CHARAN SINGH Vs. BIRLA TEXTILES

JUDGEMENT

(1.) The short question in this appeal by special leave is whether the appellant-workman was entitled to interest on the gratuity due to him under the provisions of the Payment of Gratuity Act, 1972 (39 of 1972).

(2.) Appellant joined service under Respondent No. 1 in April, 1944 and was relieved from service on his resignation with effect from 24-5-1983. The employer did not determine the amount of gratuity payable to the appellant as required under S. 7(2) of the Act. On 7-6-1983, the appellant furnished an application in Form-I for payment of gratuity but no action was taken by the employer; then appellant approached the statutory controlling authority for determination of the amount of gratuity and requested that on the sum due interest may be paid. The employer contested the claim both in regard to gratuity as also interest. On 3-12-1984, the controlling authority determined the amount of gratuity at Rs. 16,380/- ad directed the Respondent No. 1 to pay the same along with compound interest of 9 per cent. Thereupon Respondent No. 1 challenged the order before the appellate Authority. The appellate Authority affirmed the determination of gratuity but set aside the order for payment of interest.

(3.) We have heard learned counsel for both parties in regard to payability of interest. Relevant portions of S. 7 of the Act, as it stood in 1983, when the cause of action arose, may now be extracted:-