******* The petitioner is a Salt Workers Co-operative Production and Sale Society Limited at Arumuganeri. They have come forward to challenge the order passed by the second respondent, who is the appellate authority under the Payment of Gratuity Act, 1972.
2. The first respondent in this Writ Petition, who was employed as a worker in the Society, on daily wages basis, filed an application for payment of gratuity, on his having resigned his employment on 01.06.2003. Notwithstanding his resignation, the petitioner Society did not pay gratuity, which forced the first respondent to move the controlling authority under the Payment of Gratuity Act, 1972. His complaint was taken on file as P.G.No.337 of 2003 and notice was issued to the writ petitioner. Before the controlling authority, the petitioner took up the contention that the first respondent was daily rated employee and was not appointed in a regular manner, inasmuch as he was not sponsored through Employment Exchange and his appointment was the irregular appointment and the action of regularizing him with effect from 01.03.1999 was itself is illegal and, therefore, the audit department has objected for making any payment to the first respondent. These contentions were rejected rightly so by the controlling authority. The controlling authority, by referring to
Section 14 of the Payment of Gratuity Act, 1972, which has overriding effect over the other enactments, found that the first respondent was eligible for gratuity for the period of service from 30.12.1996 to 01.06.2003 in terms of
Section 4(1) of the Payment of Gratuity Act, 1972. Therefore, for the six years service rendered by him and on the basis of his last drawn pay of Rs.2,800/-, the total gratuity was worked out to Rs.9,692/-. The authority, without reference to
Sections 7(3) and
7(3A) of the Payment of Gratuity Act, 1972, had directed interest payment to be made, if the gratuity is not paid within 30 days from the date of his order.
3. It is the stand of the petitioner Society that they have paid the gratuity within 30 days. The matter did not end therein. The first respondent filed an appeal under
Section 7(7) of the Payment of Gratuity Act, 1972, before the second respondent stating that the controlling authority did not grant interest on the delayed payment of gratuity. The appeal filed by the first respondent was taken on file as P.G.A.No.47 of 2008 by the second respondent and notice was issued to the petitioner Management.
4. The short question that arose before the second respondent was whether the first respondent is entitled for interest on the delayed payment of gratuity. The second respondent, by its order dated 27.01.2009, found that the first respondent is entitled for interest on the gratuity in terms of
Section 7(3) and
7(3A) of the Payment of Gratuity Act, 1972 and, therefore, he directed 10% interest to be paid from the date on which the gratuity becomes due till the date on which it was paid by the petitioner Management. Aggrieved by the said order, the present Writ Petition has been filed.
5. Mr.V.O.S.Kalaiselvam, learned counsel appearing for the petitioner contended that the payment of interest will arise only when there is a delayed payment and in this case, there is no delay, since they have paid gratuity as ordered by the controlling authority and hence, the question of payment of interest will not arise.
6. This Court is unable to accept the said statement, since the entire controversy relevance legal provision. It is necessary to extract
Section 7(3) and
Section 7(3A) of the Payment of Gratuity Act, 1972, which read as follows:-
"(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 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."
7. When
Section 7(3A) talks about the gratuity becomes payable, it is useful to refer to
Section 4(1) of the Payment of Gratuity Act, 1972, which reads as follows:-
"4.Payment of gratuity,- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuos service for not less than five years,-
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement."
8. Therefore, the date i.e., relevant for determination of interest is the date on which the gratuity becomes payable, which in the present case, when the first respondent resigned his employment on 01.06.2003. Thereafter, when the first respondent issued notice for payment of gratuity, the petitioner employer did not honour the notice, nor deposit the amount with the controlling authority raising whatever disputes that they want to raise. On the contrary, it is only when the workman instituted a claim before the controlling authority, they contended about the irregular nature of his employment and his alleged disqualification from receiving gratuity. Therefore, from the beginning, it is the stand of the petitioner society that the first respondent is not eligible for gratuity. Therefore, there is no gain saying that they have paid gratuity, pursuant to the order passed by the controlling authority. If
Section 7(3) and
Section 7(3A) of the Payment of Gratuity Act, 1972, are read together, then there is no difficulty in understanding the eligibility for receiving interest. In the present case, the appellate authority has correctly construed the legal provisions and there is no case made out to interfere with the interpretation placed by the authority.
9. Under the said circumstances, the Writ Petition stands dismissed. The petitioner Society shall pay the amount due pursuant to the impugned order, within a period of 30 days from the date of receipt of a copy of this order, without further driving the first respondent to any other forum. Consequently, the connected miscellaneous petition is closed. However, there will be no order as to costs.
SML To The Appellate Authority, (Under the Payment of Gratuity Act) Indira Nagar, Anna Nagar, Madurai-625 020.