HINDUSTHAN ANTIBIOTICK LTD Vs. PRAMODINI ROHIDAS SUTHAR

JUDGEMENT

(1.) The controlling authority has directed the petitioner to pay an amount of Rs. 1,30,823/- towards the dues on account of gratuity together with interest at the rate of 7% per annum with effect from 1st February, 1997. The order of the controlling authority has been confirmed by the Appellate Authority on 5th February, 2008.

(2.) The Payment of Gratuity Act, 1972 provides in Section 4(1) that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years on superannuation, retirement or resignation or death or disablement, as the case may be. Sub-section (6) of Section 4 contains a non-obstante provision and provides for the circumstances in which gratuity may be forfeited wholly or in part. Sub-section (6) of Section 4 is to the following effect:

(3.) Under Sub-section (2) of Section 7 the employer is statutorily under an obligation whether an application for the payment of gratuity is made or not, to determine the amount of gratuity, and furnish a notice to the person to whom it is payable and to the controlling authority specifying the amount so determined. Under Sub-section (3) of Section 7 the employer is under a statutory obligation to arrange for the payment of gratuity within 30 days from the date on which it becomes payable. In the event that the payment is not effected within the period specified in Sub-section (3) then Sub-section (3A) of Section 7 prescribes for the payment of interest from the date on which the gratuity becomes payable after the date on which it is payable at the rate notified by the Central Government for the repayment of long term deposits. Section 13 provides that gratuity payable under the Act shall not be liable to attachment in execution of any decree of a civil, revenue or criminal Court. Under Section 14 the Act has overriding force and effect, notwithstanding anything contained in any other Act, instrument or contract. The controlling authority appointed by the appropriate government is a creature of the statute and so is the Appellate Authority designated under the Act. Neither the controlling authority nor the appellate authority possess a discretion not to order or direct the payment of gratuity where the conditions prescribed by the Act have been otherwise fulfilled. This needs emphasis, because the present case is not a case where the employee had approached this Court in the exercise of its constitutional jurisdiction under Article 226. In such a case this Court will be justified in declining to exercise the jurisdiction under Article 226 for valid reasons based on the exercise of judicial discretion. On the contrary, it was the employee who had approached the controlling authority which has duly enforced the provisions of the Act by directing the payment of gratuity. Where the Payment of Gratuity Act, 1972 prescribes those circumstances in which gratuity can be forfeited, it would not be open to the controlling authority to expand those circumstances or to permit the employer to withhold gratuity in circumstances which are not provided by the legislature. Hence, the controlling authority was not in error in directing the petitioner to pay gratuity together with interest. Insofar as the liability to pay interest is concerned, Section 7(2) confers an obligation on the employer to determine the gratuity whether or not an application is made and under Sub-section (3) a period of thirty days is given to the employer to effect payment of gratuity. In the absence of payment within the stipulated period, Sub-section (3A) provides a liability to pay interest. Therefore, the direction in regard to the payment of interest cannot be faulted.