Transport corporations must pay 6% interest on belatedly disbursed retirement benefits.

The petitioner, a retired Selection Grade Conductor, served the Tamil Nadu State Transport Corporation from 17 November 1995 until his retirement on 30 November 2024.

His retirement benefits were disbursed on 11 March 2026.

After his representation seeking interest for the delay received no response, he filed a writ petition under Article 226 seeking interest at 6% per annum on the delayed benefits.

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

1. Whether the petitioner was entitled to interest for the delayed payment of his retirement benefits

2. If so, whether interest at 6% per annum should be paid, and for what period

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 or administrative instructions, and, even in their absence, may invoke Articles 14, 19 and 21 of the Constitution.

The Court also relied on the Madras High Court Division Bench’s common order dated 4 July 2014 in W.A.(MD) No. 403 of 2010 and connected cases, which held that a Transport Corporation is obliged to pay interest where retirement benefits are delayed, notwithstanding the absence of an express interest provision in the Pension Fund Rules.

The Court noted that the petitioner’s retirement benefits were paid only on 11 March 2026, despite his retirement on 30 November 2024.

Applying S.K. Dua and the Division Bench’s ruling, it reasoned that retirement benefits are not a bounty and that an employer must compensate an employee when those benefits are paid late, even if the governing rules do not expressly provide for interest.

The petitioner was therefore entitled to interest on the eligible benefits disbursed belatedly.

No costs were awarded.