The Management Vs The Joint Commissioner of

The Assistant Commissioner of Labour, (Controlling Authority under Payment of Gratuity Act 1972), 414, Fourth Floor, Collectorate Building, Salem – 1.

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V.Rajan ...Respondents

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Petition filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorari, to call for the records in AGA.No.37 of 2013 on the file of the Joint Commissioner of Labour (Appellate Authority under Payment of Gratuity Act 1972), Coimbatore – 18, the 1^st respondent herein, quash the order dated 04.04.2014 passed therein insofar as direction for interest is concerned.

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W.P.No.14361 of 2015

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For Petitioner : Mr.P.Anbarasan For Respondents : Mr.K.Surendran, AGP, for R1 & R2 : Mr.S.Siva Shanmugam, for R3

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O R D E R

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The petitioner has come up with this Writ petition seeking quashment of the order passed by the 1^st respondent in AGA.No.37 of 2013 dated 04.04.2014.

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It is the case of the petitioner that, the 3^rd respondent retired from the services of the petitioner on 30.11.2004. While so, around 61 employees along with the 3^rd respondent filed petitions before the 2^nd respondent seeking payment of gratuity amount and the 3^rd respondent's petition was numbered as P.G.No.67 of 2010 and the 2^nd respondent, on analysis of the entire materials available before it, passed an common order on 29.08.2012, directing the petitioner to pay gratuity to all the 61 employees. As against the said order, the petitioner an preferred appeal before the Joint Commissioner of Labour, Coimbatore, the 1^st respondent herein, who in turn, vide impugned common order dated 04.04.2014 set aside the order passed by the 2^nd respondent/Original authority. However,

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W.P.No.14361 of 2015

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insofar as the 3^rd respondent is concerned, the 1^st respondent directed the petitioner to pay interest at the rate of 10%. Challenging the same, the petitioner has come up with this Writ petition.

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Learned Counsel for the petitioner submitted that, when the irregularities committed by the workman causes loss to the management, it has every rights to withhold the gratuity amount of the said workman. In the present case, there were around 87 surcharge proceedings pending as against the 3^rd respondent and thereby, the petitioner bank withheld the Gratuity amount payable to the 3^rd respondent, which cannot be said to be erroneous as the same is in compliance of proviso to Section 7(3A) of the Payment of Gratuity Act. Learned counsel further submitted that, even then, pending appeal before the 1^st respondent, the petitioner bank paid the gratuity amount to the 3^rd respondent on 09.09.2011, for which, the 1^st respondent ordered for interest that to at the rate of 10% which is wholly unsustainable. Accordingly, he prayed for appropriate orders.

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Per contra, the learned counsel appearing on behalf of the 3^rd respondent/workman submitted that, the 3^rd respondent superannuated on 30.11.2004, however, the gratuity amount was paid in his favour only on 3/8

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W.P.No.14361 of 2015

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09.09.2011, which is after a period of nearly seven years. Thereby, the 1^st respondent/appellate authority directed the petitioner to pay interest for the belated payment at the rate of 10%, which cannot be said to be erroneous. Accordingly, he prayed for dismissal of this Writ petition.

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On the above said contentions, heard learned Additional Government Pleader appearing on behalf of the 1^st and 2^nd respondents and perused the material available on record.

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In view of the limited point to be determined in this Writ petition, this Court is not inclined to go into the merits of the arguments advanced by the learned counsel on either side.

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The petitioner is aggrieved by the award of 10% interest to the 3^rd respondent. On a perusal of the impugned award it is evident that, as rightly noted by the 1^st respondent/Appellate authority, as per section 7(3A) of the Payment of Gratuity Act, the Gratuity amount should be paid to the employee within a 30 days of a superannuation. For better appreciation, the relevant section is extracted hereunder:-

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“ 7. Determination of the amount of gratuity.— (1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

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(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined.

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1[(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

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(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in subsection (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of longterm deposits, as that Government may, by notification specify:

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Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.]”

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W.P.No.14361 of 2015

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In the present case, though the 3^rd respondent superannuated as

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early as on 30.11.2004, till 09.09.2011 his gratuity amount was not paid. Considering this aspect, the 1^st respondent, vide impugned order had rightly directed the petitioner to pay interest at the rate of 10% from 01.12.2004 to 08.09.2011, in which this Court does not find any infirmity and thereby this Court is not inclined to interfere with the same.

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For the reason aforesaid, this Writ petition stands dismissed and

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the petitioner is directed to pay the interest to the 3^rd respondent at the rate of 10% per annum as ordered by the 1^st respondent from 01.12.2004 till 08.09.2011, less the amount, if any already paid, within a period of twelve weeks from the date of receipt of a copy of this order. No costs. Consequently, the connected Miscellaneous petition is closed.

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04.03.2025

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skt NCC : Yes / No Index : Yes / No Speaking order : Yes / No

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W.P.No.14361 of 2015

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To

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The Joint Commissioner of Labour, (Appellate Authority under Payment of Gratuity Act 1972), Coimbatore – 18.

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The Assistant Commissioner of Labour, (Controlling Authority under Payment of Gratuity Act 1972), 414, Fourth Floor, Collectorate Building, Salem – 1.

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W.P.No.14361 of 2015

M.DHANDAPANI, J.

skt

W.P.No.14361 of 2015