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2014 DIGILAW 2313 (MAD)

V. Kalyanasundaram v. District Collector Nilgiris District

2014-08-04

K.RAVICHANDRA BAABU, N.PAUL VASANTHAKUMAR

body2014
Judgment : N. Paul Vasanthakumar, J 1. This Writ Appeal is filed against the order made in W.P.No.16817 of 2012 dated 12.03.2013, wherein the learned Single Judge has rejected the claim of interest for the belated payment of gratuity to the appellants, insofar as giving direction to disburse the proportionate interest to the appellants, if any excess amount is available with the 3rd respondent viz., the Liquidator cum Assistant Director of Industries and Commerce. 2. It is not in dispute that the appellants are entitled to get gratuity. It is also not in dispute that the appellants have received the principal amount payable towards gratuity to the tune of Rs.2,01,803, Rs.1,01,686, Rs.1,20,545 and Rs.45,007 respectively, totalling a sum of Rs.4,69,041/-. The learned Single Judge had refused to give positive direction to pay interest for the belated payment of gratuity on the ground that the Society was under liquidation. 3. The contention of the learned counsel for the appellants is that under Section 7(3-A) of the Payment of Gratuity Act, 1972, if the amount of gratuity is not paid by the employer on the date when it is payable, simple interest at such rate not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify, shall be paid by the employer till the date of payment. 4. Further, according to the learned counsel for the appellants, the interest payable as per the Government of India Notification as on date is 8.75% p.a. and therefore, the appellants are entitled to get interest at the rate of 8.75% p.a. from the date when the amount became due till the date of payment. The learned counsel also submitted that though the Society is under liquidation, that will not absolve their liability to pay interest, in the light of the overriding power given under Section 14 of the Payment of Gratuity Act, 1972. 5. The learned counsel for the 3rd respondent on the other hand submitted that the Society is under liquidation and the total liability as per their books of accounts as on the date of liquidation was Rs.2,79,13,000/- and the Society is not having any amount and hence for the payment of interest to the appellants, the 3rd respondent may be granted liberty to approach the Government for release of the amount. 6. 6. We have heard the rival submissions with reference to the statutory provisions contained under the Payment of Gratuity Act, particularly Section 14. 7. Section 14 of the Payment of Gratuity Act, 1972, reads as follows:- "14. Act to override other enactments, etc. -The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act". 8. It is not in dispute that the amount of gratuity was payable to the appellants within 30 days from 30.08.2000, the date on which the Society gave a letter to the workers relieving them from their services. It is also not in dispute that the amount of gratuity was already released on 22.04.2013 by way of demand draft to the petitioners. Further, the interest payable as per the Government of India Notification as on date is 8.75% p.a for the belated payment of gratuity under Section 7(3-A) of the Payment of Gratuity Act, 1972. In view of the above, we are unable to subscribe to the direction issued by the learned Single Judge insofar as payment of interest is concerned. 9. Hence, the respondents are directed to calculate interest payable to each of the appellants at the rate of 8.75% p.a. on the amount of gratuity to which the appellants are entitled from the date when it became payable till the date of payment of gratuity amount and the said amount is directed to be paid to each of the appellants within a period of three months from the date of receipt of a copy of this order. The Writ Appeal is disposed of with the above direction. No costs.