Point of Law: Interpreting Act unequivocally indicate that payment of gratuity would not depend upon employee filing an application before employer demanding gratuity but will have to be paid immediately on cessation of employment in terms of Section 4 of Act, irrespective of demand.

ORDER :

The petitioners/Verma Industrial Private Limited and IBC Knowledge Park Private Limited (hereinafter referred to as ‘1st Company and 2nd Company respectively’ for short) have called in question the order of the Controlling Authority under the Payment Gratuity Act, 1972 (‘the Act’ for short) directing payment of interest against the 1st petitioner and payment of gratuity in respect of the 2nd petitioner. For the sake of convenience the petitioners will be referred to as petitioners and the respondent as the workman in this order.

2. Brief facts leading to the filing of the present common writ petition, as borne out from the pleadings, are as under :

The 1st respondent/workman was an employee of petitioners’ companies who joined the services of the 1st petitioner on 2-08-1971 and was due to retire on attaining the age of superannuation on 20th October, 2002 after rendering about 31 years of service, by which point of time., the workman joined the 2nd petitioner/Company as a fresh candidate and worked there up to 15-01-2015. After completion of the aforesaid services, the petitioner gave a representation demanding payment of gratuity amount from the hands of the 1st petitioner company for 31 years of service that he had rendered. In reply the 1st petitioner/Company paid gratuity on 2-06-2015 sans payment of interest for the delayed payment, after which the workman approached the Controlling Authority under the Act demanding interest on delayed payment of gratuity in so far as it pertained to the 1st petitioner/Company and gratuity in so far as it pertained to the 2nd petitioner/company. The Controlling Authority by his order dated 4-09-2017 directed both the companies to pay Rs.3,94,615/- along with 10% interest for two distinct issues one being interest on delayed payment by the 1st petitioner and gratuity along with interest by the 2nd petitioner. It is these orders that are called in question by the companies before this Court.

3. Heard Sri.Arjun Rao, learned counsel appearing for petitioners and Sri.S.B.Mukkannappa, learned counsel appearing for respondent No.1 and Smt.M.C.Nagashree, learned Additional Government Advocate appearing for respondent Nos.2 and 3.

4. Sri Arjun Rao, learned counsel appearing for the petitioners would vehemently contend that though the workman retired from the company and was relieved on 20-10-2002 had raised a claim for payment of gratuity by giving an application only on 30-05-2015 and immediately thereafter on 2-06-2015 gratuity was dispensed. Therefore, he would submit that there can be no interest which can be saddled upon the 1st petitioner as gratuity is paid immediately after the demand is raised.

5. Insofar as the 2nd petitioner/Company is concerned, he would accept that gratuity had to be paid. But, again contends that payment of interest is not warranted even in the said case as the workman had never demanded gratuity. For the first time before the Controlling Authority a demand was made by the workman. He would place reliance on a judgment of coordinate Bench of this Court in Writ Petition No.31761 of 2011 disposed of on 4.06.2012.

6. On the other hand, Sri S.B. Mukkannappa, learned counsel appearing for the workman would contend that payment of gratuity does not depend upon the sweet will of the employer but is a right accrued to the workman for the services that he has rendered to be paid immediately after cessation of service, withholding the same can only be in accordance with law.

7. The learned counsel would submit that it is the duty of the employer to immediately dispense all terminal benefits to an employee who ceases to be so on attaining the age of superannuation and gratuity being a terminal benefit, the same cannot be denied to be paid immediately and would place reliance upon CHAMPARAN SUGAR COMPMANY LIMITED v. JOINT LABOUR COMMISSIONER AND APPELLATE AUTHORITY reported in 1986 SCC OnLine Pat.228; MOHANLAL v. APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT, BHOPAL reported