Meghalaya High Court
Azranath M. Momin vs . G.H.A.D.C. & Ors on 18 March, 2019
Equivalent citations: AIRONLINE 2019 MEG 148, (2019) 161 FACLR 603 (2019) 3 GAU LT 219, (2019) 3 GAU LT 219
Bench: Mohammad Yaqoob Mir, H.S. Thangkhiew
Serial No.04
Regular List
HIGH COURT OF MEGHALAYA
AT SHILLONG
1.WA No.34/2017
2. WP (C) No.17/2017
3. WP (C) No.18/2017
4. WP (C) No.19/2017
5. WP (C) No.20/2017
Date of Order: 18.03.2019
Azranath M. Momin Vs. G.H.A.D.C. & ors
Shri Profulla Hajong Vs. G.H.A.D.C. & ors
Shri Hriday Rabha Vs. G.H.A.D.C. & ors
Shri Salchang Rabha Vs. G.H.A.D.C. & ors
Shri Ceasar Marak Vs. G.H.A.D.C. & ors
Coram:
Hon'ble Mr. Justice Mohammad Yaqoob Mir, Chief Justice
Hon'ble Mr. Justice H.S. Thangkhiew, Judge
Appearance:
For the Petitioner/Appellant(s) : Mr. SA Sheikh, Adv
For the Respondent(s) : Mr. S Dey, Adv
i) Whether approved for reporting in Yes
Law journals etc.:
ii) Whether approved for publication
in press: No
Per Mohammad Yaqoob Mir, 'CJ'
1. Instant appeal is directed against the order dated 05.06.2017 passed in WP (C) No.391 of 2016 in terms whereof respondents were directed to release the salary of the petitioner and other service benefits within 10 (ten) months.
2. Appellant admittedly was an employee of respondent-GHADC on reaching superannuation retired on 12.11.2014. He was not paid gratuity and leave salary as a result whereof filed writ petition in the year 2016 with a prayer to command the respondents to release retirement benefits i.e. amount of gratuity and leave salary with interest till the actual payment is made.
13. The position of the petitioner was not disputed by the respondent- GHADC. In the affidavit-in-opposition they have stated that the orders dated 16.03.2016 and 17.03.2016 pertaining to sanction of gratuity and leave salary is not denied, however, GHADC is clearing the retiral benefits in favour of all retired employees in order of seniority because of financial crisis faced by them. It is further stated that the respondents have never denied responsibility to pay the dues but unfortunately due to paucity of funds immediate payment on retirement could not be made to the petitioner. The Executive Committee has inherited empty coffers and lots of debts in respect of payment of dues/retirement benefits to its retired employees. The respondents are sincerely working out for payment of retiral benefits to all its retired employees without any partiality.
4. Learned Single Judge has taken note of the affidavit-in-opposition and submission of learned counsel for the respondents and has acceded to the prayer of learned counsel for the respondents by granting 10 months' time for release of salary and other service benefits in favour of the petitioner but award of interest has been ignored.
5. Petitioners in the connected writ petitions too were not paid the retiral benefits i.e. gratuity and leave salary. Therefore, issues for determination being identical were clubbed together.
6. When appeal as well as writ petitions were taken up for consideration on 07.09.2017. Learned counsel for the parties stated the retiral dues have already been paid to the appellant of WA No.34 of 2017 and also to the petitioners of connected writ petitions. Regarding grant of interest writ petitions were admitted to hearing.
7. The claim for interest is a statutory right so cannot be denied. Section 7 Clause (3) and (3A) of the Payment of Gratuity Act, 1972 (hereinafter referred to as the Act), are relevant to be quoted:-
"7. Determination of the amount of gratuity.- (1) A person who is eligible for payment of gratuity under this Act or any person authorized, 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.2
(2) As soon as gratuity become 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.2
[(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.
(3A) 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 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 long-term deposits, as that Government may, by notification specify:
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.]
8. Plain language of Section 7 (3) of the Act mandates that the employer has to arrange so as to pay the amount of gratuity within 30 days from the date it becomes payable. Sub-section (3A) of Section 7 envisage that in case the gratuity is not paid on the date it becomes payable then simple interest has to be paid on such rate not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits as Government may, by notification specify.
9. Proviso to sub-section (3A) provide that no interest shall be payable if delay in payment of gratuity is due to the fault of the employee and employer has obtained permission in writing from the controlling authority for the delayed payment on that ground.
10. Admittedly no fault is attributed to the employees (writ petitioners) therefore there is no question for obtaining permission for delayed payment. All along respondents have projected that GHADC was faced with financial problem i.e. financial health was not so sound to pay gratuity and salary to its retired employee which in view of proviso to sub- section (3) of Section 7 of the Act does not constitute a ground for non- payment of interest. Interest payable is statutory so is not within the domain 3 of discretion of the Court except for rate of interest, which shall not exceed the maximum rate notified. Para 4 of the judgment rendered in the case of D.D. Tiwari (Dead) Through Legal Representatives v. Uttar Haryana Bijli Vitran Nigam Limited & ors: (2014) 8 SCC 894 in this behalf shall be advantageous to be quoted:-
"4. The learned Single Judge has allowed the writ petition vide order dated 25-8-20102 [CWP No 1048 of 2010, decided on 25-8- 2010 (P&H)] after setting aside the action of the respondents in withholding the amount of gratuity and directing the respondents to release the withheld amount of gratuity within three months without awarding interest as claimed by the appellant. The High Court has adverted to the judgments of this Court particularly, in State of Kerela v. M. Padmanabhan Nair3: [(1985) 1 SCC 429:
1985 SCC (L&S) 278], wherein this Court reiterated its earlier view holding that: (SCC pp. 429-30, para 1).
"1. [the] pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment [to the employees]."
