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2025 DIGILAW 639 (KER)

Kerala Ayurvedic Co-operative Society Limited v. State Of Kerala

2025-03-18

D.K.SINGH

body2025
JUDGMENT : (D. K. SINGH, J.) [WP(C) Nos.8278/2024, 8388/2024, 43689/2023] The Kerala Ayurvedic Co-operative Society Limited has filed these writ petitions before this Court impugning the Order dated 31.10.2023 passed by the Deputy Labour Commissioner directing the petitioner Co- operative Society to pay the gratuity amount due to its employees along with statutory interest. Under the agreement between the petitioner Co-operative Society and the Life Insurance Corporation of India, the gratuity is to be paid by the Life Insurance Corporation to the retired employees provided, the employer has remitted the said amount to the Life Insurance Corporation. 2. The Life Insurance Corporation, the 4 th respondent, submitted that the petitioner Co-operative Society has remitted the amount with a deficit of Rs.5 lakhs towards the gratuity of the retired employees. 3. This Court Order dated 30.10.2024 directed the petitioner Co-operative Society to remit Rs.5 lakhs to the Life Insurance Corporation. Thereafter, the Life Insurance Corporation should pay the gratuity to the retired employees as the deficit was only Rs.5 lakhs. 3.1 In compliance with the said order and orders passed thereon, including the order dated 17.03.2025, the petitioner Co-operative Society has paid the Life Insurance Corporation the deficit amount of Rs.5 lakhs. 4. The learned Counsel for the Life Insurance Corporation submits that it has now received the entire amount due in respect of the gratuity to be paid to the retired employees. She, however, submits that the employer has not paid interest, and the Life Insurance Corporation is not liable to pay interest on delayed gratuity payments to the retired employees. 5. It is not in dispute that the entire gratuity amount has been i.e paid by the employer, ., the petitioner Co-operative Society. Whether the Life Insurance Corporation is entitled to receive interest from the petitioner Co-operative Society is between the Life Insurance Corporation and the petitioner Co-operative Society. If any further amount is due in respect of the interest, the Life Insurance Corporation shall be free to realize the said amount from the petitioner Co-operative Society. 5.1 However, under the Payment of Gratuity Act 1972 a retired employee is entitled to interest under Sub-section (3-A) of Section 7 if the amount due in respect of the gratuity is not paid within thirty days from the date of retirement. In these cases, the amount due on account of gratuity was not paid within thirty days to the retired employees. In these cases, the amount due on account of gratuity was not paid within thirty days to the retired employees. Therefore, they are entitled to receive statutory interest as per the provisions of Sub-section (3-A) of Section 7 of the Payment of Gratuity Act 1972. 6. Thus, the present writ petitions are closed with direction to the Life Insurance Corporation, the 4 th respondent, to pay the gratuity amount to the retired employees along with statutory interest. If there is any shortfall in respect of the payment received from the petitioner Co-operative Society, the Life Insurance Corporation shall be free to recover the said amount from the petitioner Co-operative Society. With the aforesaid directions, the writ petitions and all interlocutory applications regarding interim matters stand closed.