Interest at GPF rates is payable on delayed payment of retiral benefits for administrative reasons.

The applicant, a retired Assistant Engineer from the New Delhi Municipal Council (NDMC), retired on 31.01.2018.

Under the 7th CPC recommendations, he was entitled to a gratuity (DCRG) amounting to ₹20,00,000.

The respondent paid the principal amount in two installments: ₹10,00,000 on 23.11.2023 and the remaining ₹10,00,000 on 17.06.2025.

While partial interest was paid on the first installment, no interest was paid on the second installment, which was delayed by over seven years.

The applicant approached the Tribunal seeking the quashing of the Office Order dated 31.01.2024 and a direction for the payment of outstanding interest on the delayed gratuity.

1. Whether the applicant is entitled to interest on the delayed disbursement of the second installment of his gratuity (₹10,00,000) where the delay is attributable to administrative reasons.

The Tribunal applied the settled legal principle that delay in the disbursement of retiral dues entitles an employee to interest.

It specifically relied on the Full Bench judgment of the Central Administrative Tribunal in Rajbir Singh vs. Municipal Corporation of Delhi & Ors. (OA No. 2821 of 2023, decided on 30.10.2025), which held that interest at the applicable General Provident Fund (GPF) rate is mandatory on delayed payments of retiral benefits, such as gratuity, when the delay is caused by administrative factors.

The Tribunal observed that although the principal amount of the gratuity had been paid in full by June 2025, the timeline of payments confirmed a significant delay relative to the applicant’s retirement in January 2018.

The Tribunal noted that the respondents did not dispute the fact of the delay but argued the matter was infructuous since the principal had been settled.

However, following the Rajbir Singh precedent, the Tribunal reasoned that once a delay in disbursement is established as administrative, the right to interest at the GPF rate becomes an entitlement.

Consequently, the only surviving controversy was the calculation and payment of interest for the period between the date the gratuity became due (allowing for a grace period after retirement) and the actual date of final payment.

The Respondent (NDMC) was directed to pay interest on the amount of ₹10,00,000 for the period from 01.05.2018 to 17.06.2025 at the applicable GPF rate.

The Tribunal ordered this exercise to be completed within three months from the date of receipt of the certified copy of the order.

No costs were awarded.