Employer must pay gratuity within 30 days of it becoming due, with interest chargeable after this period, regardless of employee application.

JUDGMENT :

Heard Mr. G. Choudhury, the learned counsel appearing on behalf of the Petitioner and Mr. M. Chetia, the learned Government Advocate appearing on behalf of the Respondent Nos. 1 and 2. I have also heard Mr. N. Patiri, the learned counsel appearing on behalf of the Respondent No.3.

2. The Petitioner herein has approached this Court challenging the orders dated 04.03.2025 and 08.05.2025 passed in LPG case No.47/2024 whereby the Respondent No.2 had arrived at the finding that the Respondent No.3 is entitled to an amount of Rs.5,77,343/- on account of gratuity and as an amount of Rs. 1,00,000/- has already been paid, the Petitioner was further required to pay an amount of Rs.4,77,343/- along with interest at the rate of 10% per annum from the date it fell due.

3. This Court while entertaining the instant writ petition and issuing notice on 19.09.2025 categorically observed that the Respondent No.3 herein is entitled to the gratuity of Rs.5,77,343/- in terms with the Payment of Gratuity Act, 1972 (for short ‘the Act of 1972’) and therefore and as an amount of Rs.1,00,000/- have already been paid to the Respondent No.3 earlier, this Court directed the Petitioner to disburse the amount of Rs.4,77,343/- to the Respondent No.3 on or before 01.12.2025.

4. The only question herein which arises before this Court is as to from when the interest at the rate of statutory rate of 10% would be chargeable on the amount of gratuity payable to the Respondent No.3.

5. Mr. G. Choudhury, the learned counsel appearing on behalf of the Petitioner has submitted that the Petitioner is not entitled to any interest inasmuch as, the Petitioner had approached the controlling authority after a period of five years in the year 2024. The learned counsel further submitted that at best the interest at the rate of 10% on the amount due can be calculated from the date the impugned order was passed i.e. 04.03.2025 on which date, the Controlling Authority had come to an opinion that the Respondent No.3 is entitled to an amount of Rs.5,77,343/- and out of which Rs.1,00,000/- have already been paid.

6. Per contra Mr. N. Patiri, the learned counsel who represents the Respondent No.3 submitted that dehors any application filed by the Petitioner in terms of Section 7 of the Act of 1972, it is a duty entrusted upon the employer i.e. the Petitioner to make payment of the gratuity payable to the Respondent No.3/employee within 30 days from the date it is payable. The learned counsel further submitted that a perusal of Sub-Section (3A) of of the Act of 1972 would further show that if the gratuity amount is not paid in terms with Sub-Section (3) of of the Act of 1972, simple interest not exceeding the rate notified by the Central Government from time to time for payment of the long term deposits has to be paid. The learned Counsel therefore submitted that the amount of gratuity was payable to the Respondent No.3 w.e.f. 01.05.2019. In that regard, the learned counsel has referred to a judgment of the Supreme Court in the case of H. Gangahanume Gowda Vs. Karnataka Agro Industries Corporation Limited reported in (2003) 3 SCC 40 .

7. This Court has duly heard the learned counsels appearing on behalf of the parties and perused the materials on record.

8. For the purpose of deciding the dispute in question, this court finds it pertinent to quote the provisions of Sub-Sections 1, 2, 3, 3A, 4 of Section 7 of the Act of 1972.

“7. Determination of the amount of gratuity.-(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing to act on his behalf shall send a written application to the employer, with