Research › Browse › Judgment

Supreme Court of India · body

2025 DIGILAW 540 (SC)

M. Meenakshi Sundaram v. S. Manoharan

2025-02-11

AHSANUDDIN AMANULLAH, SUDHANSHU DHULIA

body2025
ORDER : 1. Leave granted. 2. Heard learned counsel/senior counsel for the appellant(s) and the respondents. 3. The appellant, before this Court, is the representative of the 317 workmen, who were working in a firm i.e. M/s. Everest Engineering Works, Coimbatore of which respondent no.1 and his late father were the directors/proprietors. The said firm was to wind up by the order of the Sub Court, Coimbatore on 28.08.1989. Since the workmen were not given their dues in form of gratuity and wages, hence the workmen (227 in number) had approached the Gratuity Authority under the Payment of Gratuity Act, 1972 (for short "the Gratuity Act") where awards were passed declaring the amount of gratuity due to be paid to the workmen and awarding interest under Section 7(3A) of the Gratuity Act. As this amount was not paid the workmen (213 in number) moved the Labour Court, Coimbatore by filing application(s)/petition(s) under Section 33C (1) of the Industrial Disputes Act, 1947 (for short "the ID Act") where an order was passed in their favour and the respondent(s) were directed to release the remaining wages as well as arrears of bonus. Since, this was not done, the workmen were constrained to move an application(s)/petition(s) under Section 8 of the Gratuity Act before the Deputy Commissioner of Labour concerned and consequently the said Commissioner issued notice to the District Collector concerned and an order of recovery was passed by the Tehsildar concerned which was challenged by the respondent's company before the High Court in a writ petition which was ultimately dismissed by the Learned Single Judge. Consequently, respondent no.1 had filed a writ appeal before the Division Bench of the Madras High Court where interalia the following order was passed:- "14.After hearing Mr.V.Karthic, learned Senior Counsel, representing for Mr.R.Syed Mustafa, learned counsel appearing for the appellant, Mr.V.Manoharan, learned Government Advocate appearing for R1 and R2, Ms.V.S.Usharani, learned counsel appearing for R3 to R5 and Mr.P.Ebenezer Paul, learned counsel appearing for R6, we are inclined to accept the suggestions made by the learned Senior Counsel while disposing of this appeal. Accordingly, this appeal stands disposed of with the following directions: (a) As the issue was pending for consideration from the year 1989, to avoid further delay, this Court hereby directs the Registry to transfer this case bundle to the file of the Principal Labour Court, Coimbatore immediately; (b) The Bank of Baroda, Ram Nagar Branch, Coimbatore is directed to hand over the amount along with interest accrued as on today available in their credit to the fifth respondent as and when required by the fifth respondent; Image (c) The Principal Labour Court, Coimbatore, after receiving the amount from the fifth respondent along with interest accrued as on today, shall disburse the same to the workers as per the Table shown in page No.144 of the Additional Typed Set I, which is tabulated hereunder: (d) Since respondents 3 and 4 are no more, the Principal Labour Court, Colmbatore is directed to pay a sum of Rs.5,00,000/- (Rupees Five Lakhs only) to the fifth respondent towards remuneration from and out of the funds available in the Bank of Baroda. (e) As submitted by the learned senior counsel that since list of properties shown in page No.165 of the Additional Typed Set I, namely, item Nos.10, 11 to 14, which are landed properties, have not been sold by respondents 3 to 5, they are also available for meeting out the dues of the 315 workers, the Principal Labour Court, Coimbatore is permitted to make use of the same for disbursing the amount to the workers, if needed. (f) The Principal Labour Court, Coimbatore is directed to dispose of the matter within a period of three months from the date of receipt of a copy of this order. Consequently, connected M.P. is closed. No costs." 4. Since in the order of the High Court, there was no provision regarding interest either on the gratuity or on the wages, hence this case is filed before us. The learned counsel for the appellant(s) has brought to our notice sub-section (3) & (3A) of Section 7 of the Gratuity Act which reads as under: "(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. The learned counsel for the appellant(s) has brought to our notice sub-section (3) & (3A) of Section 7 of the Gratuity Act which reads as under: "(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. (3A) If the amount of gratuity payable under subsection (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. A bare perusal of this provision shows that under sub-Section 3A, gratuity is not paid within one month, it shall carry an interest till the time it is ultimately paid. This interest has not been given. Moreover, no interest has been calculated on the wages as well by the High Court despite the fact that these wages were also not paid to the workmen for about 39 years. In our opinion, interest was liable to be given on gratuity as well as on wages. 6. We therefore, direct that the amount already fixed by the High Court shall, in addition, carry interest at the rate of 7.5% per annum on gratuity from the date when it was payable as per Section 7(3A) of the Gratuity Act and a similar interest will also be given on the arrears of wages, which shall be paid to the workmen within a period of one month from today. 7. We have also been informed that the Administrator has already transferred the amount to the concerned Labour Court. The appellant(s) would always be at liberty to move an application before the concerned Labour Court and the amount shall be disbursed to each of the workmen as per our finding in the preceding paragraph above, within two weeks of the moving such application. 8. The appellant(s) would always be at liberty to move an application before the concerned Labour Court and the amount shall be disbursed to each of the workmen as per our finding in the preceding paragraph above, within two weeks of the moving such application. 8. In addition to the above, the Administrator shall transfer an amount of Rupees Five Lakhs within three weeks to the concerned Labour Court which should release the said amount within a month, to be collectively distributed amongst all the workmen as cost of litigation. 9. The present appeal is disposed of in the above terms. 10. Pending application(s), if any, shall also stand disposed of.