ALLAHABAD BANK Vs. APPELLATE AUTHORITY

JUDGEMENT

(1.) The claim for delayed payment of interest on the amount of gratuity, which was payable under Subsection (1) of Section 7 of the Payment of Gratuity Act, 1972, was rejected by the Controlling Authority by its order dated 26/09/2003 relying upon the provision of Clause 20(3)(iii) of the Allahabad Bank (Officers') Service Regulations, 1979. The appellate authority has reversed this order of the Controlling Authority on 16/12/2003 and has directed the payment of interest at the rate of 10% per annum on the amount of gratuity of Rs.3,50,000/ for the period from 01/02/2001 till the date of passing of order. The direction was issued as required by Subsection (3A) of Section 7 of the Payment of Gratuity Act. The employer is, therefore, before this Court in this writ petition. Rule was granted in this matter on 21/09/2005 and the impugned order was stayed.

(2.) It is not disputed that the respondentemployee has been paid with the entire amount of gratuity. The claim for payment of interest made under Subsection (3A) of Section 7 of the Payment of Gratuity Act, which is reproduced below

(3.) In terms of the aforesaid provision, no justification can be entertained for nonpayment of interest, except that the delay in making payment of gratuity was due to the fault of the employee and the employer has obtained the permission in writing from the Controlling Authority for the delayed payment on this ground. It is not the case of the petitionerBank that the enquiry was delayed due to the fault on the part of employee and that a permission was obtained in writing of the Controlling Authority for making delayed payment of gratuity. The consequences provided under Subsection (3A) of Section 7 of the said Act cannot, therefore, be stalled.