Delayed payment of retirement benefits warrants interest at six per cent per annum.

The petitioner, a retired Checking Inspector of the Tamil Nadu State Transport Corporation, retired on 30 April 2025. His retirement benefits were paid 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 Corporation confirmed that the benefits had been paid on 11 March 2026.

Whether the petitioner was entitled to interest on retirement benefits paid after a delay

Whether interest should be paid at 6% per annum and, if so, for what period

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court observed that an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions; even in their absence, such a claim may be made under Part III of the Constitution, relying on Articles 14, 19 and 21.

Applying that principle, a Division Bench of the Madras High Court in W.A.(MD) No. 403 of 2010 and connected matters (common order dated 4 July 2014) held that delayed payment of retirement benefits could attract interest at 6% per annum, notwithstanding the absence of a specific interest provision in the pension fund rules.

The Court treated the retirement benefits as payable promptly and held that delay in payment should be compensated by interest.

Relying on S.K. Dua and the Division Bench’s decision fixing interest at 6%, it applied that rate to the petitioner’s benefits, which had been disbursed belatedly. The Court directed that interest run from the day after retirement, 1 May 2025, until actual disbursement.

No costs were awarded.