Research › Search › Judgment

Madras High Court · body

2014 DIGILAW 3329 (MAD)

K. Paramasivam v. Chief Executive i/c

2014-09-15

D.HARIPARANTHAMAN

body2014
Judgment 1. The petitioner belongs to common cadre stream in the Public Sector Sugar Mills. He worked for more than 32 years. He retired from service on 31.01.1998. 2. The Government issued orders in G.O.Ms.No.302, Industries Department, dated 25.08.2000 revising the pay scale of common cadre employees with effect from 01.01.1996, but granted monetary benefits only from 01.01.1999. 3. The petitioner and three others, who are similarly situated like the petitioner herein and retired between 01.01.1996 and 01.01.1999 approached this Court by filing W.P.No.18383 of 2001 seeking to quash G.O.Ms.No.302, insofar as it denies revision of pay and monetary benefits to those who retired from service between 01.01.1996 and 31.12.1998 and also sought consequential direction to the respondents therein to pay the increased emoluments and consequent revision of leave salary, gratuity etc., to the petitioners therein, as are given to those in service as on 01.01.1999. 4. Though the prayer in the said writ petition was for monetary benefit from 01.01.1996 till the date of their retirement, this Court did not grant the said relief. However, this Court disposed the writ petition in W.P.No.18383 of 2001 on 21.10.2011 holding that G.O.Ms.No.302 revised the pay scale with effect from 01.01.1996 and therefore, the petitioners are entitled to the revision of fixation, but not monetary benefits. It was further held that pursuant to such fixation, the petitioners are entitled to terminal benefits according to the revised pay as per G.O.Ms.No.302. 5. At this juncture, it is relevant to extract para 17 of the judgment dated 21.10.2011 in W.P.No.18383 of 2001, which reads as follows: “17. Therefore, this writ is disposed of in the following terms: (i) All the petitioners herein are entitled to revision of pay scale as per the G.O.Ms.No.302 dated 25.08.2000 on and from 01.01.1996; (ii) The petitioners are entitled to calculate the retirement benefits like gratuity, leave salary etc., on the basis of their revised pay scale; (iii) It is an admitted fact that their retirement benefits were calculated on the basis of old scale that was in existence at the time of their retirement. Therefore, the retirement benefits are to be calculated on the basis of revised pay scale on and from 01.01.1996 and the monetary benefits are to be calculated accordingly i.e., gratuity, leave salary, etc., are to be paid to these petitioners within three months from the date of receipt of a copy of this order.” 6. Subsequently, the petitioners in W.P.No.18383 of 2001, including the petitioner herein were settled the balance of gratuity and leave salary etc., based on the revised pay, with effect from 01.01.1996, on notional basis. Accordingly, the petitioner was given Rs.32,408/- towards the balance of gratuity and Rs.31,829/- towards earned leave salary due to such revision of pay. 7. As stated above, this Court did not grant monetary benefits due to such revision of pay from 01.01.1996 as sought for by the petitioners. 8. The grievance of the petitioner is that he should be paid interest on the belated payment of balance of gratuity and also on earned leave salary. However, the said request was rejected by the second respondent in the impugned order dated 14.06.2012. 9. Heard both sides. 10. According to the petitioner, though G.O.Ms.No.302 was issued on 25.08.2000, the said order was implemented only with effect from 18.04.2001. Therefore, the claim for interest was made only from 18.04.2001 on the balance of gratuity, pursuant to the revision of pay as per G.O.Ms.No.302 and not from the date of retirement. The petitioner claims interest from 18.04.2001 to 21.03.2012, the date on which the balance of gratuity and earned leave salary was paid. According to the petitioner, the balance of gratuity together with earned leave salary comes around Rs.64,237. The petitioner has demanded interest @ 12% for Rs.64,237/- from 18.04.2001 to 21.03.2012. 11. The claim of the petitioner is based on Section 7(3-A) of the Payment of Gratuity Act, 1972 that provides for interest on the belated payment of gratuity. 12. On the other hand, the learned Additional Government Pleader as well as the learned counsel for the first respondent have submitted that this Court did not grant any interest on the belated payment of gratuity payable pursuant to notional fixation of pay as per G.O.Ms.No.302 and therefore, the petitioner cannot claim interest. 13. 12. On the other hand, the learned Additional Government Pleader as well as the learned counsel for the first respondent have submitted that this Court did not grant any interest on the belated payment of gratuity payable pursuant to notional fixation of pay as per G.O.Ms.No.302 and therefore, the petitioner cannot claim interest. 13. In this regard, I have already extracted para 17 of the judgment dated 21.10.2011 in W.P.No.18383 of 2001, wherein this Court directed to calculate retirement benefits on the basis of the revised pay scale on and from 01.01.1996 and the monetary benefits are to be calculated accordingly, that is gratuity, leave salary etc., are to be paid within three months from the date of receipt of the copy of the said order. 