The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK WP(C) No. 20586 of 2022 ..... MD, Odisha State Co-Operative Bank Ltd., BBSR Petitioner Mr. K.P. Nanda, Advocate -versus- ..... Appellate Authorrity Under Payment Of Gratuity Act Cum Joint Labour Commr., BBSR & Ors. Opposite Parties Mr. A.K. Mohapatra, Advocate (Opp. Party No. 3) THE HON’BLE MR. JUSTICE BIRAJA PRASANNA SATAPATHY CORAM: ORDER 09.09.2025 Order No.12 1. This matter is taken up through hybrid mode. 2. Heard Mr. K.P. Nanda, learned counsel appearing for the Petitioner and Mr. A.K. Mohapatra, learned counsel appearing for Opp. Party No. 3. 3. The present writ petition has been filed inter alia challenging the original order passed by the controlling authority under the Payment of Gratuity Act on 07.09.2020 in P.G. Appeal Case No. 23 of 2019
Legal Reasoning
under Annexure-7, further confirmed by the appellate authority in P.G. Appeal Case No. 10 of 2021 vide order dtd.27.06.2022 under Annexure-1. 4. Learned counsel appearing for the Petitioner-Bank vehemently contended that because of the implication of the Petitioner in 5 nos. of vigilance cases, so available from Annexure-2 series, Petitioner after his retirement from service on 30.06.2017, a decision was taken by the Management of the Petitioner-Bank with due approval of the Registrar of Co-operative Societies, Odisha, Bhubaneswar, Page 1 of 7. not to release the gratuity amount as due to the Petitioner to the tune of Rs.10,00,000/-.
Legal Reasoning
4.1. It is contended that because of the implication of the Petitioner in 5 nos. of vigilance cases and the decision taken by the Bank with due approval of the RCS, Odisha, the gratuity amount as due to the Private Opp. Party was not released. However, Private Opp. Party when moved the controlling authority by filing P.G. Appeal Case No. 23 of 2019 claiming extension of the benefit of gratuity to the tune of Rs.10,00,000/- along with interest, the said authority without proper appreciation of the stand taken by the Bank, allowed the claim vide order dtd.07.09.2020 under Annexure-7. As per the said order, while directing the Bank to release the gratuity amount of Rs.10,00,000/-, the controlling authority allowed interest @ 10% per annum till the payment is so made. 4.2. Learned counsel appearing for the Petitioner-Bank contended that challenging such order, Petitioner-Bank when moved the appellate authority in P.G. Appeal Case No. 10 of 2021, the said authority also without proper appreciation of the grounds of appeal and the implication of the Petitioner in the vigilance cases, dismissed the appeal vide the impugned order dtd.27.06.2022 under Annexure-1. 4.3. It is contended that since Petitioner is implicated in 5 nos. of vigilance cases and such a decision to withhold the gratuity was taken by the Bank with due approval of the RCS, Odisha, order passed by the controlling authority under Annexure-7 so confirmed by the appellate authority under Annexure-1 are not sustainable in the eye of law and it requires interference of this Court. Page 2 of 7. 4.4. It is also contended that while preferring the appeal in P.G. Appeal Case No. 10 of 2021, the entire awarded amount has been deposited by the Petitioner-Bank and out of the said deposited amount 50% of the amount along with interest has already been released in favour of Opp. Party No. 3 and the balance 50% is lying with the appellate authority-Opp. Party No. 2. 5. Mr. A.K. Mohapatra, learned counsel appearing for the Private Opp. Party No. 3 while supporting the impugned order, contended that after retirement of the Petitioner on 30.06.2017 though he became eligible to get the benefit of gratuity to the tune of Rs.10,00,000/- and other retiral benefits, but without any rhyme and reason when the gratuity amount was not released, Petitioner finding no alternative, moved the controlling authority by filing P.G. Appeal Case No. 23 of 2019. The controlling authority vide order dtd.07.09.2020 under Annexure-7 while allowing the claim, directed the Bank to pay the gratuity amount of Rs.10,00,000/- along with interest @ 10% per annum all through till the payment is made. The Bank when preferred an appeal in P.G. Appeal Case No. 10 of 2021, the appellate authority-Opp. Party No. 2 also dismissed the appeal vide order dtd.27.06.2022 under Annexure-1. 5.1. It is contended that since no approval was as such taken by the Bank from the RCS, Odisha, basing on which the gratuity amount was so withheld, no illegality or irregularity can be found with the orders passed by the controlling authority so confirmed by the appellate authority. It is also contended that since without any rhyme and reason, the gratuity amount was not released, the Bank has been rightly saddled with interest @ 10%. Page 3 of 7. 6. Considering the submission made and the pleadings available, this Court passed the following order on 04.08.2025:- “2. Heard learned counsel appearing for the Parties. 3. Learned counsel appearing for the Petitioner fairly contended that though there is no provision under the P.G. Act and Service Rules to withheld the gratuity amount of the Private Opp. Party, but in terms of the proceeding of the Bank so approved by the Registrar, Co-Operative Societies under Annexure-6, such a step was taken. 4. This Court after going through Annexure-6, finds that Registrar, Co-Operative Societies is not a Party to the proceeding and a signatory to the same. 5. Learned counsel for the Petitioner prays for some time to produce the entire proceeding showing that it has been approved and made in presence of the Registrar, Co-Operative Societies with his signature. 