Allowed

The Administrative Officer v. Appellate Authority and Assistant Labour Commissioner

Karnataka HC10 Dec 2024WP/3981/2024

Case brief

AI extract

What is this about?

The High Court quashed orders by Gratuity Authorities directing the employer to pay interest on gratuity. The Court held that since the gratuity was paid immediately after retirement and again upon statutory notification, there was no delay justifying interest. The Court further set aside the condonation of a two-year delay in filing the application for interest.

What did the court decide?

Orders of Controlling Authority and Appellate Authority directing payment of interest on gratuity are quashed. Writ Petition allowed.

The Administrative Officer Vs Appellate… — Pension and Retirement Benefits | Karnataka HC (2024)

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 10^TH DAY OF DECEMBER, 2024

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BEFORE

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THE HON'BLE MS. JUSTICE JYOTI MULIMANI

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WRIT PETITION NO. 3981 OF 2024 (L-PG)

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BETWEEN:

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THE ADMINISTRATIVE OFFICER, UNIVERSITY OF AGRICULTURAL AND SCIENCES, GKVK CAMPUS, BENGALURU-560 065. REPRESENTED BY ITS ADMINISTRATIVE OFFICER, SMT. M.S.PRATHIBHA.

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…PETITIONER

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(BY SRI. B.S.SACHIN., ADVOCATE)

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AND:

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APPELLATE AUTHORITY AND ASSISTANT LABOUR COMMISSIONER, DIVISION-II BENGALURU, KSLI MANJUNATH NAGAR, BAGALKUNTE, BENGALURU-560 092.

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Digitally signed by PREMCHANDRA M R

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Location: High

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Court of Karnataka

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THE LABOUR COMMISSIONER AND CONTROLLING OFFICER, UNDER PAYMENT OF GRATUITY ACT SUB-DIVISION-5, BENGALURU-560 092.

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SRI B.M.SHEKARA AGED ABOUT 68 YEARS, S/O NOT KNOWN, R/AT NO. 159, 'A' BLOCK, SECOND FLOOR, SAHAKARA NAGAR, BENGALURU-560 092.

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…RESPONDENTS (BY SRI. S.H.RAGHAVENDRA., AGA FOR R1 AND 2; SRI. J.M.JAYADEVAIAH., ADVOCATE FOR R3 [ABSENT])

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

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THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, AN ORDER IS MADE AS UNDER:

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ORAL ORDER

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Sri.B.S.Sachin., counsel for the petitioner and

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Sri.S.H.Raghavendra., AGA for respondents 1 & 2 appeared in person.

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There is no representation on behalf of respondent No.3, either personally or through video conferencing.

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As could be seen from the daily order sheet, the petition was listed on 03.12.2024, on that day, there was no representation on behalf of respondent No.3. Hence, for appearance of counsel for respondent No.3, the petition was ordered to be listed on 10.12.2024 and it was also ordered that if there is no representation on behalf of respondent No.3 on the next date of hearing, the Court will proceed to pass orders on the merits of the case.

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The petition is listed today. As already noted above, when the matter is called, there is no representation on behalf of

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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respondent No.3 either personally or through video conferencing. Hence, this Court proceeds to pass orders on the merits of the case.

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3. The short facts are these:

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The third respondent joined as a Daily Wage Employee under the petitioner University on 02.01.1985 and retired from service as a Daily Wage Employee on 30.11.2015. The third respondent was working under Karnataka Daily Wages Employee's Welfare Act. On 04.12.2015, the Gratuity amount of Rs.25,000/- was settled and was paid to third respondent as per the provision made under the Karnataka Daily Wages Employee's Welfare Act, 2013. On 16.05.2019, the Karnataka Daily Wages Employee Welfare Amended Rules, 2017 was published as per Sub Section 1 of Section 11 of Karnataka Daily Wages Employee Welfare Act, 2012 (Karnataka Act 19/2013 and amendment was brought to Rule 4 of Karnataka Daily Wages Employees Welfare Rule, 2017 wherein under Rule, 2013 in Rule 4 of Sub Clause 3 the following was substituted namely), "every eligible daily wage employee shall be paid such amount of gratuity as admissible under Section 4 of the payment of Gratuity Act, 1972.

