The gratuity payable to an employee is governed by the law applicable at their date of retirement, and amounts exceeding the statutory ceiling limit are recoverable.

Judgment :

Rai Chattopadhyay, J.

1. A judgment and order of the Hon’ble Single Judge dated February 18, 2025 in WPA 3101 of 2025, is under challenge in the instant appeal. The respondent No.1/writ petitioner/company, had challenged the following before the Hon’ble Single Judge in the said writ petition: (i) order dated May 25, 2022 passed by the Controlling Authority; (ii) order dated September 30, 2024 passed by the Appellate Authority; and (iii) orders dated October 28, 2022 and November 21, 2024 passed by the Certificate Officer.

2. In the order dated May 25, 2022, the Controlling Authority has held that the appellant/workman is entitled to payment of gratuity for 41 years of service; that the appellant would be entitled to Rs. 7,35,038/- plus interest admissible under section 7(3A) of the Payment of Gratuity Act amounting to Rs. 6,28,030/-, from April 17, 2014 to May 25, 2022, totalling a sum of Rs. 14,13,068/- . He has further directed that the sum of Rs. 14,13,068/- to be paid to the appellant, within 30 days. This order was challenged in the writ petition.

3. An appeal was preferred by the company against the order of the Controlling Authority dated May 25, 2022. The Appellate Authority has dismissed of the same by dint of its order dated September 30, 2024, for the reason inter alia that the company has not deposited the specified amount , that is the amount of gratuity as directed by the Controlling Authority (vide order dated May 25, 2022, in this case) in terms of section 7(4) of the Payment of Gratuity Act, 1972, which is a statutory pre-condition for an appeal to be maintainable before the said Authority. This order has also been challenged before the writ Court.

4. October 28, 2022 is the Certificate issued by the Certificate Officer under section 8 of the said Act of 1972, for recovery of the sum of Rs. 14,13,068/-as gratuity which includes the statutory simple interest, and that the said sum of money is recoverable along with the compound interest thereon to the tune of 15% per annum, with effect from June 25, 2022, till the actual date of payment. This certificate dated October 28, 2022 was challenged in the writ petition.

5. The order dated November 21, 2024, is the calculation sheet, by dint of which, the compound interest over the gratuity amount of Rs. 14,13,068/- was calculated, to amount to Rs. 5,32,023/- for the period from June 25, 2022 to October 3, 2024; disbursement thereof to the appellant was also contemplated in the said order. The writ petitioner has also challenged the instant order before the Hon’ble Single Judge.

6. After hearing the parties, the Hon’ble Single Judge has delivered judgment dated February 18, 2025, which is impugned in the instant appeal filed by the appellant/workman. The Hon’ble Single Judge has inter alia held that in view of the substituted provision of section 4(3) of the Payment of Gratuity Act 1972 vide Act 12 of 2018 [with effect from March 29, 2018], since the upper limit of gratuity payable to an employee should not exceed Rs. 10 Lakhs, which is a provision, only effective prospectively, and having no retrospective operation, the workman/appellant has been granted relief more than what he was entitled to in accordance with law. Hence, the Court has directed that the respondent No.1/company would be entitled to proceed in accordance with law for recovery of the excess payment of gratuity, against the applicant/workmen. This is the conspectus on which the instant appeal has been preferre