11. Para 7 of the judgment rendered in the case of H Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd.: (2003) 3 SCC 40 is advantageous to be quoted:-
"7. It is evident from Section 7(2) that as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to 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. Under Section 7(3), the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. Under sub- section (3-A) of Section 7, if the amount of gratuity is not paid by the employer within the period specified in sub-section (3), he 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 long term deposits; 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 that ground. From the 4 provisions made in Section 7, a clear command can be seen mandating the employer to pay the gratuity within the specified time and to pay interest on the delayed payment of gratuity. No discretion is available to exempt or relieve the employer from payment of gratuity with or without interest as the case may be. However, under the proviso to Section 7(3-A), no interest shall be payable if delay in payment of gratuity is due to the fault of the employee and further condition that the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. Under Section 8, provision is made for recovery of gratuity payable under the Act, if not paid by the employer within the prescribed time. The Collector shall recover the amount of gratuity with compound interest thereon as arrears of land revenue and pay the same to the person entitled. A penal provision is also made in Section 9 for non-payment of gratuity. Payment of gratuity with or without interest as the case may be does not lie in the domain of discretion but it is a statutory compulsion. Specific benefits expressly given in a social beneficial legislation cannot be ordinarily denied. Employees on retirement have valuable rights to get gratuity and any culpable delay in payment of gratuity must be visited with the penalty of payment of interest was the view taken in State of Kerala & Ors. v. M. Padmanabhan Nair1: [(1985) 50 FLR 145]. Earlier there was no provision for payment of interest on the delayed payment of gratuity. Sub-section (3-A) was added to Section 7 by an amendment, which came into force with effect from 1-10 -1987. In the case of Charan Singh v. Birla Textiles2: [(1988) 57 FLR 543] this aspect was noticed in the following words: (SCC pp. 214-15, para 4) "4. There was no provision in the Act for payment of interest when the same was quantified by the Controlling Authority and before the Collector was approached for its realization. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of sub-section (3-A) in Section 7. That provision has prospective application."
12. Now the question is as to what is the rate of interest awardable, in terms of sub-section (3A) of Section 7 of the Act, it has to be simple interest on such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-terms deposits, as Government may, by notification specify.
513. Rate of interest awardable has to be up to maximum because after all an employee who retired could not be asked to wait indefinitely so as to subject him to unforeseen circumstances. It is in the same background that employer has to arrange and to pay the gratuity amount within thirty days from the date it becomes due. It is a statutory obligation and breach whereof entails penalty of interest as envisaged by sub-section (3A) of Section 7 of the Act.
14. Submission of learned counsel for the respondents that GHADC was not averse to the payment of gratuity and leave salary but for its bad financial health payment got delayed therefore, interest may not be awarded. Non-awarding of interest is to violate the statutory provisions therefore impossible. However, keeping in view the financial health as projected in our view, instead of awarding prevalent maximum rate of interest, simple interest at rate of 6% per annum, from the date the amount of gratuity and leave salary had become due, is awarded in favour of the petitioners for the periods as follows:-
Sl. Party Retirement Amount of Due date Paid on 6% interest No. date gratuity and for P.A. payable leave salary payment for the due as withheld sanctioned by period the respondents
1. Appellant 12.11.14 Rs.21,06,000 - 12.12.14 31.07.17 From in Writ Rs.16,271 12.12.14 Appeal (deduction) + to No.34 of L.S. 31.07.17 2017 Rs.7,02,000 = (Azranath Rs.27,91,729 M. Momin)
2. Petitioner 31.12.15 Rs.10,68,120 31.01. 16 24.08.17 From in WP (C) + L.S. 31.01.16 No.17 of Rs.3,56,040 = to 2017 (Shri Rs.14,24,160 24.08.17 Profulla Hajong)
3. Petitioner 30.06.15 Rs.10,61,880 - 30.07.15 24.08.17 From in WP(C) Rs.374 30.07.15 No.18 of (deduction) + to 2017 (Shri L.S. 24.08.17 6 Hriday Rs.3,53,960 Rabha) =14,15,466
4. Petitioner 30.03.14 Rs.6,70,770 + 30.04.14 24.08.17 From in WP (C) L.S. 30.03.14 No.19 of Rs.2,23,590 = to 2017 (Shri Rs.8,94,360 24.08.17 Salchang Rabha)
5. Petitioner 31.03.12 Rs.8,04,960 - 31.04.12 24.08.17 From in WP (C) Rs.325 31.04.12 No.20 of (deduction) + to 2017 (Shri L.S. 24.08.17 Ceasar Rs.2,68,320 = Rs.10,72,955 Marak)
15. The amount of interest shall be accordingly worked out and paid respectively to the appellant and other writ petitioners within a period of four weeks.
16. Appeal as well as connected writ petitions succeed shall stand disposed of as above.
(H.S. Thangkhiew) (Mohammad Yaqoob Mir)
Judge Chief Justice
Meghalaya
18.03.2019
"Lam AR-PS"
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