Sri. G. Ravi Mohan, Advocate, advanced arguments on behalf v. Karnataka Agro Industries Corpn. Ltd

Sri. G. Ravi Mohan, Advocate, advanced arguments on behalf of respondent No.2. The learned counsel for the petitioner submitted that though the award dated

02.05.1995 passed by the Labour Court modifying the punishment of dismissal from service imposed by the petitioner on respondent No.2 to that of his discharge from service, has attained finality, the fact remains, the charge on which the order of dismissal from service was passed against respondent No.2, namely theft of company property, which involves moral turpitude, was not disturbed by the Labour Court, the petitioner having regard to the provisions of Section 4(6)(1)(b)(ii) of the Payment of Gratuity Act, 1972, is entitled to withhold the gratuity, and mere release of the withheld amount, which is as per the award of the Labour Court, does not entitle respondent No.2 to claim interest on the delayed payment of gratuity. Mr. G. Ravi Mohan, who advanced arguments on behalf of respondent No.2 submitted that inasmuch as the award of the Labour Court modifying the punishment of dismissal from service imposed by the petitioner on respondent No.2 to that of his discharge from service, holding that he is entitled to all the retirement benefits as though he retired from service on attaining superannuation, has attained finality for the petitioner has not preferred any appeal there against, and having regard to the fact that the petitioner has released the gratuity after expiry of the statutory period, respondent No.2 is entitled to claim interest on the delayed payment, and payment of interest on the delayed payment of gratuity is not discretionary, but mandatory.

In support of this submission, he placed reliance on the judgment of the apex Court in H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd.. The petitioner does not dispute the fact the award of the Labour Court, modifying the order of dismissal from service imposed by them on respondent No.2, to that of his discharge from service, has attained finality inasmuch as they did not prefer any appeal against the said order. The petitioner also does not dispute the fact that the Labour Court while modifying the punishment, held that the petitioner is entitled to all the retirement benefits as though he retired from service after superannuation. Therefore, by virtue of the award of the Labour Court, respondent No.2 is entitled to all the retrial benefits, which the petitioner does not dispute, includes gratuity, and which was already paid to respondent No.2. It may be noticed whether respondent No.2 is entitled to claim interest on delayed payment of gratuity.

Section 7(3-A) of Payment of Gratuity Act, 1972, mandates the employer to pay gratuity to the employee within time, and to pay interest on the delayed payment. Though the petitioner, pursuant to the award of the Labour Court, paid gratuity to respondent No.2, the fact remains it did not pay the same within time. Inasmuch as the petitioner had not paid the gratuity within time, respondent No.2 having regard to the provisions of Section 7(3-A) of the Payment of Gratuity Act, 1972, is entitled to claim interest on the delayed payment of gratuity. In H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., the apex Court having considered the provisions of Section 7(3-A) of the Payment of Gratuity Act, 1972 held: Payment of gratuity with or without interest, as the case may be, does not lie in the domain of discretion, but 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 interest. Merely because the Labour Court did not disturb the guilt of respondent No.2, while modifying the punishment imposed against him, it does not mean that respondent No.2 is not entitled to claim interest on delayed payment of gratuity, and more so when the petitioner did not assail the award of the Labour Court, which while modifying the punishment, held that respondent No.2 is entitled to all the retrial benefits as though he retired from service on attaining superannuation. The award of the Labour Court having attained finality, and the petitioner having paid the gratuity in terms thereof, cannot contend that respondent No.2 is not entitled to claim interest on the delayed payment of gratuity. For the foregoing reasons, there is no merit in the writ petition, and the same is accordingly dismissed. _________________ N.V. RAMANA, J. Date: 09th March, 2006. KSR