Writ Petition No. 34133 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 34133 OF 2024 (L-PG) BETWEEN: M/S HMT MACHINE TOOLS LIMTED (MBX), A COMPANY REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, BANGALORE COMPLEX, JALAHALLI PO BANGALORE-560 013, REPRESENTED BY ITS DEPUTY GENERAL MANAGER, (P), INCHARGE MBX-MR.SUBRAMANYA. (BY SRI RAYAPPA Y HADAGALI, ADVOCATE) AND: …PETITIONER 1. CONTROLLOING AUTHORITY, UNDER THE PAYMENT OF GRATUITY ACT, ANDASSISTANT LABOUR COMMISSIONER (CENTRAL) SHRAMSADAN, 3RD CROSS, 3RD MAIN, 2ND PHASE, TUMKUR ROAD, YESWANTHPURA, BANGALORE-560022. 2. DEPUTY COMMISSIONER, BANGALORE DISTRICT, KANDAYA BHAVAN, K G ROAD, BANGALORE - 560009. 3. THE SPECIAL TAHASHILDAR, BANGALORE NORTH TALUK, KANDAYA BHAVAN, K G ROAD, BANGALORE - 560009.
Legal Reasoning
law laid down by the Coordinate Bench of this Court in W.P. No.12622/2023 which is filed by the same petitioner. 4. Learned counsel for respondents on the other hand would contend that the gratuity amount is not paid in time and the amount is due since long. Under these - 8 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR circumstances, the authority is justified in imposing 15% compound interest on amount due and he refers to Section 8 of Act of 1972 to substantiate his contention that order imposing 15% compound interest is justified. 5. This Court has considered the contentions raised at the bar and perused the records. 6. The order directing payment of gratuity under Section 7(3A) of Act of 1972 has attained finality. Despite the said order, the employer has not paid the gratuity amount. While it is ordered to pay the arrears of gratuity, the Controlling Authority has imposed 10% interest which is provided under Section 7(3A) of Act of 1972. However, the amount is not paid. 7. The employees filed an application under Section 8 of Act of 1972 to recover the amount along with the interest. Without hearing the petitioner, the Authority has imposed 15% compound interest on the amount of gratuity due to the respondents. - 9 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR 8. As rightly pointed out by the learned counsel for the petitioner, though the Authority has the power to impose compound interest under Section 8 of Act of 1972, proviso to Section 8 also mandates the opportunity of hearing to the employer before issuing the recovery certificate. Admittedly, procedure is not followed. The petitioner is not heard before passing the order. 9. Under these circumstances, the impugned orders are unsustainable and accordingly, have to be set-aside and accordingly, quashed. 10. However, it is also required to be noticed that amount is due to the workmen from the year 2017-2023 during which period, various employees retired. The law requires the gratuity amount to be paid within 30 days from the date of retirement. 11. Under these circumstances, the Authority has imposed 10% interest on the gratuity amount due to the workmen. Though this Court has set-aside the order imposing compound interest on the technical plea that - 10 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR petitioner is not heard, now this Court has heard the petitioner as to the reasons for the delay. 