6. As requested, list this matter on 13th August, 2025.” 7. Basing on the order passed, learned counsel appearing for the Petitioner-Bank though filed an additional affidavit enclosing various documents, but no such document was filed showing any approval being made by the Registrar of Co-operative Societies permitting the Bank to withhold the gratuity amount. 8. However, placing reliance on the document enclosed by the Private Opp. Party to the counter filed to the additional affidavit, learned counsel appearing for the Petitioner contended that in terms of the decision taken by the Managing Committee in its proceeding dtd.04.08.2018, it was held that for release of such disputed gratuity amount, an employee has to give an undertaking and he is not Page 4 of 7. entitled to get any interest. Decision taken in that regard so enclosed by the Private Opp. Party vide order under Annexure-D/3 reads as follows:- “It was further resolved that in case of retired employees, who have gone to various Court of Law for release of their retirement benefits shall withdraw the legal proceedings pending in a Court of Law/Adjudication before approaching the Bank for release of their retirement benefits. In case the Bank has preferred Appeal against the decision went in favour of the retired employees, the same shall be withdrawn after obtaining undertaking from the respective employees provided they will not claim any interest over the pending gratuity dues. Further, in case of employees dismissed/ discharged/removed from the Bank in departmental proceedings, they will not be entitled to any gratuity as per Section 4(6) of the P. G. Act and as such, the cases already filed and pending shall continue in the respective of Court of Law / Adjudication. Similarly, they will also not be entitled for leave salary.” 8.1. It is accordingly contended that in view of the decision taken by the Managing Committee in its proceeding dt.04.08.2018, Opp. Party No. 3 though is eligible to get the benefit of gratuity amount of Rs.10,00,000/-, but he is not entitled to get any interest as awarded. 9. To the submission made by the learned counsel appearing for the Petitioner, Mr. Mohapatra, learned counsel appearing for the Private Opp. Party No. 3 relying on various orders passed by this Court, contended that Petitioner is entitled to get interest @ 10% and such rate of interest was allowed in terms of the notification issued by the Govt. of India on 01.10.1987. Page 5 of 7. 10. Having heard learned counsel appearing for the Parties and considering the submission made, this Court finds that Private opp. Party No. 3 while continuing in service under the Bank, retired from service on attaining the age of superannuation on 30.06.2017. After such retirement when the gratuity amount to the tune of Rs.10,00,000/- was not released, Opp. Party No. 3 approached the controlling authority by filing P.G. Appeal Case No. 23 of 2019. The said authority while allowing the claim, directed the Bank to pay to pay the gratuity amount of Rs.10,00,000/- along with interest @ 10% per annum on the gratuity amount all through vide order dtd.07.09.2020 under Annexure-7. 10.1. As found while preferring the appeal against such order, the Bank deposited the entire awarded amount with interest before Opp. Party No. 2. But the appeal so filed in P.G. Appeal Case No. 10 of 2021 was dismissed by Opp. Party No. 2 vide order dtd.27.06.2022 under Annexure-1. Since the main ground taken by the Petitioner- Bank that the gratuity amount was withheld with due approval of the decision taken by the Bank by the RCS, Odisha, was not made available, on the face of the order passed by this Court on 04.08.2025, it is the view of this Court that the Opp. Party-Bank without any authority withheld the gratuity amount of the Petitioner. 10.2. Therefore, this Court is not inclined to interfere with the impugned order so far as it relates to the direction on the Petitioner- Bank to release the gratuity amount of Rs.10,00,000/-. However, with regard to the award of interest @ 10%, it is the view of this Court that award of interest @ 10% basing on a letter issued by the Govt. of India on 01.10.1987, cannot be made applicable to the Page 6 of 7. present claim taking into account the simple interest rate available in the year 2020 and allowed by different Public Sector Banks. 10.3. Therefore, this Court in view of the rate of simple interest allowed by Public Sector Bank in the year 2020, is of the view that award of interest @ 10% requires interference of this Court. While interfering with the same, this Court held the Petitioner entitled to get interest @ 6% per annum on the gratuity amount of Rs.10,00,000/-. This Court accordingly while disposing the writ petition, directs Opp. Party No. 2 to release the balance amount in favour of Opp. Party No. 3 by calculating the interest @ 6% on the total gratuity amount of Rs.10,00,000/-, within a period of four (4) weeks from the date of receipt of this order. Residue amount, if any, be returned back to the Petitioner-Bank within the aforesaid time period also. 11. With the aforesaid observation and direction, the writ petition
Decision
stands disposed of. (BIRAJA PRASANNA SATAPATHY) Judge Sneha Signature Not Verified Digitally Signed Signed by: SNEHANJALI PARIDA Reason: Authentication Location: High Court of Orissa, Cuttack Date: 16-Sep-2025 15:40:32 Page 7 of 7.