M/S. MEAT PRODUCTS OF INDIA LTD. v. NONE

W.P (C) .No.20629 of 2004- 2 -shall not draw salary for the months of January, 1999 onwards.Post on O.P. for hearing as Item No.I in the hearing list on11.1.1999 as a last chance.” 2. This interim order continued to be in force till thedismissal of the original petition on 12.7.1999. Thereafter,the 1st respondent immediately filed Writ Appeal No.1728/1999 against the decision in the Original Petition,which was dismissed on 29.10.1999. After the dismissal ofthe Writ Appeal the 1st respondent was paid gratuity due tohim for his service in the petitioner - Company upto the dateof original retirement, namely, 30.9.1997, on 24.12.1999.The 1st respondent filed a claim before the 2nd respondentseeking payment of interest on the gratuity amount paid tohim from his date of superannuation till the date of paymentof gratuity. By Ext.P8 order, the 2nd respondent directed asfollows:“1. The applicant in G.C.46/2003 Sri. M. N.Ramachandran is entitled to get interest @ 10% from1.1.1999 to 24.12.1999 on an amount of Rs.1,94,400/-and interest @ 10% from 1.1.1999 to 20.9.2003 on anamount of Rs.16,200/- for the delayed payment of W.P (C) .No.20629 of 2004- 3 -gratuity.2. The opposite party is directed to pay the aboveamount within 30 days from the date of receipt of thisorder.”3. Ext.P8 order is under challenge before me at theinstance of the petitioner - Employer.4. The contention of the petitioner is that they are notliable to pay interest, on the ground that it is not becauseof any fault of theirs that the delay was caused in paymentof gratuity. According to them, when the 1st respondentfiled an original petition and obtained a stay of hissuperannuation itself, the petitioner could not have legallypaid any gratuity to the 1st respondent on the premise thathe has already superannuated from service. In spite of thedismissal of the original petition itself he continued to fightthe case by filing a writ appeal which was dismissed only on29.10.1999. After dismissal of the Writ Appeal, within avery reasonable time, gratuity due to the 1st respondent waspaid to the 1st respondent on 24.12.1999 is the contention W.P (C) .No.20629 of 2004- 4 -raised before me. On the above contentions the petitionerchallenges Ext.P8 order as illegal and unsustainable.5. The petitioner has another contention that regardingthe further amount of Rs.16,200/- also they are not liable topay interest. According to them, that gratuity relates to theservice of the 1st respondent in the Kerala Agro IndustriesCorporation, prior to joining the petitioner - Company whichwas sought to be clubbed with the service of the 1strespondent with the petitioner. The 1st respondent was notaware of the fact that he was entitled to gratuity in respectof the service put in by him before the Kerala AgroIndustries Corporation. In fact, he filed O.P. No. 3078/2000seeking gratuity computing that service also as eligibleservice. In that original petition, the 1st respondent'scontention that he is entitled to count his previous servicein Kerala Agro Industries Corporation was negatived by alearned Single Judge of this Court. He filed a writ appeal,namely, W.A. No.2601/2000, which was disposed of on W.P (C) .No.20629 of 2004- 5 -21.7.2003, in which his claim for computation of theprevious service also was allowed for the purpose ofgratuity. In that judgment there was a direction that theamount shall be paid within two months with interest asdirected by the learned Single Judge in respect of otheramount. According to the petitioner, therefore in respect ofthe latter amount of Rs.16,200/- mentioned in Ext.P8 also,the 1st respondent is not entitled to any interest since withintwo months from the date of judgment in the Writ Appeal,additional gratuity was also paid to him on 20.9.2003.6. In answer to the above contentions the 1strespondent would contend that payment of interest isstatutory as per the Payment of Gratuity Act. As per subsection 3(A) of Section 7 the employer is bound to payinterest on the gratuity amount from the date of retirement.The 1st respondent's date of retirement is 30.9.1997 andtherefore he is entitled to gratuity from that date and if notpaid, he is entitled to interest from that date. He would W.P (C) .No.20629 of 2004- 6 -further submit that since he was drawing salary from thepetitioner upto 31.12.1998 in respect of the amount ofgratuity payable for the service in the petitioner - Companyby Ext.P8 order interest was sanctioned only from 1.1.1999till date of payment namely 24.12.1999, which according tothe 1st respondent is perfectly in order. He also relies on adecision of the Supreme Court in H.Gangahanume Gowdav. Karnataka Agro Industries Corporation Ltd. 2003-I-LLJ 1119 which, according to the counsel for the 1strespondent, is an authority for the proposition that thepayment of interest is automatic from the date on which theemployee became eligible for gratuity. Regarding intereston the additional amount of gratuity of Rs.16,200/- also heraises the very same contentions. He therefore argues forsustaining Ext.P8 order. 