Delayed payment of retiral benefits attracts compound interest at rates applicable to General Provident Fund.

The applicant, a Group A employee, retired from the Municipal Corporation of Delhi (MCD) on May 31, 2020, after joining service in 1989

Following her retirement, the respondents failed to release her pensionary benefits and arrears of pay in a timely manner, prompting multiple representations between 2021 and 2025

The respondents filed a counter-affidavit on April 12, 2026, admitting that payments for Gratuity and Pension Commutation were delayed until late 2023 and 2024, and that certain dues regarding the 3rd MACP and Bonus (2019-20) remained unpaid

The respondents cited "financial difficulty" and stringency as the primary reasons for the delay in disbursing these statutory dues

1. Whether the applicant is entitled to interest on the delayed disbursement of Gratuity, Pension Commutation, and 7th CPC arrears

2. Whether the respondents are liable to pay the remaining unpaid dues regarding MACP and Bonus

The Tribunal primarily relied on the precedent set by the Full Bench of the Central Administrative Tribunal in Rajbir Singh v. MCD and Ors. (OA No. 2821/2023, decided on 30.10.2025)

The rule established in Rajbir Singh dictates that interest is payable on the delayed payment of GPF, Pension, and Gratuity at the prevailing GPF rate for the relevant years, calculated on a compound interest basis

This rule is currently subject to the outcome of WP (C) No. 19558/2025 pending before the Hon’ble Delhi High Court

The Tribunal observed that the respondents did not dispute the applicant’s claims or the fact that payments were delayed; rather, they sought to justify the delay through a plea of financial stringency

Applying the rule from the Rajbir Singh Full Bench decision, the Tribunal found that financial difficulty does not exempt the state from its obligation to pay interest on delayed retiral benefits

Since the facts of the present case regarding delayed statutory payments are identical to those in the cited precedent, the Tribunal held that the applicant is legally entitled to interest

The Tribunal noted the pending litigation in the Delhi High Court regarding the same principle and determined that the relief should be granted subject to the High Court’s final observations

the respondents were directed to pay interest on the delayed payments in accordance with the formula established in Rajbir Singh v. MCD and Ors. (GPF rates/compound interest), with the caveat that such interest payment is subject to the final outcome of WP (C) No. 19558/2025 before the Hon’ble Delhi High Court

No costs were awarded