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IN THE HIGH COURT OF MADHYA PRADESH
Sheel Nagu, J.
Ram Nihore Soni v. Mines Manager & Others
Writ Petition No. 13382 of 2018 (Jabalpur);
Decided on 31.10.2022
Payment of Gratuity Act, 1972 -- S.7 (3A) -- interest on principal amount of gratuity -- even if employee did not come forward to receive amount of gratuity, employer was statutorily obliged to deposit same within 30 days of date of superannuation -- same not done -- interest attracted -- petitioner entitled to cost of litigation Rs.5,000/-. Writ Petition No. 1141 of 2012 decided on 26.6.2012 held per incuriam. SLP (Civil) No. 11025 of 2020 and (2005) 5 SCC 245 distinguished. [Paras 5.1, 7 to 10
minku lank; vf/kfu;e] 1972 && /kkjk 7¼3d½ && minku dh ewy jde ij C;kt && deZpkjh minku dh jde izkIr djus vkxs ugha vk;k gks rc Hkh fu;kstd mls vf/kof"kZrk ds fnukad ls 30 fnol ds Hkhrj fuf{kIr djus ds fy, dkuwuh :i ls ck/; Fkk && ,slk ugha fd;k x;k && C;kt vkÑ"V && ;kph #- 5]000@& eqdnek O;; dk gdnkjA fjV ;kfpdk Ø- 1141 lu~ 2012 fu.khZr fnukad 26-6-2012 vuo/kkurk ds dkj.k vfHkfu/kkZfjrA fo'ks"k btktr ;kfpdk ¼flfoy½ Ø- 11025 lu~ 2020 rFkk ¼2005½5 ,l lh lh 245 izHksfnrA ¼iSjk 5-1] 7 ls 10
ORDER
1. This petition under Article 226 has been filed seeking writ of certiorari for quashing order dated 16.5.2018 (Annexure P/1) passed by appellate authority under the Payment of Gratuity Act, 1972 (for brevity “the Act of 1972”) by partly allowing the appeal of respondent-employer, the appellate authority has interfered with the order of controlling authority dated 13.12.2017 (Annexure P/10) to the extent of declining interest over the principal amount of gratuity for the period from 1.1.2017 to 31.10.2017.
2. Learned counsel for the rival parties are heard on the question of admission so also final disposal.
3. Bare facts giving rise to the present dsispute are enumerated below in a chronological manner for convenience and ready reference :
| Dates | Events |
| 19.12.2016 | The employer informed petitioner about his entitlement to Gratuity on the eve of his retirement. |
| 31.12.2016 | Petitioner retired on attaining the age of superannuation from the post of EP Fitter, Dhanpuri Opencast Mine, District Annuppur, South Coalfields Ltd. (SECL). |
| Little before the date of retirement | Petitioner had raised a dispute as regards date of birth. |
| 27.2.2017 | The Employer sent information to petitioner to come forward to collect the gratuity amount. However petitioner declined to accede to this request. |
| 28-31.10. | The Employer deposited amount of gratuity with the controlling authority in terms of section 7(2) of the Act of 1972. |
| 13.12.2017 | The Controlling Authority directed the employer vide Annexure P/10 to pay gratuity amount of Rs.10,00,000/- and interest @ 10% p.a. for the period from 1.1.2017 to 31.10.2017. |
| Appeal preferred by | On following grounds : (a) Government Accommodation not vacated by the petitioner; (b) Date of birth dispute pending; (c) Petitioner failed to come forward to accept the principal amount of gratuity despite having been reminded by the employer more than once. |
| 16.5.2018 | Impugned order is passed by appellate authority under the Act of 1972 partly allowed appeal of the employer by declining interest of 10% granted by the Controlling Authority for the period from 1.1.2017 to 31.10.2017. |
4. The sole question which begs for an answer herein is as to whether the employer can absolve itself of the statutory obligation of payment of interest u/S 7(3A) of the Act of 1972 on the ground of a dispute raised by the employee as regards date of birth pending, the employee not having vacated the official accommodation and the employee not having come forward to accept the gratuity amount despite the employer asking the employee to do so ?
4.1 To properly appreciate the facts and circumstances prevailing in the instant case and to answer the aforesaid question, it is apt to reproduce 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, within such time and in such form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined.
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes paya
An employer must pay gratuity within 30 days and is liable for interest if delayed, regardless of an employee's application.
Employer must pay gratuity within 30 days of it becoming due, with interest chargeable after this period, regardless of employee application.
Interpreting Act unequivocally indicate that payment of gratuity would not depend upon employee filing an application before employer demanding gratuity but will have to be paid immediately on cessat....
Employer cannot withhold gratuity for unauthorized retention of quarters post-retirement; statutory interest of 10% applies for delayed payment.
The right to interest on delayed gratuity payments is statutory and mandatory under Section 7(3-A) of the Payment of Gratuity Act, 1972.
Employers must comply with statutory deposit requirements before appealing against gratuity determinations; failure to deposit the determined amount renders the appeal inadmissible.
The statutory notification setting the interest rate for gratuity under the Payment of Gratuity Act is binding until modified by a new notification from the government.
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