The petitioner has challenged the rejection order dated 5.7.2001 passed by the first respondent rejecting the claim of the petitioner for interest and also the legal expenditure incurred in connection with the case.
2. The case of the petitioner is that he was employed as boiler Operator in a Mill at Myiladuthurai from 11.10.1971 to 31.10.1995 and retired from service on 31.7.1995. After retirement the respondents did not disburse the gratuity due to the petitioner. The fourth respondent informed the petitioner that there was a shortage in food grain while he was in service and that his gratuity amount was adjusted to the amount. A reply was given pursuant to the notice given to the petitioner. The petitioner contended that he filed a case PG 19/97 before the Controlling Authority under the Payment of Gratuity Act. The said authority passed an order on 23.2.1998 directing the fourth respondent to disburse Rs.54,111/- immediately to the petitioner. Aggrieved by that, the fourth respondent filed an appeal before the second respondent. The said appeal was dismissed by the second respondent on 31.8.1999.
3. Inspite of dismissal, no amount was paid and hence, on a petition, Gratuity Disbursement Law Officer passed an order dated 11.12.2000 directing the fourth respondent to pay the said amount of Rs.54,111/- along with interest and it was subsequently stated by an order dated 5.2.2001 that Rs.54,111/- only had to be paid to the petitioner. Hence petitioner made representations to the first respondent on 28.4.2001 and on 12.5.2001 claiming interest as well as legal expenditure and the same was rejected by an order dated 5.7.2001 which is impugned herein.
4. Ms.S.Suganthi, representing Mrs.Sudha Ramalingam submitted that
Section 8 of the Payment of Gratuity Act 1972 speaks about the interest for the Gratuity amount which was not paid in the prescribed time. Learned counsel also submitted that the petitioner is entitled to 12% simple interest from the date of order to till the amount was deposited on 28.8.1998.
5. Learned counsel for the fourth respondent submitted that the petitioner caused loss to the tune of Rs.54,470.85/- while he was in service and the said amount was adjusted from the gratuity payable to him. Further the fourth respondent submitted that there is no necessity to pay interest to the petitioner by the fourth respondent. The fourth respondent immediately on receipt of the order of the Assistant Commissioner of Labour, Controlling Authority, Payment of Gratuity, Trichy had deposited the amount on 28.8.1998.
6. A perusal of the records would show that after retirement of the petitioner on 31.7.1995, the fourth respondent did not pay the gratuity amount. Pursuant to the order passed by the first respondent, the amount was deposited on 3.8.1998. The appeal filed by the fourth respondent was dismissed on 31.8.1999 and the same attained finality. Hence the liability of the fourth respondent was confirmed. Now the question is whether the petitioner is entitled to interest for the period from 31.7.1995 to 28.8.1998 on which day, the fourth respondent deposited the amount before the second respondent.
Section 8 of the Payment of Gratuity Act 1972 is extracted as follows:
"8. Recovery of gratuity:-- If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon (at such rate as the Central Government may, by notification, specify, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto:
(Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate.:
Provided further that the amount of interest payable under this section shall, in no case exceed the amount of gratuity payable under this Act."
7. As per the said Section if the amount of gratuity was not paid by the employer within the prescribed time, the controlling authority would issue certificate for the amount together with compound interest. In this case the amount was to be paid on the date of retirement. However it was deposited only on 28.8.1998 and during which period the petitioner is entitled to claim interest under
Section 8 of the Payment of Gratuity Act and the fourth respondent is liable to pay the same. When there is a specific Section available under the Act, it is not understandable as to how the respondent passed the impugned order stating that there was no provision in the Act to pay interest. The first respondent is the controlling authority under the Payment of Gratuity Act as defined under
Section 2(d) of the Act read with
Section 3 of the Payment of Gratuity Act 1972. The said authority is supposed to know the provision of law especially when he is dealing with the claims of weaker section, namely workers. The impugned order per se illegal and against the provisions of Payment of Gratuity Act 1972. Preamble of the Act reads as follows:
"An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations , ports, railway companies, shops of other establishments and for matters connected therewith or incidental thereto."
8. The very enactment itself is for the benefit of workers. The first respondent cannot pass order contrary to the provisions of the Act. Hence the said order is liable to quashed and the fourth respondent is directed to pay a sum of Rs.19,470/ being the simple interest at the rate of 12% for three years i.e. from 31.7.1995 to 3.8.1998. The said amount was arrived at after calculation. Hence the fourth respondent is directed to pay the said amount of Rs.19,470/- within two weeks from the date of the receipt of a copy of this order. Accordingly the writ petition is allowed. No order as to costs.
8.12.2009 Internet:Yes/No Index :Yes/No vk To:
1.Assistant Commissioner of Labour Controlling Authority, Payment of gratuity, Trichy.
2.Joint Commissioner of Labour, Appellate Authority, Payment of Gratuity.
3.The Collector, Office of the Collector, Trichy District, Trichy.
4.The Managing Director, Tamilnadu Civil Supplies Corporation Ltd., 12, Thambuswamy Street, Kilpauk, Chennai-600 010.
N.KIRUBAKARAN,J.
vk W.P.No.6021 of 2003 8.12.2009