MCD Employees Entitled to Interest at GPF Rates on Delayed Payment of Retirement Benefits

The applicant, Surender Singh, retired as a Malaria Inspector (MI) from the Rohini Zone of the Municipal Corporation of Delhi (MCD) on July 31, 2024

Despite his retirement, the respondents failed to timeously release his retirement benefits, prompting the applicant to file a representation on June 23, 2025

The MCD contended that while several payments (Leave Encashment, GPF, Pension Commutation, and Gratuity) were processed between March and May 2025, the delay was attributable to the applicant's late submission of a "No Dues Certificate" from the Land Estate Department on November 29, 2024

The applicant approached the Tribunal seeking the release of all pending dues and 18% interest on delayed payments

1. Whether the respondents are liable to pay interest on the delayed release of retirement benefits, including GPF, Pension, and Gratuity

2. Whether the rate of interest for such delays should be governed by the GPF interest rates as per the Full Bench decision in Rajbir Singh vs. MCD

The Tribunal applied Rule 65 of the CCS (Pension) Rules, 2021 (and the corresponding Rule 68 of the 1972 Rules), which mandates that interest on delayed payment of pension or gratuity shall be paid at the rate applicable to GPF amounts

It relied heavily on the Full Bench precedent of Rajbir Singh vs. MCD Ors. (O.A. No. 2821/2023), which established that interest on delayed retiral dues not attributable to the employee must be calculated based on the compound interest rate applicable to GPF for the relevant years

The court also clarified that the Supreme Court's ruling in D. Khosla and Company vs. Union of India regarding contractual interest does not apply to statutory service matters

The Tribunal examined the timeline of payments and noted that while the MCD had begun processing dues, portions remained outstanding or were paid significantly after the retirement date

The court applied the rationale from the Rajbir Singh Full Bench decision, noting that interest is a statutory right under Rule 65 when the delay is not the fault of the employee

Although the respondents argued that the applicant delayed submitting his "No Dues Certificate," the Tribunal found the applicant still entitled to interest in accordance with the established legal framework for MCD employees

The Tribunal noted the pendency of a related Writ Petition (MCD vs. Rajbir Singh) in the High Court of Delhi but determined that the applicant is entitled to the benefit of the Tribunal's own Larger Bench ruling in the interim

It held that the applicant is entitled to interest on delayed payments at the GPF rate, as prescribed in Rajbir Singh vs. MCD

This direction is specifically made subject to the final outcome of the pending Writ Petition (C) No. 19558/2025 before the Hon’ble High Court of Delhi