8. I have considered the rival contentions in detail. 9. It is not disputed before me that as per theregulations of the petitioner - Company, the age of W.P (C) .No.20629 of 2004- 7 -retirement was 58 years, which the 1st respondent attainedon 30.9.1997. But he raised a contention that the saidregulation was invalid and filed O.P. No.21644/1997, inwhich he obtained an interim order against the terminationof his service on attaining 58 years. On the basis of thatstay order he continued to draw salary from the petitioner -Company till 31.12.1998. Thereafter, by virtue of themodification of the interim order in CMP No. 38876/1997,the petitioner was denied salary from January 1999onwards. But the interim order of stay against hissuperannuation continued. That stay continued till thedismissal of the original petition on 12.7.1999. Immediatelythereafter, the 1st respondent filed a writ appeal which wasdismissed only on 29.10.1999. Gratuity due to thepetitioner was paid on 24.12.1999. Therefore, the delay inpayment of gratuity is merely on account of the originalpetition and the writ appeal, which was the creation of the1st respondent himself. After having fought a case against W.P (C) .No.20629 of 2004- 8 -his superannuation from service, the 1st respondent cannotnow contend that he should be paid interest on the gratuityfor delayed payment of the same. The petitioner could nothave paid gratuity to the 1st respondent unless and until thecase filed by the 1st respondent against his superannuationwas finally decided, because until then the question as towhether the 1st respondent can continue in service till 60years was still uncertain. In fact the 1st respondent couldnot have accepted the gratuity if offerred to him because itwould adversely affect his case. If the petitioner could nothave paid the gratuity and the 1st respondent could not havereceived the same, the question of payment of gratuity andconsequently the question of delay in payment thereof doesnot arise. Interest can run only from the date on which thepetitioner could have legally paid the gratuity, which in thiscase was within a reasonable time after dismissal of the writappeal. In the above circumstances I am of opinion that the1st respondent is not entitled to interest on the amount of W.P (C) .No.20629 of 2004- 9 -gratuity since there was no fault on the part of thepetitioner in the matter of payment of gratuity, in so far asimmediately after the litigation was concluded thepetitioner had paid the gratuity due to the 1st respondent.As such, the direction to pay gratuity of Rs. 1,94,400/- from1.1.1999 to 24.12.1999 in Ext.P8 order is clearlyunsustainable.10. In respect of the claim for interest on additionalamount of gratuity of Rs.16,200/-, paid in respect of the 1strespondent's previous service in Kerala Agro IndustriesCorporation also the same yardstick applies. The 1strespondent filed an original petition seeking computation ofthat service also for the purpose of gratuity in March 2000which was dismissed on 7.3.2000 by a learned Single Judge.It was taken in appeal before a Division Bench, as writappeal No. 2601/2000 in which the Division Bench deliveredjudgment dated 21.7.2003, upholding the claim of the 1strespondent for gratuity taking into account that period of W.P (C) .No.20629 of 2004- 10 -service also. In that judgment, there was a direction to paythe amount within two months. That amount was also paidwithin the time stipulated by this Court. In fact in Ext.P5judgment the Division Bench directed payment of interestas directed by the learned single judge. In Ext.P4judgment, the learned single judge did not accept the claimof the petitioner for gratuity. Therefore, the question ofsingle judge directing interest also does not arise. In fact inExt. P4 judgment 1st respondent's claim for interest onprovident fund amount was rejected on the ground that theamount could not be paid only because of the pendency ofthe earlier litigation on the age of retirement. Therefore, inrespect of that additional amount of gratuity also, I cannothold that the 1st respondent is entitled to interest. In viewof the peculiar circumstance of this case, I am not satisfiedthat the decision cited by the Counsel for the 1st respondentis applicable, the facts of which are clearly distinguishable.In the above circumstances, I am satisfied that Ext.P8 W.P (C) .No.20629 of 2004- 11 -order whereby the petitioner has been directed to payinterest on the gratuity amounts to the 1st respondent is notsustainable. Accordingly, Ext.P8 is quashed. The writpetition is allowed as above.S.SIRI JAGAN, JUDGErhs