Delayed retirement benefits attract 6% annual interest, even absent an express rule.

The petitioner, a Senior Grade Driver with the respondent 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 this 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.

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

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.

Following 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 a Transport Corporation is obliged to pay interest when retirement benefits are delayed, notwithstanding the absence of a specific provision for interest; the rate fixed there was 6% per annum.

The Court applied the principle that retirement benefits must be paid promptly and that delay should be compensated by interest.

Since the petitioner’s benefits were paid only on 11 March 2026, after his retirement on 30 April 2025, the Court found him entitled to interest.

Following the Division Bench’s approach in the similar Transport Corporation cases, it fixed the rate at 6% per annum rather than the 18% sought.

No costs were awarded.