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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Pursuant to the said notification, the petitioner university paid the gratuity amount of Rs.2,33,039/- to the third respondent on 24.06.2020. However, the third respondent moved an application before the Controlling Authority on 21.05.2022, claiming interest at the rate of 10% per annum on the gratuity amount. The Controlling Authority vide order dated 31.03.2023 allowed the application and directed the University to pay the interest amount. Aggrieved by the order of the Controlling Authority, the petitioner preferred an appeal before the Appellate Authority. The Appellate Authority vide order dated:30.09.2023 confirmed the order passed by the Controlling Authority. The orders of Gratuity Authorities are called into question in this Writ Petition on several grounds as set out in the Memorandum of Writ Petition.

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Counsel for the respective parties urged several contentions.

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Sri.B.S.Sachin., counsel for the petitioner in presenting his arguments vehemently contended that the third respondent retired from the service on 30.11.2015 and immediately, on 04.12.2015, he was paid the gratuity amount of Rs.25,000/-. He also submitted that pursuant to the Notification dated

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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16.05.2019, the petitioner took steps to pay the revised Gratuity amount payable to the third respondent and paid a sum of Rs.2,33,039/- to him on 24.06.2020. However, on an application filed by the third respondent after a lapse of two years, the Gratuity Authorities entertained the application and directed the petitioner to pay the interest on the gratuity amount. Counsel, therefore, submits that the orders of the Gratuity Authorities are liable to be set-aside.

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Heard, the arguments and perused the Writ papers with care.

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The point that requires consideration is whether the orders of the Gratuity Authorities requires interference.

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The facts are sufficiently said and they do not require reiteration. It is not in dispute that the third respondent retired from the service on 30.11.2015 and immediately, on 04.12.2015, he was paid the gratuity amount of Rs.25,000/-. Pursuant to the Notification dated 16.05.2019, the University also paid the revised gratuity amount of Rs.2,33,039/- to the third respondent on 24.06.2020.

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Strangely, after a lapse of two years, the third respondent filed an application before the Controlling Authority

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6 - NC: 2024:KHC:50914 WP No. 3981 of 2024

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seeking interest on the delayed payment of the gratuity amount. The Controlling Authority directed the petitioner to pay interest on the gratuity amount. This is untenable. The reason is simple. The petitioner paid gratuity amount to the third respondent immediately after his retirement from service. Moreover, as per the Notification dated 16.05.2019, the petitioner also paid the revised gratuity amount. There is no delay in paying the Gratuity amount. Hence, the question of paying interest on the gratuity amount does not arise. The Gratuity Authorities over-looked this aspect of the matter and erroneously ordered interest.

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Furthermore, there is an inordinate delay of almost two years in filing the application. The applicant sought for condonation of delay. The University contested the application and sought for dismissal of the application. However, the Controlling Authority condoned the delay on the ground that the Payment of Gratuity Act is a beneficial legislation. This is incorrect. The reason is apparent. In the present case, the third respondent contends that there is a delay in the payment of gratuity and sought interest on the alleged delay in payment. However, the contention is not correct. As already noted above, the University paid requisite gratuity amount well in time and

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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there is no delay to seek interest on the gratuity amount. In my view, the Controlling Authority ought to have considered the financial repercussions on the University. Hence, the Controlling Authority could not have viewed the delay aspect so lightly. The Controlling Authority ought to have rejected the claim on the grounds of delay and laches. I may venture to say that the Gratuity Authorities have failed to have regard to relevant consideration and disregarded relevant matters. For the reasons stated above, the orders of the Gratuity Authorities are liable to be set-aside, and so, they are set-aside.

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The Writ of Certiorari is ordered. The order dated:31.03.2023 passed by the Controlling Authority in ¸ÀASÉå:PÁC¨ÉA-5/¦fJ/¹Dgï-35/2022-23 vide Annexure-B and the order

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dated:30.09.2023 passed by the Appellate Authority in ¸ÀASÉå:¸ÀPÁ¨ÉA-2/G¥ÁPÁ(ªÉÄÃ)/¹Dgï-11/2023-24 vide Annexure-A are quashed.

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8. Resultantly, the Writ Petition is allowed .

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NC: 2024:KHC:50914 WP No. 3981 of 2024

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Amount in deposit if any to be released in favor of the petitioner after due identification.

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Sd/(JYOTI MULIMANI) JUDGE

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