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1987 DIGILAW 405 (KAR)

DINAKARA DONDU KULKARNI v. JOINT LABOUR COMMISSIONER

1987-11-30

M.P.CHANDRAKANTARAJ

body1987
CHANDRAKANTHARAJ, J. ( 1 ) THE short question which falls for determination is whether this Court under article 226 of the Constitution could interfere with the order of the Appellate authority under the Payment of Gratuity act which is at Annexure-A. ( 2 ) THE grievance of the petitioner is that the competent authority had directed on the finding recorded on Issue No. 6 that the applicant would be eligible for compound interest on the delayed payment of gratuity at the rate of 9% per annum and therefore, the Appellate authority was in error in directing that the competent authority erred in law in awarding compound interest as it is opposed to law. ( 3 ) IN a sense the petitioner may be right. But, on a strict interpretation of section 6 of the Payment of Gratuity Act, 1972, the competent authority, respondent-2 namely, the Deputy Labour Commissioner, Belgaum Division, Belgaum, has done no more than indicating the eligibility of the petitioner to the amount of gratuity together with compound interest at 9% per annum. By that, he did no more than pointing out the law on the subject. Section 8 reads as follows :"recovery of gratuity.-if the amount of gratuity payable under this act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per anrum from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto. "it is clearfromthe language employed that the primary duty of the competent authority is to quantify the gratuity due to the employee and certify that amount as due to the employee. Thereafter, the collector while collecting that amount must collect together with compound interest from the due date, namely, 30 days after the retirement or termination of the services of the employee who is entitled to gratuity. It is there that the error took place. The Appellate Authority could well have considered that as no more than an observation and not exactly a direction. It is there that the error took place. The Appellate Authority could well have considered that as no more than an observation and not exactly a direction. Even if it is considered as a direction, the Collector is in any event duty bound by the mandate of the Legislature to collect the compound interest from the date on which the gratuity amount fell due. Once it is quantified and certified, the Collector has no choice left in the matter, but to collect the compound interest. However, it is clati- fied that in the event of a deposit having been made, the compound interest shall be calculated by the Collector only upto the date of deposit from the date it fell due and not thereafter. The observation of the Supreme Court in State of Kerala v. M. Padmanabha Nair ( AIR 1985 SC 356 ) is fully reflected in Section 8 of the act itself. While the Supreme Court has refferred to it as penal interest. Legislature has chosen to award compound interest on the amount due once it is quantified and certified. ( 4 ) SUBJECT to the above observations, this write petition is disposed of. --- *** --- .