Belated retirement benefits warrant 6% annual interest, even absent an express rule.

The petitioner, a Special Grade Driver, retired from the respondent Transport Corporation on 30 June 2025.

His retirement benefits were paid on 11 March 2026. After his representation seeking interest for the delay received no response, he filed a writ petition seeking interest at 6% per annum from retirement until payment.

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

1. Whether the petitioner was entitled to interest for the belated payment of his retirement benefits.

2. If so, what rate and period of interest should apply.

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court held that an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions and, even in their absence, may invoke Articles 14, 19 and 21 of the Constitution.

The Court also relied on the Division Bench decision in W.A.(MD) No. 403 of 2010 and connected cases, dated 4 July 2014, which held that an employer must pay interest when retirement benefits are delayed, notwithstanding the absence of an express provision for interest.

The applicable rate in that decision was 6% per annum.

The retirement benefits were paid after the petitioner’s retirement, and the Court applied the principle that such benefits must be settled promptly and that delay should be compensated by interest.

Following the Supreme Court’s reasoning in S.K. Dua and the Madras High Court Division Bench’s determination of a 6% rate in similar cases, the Court found the petitioner entitled to interest on the eligible benefits for the period of delay.

The Court disposed of the writ petition and ordered payment within six months from receipt of a copy of the order; no costs were awarded.