Entitlement to Interest at GPF Rates on Delayed Retiral Benefits Due to Administrative Lapses.

The applicant, an Assistant Malaria Inspector (AMI) with the Municipal Corporation of Delhi (MCD), superannuated on 31.05.2023.

He approached the Tribunal aggrieved by the respondents' failure to release several retiral dues, including gratuity, commutation of pension (CVP), leave encashment, and MACP arrears, within the stipulated period.

The respondents admitted that while some payments (like GPF and portions of gratuity) were released with delays in 2023 and 2024, certain dues—specifically 2nd MACP arrears (₹29,500), bonus for 2021–22 (₹6,908), and interest on delayed payments—remained unpaid due to a "shortage of funds".

1. Whether the applicant is entitled to interest on the delayed payment of retiral benefits and arrears.

2. Whether the lack of funds is a valid defense for the non-payment of statutory pensionary dues.

Rule 68 of the CCS (Pension) Rules, 1972 (as updated by notification dated 20.12.2021), which mandates the payment of interest on delayed gratuity and pensionary benefits if the delay is not attributable to the employee.

The precedent set by the Full Bench of the Central Administrative Tribunal in Rajbir Singh v. MCD Ors. (OA No. 2821/2023, decided on 30.10.2025), which established that interest on delayed GPF, pension, and gratuity must be paid at the GPF rate for the relevant years, calculated as compound interest.

The Tribunal noted that the respondents did not attribute any delay or lapse to the applicant; rather, the delay was admitted to be an administrative and financial failure on the part of the MCD.

Applying the law from the Rajbir Singh Full Bench decision, the Tribunal reasoned that once a delay is established as fault of the employer, the employee is legally entitled to interest from the date of retirement until the actual date of payment.

The court rejected the implicit defense of financial hardship, emphasizing that statutory retiral benefits must be settled in accordance with the timelines and interest rates prescribed under the CCS (Pension) Rules.

The respondents were directed to: (i) verify the case and grant the remaining arrears (MACP and Bonus); and (ii) calculate and pay interest on all delayed retiral benefits at the GPF rate (compounded) in terms of the Rajbir Singh judgment. This direction must be complied with within three months of receipt of the order. No order as to costs was made.