Retired Transport Corporation Conductor Awarded 6% Interest on Retirement Benefits Paid 18 Months Late: Madras HC

In brief

The question

Whether the petitioner was entitled to interest on retirement benefits paid after a delay, notwithstanding the absence of an identified rule providing for interest

The court held

The Court disposed of the writ petition and directed the respondents to pay interest at 6% per annum on the eligible retirement benefits that had been disbursed belatedly, from the date of retirement until actual disbursement.

It also directed

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

01Facts

The petitioner, a Special Grade Conductor, retired from the respondent Transport Corporation on 31 May 2024. His retirement benefits were paid on 2 December 2025. After his representation seeking interest for the delay received no response, he filed a writ petition seeking interest at 6% per annum on the delayed benefits

pp. 2–3

The respondents reported that the benefits had been paid on 2 December 2025

p. 4

02Issues

i.Whether the petitioner was entitled to interest on retirement benefits paid after a delay, notwithstanding the absence of an identified rule providing for interest

pp. 4–6

ii.Whether interest at 6% per annum should be ordered, and for what period

pp. 5–7

03Law Applied

In S.K. Dua v. State of Haryana, (2008) 3 SCC 44, the Supreme Court held that an employee may claim interest on delayed retiral benefits under applicable statutory rules, administrative instructions or guidelines; even in their absence, such a claim may be founded on Articles 14, 19 and 21 of the Constitution, and retiral benefits are not a bounty

p. 5

The Court also followed the Madras High Court 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 Employees Pension Fund rules does not excuse belated payment and fixed interest at 6% per annum

pp. 5–6

04Reasoning

The Court accepted that the petitioner’s retirement benefits had been paid only on 2 December 2025, although he had retired on 31 May 2024

p. 2, 4

Applying S.K. Dua and the Division Bench’s decision concerning delayed Transport Corporation retirement benefits, it held that the employer must compensate an employee for delayed payment, even where the governing rules contain no express interest provision

pp. 4–6

It therefore applied the 6% rate adopted in the Division Bench decision to the petitioner’s eligible benefits

pp. 5–7