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IN THE HIGH COURT OF CALCUTTA
Soumen Sen, J.
National Textile Corporation Limited - Appellant
Vs.
Sanjay Sengupta And Others - Respondents
Writ Petition No. 37653 (W) of 2013
Decided On : 12-02-2014
For the Appellant : Soumya Majumdar, Mr. Sounak Bhattacharya and Mr. Uttam Kumar Mandal
For the Respondent: R. Guha Thakurta and Mr. Debasis Banerjee
The amount required to be deposited under Section 7(7) of the Payment of Gratuity Act, 1972 is the amount of gratuity determined under Section 7(4)(c) and not the amount admitted by the employer under Section 7(4)(a).
Headnote:
PAYMENT OF GRATUITY ACT - GRATUITY AMOUNT DEPOSIT - SECTION 7(4), 7(7) - The amount required to be deposited under Section 7(7) of the Payment of Gratuity Act, 1972 is the amount of gratuity determined under Section 7(4)(c) and not the amount admitted by the employer under Section 7(4)(a).
Fact of the Case:
The writ petitioner challenged the order of the controlling authority under the Payment of Gratuity Act, 1972, directing the petitioner to pay Rs. 6,04,436 as gratuity and Rs. 2,46,811 as interest, totaling Rs. 8,51,247, to the private respondent. The petitioner contended that, under Section 7(7) of the Act, the petitioner was only required to deposit an amount equal to the gratuity amount determined under Section 7(4) and not the interest.
Finding of the Court:
The court held that the amount required to be deposited under Section 7(7) of the Payment of Gratuity Act, 1972 is the amount of gratuity determined under Section 7(4)(c) and not the amount admitted by the employer under Section 7(4)(a). The court interpreted Section 7(4)(a) and Section 7(7) to mean that the employer is only required to deposit the amount of gratuity admitted by the employer under Section 7(4)(a) at the time of preferring an appeal, and not the interest amount.
Issues: 1. Whether the amount required to be deposited under Section 7(7) of the Payment of Gratuity Act, 1972 is the amount of gratuity determined under Section 7(4)(c) or the amount admitted by the employer under Section 7(4)(a)? 2. Whether the employer is required to deposit the interest amount along with the gratuity amount under Section 7(7) of the Act?
Ratio Decidendi: 1. The court interpreted Section 7(4)(a) and Section 7(7) of the Payment of Gratuity Act, 1972 to mean that the employer is only required to deposit the amount of gratuity admitted by the employer under Section 7(4)(a) at the time of preferring an appeal, and not the interest amount. 2. The court held that the amount required to be deposited under Section 7(7) of the Act is the amount of gratuity determined under Section 7(4)(c) and not the amount admitted by the employer under Section 7(4)(a).
Final Decision: The court allowed the writ petition and directed the appellate authority to proceed with the appeal and decide the same within five months from the date of communication of the order.
Soumen Sen, J.
The quantum of the amount that the writ petitioner is required to deposit u/s 7(7) of the Payment of Gratuity Act, 1972 is the subject matter of consideration in this writ petition. The controlling authority under the Payment of Gratuity Act, 1972 in a proceeding u/s 7 of the said Act of 1972 held that the private respondent is entitled to the payment of gratuity alongwith interest. The writ petitioner was held liable to pay Rs. 6,04,436.00/- as gratuity and Rs. 2,46,811/- as interest aggregating to Rs. 8,51,247/-.
2. The writ petitioner before the authority did not admit any amount to be payable as gratuity and, accordingly, the controlling authority has proceeded to determine the said matter u/s 7(4)(b) and determined the said amount u/s 7(4)(c) of the said Act. The order also records that the petitioner neither paid the gratuity amount to the private respondent, nor deposited the admitted amount of gratuity with the controlling authority as required under sub-section (4)(a) of Section 7 of the said Act of 1972 in time on justified ground and no permission whatsoever had also been obtained from the controlling authority for the delay in depositing the gratuity amount.
3. Mr. Majumdar, learned Counsel appearing on behalf of the writ petitioner, submits that u/s 7(7), the writ petitioner as appellant is required to deposit before the appellate authority 'the amount equal to the amount of gratuity required to be deposited' under sub-section (4) and it does not require the payment of any interest.
4. Mr. Majumdar has referred to Sections 7(4)(a), (4)(c) and (7) of the said Act in support of his submission. It is submitted that u/s 7(4)(a), the employer in case of a dispute would be required to deposit with the controlling authority such amount as he admits to be payable by him as gratuity. Similar expression is used in second proviso to sub-section (7) of Section 7 of the said Act, 1972 which requires the appellant to produce a certificate of the controlling authority to the effect that the said appellant has deposited with the controlling authority an amount equal to the amount of gratuity with the controlling authority an amount equal to the amount of gratuity required to be deposited under sub-section (4). The said proviso does not require deposit of any interest or any other sum.
5. Mr. Majumdar has referred to Section 7(4)(c), which requires the controlling authority after inquiry and upon hearing the parties to determine the matter or matters in dispute and if as a result of such inquiry any amount is found to be payable to the employee, the controlling authority would direct the employer to such payment or as the case may be such amount as reduced by the amount already deposited by the employer.
6. The contention of the petitioner appears to be that if the petitioner is required to deposit any amount over and above the amount of gratuity as determined or admitted then the legislature would have in the second proviso to sub-paragraph 7 used the expression as amount "determined" or "adjudicated" upon by the Controlling Authority instead of using the expression "an amount equal to the amount of gratuity required to be deposited under sub-section (4)." The use of the phrase "an amount equal to the amount of gratuity..............." has made all the difference. The word "amount" is qualified by the "amount of gratuity" instead of gratuity and interest.
7. Mr. Majumdar in this regard has relied upon the decisions reported in Gloster Jute Mills Ltd. Vs. Deputy Secretary, Labour Department and Others, (2002) 3 LLJ 908) and Auckland International Ltd., Unit-Auckland Jute Mill and Another Vs. State of West Bengal and Others, (2006) 3 CHN 299
8. Per contra, the learned Counsel appearing on behalf of the workmen submits that the Payment of Gratuity Act, 1972 is a beneficial statute and such legislation has to be interpreted in such a manner which would advance the object of the Act.
9. The learned Counsel has relied u
