Allowed¶47

Shri Padmanabha Acharya v. New Mangalore Port Trust

Karnataka HC20 Mar 2025WP/12836/2013

Case brief

AI extract

What is this about?

Interest on delayed/belated retirement benefits; Payment of Gratuity Act 1972 Section 7(3A) interest at not less than 10% per annum; duty to pay retirement benefits within one month of superannuation; New Mangalore Port Trust; NMPT Education Society; Triple Benefit Scheme TBF Form-4; counting past service at Vidyadayini High School for pension re-fixation; W.P. No.39252/2004 order dated 29.03.2007; W.A. No.998/2007 dismissed 12.06.2012; retirement December 2002, payment 03.12.2012; cheque Rs.8,82,634/-; Karnataka High Court writ under Articles 226 and 227.

What did the court decide?

Interest on retirement benefits for the delayed period of 10 years at 10% per annum from the date of retirement till the date of payment, to be paid by respondent Nos.1 and 2 within three months from receipt of a certified copy of the order. ¶47

Shri Padmanabha Acharya Vs New Mangalore Port Trust — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner, who retired in December 2002 but received his retirement benefits only on 03.12.2012, is entitled to interest on the belated payment of retirement benefits, and if so at what rate and from what date.

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Court's answer

Retirement benefits ought to have been paid soon after retirement, at any rate within one month from the date of retirement; since they were not paid, respondent Nos.1 and 2 are bound to pay interest for the delayed payment of retirement benefits.

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Ratio / Principle

Under sub-section (3A) of Section 7 of the Payment of Gratuity Act, 1972, if gratuity payable under sub-section (3) is not paid by the employer within the specified period, the employer is bound to pay interest at not less than 10% per annum from the date the gratuity becomes payable till the date of payment.

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Key takeaways

Having taken 10 years to settle the retirement benefits, respondent Nos.1 and 2 are directed to pay interest on the retirement benefits for the delayed period of 10 years at the rate of 10% per annum from the date of retirement till the date of payment, compliance within three months of receipt of a certified copy of the order.ratio¶47

Detailed headnote1 paragraphs

Karnataka High Court (R. Nataraj, J.) allowed W.P. No.12836 of 2013 (S-R) filed under Articles 226 and 227 of the Constitution. The petitioner, a retired Headmaster of NMPT High School whose past aided-school service (Vidyadayini High School, 17.06.1968 to 23.06.1985) had already been ordered counted for re-fixation of pension under the Triple Benefit Scheme in W.P. No.39252/2004 (order dated 29.03.2007, upheld in W.A. No.998/2007 dismissed on 12.06.2012), retired in December 2002 but received his retirement benefits only by cheque dated 03.12.2012 for Rs.8,82,634/-. Holding that retirement benefits were payable within one month of superannuation, and invoking sub-section (3A) of Section 7 of the Payment of Gratuity Act, 1972 (interest at not less than 10% per annum on unpaid gratuity), the Court directed respondent Nos.1 and 2 (New Mangalore Port Trust and its Education Society) to pay interest on the retirement benefits for the delayed period of 10 years at 10% per annum from the date of retirement till the date of payment, compliance within three months.

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1 - NC: 2025:KHC:11703 WP No. 12836 of 2013

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 20^TH DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ WRIT PETITION NO.12836 OF 2013 (S-R)

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BETWEEN:

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SHRI PADMANABHA ACHARYA RETIRED HEAD MASTER, NMPT HIGH SCHOOL, AGED 65 YEARS, R/AT: 'SREE-NIVAS', THOKUR VILLAGE, HOLEANGADY, MANGALORE-574 146 D.K. DISTRICT.

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…PETITIONER

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(BY SMT. SHEELA KRISHNA, ADVOCATE)

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AND:

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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NEW MANGALORE PORT TRUST, BY ITS CHAIRMAN, PENAMBUR, MANGALORE-575 010.

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THE NEW MANGALORE PORT TRUST EDUCATION SOCIETY, BY ITS PRESIDENT, NEW MANGALORE PORT TRUST, PANAMBUR, MANGALORE-575 010.

