Point of Law: Section 7 (3-A) of Payment of Gratuity Act, 1972 provides that the employer shall be liable to pay interest not exceeding the rate notified by the Central Government

JUDGMENT :

1. Heard Sri S.N. Dubey, learned counsel for the petitioner and Sri Jitendra Narain Rai, learned Additional Chief Standing Counsel.

2. This writ petition has been filed for the issuance of writ, order or direction in the nature of Certiorari for quashing the Award dated 18.12.2009 passed by Respondent no. 1 so far it relates to 4% interest and also for issuance of mandamus directing the Respondent no. 2 to pay 10% interest on the delayed payment of gratuity.

3. In brief, facts of the case are that the petitioner was clerk in District Cooperative Bank, Ltd. Fatehpur, and retired from the service on 31.01.2000. He completed 29 years service but the respondent no. 2 paid him less gratuity of 4 years and 10 months. He moved an application on 16.08.2007 before the Respondent no. 01 with the prayer that the respondent no. 2 has paid less gratuity therefore, he may be directed to pay Rs.85,983/-. The case was registered as case no. P.G. 13/2007 marked as annexure-1 to the petition. Respondent no. 2 filed written statement and its photocopy is annexure-2 to this petition. The petitioner filed the rejoinder annexure-3 to the petition.

4. The petitioner filed documentary evidence and adduced oral evidence before respondent no.1. The respondent no. 1 by the judgment and order dated 18.12.2009 allowed the petition directing the respondent no. 2 to pay Rs.34,632/- which is annexure-4 to the petition. The respondent no. 1 while allowing the claim of the petitioner awarded 4% interest which is against the law. The petitioner had prayed for and was entitled for 10% interest on delayed payment.

5. Section 7 (3-A) of Payment of Gratuity Act, 1972 provides that the employer shall be liable to pay interest not exceeding the rate notified by the Central Government. The central Government by notification dated 01.10.1987 has notified that on delayed payment the rate of interest would be 10% which is as under :

“NOTIFICATION NO. S.O 874 (E), dated 1st October, 1987 Gazette of India, Extraordinary, dated 1.10.1987, Part II, Section 3 (ii), P – 2

In exercise of the power conferred by sub-section (3-A) of Section 7 of the Payment of Gratuity Act, 1972, the Central Government hereby specifies ten per cent annum at the rate of simple interest payment for the time being by the employer to his employee in cases where the gratuity is not paid within the specified period.

(2) This notification shall come into force on the date of its publication in the official gazette.”

6. Thus the petitioner was entitled for 10% interest on the delayed payment as per Section 7 (3-A) of Payment of Gratuity Act, 1972 but respondent no. 1 has awarded only 4% interest which is illegal. The respondent no. 1 has not recorded any findings as to why 10% interest has not been awarded. The order passed by respondent no. 1 is illegal and unjust. The petitioner has got no equally efficacious and alternatively remedy except to invoke the extraordinary writ jurisdiction of this Hon’ble court under Article 226 of the Constitution of India hence, this petition has been instituted.

7. As per office report no undelivered registered notice and acknowledgment have been received back hence opposite party no. 2 is presumed to be sufficiently served through notice. No counter affidavit and vakalatnama has been filed. Hence heard learned counsel for the applicant S.N. Dubey, Amit Kumar Srivastava, Shri S.K. Dubey for petitioner and learned standing counsel for the respondent and perused the record.

8. The petitioner has annexed all the relevant papers along with the notification of the Central Government which are referred in the petition. There is no evidence that respondents have challenged the order dated 18.12.2009 before the competent authority or the court. Hence, the finding in favor of the petitioner in respect of the claim has become absolute. It is the petitioner who has grievance regarding payment of less percentage of interest on the ground that in case of delayed payment of gratuity