12. Learned counsel for the petitioner would submit that the petitioner establishment is running under loss. It is submitted that proceeding was pending before the Board for Industrial and Financial Reconstruction from 2006-2014. Merely because the petitioner is running under loss is not a ground to deny the gratuity payable to the workmen. It is not in dispute that the petitioner has valuable assets. 13. This being the position, the petitioner has to take steps for payment of gratuity. In case, the amount is not paid within eight weeks, the amount due shall carry compound interest @ 15% from the expiry of eight weeks from today. 14. With these observations, the impugned orders are
Arguments
4. SRI. G. SHIVAPPA, S/O LATE GURUCHANNABASAPPA, AGED ABOUT 60 YEARS, Digitally signed by C HONNUR SAB Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR R/AT 509, 8TH MAIN, 4TH CROSS, VIJAYANAGAR, BANGALORE-40. 5. SRI. S.R. VENKATESH, S/O LATE S. RANGAPPA, AGED ABOUT 62 YEARS, R/AT NO.125, SAPTHAGIRI, 2ND CROSS, 1ST BLOCK, KUVEMPU NAGAR, TUMKUR-02. 6. SRI SHANMUGAM .K, S/O LATE M.K. KRISHNA SWAMY, AGED ABOUT 63 YEARS, R/AT 342/4, 9TH CROSS, NEW KAVIKA LAYOUT, NEAR GEETHA ASHRAM, BAPUJI NAGAR, BANGALORE-26. 7. SRI. SURESH G.J, S/O LATE G.B. JAYARAM, AGED ABOUT 62 YEARS, R/AT NO.145, 3RD CROSS, SINGAPURA GARDEN, CHIKKA BANAVARA POST, BANGALORE-90. 8. SRI. M. VENKATESH, S/O LATE M. MOODALAIAH, AGED ABOUT 63 YEARS, R/AT NO.65, MUDALAGIRI NIVASA, 4TH CROSS, JANATHA COLONY, SHATTIHALLI VILLAGE, JALAHALLI WEST, BANGALORE-15. 9. SRI. M.E. VIJAYA KUMAR, S/O LATE ESHWARAPPA, AGED ABOUT 63 YEARS, R/AT ARUNODAYA NILAYA, 4TH B CROSS, MUNESHWARA NAGAR, NAGASANDRA POST, - 3 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR BANGALORE-73. 10. SRI. S. SRINIVASA REDDY S.T, S/O V. THIMMAIAH, AGED ABOUT 61 YEARS, R/AT 83, SULIKUNTE VILLAGE, SARJAPURA MAIN ROAD, BOMMASANDRA POST, BANGALORE EAST-25. 11. SRI. VENUGOPAL R.C, S/O LATE CHINNAIAH, AGED ABOUT 65 YEARS, R/AT 55, SRI HARA NIVASA, 4TH CROSS,RAJU LAYOUT, NAGADEVANA HALLI, NEAR NEHRU SCHOOL, BANGALORE-56. 12. SRI. R. GOVINDAPPA, S/O LATE RAMACHANDRAPPA, AGED ABOUT 67 YEARS, R/AT SRI. CHENNAKESHAVA PRASANNA, SHABARI NAGAR, 3RD MAIN, 1ST CROSS, BYATARAYANAPURA, SAHAKARA NAGAR POST, BANGALORE-560092. 13. SRI. G. VENKATESH MURTHY, S/O LATE K.S. GOPAL RAO, AGED ABOUT 64 YEARS, R/AT NO.615, 4TH A MAIN, 6TH A CROSS, OMBR LAYOUT, BHUVANAGIRI, BANASWADI, BANGALORE-43. 14. SRI. M.B. VENKATESH, S/O LATE M.N. BHEEMARAO, AGED ABOUT 62 YEARS, 14/2, 1ST FLOOR, PUTTANNA ROAD, BASAVANAGUDI, BANGALORE-04. - 4 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR 15. SRI. M. KESHAVA REDDY, S/O LATE M. MUNISWAMY REDDY, AGED ABOUT 60 YEARS, R/AT NO.18, 2ND CROSS, NEAR OLD UJALA FACTORY, HOSAPALYA, BOMMANA HALLI POST, BANGALORE-68. 16. SMT. LAKSHMI KUMARI. K, W/O SRINIVASA LANKA, AGED ABOUT 63 YEARS, R/AT NO.41, 12TH MAIN, 1ST BLOCK, HMT LAYOUT, VIDYARANYAPURA, BANGALORE-97. 17. SRI. MOHAN J, S/O LATE JAYARAMAIAH, AGED ABOUT 64 YEARS, R/AT NO.23, 8TH MAIN, 15TH CROSS, MUTYALA NAGAR, BANDAPPA GARDEN, JP PARK WEST GATE, BANGALORE-54. 18. SRI. CHANDRASHEKHAR .K, S/O LATE KRISHNAPPA. S, AGED ABOUT 61 YEARS, R/AT NO.130, SECTOR-II, HMT COLONY, BANGALORE-13. 