The statutory interest rate for delayed gratuity payments is 10%, as mandated by Section 7(3A) of the Payment of Gratuity Act, 1972, and prior contrary rulings are not binding.

JUDGMENT :

SANJAY KUMAR MISHRA, J.

1. This writ petition has been preferred by the Petitioner-Bank challenging the order dated 08.02.2019 passed by the Appellate Authority under P.G. Act-cum- Joint Labour Commissioner (O.P. No.2) in P.G. Appeal Case No.4 of 2018/10/2019, vide which the Opposite Party No.2 confirmed the order dated 11.04.2018 passed in P.G. Case No.20 of 2017 by the Controlling Authority under the Payment of Gratuity Act, 1972, shortly, “the P.G. Act”.

2. Though the confirming order passed by the Appellate Authority has been challenged on various grounds, during hearing, relying on a recent order dated 09.09.2025 passed by the coordinate Bench in W.P.(C) No.20586 of 2022 (M.D., Odisha State Co-Operative Bank Ltd., Bhubaneswar Vs. Appellate Authority under Payment of Gratuity Act cum Joint Labour Commr, BBSR & Ors,) learned Counsel for the Petitioner submitted that the Petitioner-Bank would like to challenge the impugned order passed by the Appellate Authority confining it to the rate of interest of 10% awarded by the Controlling Authority, which was also erroneously confirmed by the Appellate Authority.

3. The said submission of the learned Counsel for the Petitioner was also duly recorded vide order dated 23.09.2025. Paragraph Nos.3 & 4 of the said order dated 23.09.2025, being relevant, are reproduced below:-

“3. Learned Counsel for the Petitioner submits, though impugned is the order dated 08.02.2019 passed in P.G. Appeal Case No.4 of 2018/10/2019, as at Annexure-1, as per the instruction received, he would like to confine the prayer made in the writ petition regarding the quantum of interest awarded by the Controlling Authority under the Payment of Gratuity Act, which was confirmed by the Appellate Authority vide the impugned order.

4. He further submits, in a recent order dated 09.09.2025 passed by the Coordinate Bench in WP(C) No.20586 of 2022, it held that six per cent interest is payable on the gratuity amount.”

(Emphasis Supplied)

4. Learned Counsel for the Petitioner, relying on the said order passed in M.D., Odisha State Co- Operative Bank Ltd (Supra), submitted that the impugned order passed by the Appellate Authority, vide which, apart from confirming the direction given by the Controlling Authority for payment of gratuity to the applicant Employee, it was also erroneously confirmed that the rate of interest to be 10%, to be paid on the unpaid gratuity. Hence, the said order deserves interference.

5. In response to the said submission made by the learned Counsel for the Petitioner-Bank so also order passed by the coordinate Bench, learned Counsel for the Opposite Party No.1 submitted that in W.P.(C) No.20586 of 2022, the coordinate Bench passed an incorrect order that the concerned employee is entitled to interest at the rate of 6%, even though there is a specific provision under sub section (3A) of section 7 of the P.G. Act to pay interest and the Central Government, exercising its power conferred under sub section (3A) of section 7 of the P.G. Act, has notified since 01.10.1987 to pay interest @ 10%, which is still in vogue.

5.1. Learned Counsel for the Opposite Party No.1 further submitted that the said order in W.P.(C) No.20586 of 2022 has been passed in ignorance of the provisions of the governing statute, so also earlier judgments of this Court as well as the Supreme Court. Hence, such order is rendered per incuriam. To substantiate his submission, learned Counsel for the Opposite