Delayed payment of pensionary and retiral benefits attracts compound interest at prevailing GPF rates.

The applicant, a retired Mali (Group "C") of the MCD, filed an Original Application (OA) seeking a direction for the respondents to release all pension-cum-retirement benefits, including gratuity, commuted pension, 7th CPC arrears, DA arrears, bonus, and various allowances

The applicant further sought 12% annually compounded interest on these delayed payments

The respondents filed an additional affidavit admitting that arrears amounting to ₹6,56,832 and 7th CPC arrears of ₹61,236 remained unpaid due to a financial crisis within the MCD

1. Whether the applicant is entitled to the immediate release of unpaid retiral benefits and arrears

2. Whether the applicant is entitled to compound interest on the delayed payment of these dues in accordance with the Full Bench decision of the Tribunal

The Tribunal primarily applied the legal principle established by its Full Bench in Rajbir Singh v. Municipal Corporation of Delhi & Anr. (O.A. No. 2821/2023, decided on 30.10.2025).

This precedent mandates that delayed payments of GPF, pension, and gratuity attract interest at the compoundable GPF rates for the relevant years

The Tribunal noted the respondents' admission regarding the specific unpaid amounts and their willingness to release the dues along with interest, subject to the outcome of a pending challenge to the Rajbir Singh precedent in the Delhi High Court

The court applied the "Rule of Law" from the Full Bench decision to the "Facts" of the current case, concluding that financial hardship cited by the MCD does not absolve it from the obligation to pay retiral dues or the interest accrued on their delay

The Tribunal determined that since the applicant’s claims were identical to the issues resolved in Rajbir Singh, the applicant was entitled to the same relief of compound interest, regardless of the pending Writ Petition [W.P.(C) No. 19199/2025] unless and until that judgment is stayed or overturned

The court held that interest on these delayed payments must be calculated at compoundable GPF rates from the due date until the actual date of release

This direction regarding the payment and rate of interest is expressly made subject to the final outcome of the decision of the Hon’ble High Court of Delhi in W.P.(C) No. 19199/2025

No order was made as to costs