Delayed retiral benefits attract compound interest at GPF rates, subject to the outcome of pending litigation.

The applicant, widow of a deceased employee of the Municipal Corporation of Delhi (MCD), filed an Original Application under Section 19 of the Administrative Tribunals Act, 1985, seeking the release of balance retiral benefits.

Specifically, she claimed arrears arising from an enhanced Dearness Allowance (DA) rate of 31%, whereas she had only received payment at the rate of 17%.

During proceedings, the respondents admitted that while Rs. 4,68,820/- had been paid, a balance of Rs. 2,07,512/- remained outstanding, though the bills for the same had been passed.

The respondents also noted that the legal principle regarding interest on delayed retiral benefits was currently under challenge before the Hon’ble High Court of Delhi.

1. Whether the respondents are liable to release the remaining balance of retiral benefits to the applicant in a time-bound manner.

2. Whether the applicant is entitled to interest on the delayed payment of retiral benefits and the impact of pending litigation on this entitlement.

Section 19 of the Administrative Tribunals Act, 1985, regarding the jurisdiction of the Tribunal to redress grievances related to service matters.

Legal principle established by the Full Bench of the Central Administrative Tribunal in Rajbir Singh v. Municipal Corporation of Delhi & Anr. (OA No. 2821/2023), which held that interest on delayed payments of GPF, Pension, and Gratuity is payable at the GPF rate for the relevant years, calculated on a compound interest basis.

The Tribunal examined the respondents’ admission of the outstanding liability and their assurance that the remaining amount would be released expeditiously.

The court noted the applicant's willingness to dispose of the matter provided a time-bound direction for payment was issued.

The Tribunal balanced the precedent set in Rajbir Singh with the fact that the said judgment is currently under challenge before the Hon'ble High Court in W.P.(C) No. 19199/2025.

Consequently, the Tribunal determined that while the principal amount must be paid immediately, the obligation to pay interest—and the specific rate thereof—must remain contingent upon the final judicial outcome of the pending Writ Petition.

Regarding interest on delayed payments, the Tribunal ordered the respondents to pay interest from the due date until the actual date of release in accordance with the Rajbir Singh decision; however, it explicitly held that the payment and rate of such interest shall be subject to the outcome of W.P.(C) No. 19199/2025 pending before the Hon’ble High Court.

No costs were awarded.