Employers must pay 6% interest on retirement benefits disbursed belatedly.

The petitioner’s husband, S. Saraboji, served as a Conductor and later as a Checking Inspector in the respondent Transport Corporation.

He retired on 30 April 2018 and died on 22 May 2021.

His retirement benefits were paid on 20 September 2019.

The petitioner sought interest at 6% per annum for the delayed payment, but her representation dated 27 May 2026 received no response; she then filed this writ petition under Article 226.

The respondents reported that the benefits had been settled on 20 September 2019.

1. Whether the petitioner was entitled to interest on her deceased husband’s retirement benefits because they were paid belatedly.

2. If so, whether interest at 6% per annum should be paid from the date of retirement until actual disbursement.

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’s common order dated 4 July 2014 in W.A.(MD) No. 403 of 2010 and connected matters, which held that the absence of a specific interest provision in the Transport Corporation’s pension rules does not excuse delayed payment and fixed interest at 6% per annum.

The Court accepted that the retirement benefits had been paid only on 20 September 2019, after the employee’s retirement on 30 April 2018.

Applying S.K. Dua and the Division Bench’s ruling, it reasoned that retirement benefits must be paid promptly and that delay may be compensated by interest, notwithstanding the absence of a specific provision for interest in the pension rules.

It therefore applied the established 6% rate to the eligible benefits paid belatedly.

No costs were awarded.