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IN THE HIGH COURT OF MADHYA PRADESH
Anand Pathak, J.
Shrikant Kaushik (Dr.) v. The State of Madhya Pradesh & Others
Writ Petition No. 8528 of 2016 (Gwalior);
Decided on 17.3.2023
(1) Interest Act, 1978 -- Ss.3 and 4 -- interest on delayed payment of gratuity -- respondents erred in withholding gratuity exceeding amount equivalent to ascertainable dues, amounting to Rs. 1.87 lacs -- instant case is a proceeding under Constitutional/Administrative Law to claim damages from State as per S.3 -- it is also a case in which interest is payable by virtue of usage, having force of law as contained in S. 4 (1) -- respondents deliberately held payment of gratuity on wrongful pretext -- obliged to suitably compensate petitioner -- have to bear burden of interest @ 6% p.a. for period when gratuity was withheld, on amount Rs. 10,00,000 - Rs. 1,87,000 = Rs. 8,13,000/- or so. (1999) 3 SCC 438, (2013) 3 SCC 472 and (2022) 4 SCC 627 followed. [Paras 10 to 12, 15, 16 to 18
(2) Civil Services (Pension) Rules, 1976 (M. P.) -- R.65 -- Interest Act, 1978 -- Ss. 3 and 4 -- delayed payment of gratuity -- when petitioner was likely to retire, District Ayush Officer assessed recovery of Rs. 18,807/- and interest amounting to Rs. 1.87 lacs on excess payment made due to wrongful grant of advance increments
-- it was incumbent upon respondents to either take equivalent cash deposit or deduct equivalent ascertainable dues -- rest amount of gratuity had to be paid without delay -- respondents erred in withholding gratuity exceeding amount equivalent to ascertainable dues, amounting to Rs.1.87, that too without resorting to clause (a) of R. 65 (2) first -- instant case is a proceeding under Constitutional/Administrative Law to claim damages from State as per S. 3 of Interest Act -- it is also a case in which interest is payable by virtue of usage, having force of law as contained in S. 4 (1) of Interest Act -- gratuity has been withheld, which was legitimate right of petitioner -- even if it was to be withheld, it could have been to extent of Rs. 1.87 lacs which was to be paid allegedly by petitioner as part of recovery, not beyond that -- respondents deliberately held payment of gratuity on wrongful pretext -- obliged to suitably compensate petitioner -- respondents have to bear burden of interest @ 6% p.a. for period when gratuity was withheld, on amount Rs. 10,00,000 - Rs. 1,87,000 = Rs. 8,13,000/- or so. (1999) 3 SCC 438, (2013) 3 SCC 472 and (2022) 4 SCC 627 followed. [Paras 10 to 12, 15, 16 to 18
¼1½ C;kt vf/kfu;e] 1978 &&/kkjk 3 rFkk 4 && minku ds foyafcr Hkqxrku ij C;kt && izR;FkhZx.k us #- 1-87 yk[k ds vfHkfu'ps; ns; ds cjkcj jde ls vfèkd minku jksd dj xyrh dh && orZeku izdj.k/kkjk 3 ds vuqlkj jkT; ls uqdlkuh dk nkok djus ds fy, lkafo/kkfud@iz'kklfud fof/k ds v/khu dk;Zokgh gS && ;g ,slk Hkh izdj.k gS ftlesa/kkjk 4¼1½ esa ;Fkk varfoZ"V fof/k dk cy j[kus okyh izFkk ds dkj.k C;kt lans; gS && izR;FkhZx.k us tkucw> dj xyr cgkus ls minku dk lank; jksdk && ;kph dh mi;qDr {kfriwfrZ djus ds fy, ck/; && ftl vof/k ds fy, minku jksdk x;k ml vof/k ds fy, #- 10]00]000 & #- 1]87]000 ¾ 8]13]000@& ;k mlds yxHkx dh jde ij@6 izfr'kr izfro"kZ dh nj ls C;kt dk Hkkj ogu djuk gksxkA ¼1999½3 ,l lh lh 438] ¼2013½3 ,l lh lh 472 rFkk ¼2022½4 ,l lh lh 627 vuqlfjrA ¼iSjk 10 ls 12] 15] 16 ls 18
¼2½ flfoy lsok ¼isU'ku½ fu;e] 1976 ¼e-iz-½ && fu-65 && C;kt vfèkfu;e] 1978 &/kkjk 3 rFkk 4 && minku dk foyafcr Hkqxrku && ;kph lsokfuo`Ùk gksus okyk Fkk rc ftyk vk;q"k vf/kdkjh us vfxze osruo`f);k¡ xyr fn, tkus ds dkj.k fd, x, #- 18]870@& ds vf/kd lank; rFkk ml ij #- 1-87 yk[k C;kt dh olwyh fu/kkZfjr dh && izR;FkhZx.k ds fy, vko';d Fkk fd og ;k rks mlds cjkcj uxn fu{ksi ysrs] ;k fQj mlds cjkcj vfHkfu'ps; ns; jkf'k dh dVkSrh djrs && minku dh 'ks"k jde vfoyac lanÙk dh tkuk Fkh && izR;FkhZx.k us #- 1-87 ds vfHkfu'ps; ns; ds cjkcj jde ls vf/kd minku jkf'k] og Hkh igys fu- 65 ¼2½ ds [kaM¼d½ dk vkJ; fy, fcuk] jksd dj xyrh dh && orZeku izdj.k C;kt vf/kfu;e dh /kkjk 3 ds vuqlkj jkT; ls uqdlkuh dk nkok djus ds fy, lkafo/kkfud@iz'kklfud fof/k ds v/khu dk;Zokgh dh && ;g ,slk Hkh izdj.k gS ftlesa C;kt vf/kfu;e dh /kkjk 4¼1½ esa ;Fkk varfoZ"V fof/k dk cy j[kus okyh izFkk ds dkj.k C;kt lans; gS && minku jksdk x;k gS] tks ;kph dk fof/klaxr vfèkdkj Fkk && og jksdk tkuk Hkh Fkk rks #- 1-87 yk[k dh lhek rd gh jksdk tk ldrk Fkk] tks vfHkdfFkr :i ls olwyh ds :i esa ;kph }kjk lanÙk dh tkuk Fkh] mlls vf/kd ugha && izR;FkhZx.k us tkucw> dj xyr cgkus ls minku dk lank; jksdk && ;kph dh mi;qDr {kfriwfrZ djus ds fy, ck/; && ftl vof/k ds fy, minku jksdk x;k ml vof/k ds fy, #- 10]00]000 & #- 1]87]000@& #- 8]13]000@& ;k mlds yxHkx dh jde ij @ 6 izfr'kr izfro"kZ dh nj ls C;kt dk Hkkj ogu djuk gksxkA ¼1999½3 ,l lh lh 438] ¼2013½3 ,l lh lh 472 rFkk ¼2022½4 ,l lh lh 627 vuqlfjrA ¼iSjk 10 ls 12] 15] 16 ls 18
