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2014 DIGILAW 720 (ORI)

Mohan Dakua v. Steel Authority of India Limited

2014-10-31

BISWANATH RATH

body2014
JUDGMENT : Biswanath Rath, J. 1. This is a case at the instance of the employees Rourkela Steel Plant claiming interest for delayed payment of gratuity. The petitioners justify that their claim for interest relying on provision contained in Section 7(3) and Section 7(3-A) of the Payment of Gratuity Act, 1972. 2. Petitioner's case is that even though their V.R. applications were accepted and they have all retired from particular dates, the Gratuity as due against them was not released in time. There is no dispute that the petitioners have all retired by taking V.R. There is also no dispute that there is delay in the payment of gratuity as against the petitioners. Pursuant to the direction of this Court in W.P.(C) No. 4351/2013. Petitioners filed representations under Annexure-2 (series) to the writ petition. The petitioners have quoted the order passed by the competent authority at Annexure-3 (series) on disposal of the one of the representation at the instance of the petitioner No. 1 (Mohan Dakua). The plea taken by the management in rejecting the request for grant of interest is that there were about 2000 and odd persons applied for VR. Many of them did not vacate quarters on their retirement for which clarifications were sought for from the competent authority. It is for this reason, the gratuity as against the petitioners could not be released in time and since the delay was bona fide, there should not be charging of any interest. 3. Learned counsel appearing for the opposite parties brought some documents to my notice as well as the documents filed by the opposite parties in their counter. In filing the counter, the S.A.I.L. Authority has just repeated the ground taken in the order of rejection of the representation of the petitioners. 4. In order to appreciate the above contentions urged, it is necessary to notice the provisions of the Payment of Gratuity Act, 1972 (for short, "the Act") to the extent they are relevant. They are extracted below: "7. Determination of the amount of gratuity-(1) A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. They are extracted below: "7. Determination of the amount of gratuity-(1) A person who is eligible for payment of gratuity under this Act or any person authorized, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. (2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the Controlling authority specifying the amount of gratuity so determined. * * * * * * * (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." 5. Reading of Sub-section (3) of Section 7 gives a clear indication for release of the gratuity within a period of thirty days from the date it becomes payable to the person to whom the gratuity is payable. Similarly in Sub-section (3-A) of Section 7, there is a statutory mandate that in case the gratuity is not released within the time framed, the employer is required to pay the simple interest at such rate not exceeding the rate notified in the notification by the Central Government from time to time for repayment of long term deposit as the Government may be certified by such notification. 6. From the pleadings of the parties, it appears that there is no latches on the part of the petitioners in the matter of release of the gratuity. 6. From the pleadings of the parties, it appears that there is no latches on the part of the petitioners in the matter of release of the gratuity. I find force in the submissions of the petitioners which is not only supported by the statutory provisions as at Sub-section (3), (3-A) of Section 7 but also covered by a decision decided by Hon'ble Apex Court in case of H. Gangahanume Gowda Versus Karnataka Agro Industries Corporation Ltd. as reported in (2003) 3 Supreme Court Cases 40. By deciding similar matter, the Hon'ble Apex Court was pleased to grant interest for the delayed period @ 10% as available in para-9 and 10 of the said decision. The petitioner's case is squarely covered under the above decision of the Hon'ble Apex Court. 7. Further, the petitioners have also referred to the statutory provisions as recorded to hereinabove and they are entitled to interest for delayed payment of Gratuity under the statute also. 8. Under the circumstances, I allow the writ petition directing the opposite party No. (S.A.I.L.) to calculate the interest @ 10% to be paid to each of petitioners independently. Calculation as directed be made within a period of four weeks from the date of communication of the order and payment as calculated be released in favour of each of the petitioner within a period of two weeks thereafter. The Writ petition succeeds to the above extent. However, there shall be no order as to cost.