Delayed retiral benefits attract compound interest at GPF rates from the due date until actual payment.

The applicant, a retired Mali from the Municipal Corporation of Delhi (MCD), filed an Original Application under Section 19 of the Administrative Tribunals Act, 1985

He sought directions for the release of all pension-cum-retirement benefits, including gratuity, commuted pension, 7th CPC arrears, MACP scheme benefits, and various allowances, along with 12% compounded interest on delayed payments

The respondents filed an additional affidavit admitting that specific amounts—Rs. 20,964 for 3rd MACP arrears and Rs. 41,625 for 7th CPC arrears—remained unpaid

The respondents expressed readiness to release these amounts with interest in accordance with a Full Bench decision of the Tribunal, noting that the said decision is currently under challenge before the Hon’ble High Court of Delhi

1. Whether the applicant is entitled to the immediate release of unpaid retiral benefits and arrears

2. Whether the applicant is entitled to interest on the delayed payment of retiral dues, and if so, at what rate and frequency

The court primarily relied on the principles established by the Full Bench of the Central Administrative Tribunal in Rajbir Singh v. Municipal Corporation of Delhi Anr. (O.A. No. 2821/2023, decided on 30.10.2025), which held that interest on delayed payments of GPF, pension, and gratuity is payable at the relevant GPF rates

This precedent further established that such interest must be calculated on a compoundable basis for the period of delay

The Tribunal noted the respondents' admission regarding the outstanding arrears due to the applicant

Applying the ratio of the Full Bench decision in Rajbir Singh, the Tribunal reasoned that any delay in the disbursement of retiral dues attracts interest at the GPF rate to compensate the pensioner

Although the respondents pointed out that the Rajbir Singh judgment was being challenged in the Delhi High Court via W.P.(C) No. 19199/2025, the Tribunal determined that the applicant's dues should be settled in line with the current prevailing law, while making the payment of interest contingent upon the High Court's final decision

The court ordered that interest on the delayed payments be calculated at compoundable GPF rates from the due date until the actual date of release

However, it explicitly held that the directions regarding the payment and rate of interest are subject to the outcome of W.P.(C) No. 19199/2025 pending before the Hon’ble High Court of Delhi

No order as to costs was made