IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Anoop Kumar Mendiratta, JJ.
Govt. of NCT of Delhi & Ors. - Appellants
Versus
Ramesh Sagar - Respondent
W.P.(C) 14704 of 2023, CM APPL. 58515 of 2023
Decided On : 21-11-2023
Gratuity - Central Administrative Tribunal - The court directed the petitioners to pay the interest computed on the gratuity, one month after July 27, 2012, and pay the same to the respondent within a period of eight weeks from today, subject to adjustment of the interest already paid.
Fact of the Case:
The respondent sought gratuity from April 1, 2004, till July 3, 2018, but the court held that the interest was to be paid one month after July 27, 2012, and not from 2004.
Finding of the Court:
The court directed the petitioners to pay the interest computed on the gratuity, one month after July 27, 2012, and pay the same to the respondent within a period of eight weeks from today, subject to adjustment of the interest already paid. The court also closed the MA being MA No.3204/2021 pending before the Tribunal.
Issues: The issue was the entitlement of the respondent to gratuity from April 1, 2004, till July 3, 2018, and the computation of interest on the gratuity.
Ratio Decidendi: The court held that the interest on the gratuity was to be paid one month after July 27, 2012, as directed by the Tribunal, and not from 2004 as claimed by the respondent.
Final Decision: The writ petition was disposed of, directing the petitioners to pay the interest computed on the gratuity, one month after July 27, 2012, and pay the same to the respondent within a period of eight weeks from today, subject to adjustment of the interest already paid. The court also closed the MA being MA No.3204/2021 pending before the Tribunal.
JUDGMENT
V. Kameswar Rao, J. (Oral)
1. The challenge in this writ petition is to an order dated September 14, 2023, passed by the Central Administrative Tribunal Principal Bench, New Delhi (`Tribunal', for short) in MA No.3204/2021 in Original Application No.4488/2011 (`OA', for short), whereby the Tribunal has granted three weeks time as a last opportunity to petitioners herein to file an affidavit indicating compliance of directions of the Tribunal particularly as contained in paragraph 17 of the order dated July 27, 2012, passed in the OA. Suffice to state, paragraph 17 of the order dated July 27, 2012 reads as under:
"17. However, prayer 8.3 made in the OA is allowed, and as and when the withheld amount of gratuity is disbursed to the applicant, simple interest at the rate of applicable rates of interest on Provident Fund from time to time, for the whole period, shall be paid to the applicant, without any compounding of the interest."
2. It may be stated here that the respondent herein had filed the OA before the Tribunal wherein the issue was with regard to the final orders to be passed on the inquiry report pursuant to charge sheet issued to the respondent herein which was converted into Rule 9 of CCS (Pension) Rules, 1972 proceedings. In paragraphs 15 to 17, the Tribunal has held as under:
"15. As per the submission of both sides, it is clear that the departmental enquiry against the applicant is now complete, and a decision on the enquiry report can be taken by the respondent authorities. The applicant has also cooperated in the conduct of the enquiry and, therefore, his first prayer to quash the charge sheet issued to him cannot be allowed. In these circumstances, it is apparent that we can only direct the Disciplinary Authority to take a final decision and pass appropriate orders, after affording the applicant an opportunity to respond to the enquiry report submitted against him. Such final orders of the Disciplinary Authority may be passed within one month of receipt of the reply/response of the applicant.
16. A decision on the disciplinary enquiry would also allow the respondents to pass necessary orders in regard to the release of the gratuity amount lying un-disbursed with the respondent authorities. Therefore, it is not necessary to pass a separate order in this regard, except directing that a decision on the release of the gratuity amount should also be taken within one month after the receipt of the representation of the applicant to the Disciplinary Authority against the enquiry report.
17. However, prayer 8.3 made in the OA is allowed, and as and when the with-held amount of gratuity is disbursed to the applicant, simple interest at the rate of application rates of interest on Provident Fund from time to time, for the whole period, shall be paid to the applicant, without any compounding of the interest."
3. It is a conceded position that the respondent was given the gratuity with interest pursuant to the final order passed by the Ministry of Home Affairs, Government of India dated August 24, 2017. The gratuity was released on July 4, 2018 after computing interest w.e.f. November 24, 2017, for an amount of Rs.8,838/-.
4. The claim of the respondent before the Tribunal in MA No.3204/2021 was that the respondent is entitled to gratuity from April 1, 2004 till July 3, 2018, when the gratuity was required to be paid.
5. We are not in agreement with this plea of the learned counsel for the respondent for the reason the order of the Tribunal dated July 27, 2012 more specifically paragraph 16 thereof is very clear that the final order was required to be passed within one month from July 27, 2012. Though, the final order was passed on August 24, 2017, surely the respondent is entitled to the interest as directed by the Tribunal i.e., one month after July 27, 2012 and not from 2004, as is the claim of the respondent.
6. The writ petition is disposed of directing the petitioners to pay the interest computed on the gratuity, one
The interest on the gratuity was to be paid one month after July 27, 2012, as directed by the Tribunal, and not from 2004 as claimed by the respondent.
An employer must pay gratuity within 30 days and is liable for interest if delayed, regardless of an employee's application.
Interest under the Payment of Gratuity Act is due from the date of entitlement unless hindered by claim delays, resulting in dismissal of a petition for earlier interest claims.
Employer must pay gratuity within 30 days of it becoming due, with interest chargeable after this period, regardless of employee application.
The court held that the employer was justified in withholding the gratuity pending finalization of disciplinary proceedings as permitted in Section 4(6) of the Payment of Gratuity Act.
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.
The right to interest on delayed gratuity payments is statutory and mandatory under Section 7(3-A) of the Payment of Gratuity Act, 1972.
The main legal point established in the judgment is the statutory entitlement of an employee to interest on delayed payment of gratuity as per the provisions of the Payment of Gratuity Act, 1972.
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