counsel relies upon the notification dated 15.10.2010, this Court is of the firm view that the mere issuance of a notification and the failure of the petitioners to submit their claims or representations would not, by themselves, nullify the directions issued by the Hon'ble Supreme Court. It is also not disputed by the respondents that the petitioners are similarly placed as the employees who were before the Hon'ble Supreme Court in the reported case and are entitled to the same benefits.

11. In view of the above factual position, this Court is of the considered opinion that the petitioners are entitled to interest at the rate of 9% per annum in terms of the directions issued by the Hon'ble Supreme Court. However, as rightly pointed out by the learned Senior Panel Counsel, in a subsequent order, this Court, taking into consideration the considerable delay and the need to safeguard the public exchequer against further financial burden, restricted the period for which interest was payable to the period commencing from 01.01.2016. The said order was subsequently affirmed by the Division Bench of this Court in W.A.No.219 of 2020, by judgment dated 13.02.2024. For ready reference, paragraph 4 of the said judgment is extracted hereunder:- “The only dispute is with regard to the date on which the appellant had made his claim. The learned Single Judge while dealing with the Writ Petition, had taken into account the representation made by the appellant and other persons before him, as to have been made in the year 2015 and therefore, the learned Single Judge had held that they would be entitled for interest only from 01.01.2016.”

12. In view of the directions issued by the Hon'ble Division Bench of this Court and the conclusion reached by this Court regarding the petitioners' entitlement to interest at the rate of 9% per annum, this Court deems it appropriate to dispose of the present Writ Petitions by directing the respondents to pay interest at the rate of 9% per annum on the amounts already disbursed to the petitioners towards the difference in Dearness Allowance, for the period commencing from 01.01.2016 till the date of it’s actual disbursement. The above exercise shall be completed within a period of eight weeks from the date of receipt of a copy of this order.

13. In the result, these Writ Petitions are disposed of with the above directions. No costs. 26-10-2026

Index: Yes Speaking order Neutral Citation: Yes KV To

1. Union of India Represented by its Secretary - Food Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, Krishi Bhawan, New Dlehi 110 001.

2. The Director (Police II and FC III) Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, Government of India, Krishi Bhawan, New Delhi 110 001.

3. The Regional Director (Food) South Zone Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, Government of India, Office of The Executive Director (South) Food Corporation of India Southern Region, No 3, Haddows Road, Chennai 600 006.

4. The Pay and Accounts Officer (Food), (South) Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, Shashtri Bhavan, Chennai 600 006.

C.KUMARAPPAN J. KV WP Nos. 33785 and 33790 of 2024 26-10-2026