After 18-Month Benefits Delay, Madras HC Orders 6% Interest For Transport Retiree

In brief

The question

Whether the petitioner was entitled to interest on retirement benefits paid belatedly, despite the absence of an identified rule expressly providing for such interest.

The court held

The Court disposed of the writ petition and directed the respondents to pay interest at 6% per annum on the eligible retirement benefits disbursed belatedly, calculated from the petitioner’s retirement date until actual disbursement, within six months of receiving a copy of the order.

It also directed

No costs were awarded.

01Facts

The petitioner, a Special Grade Driver appointed by the respondent Transport Corporation on 29 March 1999, retired on 31 May 2024. His retirement benefits were disbursed on 2 December 2025.

pp. 2–3

After his representation seeking interest for the delay received no response, he filed a writ petition seeking interest at 6% per annum on the delayed benefits.

pp. 2–3

The respondents reported that the benefits had been paid on 2 December 2025.

p. 4

02Issues

i.Whether the petitioner was entitled to interest on retirement benefits paid belatedly, despite the absence of an identified rule expressly providing for such interest.

pp. 4–6

ii.If so, whether interest at 6% per annum should be paid from the date of retirement until actual disbursement.

pp. 5–7

03Law Applied

Under S.K. Dua v. State of Haryana, (2008) 3 SCC 44, an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions; even in their absence, such a claim may be founded on Articles 14, 19 and 21 of the Constitution. Retiral benefits are not a bounty.

pp. 4–5

The Court also relied on the Madras High Court Division Bench’s common order dated 4 July 2014 in W.A.(MD) No. 403 of 2010 and connected matters, which held that the absence of a specific pension-fund provision for interest does not excuse delayed payment and fixed interest at 6% per annum.

pp. 5–6

04Reasoning

The petitioner’s retirement benefits had been disbursed substantially after his retirement, and the respondents confirmed the delayed payment.

p. 2, 4

Applying S.K. Dua and the Division Bench ruling, the Court held that retirement benefits must be settled promptly and that delay must be compensated by interest, notwithstanding the absence of a specific provision for interest in the Pension Fund rules.

pp. 4–6

It therefore applied the established rate of 6% per annum to the eligible benefits paid late.

p. 7