ORDER
1. With consent, heard finally.
The petitioner, under Article 226 of the Constitution of India, has preferred this petition seeking the following reliefs:
(i) The respondents may be directed to pay interest @ 12 % p.a. on the amount of gratuity Rs.10.00 lacs for the period 31.12.2014 (date of retirement) till 23.4.2016 (date of payment).
(ii) Any other relief which this Hon’ble Court may deem fit in the circumstances of the case including costs may also be granted.
2. Precisely stated facts of the case are that petitioner retired from the post of Ayurvedic Medical Officer on 31.12.2014 from Government Gandhi Ayurvedic Hospital, Morena. When petitioner was likely to retire, District Ayush Officer, district Morena (respondent no.2 herein) assessed the recovery of Rs.18,807/- and interest amounting to Rs.1.87 lacs on excess payment made in the year 1987 on the pretext of wrongful grant of advance increments.
3. Petitioner challenged the said recovery by way of Writ Petition No.5903/2014 and vide order dated 30.9.2014 (Annexure P/2) recovery was stayed. It appears that the said writ petition was finally decided in Lok Adalat vide order dated 12.12.2015 whereby Government Advocate conceded to the extent whereby respondents had to decide the petitioner’s case afresh keeping in view the Circular dated 9.7.2014 issued by the Finance Department. The said circular stipulates that in case of recovery on the pretext of wrongful grant of increments or wrong fixation, interest shall not be levied. Therefore, it further appears that respondents quashed the recovery order so far as levy of interest is concerned and recovered only Rs.18,807/- as Principal sum.
4. Since after the order of recovery, petitioner approached this Court and the petition was kept pending for around 18 months, therefore respondents withheld the gratuity amount of Rs.10 lacs and released the same on 23.4.2016.
5. The grievance of petitioner, as echoed in the petition, is that withholding of gratuity by the respondents was an arbitrary exercise of powers. According to him, gratuity could have been withheld as per Rule 65 of the Madhya Pradesh Civil Services (Pension) Rules, 1976. Here, neither any departmental enquiry nor any criminal trial was pending against him. Therefore, withholding of gratuity on the pretext of pendency of writ petition is arbitrary and illegal. Alternatively, respondents could have withheld the gratuity to the extent of amount in question (which comes around Rs.1.87 lacs) as security and rest of the amount could have been released then and there. But the respondents did not do so. When the respondents claimed interest on such delayed payments and tried to recover an amount, which was not otherwise recoverable, sanctioned by law then adopting legal remedy by way of a writ petition cannot be a ground to withhold gratuity. Therefore, petitioner’s gratuity was illegally withheld without any just and legal ground.
6. Learned counsel for respondents opposed the prayer and referred the contents of return. According to him, No Objection Certificate (NOC) was not given by the Officer on Special Duty (OSD) of Directorate of Ayush Department, Bhopal, whereas vide letter dated 13.11.2014, NOC to other officers were given. In pursuance thereof, vide letter dated 31.12.2014, District Pension Officer referred the objection raised by the Department which referred pendency of Writ Petition No.5903/2014. The orders dated 13.11.2014 and 31.12.2014 nowhere refer pendency of any departmental enquiry or criminal proceedings. Therefore, payment of gratuity was not made. When OSD issued NOC dated 19.2.2016, then immediately gratuity was paid. However, he prayed for dismissal of petition.
7. Heard the counsel for parties at length and perused the documents appended thereto.
8. This is a case where petitioner is seeking interest over the delayed payment of gratuity on wrong pretext.
9 . Petitioner retired on 31.12.2014 as Ayurvedic Medical Officer from Government Gan
The main legal point established in the judgment is the statutory entitlement of an employee to interest on delayed payment of gratuity as per the provisions of the Payment of Gratuity Act, 1972.
The right to interest on delayed gratuity payments is statutory and mandatory under Section 7(3-A) of the Payment of Gratuity Act, 1972.
Interest under the Payment of Gratuity Act is due from the date of entitlement unless hindered by claim delays, resulting in dismissal of a petition for earlier interest claims.
The court established that compliance with statutory timelines for gratuity payments negates entitlement to interest on delayed payments when no timely claims are made.
Retired employees are entitled to gratuity and interest on delayed payments, with the court having no discretion to deny interest under the Payment of Gratuity Act.
Gratuity is a statutory right that cannot be withheld or adjusted against employer claims or dues, except under the specific conditions prescribed in S. 4(6) of the Payment of Gratuity Act, 1972.
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