Mewa Lal v. Counsel for

3. The Tribunal after hearing the parties, directed as under:- "Accordingly, I feel that the applicant has retired way back in the year 1998 and the gratuity has been withheld for almost 24 years now. The applicant has already suffered enough for non release of his gratuity which is an amount of 88,376/-. Therefore, I feel that it is a case where the Tribunal should interfere taking a lenient view, accordingly, the respondents are directed to release the said gratuity within a period of two months from today. The respondents will be at liberty to deduct the licence fee, if any, due towards the respondents from the said amount for the legitimate period as per rule"

4. On petitioner demanding payment of interest for the delay in making 2 WRIA No. 730 of 2025 payment of amount of gratuity, the respondents on 04.03.2023 observed that amount of Rs.88,397/- has been paid and as there is no direction to pay interest on gratuity, the demand was not justified. The petitioner, it appears, thereafter filed the review petition seeking review of order dated

15.07.2022 seeking direction for payment of interest. The Tribunal condoned the delay, however, came to the conclusion that no case for review of the order was made out as the same did not fall within the parameters of a review and, consequently, rejected the review petition.

5. Learned counsel for the petitioner made submissions that action of the respondents in not paying the amount of gratuity only on account of the fact that the Tribunal has not passed any direction is not justified as under the provisions of Section 7 (3A) of the Payment of Gratuity Act, 1972 (for short 'the Act of 1972'), the payment of interest on delayed payment of gratuity is automatic and denial by the respondents in this regard is not justified.

6. Counsel for the respondents supported the orders impugned and submissions were made that the petitioner is not entitled to any interest as the delay in payment was due to fault of the petitioner and, therefore, the petition deserves dismissal.

7. We have considered the submissions made by counsel for the parties and have perused the material available on record.

8. Provisions of Section 7(3A) of the Act of 1972 inter alia read as under:- "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."

9. A perusal of the above would reveal that if the gratuity payable is not paid by the employer within the period specified in sub-section (3) i.e. within 30 days from the date it becomes payable, the employer shall pay from the date on which the gratuity becomes payable to the date on which the same is paid, simple interest. The proviso to the section provides that no such interest shall be payable if the delay in the payment is due to the 3 WRIA No. 730 of 2025 fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.

10. As seen hereinbefore, the Tribunal passed the order for payment of gratuity to the tune of Rs. 88,376/- and left it open for the respondents to deduct the licence fee, if any, due towards the petitioner for the said amount for the legitimate period. Admittedly, the respondents have not deducted any amounts towards the due licence fees and has made payment of Rs. 88,397/- to the petitioner.

11. Once it is admitted by the respondents that no amount of licence fee etc was due towards the petitioner as he has been paid the entire amount of gratuity to the tune of Rs.88,376/-, the reason initially indicated for non-payment of gratuity, cannot be sustained and, therefore, the plea raised that the delay occurred on account of the fault of the employee, cannot be accepted.

12. In view of the above fact situation, in view of the provisions of Section 7 (3A) of the Act of 1972, the petitioner is entitled for payment of interest on the amount of gratuity from 30 days from the date of his superannuation till the amount has been paid to the petitioner at the rate specified by the Government from time to time.

13. Consequently, the petition is allowed. The order dated 15.07.2022 passed by the Tribunal is accordingly modified.

14. The respondents are directed to make payment of interest in terms of provisions of Section 7(3A) of the Act of 1972 to the petitioner within a period of two months from the date of this order. October 9, 2025 RK/AKShukla (Kshitij Shailendra,J.) (Arun Bhansali,CJ.) RAJESH KUMAR High Court of Judicature at Allahabad

3. The Tribunal after hearing the parties, directed as under:- "Accordingly, I feel that the applicant has retired way back in the year 1998 and the gratuity has been withheld for almost 24 years now. The applicant has already suffered enough for non release of his gratuity which is an amount of 88,376/-. Therefore, I feel that it is a case where the Tribunal should interfere taking a lenient view, accordingly, the respondents are directed to release the said gratuity within a period of two months from today. The respondents will be at liberty to deduct the licence fee, if any, due towards the respondents from the said amount for the legitimate period as per rule"

4. On petitioner demanding payment of interest for the delay in making 2 WRIA No. 730 of 2025 payment of amount of gratuity, the respondents on 04.03.2023 observed that amount of Rs.88,397/- has been paid and as there is no direction to pay interest on gratuity, the demand was not justified. The petitioner, it appears, thereafter filed the review petition seeking review of order dated

15.07.2022 seeking direction for payment of interest. The Tribunal condoned the delay, however, came to the conclusion that no case for review of the order was made out as the same did not fall within the parameters of a review and, consequently, rejected the review petition.

5. Learned counsel for the petitioner made submissions that action of the respondents in not paying the amount of gratuity only on account of the fact that the Tribunal has not passed any direction is not justified as under the provisions of Section 7 (3A) of the Payment of Gratuity Act, 1972 (for short 'the Act of 1972'), the payment of interest on delayed payment of gratuity is automatic and denial by the respondents in this regard is not justified.

6. Counsel for the respondents supported the orders impugned and submissions were made that the petitioner is not entitled to any interest as the delay in payment was due to fault of the petitioner and, therefore, the petition deserves dismissal.

7. We have considered the submissions made by counsel for the parties and have perused the material available on record.

8. Provisions of Section 7(3A) of the Act of 1972 inter alia read as under:- "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."

9. A perusal of the above would reveal that if the gratuity payable is not paid by the employer within the period specified in sub-section (3) i.e. within 30 days from the date it becomes payable, the employer shall pay from the date on which the gratuity becomes payable to the date on which the same is paid, simple interest. The proviso to the section provides that no such interest shall be payable if the delay in the payment is due to the 3 WRIA No. 730 of 2025 fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.

10. As seen hereinbefore, the Tribunal passed the order for payment of gratuity to the tune of Rs. 88,376/- and left it open for the respondents to deduct the licence fee, if any, due towards the petitioner for the said amount for the legitimate period. Admittedly, the respondents have not deducted any amounts towards the due licence fees and has made payment of Rs. 88,397/- to the petitioner.

11. Once it is admitted by the respondents that no amount of licence fee etc was due towards the petitioner as he has been paid the entire amount of gratuity to the tune of Rs.88,376/-, the reason initially indicated for non-payment of gratuity, cannot be sustained and, therefore, the plea raised that the delay occurred on account of the fault of the employee, cannot be accepted.

12. In view of the above fact situation, in view of the provisions of Section 7 (3A) of the Act of 1972, the petitioner is entitled for payment of interest on the amount of gratuity from 30 days from the date of his superannuation till the amount has been paid to the petitioner at the rate specified by the Government from time to time.

13. Consequently, the petition is allowed. The order dated 15.07.2022 passed by the Tribunal is accordingly modified.

14. The respondents are directed to make payment of interest in terms of provisions of Section 7(3A) of the Act of 1972 to the petitioner within a period of two months from the date of this order. October 9, 2025 RK/AKShukla (Kshitij Shailendra,J.) (Arun Bhansali,CJ.) RAJESH KUMAR High Court of Judicature at Allahabad