Andhra HC (Pre-Telangana)
V. Balakrishna And Others vs General Manager, Mth Division, Hmt ... on 22 December, 1998
Equivalent citations: 1999(1)ALD432, 1999(1)ALT482, [1999(82)FLR212], (1999)IILLJ1310AP
Author: B. Sudershan Reddy
Bench: B. Sudershan Reddy
ORDER
1. In this batch of writ petitions common question of law arises for consideration and, therefore, they are taken up for hearing and disposal together.
2. All the petitioners herein have retired on 31-10-1996 under the Voluntary Retirement Scheme (for short 'VRS') formulated by the respondent-Company. It is their specific case that they are entitled to receive gratuity amounts as per Section 4 of Payment of Gratuity Act, 1972 (for short 'the Act') read with Rule 7 of Payment of Gratuity (Central) Rules, 1972 (for short 'the Rules'), on the date of retirement itself. It stated that the respondent-Company failed to pay the gratuity amount on the date of retirement itself and paid the amount in the month of April, 1997, though they have retired in the month of October, 1996. Under those circumstances, the petitioners claim interest at the rate of 24% per annum. It is stated that the inaction and negligence on the part of the respondent-Company in paying the gratuity amount had caused financial problems and inconvenience to the petitioners. There is no justification on the part of the respondent-Company for the delayed payment. It is stated that inspite of representations, the respondent-Company failed to pay interest. Hence the writ petition.
3. In the counter-affidavit it is stated that the company is passing through a grave financial situation and with great difficulty the company is able to raise necessary finance to meet its day-to-day expenditure. The company is not even in a position to disburse the salaries to those who are in employment as on today. The company is facing critical financial condition and, therefore, could not meet its obligation of paying gratuity amount to some of the employees, who had retired from service in time. The company, however, made its efforts to release gratuity to the employees who had retired from service in a phased manner as and when it could generate necessary amounts. Under those circumstances there was some delay in payment of amounts to the petitioners.
4. The respondent-company raised a preliminary objection as to the maintainability of the writ petition. It is stated that the petitioners have to get their claims adjudicated under the provisions of the Act and the Rules framed thereunder. The Act provides for adjudication of the claims by the Controlling Authority. An appeal is provided against an order passed by the Controlling Authority. The Payment of Gratuity Act is a self contained code and all the claims/disputes arising under the said Act have to be adjudicated before the Authority constituted for the purpose.
5. Learned Counsel for the petitioners would urge that it is the bounden duty of the company to pay the gratuity amount within thirty days from the date it becomes payable and the amount, itself, becomes payable as on the date of retirement. The petitioners are entitled for interest as a matter of right for the delayed payments by the company. The learned Counsel for the petitioners would place reliance upon the decision of the Apex Court in R. Kapur v. Director of Inspection, , and an order passed by a Division Bench of this Court in Ch. Saraih Chandra Base v. A/A. IIMT, WA No. 1166 of 1997 dated 21-11-1997.
6. It is true as held by the Apex Court in R. Kapur v. Director of Inspection (supra) and State ofKerala v. M. Padmaaabhan Nait; , the Pension and Gratuity are no longer any bounty to be distributed by the employer to its employees on their retirement, but valuable right and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with penalty of payment of interest. The Division Bench of this Court in the case of Ch. Saraih Chandra Boss (supra) awarded interest at the rate of 12% per annum by modifying the order passed by a learned single Judge of this Court awarding interest at the rate of 18% per annum.
7. It is required to notice that in none of the said decisions the question relating to the maintainability of a writ petition was gone info. The said plea was not raised and, therefore, there is no decision touching upon that aspect of the matter.
8. The payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when such right will accrue, and also further provides for quantification of the gratuity. The Act. itself, provides the mode and method of recovery of the amount. It contains an especial provision for payment of interest, if the gratuity amount is not paid by the employer within the specified time and such interest not exceeding the rate notified by the Central Government from lime to time for repayment of long term deposits. The Act, itself, provides for appointment of Controlling Authority, who is entrusted with the task of administering the Act. An order passed by the Controlling Authority can be corrected in appeal by the appellate authority, particularly constituted under the Act. It is, thus, clear that the Parliament intended that the proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act. (Sec: Slate of Punjab v. Labour Court, Jullundur, .)
