Madras HC Orders 6% Interest For Retired Conductor After Benefits Were Paid A Year Late

The petitioner, a Special Grade Conductor employed by the respondent Transport Corporation from 23 December 1992, retired on 28 February 2025.

His retirement benefits were disbursed on 11 March 2026.

After a representation seeking interest for the delay received no response, he filed a writ petition under Article 226 seeking interest at 12% per annum from retirement until payment.

The respondents reported that the benefits had been paid on 11 March 2026.

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 invoke 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 where the rules contemplate prompt payment, the absence of an express interest provision does not excuse belated payment, and fixed interest at 6% per annum.

The Court applied the principle that retirement benefits must be paid promptly and that delay warrants compensation by way of interest.

The petitioner’s benefits were paid only on 11 March 2026, after his retirement on 28 February 2025.

Following S.K. Dua and the Division Bench’s determination of the applicable rate in similar cases, the Court rejected the requested 12% rate in favour of 6% per annum.

Payment was ordered within six months of receipt of a copy of the order; no costs were awarded.