Delayed Payment of Retiral Dues Entitles Interest at GPF Rate.

The applicant, Jaipal, retired from service on May 31, 2020, upon attaining the age of superannuation.

He filed an Original Application seeking the release of various retiral dues, including gratuity, commuted pension, arrears of 7th CPC (Central Pay Commission), arrears of III MACP (Modified Assured Career Progression), bonus, DA (Dearness Allowance) arrears, and interest on delayed payments.

The respondents, Municipal Corporation of Delhi, admitted to making some payments in a piecemeal manner and with delays.

For instance, retirement gratuity was paid on October 11, 2024, and pension commutation on January 22, 2024.

Some amounts, like Bonus 2019-20 (Rs. 6,908) and MACP Arrear (Rs. 55,471), had bills passed but were awaiting fund availability.

The respondents referred to a previous decision in O.A. No. 2821/2023, Rajbir Singh vs. MCD & Ors., decided on October 30, 2025, which addressed interest on delayed payments.

Whether the applicant is entitled to the release of outstanding retiral dues, including arrears of 7th CPC, III MACP, balance increment, bonus, DA arrears, and various other components.

Whether the applicant is entitled to interest on the delayed payment of retiral dues from the date of superannuation until actual payment.

The court's primary rule of law was derived from its own Full Bench decision in O.A. No. 2821/2023, Rajbir Singh vs. MCD & Ors., decided on October 30, 2025.

This precedent established that interest would be payable at the GPF (General Provident Fund) rate for the relevant years on delayed payments of GPF, pension, gratuity, and similar amounts.

It clarified that such interest should be calculated on a compound interest basis.

The Rajbir Singh decision also distinguished itself from D. Khosla and Company vs. Union of India (Special Leave Petition (Civil) No. 812 of 2014), stating that the latter, which concerned contractual agreements, was not applicable to service matters where Rule 65 specifically provides for interest on delayed payment based on the GPF rate.

The court recognized that the applicant's retiral dues were not released on time and were made in a piecemeal manner, leading to a deprivation of legitimate dues for a considerable period.

The detailed submissions by the respondents confirmed that certain payments were made significantly after the retirement date of May 31, 2020, and some were still pending.

The court explicitly stated that the due date for the grant of interest would be the date of superannuation, as it is a well-settled principle of law.

Leveraging the precedent set by the Full Bench in Rajbir Singh (supra), the court determined that the applicant was entitled to interest on the delayed payments at the GPF rate, to be calculated on a compound interest basis.

This application of the Rajbir Singh ruling, which specifically addresses delayed payments in service matters, provided the legal framework for resolving the applicant's claim for interest.

The respondents were directed to ensure that all admissible payments, if not already released, be released within two months from the date of receipt of the certified copy of the Order.

For any inadmissible payment, a separate speaking order must be passed.

The applicant is entitled to interest on the delayed payments in terms of the decision rendered in O.A. No. 2821/2023, Rajbir Singh vs. MCD & Ors., decided on October 30, 2025, subject to the final outcome of proceedings pending before the Hon'ble High Court of Delhi in that matter.

There was no order as to costs.