14. The learned Additional Government Pleader as well as the learned counsel appearing for the first respondent have vehemently contended that the amount as directed by this Court was paid well within three months and therefore, the petitioner is not entitled to interest. 15. On the other hand, the claim of the petitioner is based on Section 7(3-A) of the Payment of Gratuity Act, 1972. Therefore, the issue is as to whether the petitioner is entitled to interest on the balance of gratuity and earned leave encashment from 18.04.2001 to 21.03.2012, the date of his retirement. 16. As stated above, the petitioner retired from service on 31.01.1998. The Government Order in G.O.Ms.No.302, Industries Department, dated 25.08.2000 was issued revising the pay scales from 01.01.1996, but giving monetary benefits only from 01.01.1999. The petitioner sought revision of monetary benefits based on such revision of pay. But this Court did not grant monetary benefits, but held that the petitioner is entitled to revision and consequent to such revision, he is entitled to the balance of terminal benefits. That is, the petitioner is entitled to balance of terminal benefits, as per the Payment of Gratuity Act, 1972. 17. The judgment of this Court dated 21.10.2011 in W.P.No.18383 of 2001 has to be understood in the context of Payment of Gratuity Act. If the first respondent fails to pay gratuity within three months, it amounts to committing contempt of Court. 17. The judgment of this Court dated 21.10.2011 in W.P.No.18383 of 2001 has to be understood in the context of Payment of Gratuity Act. If the first respondent fails to pay gratuity within three months, it amounts to committing contempt of Court. Had this Court put a condition for payment of interest by issuing direction that if the amount is not paid within three months, the petitioner is entitled to interest, then there is a judicial intervention about the interest on the balance of gratuity. But it is not so. This Court simply directed to pay gratuity based on revision of pay scale on notional basis. In my view, this Court directed the payment of gratuity as per the Payment of Gratuity Act. 18. Section 7(3-A) of the Payment of Gratuity Act, 1972 contemplates interest for the belated payment of gratuity and the same is extracted hereunder: “7 (3-A). If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, 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: Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.” 19. In this case, the petitioner does not seek interest either from 31.01.1998, the date on which he retired from service or from 25.08.2000, the date on which G.O.Ms.No.302 was issued. He claims interest only from 18.04.2001, since the fist respondent paid the benefits under G.O.Ms.No.302 to all the employees on 18.04.2001 only. That is, according to the petitioner, the petitioners, who retired after 01.01.1999 were granted the benefits on 18.04.2001 as per G.O.Ms.No.302. Hence, the petitioner has claimed interest only from 18.04.2001 as the balance of gratuity shall be paid as on 18.04.2001. According to the petitioner, if it was paid on 18.04.2001, he could not have sought interest. 20. In my view, the claim of the petitioner is fully justified. Hence, the petitioner has claimed interest only from 18.04.2001 as the balance of gratuity shall be paid as on 18.04.2001. According to the petitioner, if it was paid on 18.04.2001, he could not have sought interest. 20. In my view, the claim of the petitioner is fully justified. The judgment of this Court shall be understood that gratuity shall be paid in accordance with law. Hence, I am of the view that the claim of the petitioner for interest is fully sustainable and the rate of interest is 10%. But the claim of the petitioner for 12% interest cannot be granted since the notification issued under Section 7(3-A) by the Central Government has fixed simple interest only @ 10%. Therefore, the petitioner is entitled to 10% interest for the period from 18.04.2001. 21. As far as the earned leave encashment is concerned, I am of the view that though the petitioner is not entitled to interest based on any statute, he is entitled to interest as per the decision of the Supreme Court in S.K.DUA VS. STATE OF HARYANA reported in 2008 (3) SCC 44 for any belated payment and the same was followed by a Division Bench of this Court in GOVERNMENT OF TAMIL NADU, REPRESENTED BY THE SECRETARY TO GOVERNMENT VS. M.DEIVASIGAMANI reported in 2009 (3) MLJ 1 and the rate is also prescribed by the Division Bench. Hence, I am of the view that the petitioner is entitled to interest @ 10% for the terminal benefits for the period from 18.04.2001 to 21.03.2012. 22. Accordingly, the writ petition is disposed of with a direction to the first respondent to pay 10% interest on the belated payment of terminal benefits for the period from 18.04.2001 to 21.03.2012 within a period of eight weeks from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petition is closed.