IMPORTANT POINT
Retired employees are entitled to gratuity and interest on delayed payments, with the court having no discretion to deny interest under the Payment of Gratuity Act.

JUDGMENT :

(Arijit Banerjee, J.) :

1. A judgment and order dated December 20, 2023, whereby the writ petition of the respondent no. 1 herein being WPA 26053 of 2023 was disposed of by a learned Judge of this Court, is under challenge in this appeal at the instance of the respondent no. 3 in the writ petition, i.e., Bhatpara Municipality.

2. The respondent no. 1 herein was an employee of Bhatpara Municipality. He retired from service on February 28, 2018.

3. In an earlier round of litigation, alleging that the gratuity amount payable to him upon his superannuation has not been released in his favour, the respondent no. 1 had approached a learned Judge of this Court by filing WPA 11710 of 2020. The main prayer in that writ petition was for a writ of and/or in the nature of mandamus directing the respondents to disburse the gratuity amount along with interest within a specified time period. The writ petition was disposed of by the learned Judge by a judgment and order dated August 5, 2021. The operative portion of the said order reads as follows:-

“Gratuity is an entitlement of the employee who has rendered uninterrupted and honourable service to the municipality. The municipality as the employer is not showing any charity by releasing gratuity in favour of its retired employees. As the Municipality has already approached the Government for release of funds, this court is of the opinion that the gratuity amount payable to the petitioner should be released within a period of eight weeks from the date of communication of this order. The question of granting interest is left open.

The quarrel between the State Government and the municipality with regard to release of funds cannot affect the right of a retired employee to get his gratuity. His livelihood solely depends on the retirement benefits and the inaction of the respondents is oppressive, harassive and violative of the rights of a senior citizen.

The Secretary of the Department of Urban Development and Municipal Affairs shall also ensure that such employees who retired from the Bhatpara Municipality, are not mal-treated and exploited in such manner. Necessary funds be released by the government as per law.”

4. Since the gratuity amount was not paid to the respondent no. 1 herein within the time period indicated in the aforesaid order, the respondent no. 1 filed a contempt application being CPAN 848 of 2021. When the contempt application came up for hearing before the learned Judge, it was submitted by learned Advocate for the Municipality that the gratuity amount had been paid to the retired employee, although belatedly. The learned Judge disposed of the contempt proceedings. Her Ladyship, further observed that “the issue of interest was not a part of the original order of this Court and hence further adjudication on the point of interest is beyond the scope of the contempt application. The petitioner is at liberty to take necessary steps claiming interest on gratuity, in accordance with law”.

5. It appears that thereafter the respondent no. 1 herein made a representation to the Municipality claiming interest on the delayed payment of gratuity. Such representation was rejected by the Municipality by a memo dated September 12, 2023. The memo reads as follows:-

“In your writ petition and in the contempt application there is no whisper regarding interest claim, which is full knowledge on your part.

After accepting the all dues of Gratuity as per Writ Petition and as per claim, you are estopped by the principle of “Doctrine of Waiver and Estoppel” from further claiming of interest or any claim including gratuity.”

6. Challenging such memo, the respondent no. 1 herein approached a learned Judge of this Court in the present round of litigation, by filing WPA 26053 of 2023. The said writ application was disposed of by the learned Judge by a judgment and order dated December 20, 2023, which is impugned in the present appeal by the Municipality. The operative portion of the impugned order