9. Nothing is staled in the affidavit filed in support of the writ petition as to why the petitioners could not approach the Controlling Authority raising the dispute under the provisions of the Act. The Controlling Authority for the purpose of conducting an inquiry under the Act exercises the same powers as are vested in a Court, while trying a suit, under the Code of Civil Procedure, 1908, in respect of the matters, (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits and
(d) issuing commissions for the examination of witnesses and the inquiry is deemed to be a proceeding, within the meaning of Sections 193 and 228, and for the purpose of Section 196 of the Indian Penal Code. It is, thus, clear that the Act provides an elaborate procedure and machinery for the adjudication of the disputes between the employee and the employer with regard to determination of the amount of gratuity, as well as the interest payable for delayed payment.
10. For the aforesaid reasons, in every dispute relating to the determination of the amount of gratuity, including interest, if any, payable for the delayed payment, is required to be adjudicated only under the provisions of the Act and the Rules framed thereunder. The Act clearly confers the right upon an employee to get such disputes adjudicated under the provisions of the Act by the Controlling Authority and even provides a right of appeal against the said determination by the Controlling Authority. It provides for machinery for recovery of the gratuity. If the amount of gratuity payable under the Act is not paid by the employer within the prescribed time even after the determination by the Controlling Authority, the Collector on a certificate issued by the Controlling Authority is bound to recover the said amount together with compound interest on the amount payable, at such rate, as the Central Government may by notification specify from time to time and as if the arrears of land revenue. It is, thus, clear that the Controlling Authority may, not only award simple interest on the amount for the delayed payment, but also award compound interest if the said amount is not paid even after its determination by the Controlling Authority. It is an effective and alternative remedy where every conceivable aspect relating to the payment, determination and recovery is taken care by the provisions of the Act. This Court, therefore, cannot entertain a writ petition unless it is clearly shown as to why the remedy could not be availed under the provisions of the Act. The Court may have the jurisdiction, but would not exercise it, unless clear and compelling reasons are shown by the petitioner in each given case. No such case is made out in this batch of writ petitions.
11. The matter can be viewed from a different angle also. The Apex Court in R. Kapur 's case (supra) in its considered opinion thought it fit to award interest at the rate of 18% under the facts and circumstances in that case. But, let us have a look at the provisions, which declares as to when interest becomes payable and the rate thereof. Sub-section (3A) of Section 7 of the Act declares that if the gratuity amount payable is not paid by the employer within thirty days from the date it becomes payable the employer shall pay simple interest at such rate not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits, as the Government may, by notification specify. It is, thus, clear that even the Controlling Authority while adjudicating the dispute can award simple interest at such rate but not exceeding the rate notified by the Central Government for repayment of long term deposits, as the Government may by notification specify. The Controlling Authority is conferred with the discretion in the matter of awarding interest. The maximum interest that is liable to be paid by the employer is simple interest and at a rate not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits. Neither the Act nor the Rules framed thereunder prescribe any percentage of interest as such. Awarding simple interest is mandatory. Every employer, undoubtedly, is obligated to pay simple interest for the delayed payment, but the rate of interest may depend upon variety of circumstances which may have to be taken into consideration by the Controlling Authority in exercise of the statutory power conferred upon him. The Act does not mandate any percentage of interest. But the maximum limit thereof is prescribed. Under those circumstances, it is not possible for this Court in every case to award any particular rate of interest and the Court would not be justified in exercising the discretion which is conferred upon the Controlling Authority. It would amount to this Court substituting its own opinion for that of the Controlling Authority. Such a course is not permissible. This Court, in appropriate cases, may judicially review the order of the Controlling Authority even in the matter of awarding interest. But it would not be possible for this Court to decide and quantify the rate of interest by itself.
12. For all the aforesaid reasons, I do not find any merit in this batch of writ petitions. The writ petitions are accordingly dismissed. No costs.
13. However, this order shall not preclude the petitioners from availing the remedy under the provisions of the Payment of Gratuity Act, 1972, and the Rules framed thereunder and if any such remedy is availed by the petitioners, the same shall be considered by the authority in accordance with law un-influcnced by any of the observations made in this order.