Delayed retirement benefits attract 6% interest until actual disbursement.

The petitioner, a retired Driving Instructor of the Tamil Nadu State Transport Corporation, retired on 31 May 2025. His retirement benefits were disbursed 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 respondents confirmed that the benefits had been paid on 11 March 2026.

Whether the petitioner was entitled to interest on retirement benefits disbursed after a delay, despite the absence of a specific provision providing for interest.

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 that such a claim may also be grounded in Part III of the Constitution, including Articles 14, 19 and 21, even where such rules or instructions are absent.

Relying on that principle, a Division Bench of the Madras High Court in W.A.(MD) No. 403 of 2010 and connected cases held that the absence of an express interest provision in the Transport Corporation Employees Pension Fund did not excuse delayed payment: the rules contemplated prompt payment, and the Corporation was obliged to compensate employees where payment was delayed. That decision fixed interest at 6% per annum.

The Court accepted that the petitioner’s retirement benefits had been paid only on 11 March 2026, after his retirement on 31 May 2025.

Applying S.K. Dua and the Division Bench ruling concerning the Transport Corporation, it concluded that delayed retirement benefits warrant interest and that the Corporation’s obligation to make prompt payment is not displaced by the absence of an express interest provision. It applied the 6% rate established by the Division Bench.

No costs were ordered.