Belated payment of retirement benefits attracts interest at 6% per annum.

The petitioner, a retired Special Grade Conductor of the Tamil Nadu State Transport Corporation, retired on 30 June 2025.

His retirement benefits were disbursed on 11 March 2026.

After his representation seeking interest for the delay received no response, he filed a writ petition under Article 226 seeking interest at 6% per annum from retirement until payment.

The respondents reported that the benefits had been paid on 11 March 2026.

Whether the petitioner was entitled to interest for the belated disbursement of his eligible retirement benefits

If so, whether interest at 6% per annum should be directed, and for what period

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court held that an employee may claim interest on delayed retirement benefits under applicable statutory rules or administrative directions, and that such a claim may also be founded on Articles 14, 19 and 21 of the Constitution even where no such rules or directions exist.

Following that principle, a Division Bench of the Madras High Court in W.A.(MD) No. 403 of 2010 and connected cases held that the absence of an express interest provision in the Transport Corporation Employees Pension Fund rules does not excuse delayed payment; where the rules contemplate prompt payment, the Corporation remains obliged to compensate for delay.

The Court accepted that the petitioner’s retirement benefits had been paid only on 11 March 2026, after his retirement on 30 June 2025.

Applying S.K. Dua and the Division Bench’s ruling on delayed Transport Corporation retirement benefits, it held that delay in paying eligible benefits warrants compensation by way of interest, notwithstanding the absence of an express interest provision in the Pension Fund rules.

It therefore adopted the 6% rate applied in the related Division Bench decision.

Payment was ordered within six months of receipt of a copy of the order; no costs were awarded.