Allowed

Kamal Khursheed v. State of U.P. Thru. Prin. Secy. Rural Development Lko. and 2 Others

Allahabad HC7 Aug 2024/5201/2024

Case brief

AI extract

What is this about?

The Allahabad High Court set aside an order rejecting the petitioner's claim for interest on delayed gratuity. Relying on Supreme Court and High Court precedents, the court held that gratuity is a valuable right, and delay warrants interest payment.

What did the court decide?

Impugned order dated 21-6-2024 set aside; respondent directed to pay interest on gratuity within three weeks.

Kamal Khursheed Vs State of U.P. Thru… — Pension and Retirement Benefits | Allahabad HC (2024)

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Neutral Citation No. - 2024:AHC-LKO:54221

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Court No. - 4

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Case :- WRIT - A No. - 5201 of 2024

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Petitioner :- Kamal Khursheed Respondent :- State Of U.P. Thru. Prin. Secy. Rural Development Lko. And 2 Others Counsel for Petitioner :- Vijay Kumar Srivastava Counsel for Respondent :- C.S.C.

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Hon'ble Rajesh Singh Chauhan,J.

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Heard Shri V.K. Srivastava, learned counsel for the petitioner and Shri Diwakar Singh, learned Standing Counsel for the State-respondents.

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Shri Diwakar Singh has filed the counter affidavit, the same is taken on record.

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Learned counsel for the petitioner has submitted that he will not file rejoinder affidavit.

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By means of this petition, the petitioner has prayed following main relief(s):-

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"1. issue a writ, order or direction in the nature of certiorari thereby quashing the order dated 21-6-2024 passed by the opposite party no.2, the photo copy of which is annexed as Annexure No.-1 to the writ petition.

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2. issue a writ, order or direction in the nature of mandamus commanding the opposite parties to pay Interest upon the amount of Gratuity Rs. 20,00,000/- (Twenty Lacs), to the petitioner, as per the provisions of Government Order dated 30-10-2002, for the period of delay in payment of the same i.e. w.e.f. 1-7-2023 to 31-3-2024, at the rate 10% p.a."

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The precise contention of the learned counsel for the petitioner is that the petitioner retired from the post of Statistical Assistant on 31.7.2023. If the aforesaid formalities are completed, the payment of gratuity should be paid to the employee forthwith and as per Government Order dated

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30.10.2002 issued by the Finance Department, Government of U.P. (annexure-6), the payment of gratuity should be given to the employee within a maximum period of three months and if the gratuity is not paid within the stipulated period of three months, the employee would be entitled for the interest on the delayed payment and the rate of interest would be simple interest, not compounding interest. The rationale behind this is that the said amount was kept in the Bank and the interest on such amount has been earned.

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In the present case, admittedly, there is no fault on the part of the petitioner, therefore, he should have been paid the amount of gratuity within a stipulated period of three months from his retirement but the same has been paid to the petitioner on 31.3.2024 i.e., after eight months, therefore, the petitioner is entitled for the interest on delayed payment for eight months in view of the Government Order dated 30.10.2002 (supra).

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In the counter affidavit, the plea has been taken in para no. 7 to the effect that the required amount was not provided to the Department by the Government within time, therefore, the gratuity was paid to the petitioner after eight months but there is no fault on the part of the Department making delayed payment of gratuity inasmuch as the aforesaid act was beyond control of the Department. As soon as the Department received the amount of gratuity from the Government, the aforesaid amount was immediately paid to the petitioner on 31.3.2024. Therefore, as per the counter affidavit, the represerntation of the petitioner asking for interest on the delayded payment of gratuity is not sustainable and thus, the same has been rejected by the impugned order dated 21.6.2024.

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Having heard learned counsel for the parties and having perused the material available on record, at the very outset, I

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would like to consider the dictum of the Apex Court in re: State of U.P. and others vs. Dhirendra Pal Singh reported in (2017) 1 SCC 49, whereby the Apex Court vide para nos. 9 and 10 has held that the pension and gratuity are not any bounty to be distributed by the Government to its employees on retirement but are valuable rights in their hands and any culpable delay in disbursement thereof must be visited with penalty of interest. The Hon'ble Apex Court has further held that in absence of any plea that the delay in payment of retiral dues was due to employees' fault and employer had obtained permission in writing controlling authority in terms of Section 7(3-A) of the Payment of Gratuity Act, 1972, appellants are liable to be paid interest @ 6% per annum on unpaid pension amount from the date it had fallen due and the interest @ 8% per annum on unpaid amount of gratuity from the date of retirement of employee.

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The aforesaid view has been followed by the Division Bench of this Court in re: Indrajeet Singh vs. State of U.P. and others, by holding that if there are no cogent reasons to that effect, the employee would be entitled for the interest on delayed payment.

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Besides, there is a specific Government Order dated 30.10.2002 (supra) which clealry provides that the amount of gratuity must be paid to the employee within a period of three months from his retirement and if such amount is not given within aforesaid sitpulated period, the employee would be entitled for the interest equivalent to the interest paid to the General Provident Fund. In the present case, no plausible explanation has been given in the counter affidavit and admittedly, there is no fault on the part of the present petitioner, therefore, the impugned order dated 21.6.2024 passed by the opposite party no.2 i.e., Commissioner, Rural Development,

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U.P., Lucknow is liable to be set aside/quashed.

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Accordingly, the impugned order dated 21.6.2024 passed by the opposite party no. 2 i.e., Commissioner, Rural Development, U.P., Lucknow (annexure-1) is hereby set aside/quashed.

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Therefore, the competent authority is directed to pay the interest upon the total amount of gratuity to the petitioner in terms of the Government Order dated 30.10.2002 (supra) for the period of delay in the payment of the same i.e., w.e.f. 1.7.2023 to 31.3.2024 at the rate of interest equivalent to the interest being paid on the amount of General Provident Fund. The aforesaid amount shall be paid to the petitioner within a period of three weeks from the date of production of certified copy of this order, failing which the petitioner would be entitled for the interest @ 10% per annum.

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In view of the aforesaid terms, the writ petition is allowed.

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No order as to costs.

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Order Date :- 7.8.2024 Shravan

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[Rajesh Singh Chauhan,J.]

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Digitally signed by :- SHRAVAN KUMAR High Court of Judicature at Allahabad, Lucknow Bench

Kamal Khursheed v. State of U.P. Thru. Prin. Secy. Rural Development Lko. and 2 Others

Case brief

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Kamal Khursheed v. State of U.P. Thru. Prin. Secy. Rural Development Lko. and 2 Others

Case brief

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