Tamil Nadu: Battle over, transport pensioners to get Rs 3,637 crore DA arrears in 49 instalments

CHENNAI: After a protracted legal battle over the denial of Dearness Allowance (DA) hikes, around 98,000 pensioners and family pensioners of State Transport Undertakings have finally got relief they were waiting for, with the Tamil Nadu government sanctioning the settlement of Rs 3,637 crore in DA arrears.

The Transport Department issued the order on August 31, providing for payment of the arrears in 49 monthly instalments. The first 48 instalments will be Rs 75 crore each, while the balance Rs 37 crore will be paid in the 49th and final instalment.

The move follows a long-running dispute in which pensioners of transport corporations had protested against the denial of DA hikes that were extended to other government employees and employees of public sector undertakings, including TNPDCL, TNPGCL, and Tantransco. The issue continued through successive AIADMK and DMK governments before reaching the courts.

In March 2023, the Madurai Bench of the Madras High Court ruled that retired employees of State Transport Corporations were entitled to DA at the rate applicable to serving employees. It directed the authorities to calculate the pension arrears and settle the benefits.

However, the legal battle continued even after that, with writ appeals, special leave petitions, review applications, review petitions, and a curative petition arising from the proceedings, all of which were dismissed.
The government had initially proposed settling the estimated Rs 3,637 crore arrears in 60 monthly instalments of around Rs 60.62 crore each.

During contempt proceedings on August 14, however, the High Court directed that the settlement be made at Rs 75 crore per month. The government subsequently gave an undertaking to pay Rs 75 crore in 48 monthly instalments and the remaining Rs 37 crore in the 49th instalment.

The High Court took note of the undertaking on August 21 and closed the contempt petitions and related applications.

As per the Government Order, the managing directors of all State Transport Undertakings, in coordination with the TNSTC Employees' Pension Fund Trust, will arrange for the release of the instalments from available resources. Where necessary, the undertakings can avail loans from the government or through the Tamil Nadu Transport Development Finance Corporation Ltd (TNTDFC).

The government has also said that financial assistance facilitated for the purpose may be adjusted against subsidies or viability gap funding payable to the respective transport undertaking.

The Pension Fund Trust will verify the entitlement of individual pensioners and family pensioners, ensure audit and verification of claims before payment, and submit monthly details of beneficiaries and amounts disbursed before the subsequent instalment is released.

The government said the phased settlement was decided considering the financial position of the STUs and the pension fund trust, fiscal constraints, and the larger public interest.