Delayed payment of retirement benefits entitles retirees to 6% annual interest.

The petitioner, a retired Special Grade Driver of the Tamil Nadu State Transport Corporation, retired on 30 April 2025. His retirement benefits were disbursed on 11 March 2026.

After his representation seeking interest for the delay received no response, he filed a writ petition under Article 226 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 on retirement benefits disbursed after a delay, despite the absence of an express provision for interest.

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; retiral benefits are not a bounty.

In W.A.(MD) No. 403 of 2010 and batch, common order dated 4 July 2014, a Division Bench of the Madras High Court held that the absence of a specific interest provision does not excuse delayed payment where the rules contemplate prompt settlement, and fixed interest at 6% per annum.

The Court found that the petitioner’s retirement benefits had been paid belatedly. Applying S.K. Dua and the Division Bench’s decision, it held that the employer must compensate an employee for delayed payment and that the absence of an express interest provision does not defeat the claim.

It therefore applied the 6% rate adopted by the Division Bench to the petitioner’s eligible retirement benefits.

The writ petition was disposed of with no order as to costs.