Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(SC) 10784

SUPREME COURT OF INDIA
MR. JUSTICE J.K. MAHESHWARI, MR. JUSTICE ARAVIND KUMAR, JJ
GAGAN BIHARI PRUSTY VS. PARADIP PORT TRUST
SLP(C) No. 4468/2022

Advocates:
Ms. Rimali Batra, Adv., Mr. Abhishek Lalwani, Adv., M/S. D.s.k. Legal, AOR, Ms. Madhusmita Bora, AOR, Mr. Pawan Kishore Singh, Adv., Mr. Dipankar Singh, Adv., Ms. Pavithra V., Adv., Mr. Nitin Tambwekar, Adv., Mr. Seshatalpa Sai Bandaru, AOR, Mr. Shubhranshu Padhi, AOR, Mr. D. Girish Kumar, Adv., Mr. Jay Nirupam, Adv., Mr. Pranav Giri, Adv., Mr. Ekansh Sisodia, Adv., Ms. Pritha Srikumar Iyer, Adv., Mr. Arun Srikumar, Adv., Mr. Anwesha Singh, Adv., Ms. Ishita Jain, Adv.

Employees are entitled to statutory interest on delayed gratuity payments as per Central Government notifications, irrespective of disputes causing delays.

Headnote:(A) Payment of Gratuity Act - Interest on delayed payment of gratuity - The High Court maintained the order granting interest on gratuity at 6% per annum, which was challenged by the petitioner - The applicable interest rate as per Central Government notifications was 10% per annum. (Paras 1-4)

(B) Interest - The court held that employees are entitled to the statutory interest rate without excuses for delays in payment due to disputes. (Para 4)

Facts of the case:
The petitioner challenged the High Court's decision to grant interest on delayed gratuity at a lower rate than mandated by the Central Government notifications.

Findings of Court:
The court found the High Court's order unjustified and modified the interest rate to 10% per annum.

Issues: The main issue was whether the interest on delayed gratuity should be paid at the statutory rate of 10% or the lower rate of 6%.

Ratio Decidendi: The court ruled that the interest on gratuity must align with the Central Government's notifications, emphasizing that delays do not exempt the employer from paying the statutory interest rate.

Result: The petitioner is entitled to interest at 10% per annum on the gratuity amount.

O R D E R

SLP (C) No. 4468/2022

1. Challenging the judgment dated 18.11.2021 passed by the High Court of Orissa in Writ Appeal No. 322 of 2019 maintaining the order of the learned Single Judge granting interest on the delayed payment of gratuity @ 6% per annum in place of 10%, the petitioner is before this Court.

2. We have heard learned counsel for the parties. During hearing, it is brought to our notice that the interest on the amount of gratuity shall be payable as per the notifications issued by the Central Government under the provisions of Payment of Gratuity Act . The notification which was in vogue at the relevant period is of interest payable on gratuity @ 10%

per annum.

3. It is contended that on account of a dispute of applicability of the provisions of the Payment of Gratuity Act , the payment of gratuity was delayed, therefore, urged by the respondent that interference in the order is not warranted.

4. In our view, the said argument is of no substances, in particular where an employee retires and he has to receive the gratuity belatedly, the interest would be payable as per the notifications issued by the Central Government without having any excuse. Therefore, the direction of the Single Judge maintained by the Division Bench for payment of gratuity with interest @ 6% per annum is not justified. The petitioner would be entitled to get interest @ 10% per annum on the amount of gratuity. The differential amount of interest shall be paid by the respondent within a period of four weeks from today.

5. With the above modification, in the impugned judgment, the Special leave Petition stands disposed of.

6. Pending applications, if any, shall stand disposed of.

SLP (C) NO. 20740/2022

7. De-tag.

8. list after four weeks.

(GULSHAN KUMAR ARORA) (NAND KISHOR)

AR-CUM-PS COURT MASTER

Click Here to Read the rest of this document

2025 Supreme(Online)(SC) 10784

SUPREME COURT OF INDIAMR. JUSTICE J.K. MAHESHWARI, MR. JUSTICE ARAVIND KUMAR, JJGAGAN BIHARI PRUSTY VS. PARADIP PORT TRUSTSLP(C) No. 4468/2022

Employees are entitled to statutory interest on delayed gratuity payments as per Central Government notifications, irrespective of disputes causing delays.

SUPREME COURT OF INDIA
MR. JUSTICE J.K. MAHESHWARI, MR. JUSTICE ARAVIND KUMAR, JJ
GAGAN BIHARI PRUSTY VS. PARADIP PORT TRUST
SLP(C) No. 4468/2022