Delayed retirement benefits attract 6% annual interest from retirement until actual payment.

The petitioner, a retired Special Grade Tradesman of the Tamil Nadu State Transport Corporation, retired on 31 August 2024.

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 belatedly, despite the absence of a specific provision providing for interest.

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

Under S.K. Dua v. State of Haryana, (2008) 3 SCC 44, 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 founded on Articles 14, 19 and 21 of the Constitution, since retiral benefits are not a bounty.

The Court also relied on the Division Bench decision in W.A.(MD) No. 403 of 2010 and connected cases, which held that a Transport Corporation must pay interest when retirement benefits are delayed, notwithstanding the absence of an express interest provision, and fixed the rate at 6% per annum.

The petitioner’s benefits were paid approximately eighteen months after retirement, and the respondents confirmed the delayed payment.

Applying S.K. Dua and the Division Bench ruling, the Court held that the absence of a specific interest provision did not relieve the Corporation of its obligation to compensate for delayed payment. Because the benefits had been disbursed belatedly, the petitioner was entitled to interest at the rate established in the Division Bench decision.

Payment was to be made within six months of receipt of a copy of the order. No costs were ordered.