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

The petitioner, a Senior Tradesman, retired from the respondent Transport Corporation on 31 July 2024. His terminal benefits were disbursed on 11 March 2026. After his representation dated 18 March 2026 seeking interest for the delay received no response, he filed a writ petition under Article 226 seeking interest at 6% per annum on his delayed retirement benefits.

The respondents confirmed that the benefits had been settled on 11 March 2026.

Whether the petitioner was entitled to interest on retirement benefits disbursed after a delay following his retirement

If so, what rate and period of interest should apply

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 seek it under Part III of the Constitution, relying on Articles 14, 19 and 21.

The Court also followed the Division Bench’s common order dated 4 July 2014 in W.A.(MD) No. 403 of 2010 and connected cases, which held that the absence of an express interest provision in the Tamil Nadu State Transport Corporation Employees Pension Fund Rules does not preclude interest where benefits are delayed, and fixed the rate at 6% per annum.

The petitioner’s benefits were paid approximately nineteen months after his retirement, and the respondents confirmed the delayed payment.

Applying S.K. Dua and the Division Bench ruling, the Court held that retirement benefits should be settled promptly and that delay must be compensated by interest, notwithstanding the absence of a specific provision for interest in the Pension Fund Rules. It therefore applied the established rate of 6% per annum to the eligible benefits paid belatedly.

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