19. SRI. PRABHAKAR. Y, S/O LATE Y. RAMULU, AGED ABOUT 62 YEARS, R/AT HOUSE NO. EWS 354, ROAD NO.2,KPHB COLONY, MEDCHAL, MALKAJGIRI DIST, TELANGANA STATE-500072. 20. SRI. V.N. CHANDRASHEKHAR, S/ O LATE V. NAGAIAH, - 5 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR AGED ABOUT 61 YEARS, R/AT NO.403, 13TH MAIN, 8TH CROSS, GOKULA 1ST STAGE, BANGALORE-54. 21. SRI. SOMASUNDARAM. N, S/O LATE NALLASIVAM NAINAR, AGED ABOUT 65 YEARS, R/AT B-203, SRUTIKA SPRINGFIELDS, SINGAPURA MAIN ROAD, VIDYARANYAPURA POST, BANGALORE-97. 22. SRI. S. MANJUNATH, S/O LATE SUNDAR. K, AGED ABOUT 60 YEARS, R/AT NO.G-41, SRIRAMASADHANA APARTMENTS, GOKULA, BANGALORE-54. 23. H.R. SHANKARA, S/O H.S. RAMAKRISHNA MURTHY, AGED ABOUT 62 YEARS, NO. R/AT 217, SLV SOUMYASREE PARK VIEW, SHARADAMBA NAGAR, JALAHALLI, BENGALURU-560013. 24. B.R. MURALIDHARA, S/O B.R. RAJAGOPALA SETTY, AGED ABOUT 60 YEARS, R/AT NO.81, CHIRANJEEVI NILAYA, 2ND MAIN, 3RD CROSS, PRIYADARSHINI LAYOUT, AYYAPPA NAGAR, DEVASANDRA MAIN ROAD, K.R.PURAM, BANGALORE-560036. 25. B. MURALIDHAR, S/O BHIMA RAO, AGED ABOUT 64 YEARS, R/AT NO.549, 5TH CROSS, 3RD BLOCK, HMT LAYOUT, NAGASANDRA POST, BANGALORE-73. - 6 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR 26. RAGHAVENDRA N. DESHPANDE, S/O NARAYANA RAO DESHPANDE, AGED ABOUT 62 YEARS, R/AT NO.65, GANGA SADAN, CHAMUNDESHWARI LAYOUT, VIDYARANYA PURA POST, BENGALURU-97. (BY SRI GOWTHAM C ULLAL, CGSC (CENTRAL GOVERNMENT STANDING COUNSEL) FOR R1, SRI PRINCE ISAAC, AGA FOR R2 AND R3, SRI M SUBRAMANYA BHAT, ADVOCATE FOR R4 TO R26) …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED JAPTI HUKUM NOTICES BEARING NOS. i)M.S.C(RECOVERY) CR/121/2023-24 DTD. 09.11.2024 ISSUED BY THE R-3 VIDE ANNX-A. ii) M.S.C(RECOVERY) CR/121/2023-24 DTD. 11.11.2024 ISSUED BY THE R-3 VIDE ANNX-B. iii)M.S.C(RECOVERY) CR/06/2024-25 DTD. 11.11.2024 ISSUED BY THE R-3 VIDE ANNX-C. iv) M.S.C(RECOVERY) CR/121/2024-25 DTD. 11.11.2024 ISSUED BY THE R-3 VIDE ANNX-D. v) M.S.C(RECOVERY) CR/121/2023-24 DTD. 13.11.2024 ISSUED BY THE R-3 VIDE ANNX-E. vi) M.S.C(RECOVERY) CR/01/2024-25 DTD. 19.11.2024 ISSUED BY THE R-3 VIDE ANNX-F. vii)M.S.C(RECOVERY)CR/133/2024-25 ISSUED BY THE R-3 VIDE ANNX-G. DTD. 19.11.2024 THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: [ CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE - 7 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR ORAL ORDER Heard learned counsel appearing for the petitioners as well as learned counsel appearing for the respondents. 2. This petition is filed assailing the orders at Annexures-A to G directing attachment of the petitioner's property to recover the arrears of gratuity along with 10% simple interest as imposed by the Controlling Authority and also 15% compound interest. 3. Learned counsel for the petitioner would submit that the impugned orders are unsustainable as there is a violation of Section 8 of Payment of Gratuity Act, 1972 (for short 'Act of 1972') in as much as before imposing 15% compound interest, the Authority has not given an opportunity to the petitioner and said order is contrary to the
Decision
set-aside and the petition is disposed of. - 11 - NC: 2025:KHC:23023 WP No. 34133 of 2024 HC-KAR 15. All pending applications do not survive for consideration. Sd/- (ANANT RAMANATH HEGDE) JUDGE CHS List No.: 1 Sl No.: 22