Employees are entitled to 6% interest on retirement benefits paid belatedly.

The petitioner was appointed as a Driver with the first respondent Transport Corporation on 11 July 1987 and retired as a Special Grade Driver on 30 September 2018.

His retirement benefits were paid on 21 September 2019.

After receiving no response to his representation dated 2 September 2026 seeking interest for the delay, he filed this writ petition seeking interest at 18% per annum.

The respondents reported that the benefits had been paid on 21 September 2019.

1. Whether the petitioner was entitled to interest on retirement benefits paid belatedly.

2. If so, what rate of interest and period of payment should apply.

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court recognised that an employee may claim interest on delayed retiral benefits under applicable statutory rules or administrative instructions and, even in their absence, may seek relief under Articles 14, 19 and 21 of the Constitution; retiral benefits are not a bounty.

The Madras High Court Division Bench, in W.A.(MD) No. 403 of 2010 and connected matters, held that the absence of an express interest provision in the Tamil Nadu State Transport Corporation Employees Pension Fund Rules does not excuse delayed payment, and fixed interest at 6% per annum.

The Court accepted that the petitioner’s retirement benefits had been disbursed only on 21 September 2019, after his retirement on 30 September 2018.

Applying S.K. Dua and the Division Bench’s ruling on delayed Transport Corporation retirement benefits, it held that delayed payment must be compensated by interest, notwithstanding the absence of a specific provision for interest in the Pension Fund Rules.

The Court therefore applied the 6% rate established by the Division Bench rather than the 18% sought in the petition.

No costs were awarded.