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THE GOVERNMENT OF KARNATAKA, BY ITS SECRETARY, EDUCATION DEPARTMENT, VIDHANA SOUDHA, BANGALORE-560 001.

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…RESPONDENTS

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2 - NC: 2025:KHC:11703 WP No. 12836 of 2013

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(BY MS. SAKSHI KRISHNA, ADVOCATE FOR SRI. SUBRAMANYA R., ADVOCATE FOR RESPONDENT NOS.1 AND 2;

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SRI. NEELAKANTAPPA K. PUJAR, HIGH COURT GOVERNMENT PLEADER FOR RESPONDENT NO.3)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS AND DECLARE THAT THE PETITIONER IS ENTITLED TO PAYMENT OF INTEREST, ON THE DELAYED PAYMENT OF RETIREMENT BENEFITS GIVEN TO THE PETITIONER BY ISSUE OF WRIT OF MANDAMUS AND ETC.

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THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE R. NATARAJ

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ORAL ORDER

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The petitioner has sought for a declaration that he is entitled to payment of interest on the belated payment of retirement benefits and also to direct the respondents to pay interest at 10% per annum on the total retirement amount for the period from 2002 till the date of disbursal i.e., 03.12.2012.

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2(i). The petitioner contends that he was working as a Graduate Assistant at Vidyadayini High School at Suratkal from 17.06.1968 to 23.06.1985 which was granted aid by the State Government. He joined the respondent No.2 on 24.06.1985 as a Headmaster after obtaining permission from the State

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3 - NC: 2025:KHC:11703 WP No. 12836 of 2013

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Government. His pay and other benefits were protected by the respondent No.2. Respondent No.2 was purportedly taken over by the respondent No.1 on 01.07.1983. After the petitioner attained the age of superannuation, he retired from service in the year 2002 and his services were extended for one more year till the year 2003. The petitioner contends that the respondent No.3 passed an order dated 01.09.1988 stating that the past services of the appointees would be counted while determining the pay and other terminal benefits in the subsequent appointment.

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(ii). The petitioner contends that the respondent No.2 did not consider his past service which he had put in an aided institution for the purpose of calculation of pension and other retirement benefits. He, therefore, filed W.P. No.39252/2004 before this Court and this Court in terms of an order dated 29.03.2007, held that the petitioner was entitled to re-fixation of pension by considering his past service rendered at Vidyadayini High School between 17.06.1968 to 23.06.1985. It noticed that the respondent Nos.1 and 2 as well as the Director of Secondary Education had taken action for re-fixation of pension of the petitioner by extending Triple Benefit Scheme,

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NC: 2025:KHC:11703 WP No. 12836 of 2013

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but no action was taken by the respondent No.2 to submit necessary form and the bill for re-fixation of pension of the petitioner. In that context, this Court directed the respondent Nos.1 and 2 to submit necessary application along with bill in TBF Form-4 to extend the Triple Benefit Scheme to the petitioner for re-fixation of his pension.

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(iii). The above order was challenged by the respondent Nos.1 and 2 in W.A. No.998/2007 which was dismissed on 12.06.2012. The petitioner thereafter submitted a representation requesting the respondents to comply the order passed in W.P. No.39252/2004. The Secretary of respondent No.2 gave a reply on 04.12.2012 enclosing therewith a cheque dated 03.12.2012 for Rs.8,82,634/-. The petitioner contends that though he retired from service in the year 2002, the retirement benefits were not disbursed to him till the end of 2012 and therefore, the petitioner was entitled to interest for the delayed period. The petitioner has therefore, sought for a declaration that he is entitled to interest for the delayed payment of retirement benefits payable by the respondent Nos.1 and 2.

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NC: 2025:KHC:11703 WP No. 12836 of 2013

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Learned counsel for the petitioner reiterated the above and contended that though the petitioner retired in the year 2002, his retirement benefits were finalized and paid by the respondent No.2 only on 03.12.2012 and therefore, the petitioner is entitled to interest for the delayed payment.

