The question for consideration was whether the deposit of the entire amount directed to be paid U/s.7(4) (c) of the Payment of Gratuity Act (hereinafter referred to as the Act), was a condition precedent for admitting an appeal under Sec. 7(7) of the Act.

2. The petitioner establishment, Standard Stonewares and Tiles, Thaikkattukara, Aluva, was a unit of Sudarsan Clay and Ceramics Limited, Aluva. Respondents 2 to 15 were employees of the petitioner and they had retired from service. They were paid gratuity. Respondents 2,3 and 8 to 12 preferred claim before the Authority under the payment of gratuity Act, (for short, “the Authority”), claiming interest on the gratuity amount alleging delayed payment. Respondents 4 to 7 and 13 to 15 filed claim for arrears of gratuity with interest and also interest on the amount already paid on the ground of delay. The Authority allowed the claim made by R2 to R15 by Ext.P2 order. The petitioner filed an appeal before the Appellate Authority challenging the above order. They deposited the arrears of gratuity amount ordered to be paid by the Authority, but did not permit the amount ordered to be paid towards interest on the delayed payment of gratuity. The Appellate Authority rejected the appeal by Ext.P9 order on the ground that the entire amount ordered to be paid by the Authority was not deposited as Stipulated by the 2nd proviso to Sec. 7(7) of the Act. The above order, Ext.P9 is under challenge.

3. Heard the learned counsel for the petitioner, learned counsel for the employees and the learned Govt. Pleader.

4. The petitioner-establishment, Standard stonewares & Tiles was a unit of Sudarsan Clay and Ceramics Ltd., situated at Aluva. As the above establishment was facing severe financial problem the petitioner-establishment had been declared on 20-3-1990 as a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985. The Board of Industrial and financial Reconstruction, New Delhi had prepared a rehabilitation scheme envisaging certain sacrifices from the part of the petitioner as well as its employees. Accordingly, matter had been discussed in between the representatives of the petitioner and the workmen before the district Labour officer, Ernakulam and it resulted in Ext. P1 settlement, 25-6-1991. As per clause 1(9) of Ext.P1 settlement, it had been agreed that the gratuity arrears of the retired employees would be paid within three months from the date of lifting the lock out. The establishment was under lock out for nearly four years as it was lifted on 14-3-1994. There was a further settlement reached on 1-10-1994 by which the Unions had agreed to re-start production from 10-11-1994 and the gratuity dues to the retired employees was agreed to be paid on or before 31-10-1994. the above agreement had been approved by the BIFR. Respondents 2 to 5 had received the gratuity amount from the Company during October 1994. Later, the respondents 2 to 15 filed claim petitions before the Authority for delayed payment of gratuity and also claiming balance of gratuity and interest. The authority allowed the entire claim and the Appellate Authority constituted under the Act.

5. The main argument advanced by the learned counsel for the petitioner was that the second proviso to Sec.7(7) of the act would mandates only the deposit of the amount equal to the amount of gratuity required to be deposited under sub-section (4) of “the Act”. It was further submitted that the stature did not envisage or stipulate the deposit of the interest awarded by the Authority as a condition for filing or admitting an appeal. It would be relevant to consider sub-section (7) of Sec.7, which reads:

“(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf:

Provided that the appropri