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K.Balusamy v. the Joint Registrar of

Madras HC13 Feb 2025WP(MD)/806/2017

Case brief

AI extract

What is this about?

Interest on belated payment of gratuity; co-operative society retirement benefits; compulsory retirement set aside under Section 153 Tamil Nadu Co-operative Societies Act; Society not empowered to withhold statutory interest on gratuity; 12% interest denied for laches/delay, 6.5% interest awarded for 01.02.2004 to 14.12.2023; Rs.1,72,380/- awarded; Article 226 certiorarified mandamus; W.P(MD) No.806 of 2017; Madurai Bench of Madras High Court; S. Srimathy, J.; Thrift and Credit Society; gratuity Rs.2,50,385/-.

What did the court decide?

Respondents directed to pay Rs.1,72,380/- as interest on the belated payment of gratuity (at 6.5% for the period 01.02.2004 to 14.12.2023) within twelve weeks from receipt of a copy of the order; writ petition allowed; no costs. ¶37

K.Balusamy Vs the Joint Registrar of — Writ and Judicial Review | Madras HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the petitioner is entitled to interest on the gratuity amount of Rs.2,50,385/- which was paid belatedly without interest by the second respondent Society. +1 more

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Court's answer

The second respondent is not empowered to withhold interest on the gratuity amount, since interest is granted under the statutory provisions; when the statute provides for interest on the belated payment of gratuity, the same cannot be refused.

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Ratio / Principle

Since the writ petition was filed belatedly and without challenging the second respondent's order dated 28.10.2013 withholding interest, the petitioner is not entitled to 12% interest, but is entitled to 6.5% interest for the period from 01.02.2004 to 14.12.2023.

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Detailed headnote1 paragraphs

Madras High Court (Madurai Bench), S. Srimathy, J. — Writ petition under Article 226 by a retired Manager of a co-operative thrift and credit society seeking interest at 12% on the gratuity amount of Rs.2,50,385/-, which was paid without interest after his compulsory retirement (imposed 30.01.2004 following disciplinary proceedings on a 17-charge memo dated 10.01.2003) was set aside by the Joint Registrar under Section 153 of the Tamil Nadu Co-operative Societies Act by order dated 28.10.2013 directing payment of all retirement benefits but expressly excluding interest. Held: (i) the second respondent Society is not empowered to withhold interest on gratuity, since interest on belated payment of gratuity is granted under statutory provisions and cannot be refused; (ii) however, as the petitioner did not challenge the Society's order dated 28.10.2013 and the petition was belated, he is not entitled to 12% interest but is entitled to 6.5% interest for the period 01.02.2004 to 14.12.2023, quantified at Rs.1,72,380/-, payable within twelve weeks. Writ petition allowed; no costs.

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W.P(MD) No.806 of 2017

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED : 13.02.2025

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CORAM:

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THE HONOURABLE MRS.JUSTICE S. SRIMATHY

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W.P(MD) No.806 of 2017

K.Balusamy

... Petitioner

The Joint Registrar of Co-operative Societies, Thiruchirappalli Region, Thiruchirappalli.

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The President, The Thiruchirappalli Postal Employees, Thrift and Credit Society Ltd., R-1271, Srirangam, Thiruchirappalli District.

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... Respondents

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PRAYER : Writ Petition filed under Article 226 of the Constitution of to issue a Writ of Certiorarified Mandamus, to call for the records of 1^st respondent dated 28.10.2013 bearing Na.Ka.No.2000/2012/Sapa and consequential order passed by the second respondent dated 16.11.2015 bearing No.28/15-16 and quash the same with regard to payment of interest portion is concerned and direct the second respondent to pay interest for the gratuity amount of Rs.2,50,385/- at 12% from the date of

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retirement till its realization.

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For Petitioners : Mr.R.Saravanan For R-1 : Mr.M.Sarangan Additional Government Pleader

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For R-2 : Mrs.D.Farjana Ghoushia Special Government Pleader

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O R D E R

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This Writ Petition has been filed challenging the order dated 28.10.2013 bearing Na.Ka.No.2000/2012/Sapa and consequential order passed by the second respondent dated 16.11.2015 bearing No.28/15-16 and quash the same with regard to payment of interest portion is concerned and direct the second respondent to pay interest for the gratuity amount of Rs.2,50,385/- at 12% from the date of retirement till its realization.

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The petitioner was serving as the Manager in the second respondent Society. He was issued with a charge memo dated 10.01.2003, by framing 17 charges. In the disciplinary proceedings, the charges were

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held to be proved. Thereafter, the then Special Officer passed a punishment order dated 30.01.2004, imposing compulsory retirement. The petitioner challenged the order in W.P.No.6452 of 2004. However, the petitioner was directed to approach the Regional Joint Registrar of Cooperative Societies under Section 153 of Tamil Nadu Co-operative Societies Act. In the said case, the first respondent passed an order dated 28.10.2013, wherein the compulsory retirement was set aside and consequently, directed the second respondent to pay all the retirement benefits, as by that time, the petitioner had attained superannuation on 31.01.2024. In the said order, specific direction was issued by the second respondent that no interest will be paid for the withheld retirement amount.

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The contention of the petitioner is that the retirement amount to

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the tune of Rs.13,74,760/- was paid through three cheques and the details are given below:

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(i) Rs.3,46,545/- dated 14.12.2013 towards Gratuity and leave salary out of which Rs.2,50,385/- being Gratuity amount. (ii) Rs.9,47,155/- dated 24.03.2014 towards Provident Fund. (iii) Rs.81,060/- dated 24.12.2014 regarding to interest on the Provident Fund.

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W.P(MD) No.806 of 2017

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However, the respondents failed to grant interest for the gratuity amount of Rs.2,50,385/-. Hence, the present writ petition came to be filed.

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The contention of the respondent is that, while considering the disciplinary proceedings, the second respondent categorically passed an order modifying the punishment. However, interest will not be granted on the gratuity amount. Inspite of the same, the present writ petitioner has been filed which is against the order passed by the second respondent. Further, the second respondent has not challenged the said order. If the petitioner is aggrieved by the said order, he ought to have challenged the same. Without setting aside the said order, the present claim cannot be entertained.

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After considering the rival submissions, this Court is of the considered opinion that the second respondent is not empowered to withhold interest as far as gratuity amount is concerned, since the interest is granted under the statutory provisions. When the statute provides for

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W.P(MD) No.806 of 2017

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interest on the belated payment of gratuity, the same cannot be refused.

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The petitioner has filed this petition without challenging the second respondent's order, wherein interest portion was withheld. Even though the said order is not challenged, the present writ petition is belated, as the order was passed on 28.10.2013. Therefore, the petitioner is not entitled to 12% interest, however, he is entitled to 6.5% interest for the period from 01.02.2004 to 14.12.2023. Therefore, the respondents are directed to grant Rs.1,72,380/- as interest to the belated payment of gratuity within a period of twelve (12) weeks from the date of receipt of a copy of this order.

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