Back
IN THE HIGH COURT OF ORISSA
S.K. Mohanty, D.P. Mohapatra, JJ.
JAGANNATH BARIK - APPELLANT
Versus
ORISSA KHADI AND VILLAGE INDUSTRIES BOARD AND OTHERS - RESPONDENT
O.J.C. No. 2686, 2730 and 2731 of 1990
Decided On : 09-01-1995
PAYMENT OF GRATUITY ACT - DEDUCTION FROM GRATUITY - RATE OF INTEREST ON DELAYED PAYMENT - INTERPRETATION OF SECTIONS 4, 7, 8, 13 OF THE PAYMENT OF GRATUITY ACT, 1972 AND SECTIONS 7, 9, 10, 11, 12, 12A AND 13 OF THE PAYMENT OF WAGES ACT, 1936.
Fact of the Case:
Jagannath Barik, a retired employee of Orissa Khadi and Village Industries Board, filed three cases challenging the orders of the Labour Court and the Controlling Authority under the Payment of Gratuity Act. The disputes arose from the Board's refusal to pay the full amount of gratuity and last month's pay, claiming that a sum of Rs. 19,669.39 should be deducted due to a departmental proceeding against Jagannath Barik. The employee also sought a higher rate of interest on the delayed gratuity payment.
Finding of the Court:
The court held that the sum of Rs. 19,669.39 could be deducted from the last month's pay and earned leave encashment as it fell under the definition of wages under the Payment of Wages Act. However, the court found no legal basis for deducting the amount from the gratuity payable to the employee under the Payment of Gratuity Act. The court also held that the employee was not entitled to an enhanced rate of interest on the delayed gratuity payment as the relevant provision of the Payment of Gratuity (Amendment) Act, 1987 had not been enforced.
Issues: 1. Whether the sum of Rs. 19,669.39 ordered to be recovered from Jagannath Barik could be deducted from the amount due to him under the Industrial Disputes Act or the Payment of Gratuity Act. 2. Whether the employee was entitled to a higher rate of interest on the delayed gratuity payment.
Ratio Decidendi: 1. The court interpreted Sections 7, 9, 10, 11, 12, 12A, and 13 of the Payment of Wages Act and held that the sum of Rs. 19,669.39 could be deducted from the last month's pay and earned leave encashment as it fell under the definition of wages. 2. The court interpreted Sections 4, 8, and 13 of the Payment of Gratuity Act and held that no deduction could be made from the gratuity due to the employee except as provided in the statute. The court also held that the employee was not entitled to an enhanced rate of interest on the delayed gratuity payment as the relevant provision of the Payment of Gratuity (Amendment) Act, 1987 had not been enforced.
Final Decision: OJC No. 2730/1990 was allowed, and the order of the Labour Court was quashed. OJC Nos. 2731/1990 and 2686/1990 were dismissed.
JUDGMENT :
D.P. Mohapatra, J. - The disputes raised in these three cases are inter-linked and parties are the same. Therefore, with consent of learned counsel for the parties the cases were heard together and they are being disposed of by this common Judgment.
2. The controversy relates to payment of the dues of Jagannath Barik, a retired employee of Orissa Khadi and Village Industries Board. While OJC Nos. 2730/1990 and 2731/1990 have been filed by the President, Orissa Khadi and Village Industries Board against Jagannath Barik, OJC No. 2686/1990 has been tiled by Jagannath Barik against the Orissa Khadi and Village Industries Board. In OJC No. 2730 of 1990 the petitioner has prayed for quashing the order of the Labour Court, Bhubaneswar dated December 30, 1989 in Industrial Dispute Misc. Case No. 37 of 1988 (Annexure-l) computing the amount due to the applicant Jagannath Barik at Rs. 12,846 towards last month's pay and earned leave encashment. In OJC No. 2731/1990 the petitioner has prayed for quashing the order of the Controlling Authority under the Payment of Gratuity Act-cum -Assistant Labour Commissioner, Cuttack in P.O. Case No. 15 of 1988 (Annexure-2) declaring that the applicant Jagannath Barik is entitled to receive Rs. 29, 181 towards gratuity from the President, Orissa Khadi and Village Industries Board and the order of the Deputy Labour Commissioner-cum-Appellate Authority under the Payment of Gratuity Act in P.G. Appeal No. 1 of 1989 vide the order dated April 25, 1990 (Annexure-4) summarily dismissing the appeal filed by the President of the Board. In OJC No. 2686/1990 the petitioner has prayed for quashing the direction in the requisition sent by the Asst. Labour Commissioner-cum-Controlling Authority under the Payment of Gratuity Act to the Collector, Puri (Annexure-2) that the gratuity amount of Rs. 29, 181 will carry compound interest at the rate of 9 per cent per annum. According to the petitioner, the rate of interest should be 13 per cent per annum.
OJC No. 2730 of 1990.
3. The relevant facts necessary for appreciating the case of the parties may be stated thus:
The Orissa Khadi and Village Industries Board is constituted under the Orissa Khadi and Village Industries Act, 1955 with the purpose, inter alia, to organise, develop and regulate Khadi and Village Industries in the State of Orissa. Jagannath Barik was a Senior Assistant of the Board and was officiating as Manager of the Revised Saranjam Karyalaya of the Board where Ambar Charakha Looms, seen (sic) keeping boxes and other accessories were manufactured. He superannuated from service on October 31, 1987. Shortly before his superannuation a departmental proceeding was initiated against him on October 28, 1987; fourteen charges were framed in the proceeding and as a measure of punishment it was ordered by the then President of the Board that a sum of Rs. 19,669.38 was to be recovered from him. Despite attempts to serve notice personally on him and despite notice published in newspaper, the delinquent did not participate in the proceeding. On the application filed by him u/s 33C(2) of the Industrial Disputes Act, I.D. Misc. Case No. 27/ 888 was vitiated before the Labour Court, Bhubaneswar. In the said proceeding the applicant claimed Rs. 1920 as last month's pay Rs. 10,956 as encashment of earned leave of 180 days, Rs. 22,000 as employees provident fund dues and Rs. 30,000 as bonus. Therein the Board took the stand inter alia, that a sum of Rs. 19,669.38 which has been ordered to be recovered from the applicant should be taken into account while determining the sum due to the applicant. The Labour Court on consideration of the matter held that the applicant was entitled to receive Rs. 12,846 i.e. Rs. 1920 as last month's pay and Rs. 10,956 as earned leave encashment, from the Board. He refused to allow to set off of the amount due to the Board holding that it could not be recovered from the gratuity amount due to the applicant or by other procedure under
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
