General Manager/Administration, Tamil Nadu State Transport Corporation (Kumbakonam) Limited v. D. Duraidhanapal
2019-02-01
G.R.SWAMINATHAN
body2019
DigiLaw.ai
ORDER : G.R. Swaminathan, J. 1. In all these writ petitions, the management of Tamil Nadu State Transport (Kumbakonam) is the writ petitioner. The respondents in these writ petitions were employed with the petitioner corporation. They retired from service but according to the workmen, the gratuity dues were not settled in full. Therefore, they moved the controlling authority under the Payment of Gratuity Act, 1972. The controlling authority allowed their claims. In 23 out of these 24 cases, the authority granted only 6% interest. In one case, the authority granted 10% interest. The workmen filed appeals seeking enhancement of the award granted by the controlling authority, while the management filed petition for the reduction of interest. The appeal of the management was dismissed while the appeal filed by the workmen were allowed and the interest was enhanced from 6% to 10%. Challenging the same, these writ petitions have been filed. 2. Heard the learned Senior Counsel for the management. Considering the special circumstances of this case, this Court requested Mr. Ajay Ghose to appear for the workmen. 3. The learned counsel appearing for the workmen contended that the orders passed in these writ petitions do not warrant any interference. His submission is that as per Section 7(3A) of the Payment of Gratuity Act, 1972, a notification was already issued by the Central Government and it provides for awarding 10% interest. He would contend that the notification that was issued as early as in 1987 is still holding good and no modification notification has been issued. His specific contention is that the management is not justified in placing reliance on a notification issued by the Central Government setting out the rate for repayment of long term deposit and that a special notification under Section 7(3A) of the Act is required. In as much as the notification earlier issued under this provision is still holding the field, this Court will have to necessarily abide by the same. 4. I am not able to subscribe to the aforesaid submission. As rightly pointed out by the learned Standing Counsel for the management, no doubt, the special notification issued by the Central Government under Section 7(3)A of the Act stipulates awarding of 10% interest and that it has not been modified till date. But then, a notification issued under a statutory provision cannot be applied, if it would run counter to the statutory mandate.
But then, a notification issued under a statutory provision cannot be applied, if it would run counter to the statutory mandate. Section 7(3A) of the Act states that 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. In other words, this provision provides a upper ceiling limit for the rate of interest to be awarded. The upper ceiling limit is the rate notified by the Central Government for repayment of long term deposits. 5. It is not in dispute that for the period in question, the rate notified by the Central Government for repayment of long term deposit was between 8.7% per annum to 8.5% per annum. If the notification of the year 1987 that was originally issued under the provision is applied that would certainly run counter to the restriction laid down in Section 7(3A) of the Payment of Gratuity Act. Therefore, I am of the view that the appellate authority erred in awarding 10% interest. Considering the facts and circumstances of this case, the same is modified and reduced to 8.5% per annum. 6. Mr. Ajay Ghose was requested to be an amicus curiae. Notice to the respondents was dispensed with only because the learned Standing Counsel for the management on instruction gave an undertaking that the modified award amount would be disbursed to the respective claimants within a period of six weeks from the date of receipt of a copy of this order. 7. Accordingly, this writ petition is party allowed. Since a substantial portion of the amount had already been deposited with the Appellate Authority, the respective claimants are at liberty to withdraw the same. The balance amount shall be disbursed by the management within a period of six weeks from the date of receipt of a copy of this order. 8. Accordingly, these writ petitions stand partly allowed. No costs. Consequently, connected miscellaneous petitions are closed.