1. By way of this petition, the petitioner has prayed to quash and set aside the order dated 08.09.2011 passed by the Appellate Authority as well as the order dated 27.07.2010 passed by the Controlling Authority.
2. Brief facts leading to the present petition are as follows:-
1. The respondent No.1 retired from the services of the petitioner-Insurance Company from 30.09.1997. As the CBI inquiry was pending against respondent No.1, the petitioner- Company withheld the gratuity of respondent No.1 as per the provision of Rule-45 of the General Insurance (Employees) Pension Scheme, 1995.
2. During the pendency of the said inquiry, respondent No.1 herein has preferred the Special Civil Applications being Special Civil Application Nos.3258 of 2002 and 3658 of 2002 for the direction to the petitioner herein to forthwith release the terminal benefits, which was disposed of by this Court, without giving any specific direction to the petitioner.
3. Upon acquittal from the CBI inquiry, respondent No.1 was paid Rs.3,50,000/- as gratuity. Thereafter, respondent No.1 filed Gratuity Application No.ALC/ADI/48(9)/2009 claiming interest of Rs.7,37,186/- before the Controlling Authority, which was allowed by order dated 27.07.2010 and the petitioner herein was directed to pay interest at the rate of 10% on the amount of Rs.3,50,000/- from 30.09.1997 till the date of payment.
4. The petitioner herein being aggrieved by the said order preferred the appeal before the Appellate Authority, which was rejected and the order of the Controlling Authority was confirmed. Therefore, the petitioner has preferred present petition and prayed to quash and set aside the orders passed by both the Authorities.
3. Learned advocate for the petitioner has heavily relied upon Rule-45(2) of the General Insurance (Employees) Pension Scheme, 1995, which is quoted as under:-
“Rule 45 – Provisional Pension
(1) ...
(2) In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable.”
4. I have heard learned advocate for the petitioner and perused the record. This Court has held in case of Valsad District Central Co-operative Bank Ltd. Vs. Krushnalal Manilal Vashi reported in 2004 III CLR 235 in Paragraph No.7.2 that when no departmental inquiry was conducted, merely on alleged order of dismissal or termination, that too after the employee has reached the age of superannuation, the petitioner is not entitled to forfeit the gratuity amount. It was further held in Paragraph No.10 that in view of the provisions of Section 7(3-A) of the Act, the competent authority has committed an error in grating compound interest at the rate of 15%. The order should have been for simple interest which was prevailing as on 1st January, 1998.
5. In view of the above settled legal position, in my view, the Authorities below were completely right in awarding 10% interest on the amount of gratuity. The Authorities below has not committed any error. Therefore, the petition deserves dismissal and accordingly dismissed.
(K.S.JHAVERI, J.) ..mitesh..