Delayed payment of retirement benefits attracts interest at six percent per annum.

The petitioner, a Conductor employed by the respondent Corporation from 28 February 1994, retired on 31 March 2025.

His retirement benefits were disbursed on 11 March 2026.

After his representation dated 2 September 2026 seeking interest for the delay received no response, he filed a writ petition seeking interest at 18% per annum on the delayed terminal benefits.

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

1. Whether the petitioner was entitled to interest on retirement benefits disbursed after his retirement.

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 recognised that an employee may claim interest on delayed retirement benefits under applicable statutory rules or administrative instructions and, even in their absence, may invoke Articles 14, 19 and 21 of the Constitution.

In W.A.(MD) No. 403 of 2010 and connected matters, decided on 4 July 2014, a Division Bench of the Madras High Court held that retirement benefits must be paid promptly and that the Corporation may be liable to pay interest for delay even without an express provision for interest in the applicable rules.

The Court applied a rate of 6% per annum to eligible retirement benefits paid belatedly.

The Court accepted that the petitioner’s retirement benefits had been paid belatedly and applied the principle that retirement benefits are not a bounty and should be settled promptly.

Following the Supreme Court’s recognition of a right to claim interest and the Division Bench’s approach to delayed payments by the Transport Corporation, the Court awarded interest.

It did not grant the 18% rate sought; instead, it followed the 6% rate applied in the cited Division Bench decision.

Payment was ordered within six months from receipt of a copy of the order.

No costs were awarded.