IN THE HIGH COURT OF CHHATTISGARH
Sanjay K. Agrawal, J.
Prasen Singh Kshatriya S/o Shri Dani Singh Kshatriya - Petitioner
Versus
Appellate Authority under Payment of Gratuity Act and Dy. Labour Commissioner and Others - Respondents
Writ Petition (L) No. 178 of 2016
Decided On : 08-05-2017
Payment of Gratuity Act, 1972 - Section 7(3A) - Gratuity and order - Petitioner was discontinued from his service by the Lafarge India Private Limited on he was not paid gratuity leading to filing of application before Controlling Authority under Act of 1972 which was rejected by said authority on - Against that order petitioner preferred an appeal before Appellate Authority which was also rejected on - In writ petition filed by petitioner being WP (L) this Court vide order directed Appellate Court to decide appeal of the petitioner by reasoned order - Impugned order Appellate Authority has directed for payment of gratuity of but omitted to grant of interest on said amount – Held, Following principles of law laid down in aforesaid cases – Court am unhesitatingly as well as unreservedly of considered opinion that unless delay in payment of gratuity is attributable to fault of employee and necessary permission in terms of proviso to sub-section (3-A) of Section 7 of Act is obtained by employer in writing from controlling authority for delayed payment payment of interest in terms of Section 7 (3-A) of Act of 1972 is imperative and employer is statutorily liable to make payment of interest and he cannot escape liability to make payment of interest on amount of gratuity - Applying principle of law laid-down by Supreme Court in above-stated judgments if facts of present case are examined it is quite vivid that petitioner was discontinued from service on - Writ petition is allowed
Sanjay K. Agrawal, J.
In this writ petition, short point is involved whether the petitioner is entitled for statutory interest as provided in Section 7(3A) of the Payment of Gratuity Act, 1972 (hereinafter called as "Act of 1972").
2. The petitioner was discontinued from his service by the Lafarge India Private Limited on 9.1.2004, he was not paid gratuity leading to filing of the application before the Controlling Authority under the Act of 1972, which was rejected by the said authority on 26.2.2008. Against that order, the petitioner preferred an appeal before the Appellate Authority, which was also rejected on 9.3.2011. In the writ petition filed by the petitioner being WP (L) No. 90 of 2012, this Court vide order dated 29.10.2015 directed the Appellate Court to decide the appeal of the petitioner by reasoned order.
3. By the impugned order, the Appellate Authority has directed for payment of gratuity of Rs. 57,330/-, but omitted to grant of interest on the said amount.
4. Being aggrieved and dissatisfied with the said order, the petitioner has filed this writ petition claiming interest on the amount of gratuity in terms of Section 7 (3A) of the Act of 1972.
5. Respondent No.3 has filed its return opposing the writ petition stating inter-alia that there was dispute pending under Section 4(1) of the Act of 1972 to the amount of gratuity payable to the petitioner, therefore, the petitioner is not entitled for interest.
6. Mr. S.P. Kale, learned counsel for the petitioner, would submit that statutory interest cannot be denied to the petitioner in terms of Section 7 (3A) of the Act of 1972 unless the permission is obtained by the respondent in writing from the Controlling Authority for delayed payment attributing the delay due to fault of the employee.
7. On the other hand, Mr. N.K. Vyas, learned counsel appearing for respondent No.3, would submit that after the order of the Appellate Authority dated 8.7.2016 gratuity amount has already been paid to the petitioner on 26.10.2016. He would further submit that the petitioner has a right to get payment crystallized on 8.7.2016 and therefore, no interest on the amount of gratuity is payable to the petitioner.
8. I have heard learned counsel appearing for the parties, considered their rival submissions made herein above and also gone through the record with utmost circumspection.
9. It is not in dispute that the petitioner is entitled for gratuity and order of the Appellate Authority dated 8.7.2016 with regard to amount of gratuity has become final. It is only the employee who has challenged that order claiming interest on the gratuity amount under Section 7 (3A) of the Act of 1972.
10. The question involved herein is no longer res integra, as the question of interest payable under sub-section (3-A) of Section 7 of the Act of 1972 came up for consideration before the Supreme Court in the matter of H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., (2003) 3 SCC 40 in which Their Lordships have held in no uncertain terms that payment of interest on delayed payment of gratuity in terms of Section 7 (3-A) is mandatory and statutory compulsion, and pertinently observed as under in following two paragraphs of the said report:-
"7. It is evident from Section 7(2) that as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity. Under Section 7(3), the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. Under sub-section (3-A) of Section 7, if the amount of gratuity is not paid by the employer within the period specified in subsection (3), he shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate not exceeding the rate notified by the Centra
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