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Jharkhand High Court · body

2021 DIGILAW 671 (JHR)

Virender Kumar v. Union of India

2021-08-25

ANANDA SEN

body2021
JUDGMENT : ANANDA SEN, J. 1. Heard learned counsel appearing for the petitioners and the learned counsel for the respondents through Video Conferencing. The lawyers have no objection with regard to the proceeding, which has been held through Video Conferencing today at 10.30 a.m. They have no complain in respect to the audio and video clarity and quality. 2. Petitioner confines his prayer only in respect of payment of interest on the delayed payment of gratuity. 3. It is an admitted case that the petitioner joined service of Allahabad Bank on 12.01.1976 and was dismissed on 14.03.1991. His dismissal order was upheld up to Hon’ble Supreme Court. It is admitted case that the gratuity was paid on 05.03.2010. 4. Counsel for the petitioner submits that the gratuity should have been paid immediately after 14.03.1991, as per the Payment of Gratuity Act, but, the respondents delayed the matter and ultimately paid the same on 05.03.2010, so the petitioner is entitled for interest in terms of Section 7(3-A) of the Payment of Gratuity Act. 5. Mr. P.A.S. Pati, learned counsel appearing for the respondent-Bank submits that the petitioner had moved before different forums, which resulted in delay. He further submits that the petitioner did not file all the requisite forms nor did make any request to pay the amount of gratuity. Thus, the delay cannot be attributed to the employer, i.e. Allahabad Bank. He submits that for the first time, on 22.06.2009, application was filed by the petitioner for Payment of Gratuity Act, which was, in fact, incomplete. He submits that this delay was on the part of the petitioner, so he is not entitled to get any relief. 6. After hearing the parties, I find that the petitioner was dismissed from service on 14.03.1991 and his gratuity was paid on 05.03.2010. Even if there was litigation by the parties, the employer, Allahabad Bank, could not have withheld the gratuity amount, which the petitioner was entitled to receive. Section 7 of the Payment of Gratuity Act provides for determination of amount of gratuity. Sub-Section (1) of the aforesaid Section provides that a person, who is eligible for payment of gratuity, or any person authorized on his behalf, may send his application to the employer in the prescribed form. Section 7 of the Payment of Gratuity Act provides for determination of amount of gratuity. Sub-Section (1) of the aforesaid Section provides that a person, who is eligible for payment of gratuity, or any person authorized on his behalf, may send his application to the employer in the prescribed form. Duty of the employer is prescribed in Section 7(2) of the Payment of Gratuity Act, which provides that no sooner the gratuity becomes payable, employer shall, whether an application is preferred under Section 7(1) of the Payment of Gratuity Act or not, shall determine the amount of gratuity and give notice to the person in writing to whom gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined. For better appreciation, it is necessary to quote Section 7 of the Payment of Gratuity Act herein 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) The employer shall arrange to pay the amount of gratuity, within thirty days from the date it becomes payable to the person to whom the gratuity is payable. (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. (4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. (b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute. (c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer. (d) The controlling authority shall pay the amount deposited including the excess amount, if any, deposited by the employer, to the person entitled thereto. (e) As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit: (i) to the applicant where he is the employee. (ii) where the applicant is not the employee, to the nominee or, as the case may be, the guardian of such nominee or heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity. (5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a Court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely:- (a) enforcing the attendance of any person or examining him on oath. (b) requiring the discovery and production of documents. (c) receiving evidence on affidavits. (d) issuing commissions for the examination of witnesses. (b) requiring the discovery and production of documents. (c) receiving evidence on affidavits. (d) issuing commissions for the examination of witnesses. (6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196, of the Indian Penal Code (45 of 1860). (7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf. Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4), or deposits with the appellate authority such amount. (8) The appropriate Government or the appellate authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority.” 7. Thus, from the aforesaid provision, it is clear that even if there is no application made by the employee, employer has to determine the amount of gratuity and has to give notice in writing to the person and the Controlling Authority specifying the amount of gratuity so determined. From the pleadings of the parties, it appears that this procedure has not been followed by the Allahabad Bank. Further sub-section (3) provides that employer shall arrange to pay the amount within 30 days from the date it becomes payable. In the instant case, petitioner was dismissed from service on 14.03.1991 and it is not the case of the employer that the gratuity has to be forfeited, thus, it fell due within 30 days from 14.03.1991. Admittedly, the amount has not been paid within 30 days. In the instant case, petitioner was dismissed from service on 14.03.1991 and it is not the case of the employer that the gratuity has to be forfeited, thus, it fell due within 30 days from 14.03.1991. Admittedly, the amount has not been paid within 30 days. Section 7(3-A) of the Payment of Gratuity Act mandates that if the gratuity is not paid by the employer within the specified time mentioned in sub-section (3), then interest has to be paid by the employer, which would be simple in nature at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits as the Government may notify. There is a proviso to said sub-section, which provides that the interest shall not 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. When the proviso is read carefully, it will be clear that the employer is absolved from paying interest, if the employer has obtained a permission from the Controlling Authority in writing. Thus, there are two conditions for waiver from payment of interest. First condition is that there should be fault on the part of the employee for which the delay is cause and the second condition is employer has obtained permission in writing from the controlling authority for such delayed payment. These two conditions have been joined by the word and. This word ‘and’ makes these two conditions conjunctive. Thus, both these conditions should co-exist and then only interest can be waived. Existence of any one condition will not be a ground for not paying interest. Both the grounds should simultaneously exist. Reference may be made to the following decisions of the Hon’ble Supreme Court:- (i) H. Gangahanume Gowda vs. Karnataka Agro Industries Corporation Ltd. (2003) 3 SCC 40 (ii) Kerala State Cashew Dev. Corporation Ltd. vs. N. Asokan, (2009) 16 SCC 758 (iii) Y.K. Singla vs. Punjab National Bank and Others, (2013) 3 SCC 472 8. Reference may be made to the following decisions of the Hon’ble Supreme Court:- (i) H. Gangahanume Gowda vs. Karnataka Agro Industries Corporation Ltd. (2003) 3 SCC 40 (ii) Kerala State Cashew Dev. Corporation Ltd. vs. N. Asokan, (2009) 16 SCC 758 (iii) Y.K. Singla vs. Punjab National Bank and Others, (2013) 3 SCC 472 8. In this case, even if I accept the argument of the counsel appearing on behalf of the Bank and for the sake of argument agree with him that there was a delay on the part of the petitioner, but, the second condition, that is, obtaining permission in writing from the Controlling Authority is missing. It is admitted case of the parties that no written permission of the Controlling Authority was obtained for paying the gratuity amount belatedly. 9. Thus, in this case, the two conditions as enumerated in Section 7(3-A) of the Payment of Gratuity Act have simultaneously not been satisfied by the respondents. Thus, I have no hesitation to hold that the petitioner is entitled to receive interest in terms of Section 7(3-A) of the Payment of Gratuity Act with effect from 14.04.1991 till the amount was actually paid. The amount should be calculated in terms of the provisions as contained in Section 7(3-A) of the Payment of Gratuity Act and should be paid to the petitioner within six weeks from the date of receipt of a copy of this order by the respondent-Allahabad Bank. Consequentially, the order passed by the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, i.e. order dated 06.07.2011 passed in Case No. 36(112)/2010 (Annexure 2 to the writ petition) and order dated 18.11.2011 passed in PG Appeal 42 of 2011 (Annexure 3 to the writ petition), which have been challenged by the petitioner in this writ petition are hereby set aside to the above extent. 10. This writ petition stands allowed to the above extent.