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The writ petition is opposed by the respondent Nos.1 and 2, who contend that the petitioner was earlier working as a Teacher at Vidyadayini High School from 17.06.1968 to 23.06.1985 and was later appointed as an incharge Headmaster in the respondent No.2 on 24.06.1985 and he retired from service on 31.12.2002. They contended that after the retirement, the petitioner sought for calculation of his pension benefits taking into account the services rendered by him in Vidyadayini High School. They contended that the writ petition in W.P. No.39252/2004 filed by the petitioner for counting his past service for the purpose of calculation of retirement benefits was allowed by this Court and an appeal in W.A. No.998/2007 preferred by the respondents Nos.1 and 2 was dismissed by a Division Bench of this Court. They contended that they immediately calculated the amount payable to the petitioner and forwarded him a cheque for

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NC: 2025:KHC:11703 WP No. 12836 of 2013

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Rs.8,82,634/-. They contended that the amount of Rs.8,82,634/- was paid to the petitioner even though the State Government had refused to refund the amount collected from the petitioner for the services rendered in Vidyadayini High School. It is also contended that the petitioner did not make any claim in W.P.No.39252/2004 for interest on retirement benefits and consequently, he is not entitled to make any claim in this writ petition. They contend that soon after the Writ Appeal in W.A. No.998/2007 was dismissed, respondent Nos.1 and 2 have immediately paid the retirement benefits payable to the petitioner on 03.12.2012. Therefore, they contend that there is no delay in making the payment.

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The learned counsel for respondent Nos.1 and 2 submits that in W.P. No.39252/2004, the issue was not whether the petitioner was entitled to count his service at Vidyadayini school but it was concerning extension of triple benefit scheme. She contends that a similar contention whether past service rendered by the petitioner could be considered for pay and pension was pending consideration before the Division Bench. Therefore, she contends that no relief can be granted to the petitioner. She contends that soon after W.A. No.998/2007

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NC: 2025:KHC:11703 WP No. 12836 of 2013

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was disposed off, the retirement benefits was paid to the petitioner.

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I have considered the submissions of the learned counsel for the petitioner, learned counsel for respondent Nos.1 and 2 and learned High Court Government Pleader for respondent No.3 and perused the material on record.

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The petitioner has retired from service in December 2002 after serving the respondent Nos.1 and 2 as a Headmaster. The question whether the petitioner was entitled to count his past service in Vidyadayini High School for the purpose of his retirement benefits, was considered by a coordinate Bench of this Court in W.P. No.39252/2004 on 29.03.2007 and the same was upheld by a Division Bench of this Court in W.A. No.998/2007 on 12.06.2012. Therefore, respondent Nos.1 and 2 were bound to pay the retirement benefits soon after the petitioner retired from service and at any rate, within a period of one month from the date of such retirement. Since the petitioner is not paid the retirement benefits, respondent Nos.1 and 2 are bound to pay the interest for the delayed payment of retirement benefits. Under sub-

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8 - NC: 2025:KHC:11703 WP No. 12836 of 2013

¶46

section (3A) of Section 7 of the Payment of Gratuity Act, 1972, 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 is bound to pay interest at not less than 10% per annum from the date of the gratuity becoming payable till the date of payment. In view of the fact that respondent Nos.1 and 2 have taken 10 years for settlement of retirement benefits, it is only appropriate to direct the respondent Nos.1 and 2 to pay interest on retirement benefits for the delayed period of 10 years at the rate of 10% per annum from the date of retirement of the petitioner till the date of payment.

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Consequently, the Writ Petition is allowed. Respondent Nos.1 and 2 are directed to pay interest on retirement benefits of the petitioner for the delayed period of 10 years at the rate of 10% per annum from the date of retirement till the date of payment. This shall be complied within a period of three months from the date of receipt of a certified copy of this order.

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Sd/(R. NATARAJ) JUDGE

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SMA/List No.: 1 Sl No.: 45

Shri Padmanabha Acharya v. New Mangalore Port Trust

Case brief

What is this about?

What did the court decide?

Shri Padmanabha Acharya v. New Mangalore Port Trust

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

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Parties & counsel

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