TMI Blog2003 (2) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... While in service, the appellant and few other officials were kept under suspension in March, 1999. Aggrieved by the same, the appellant and others filed writ petition Nos. 11893-11898 of 1999 inter alia contending that order of suspension passed was one without authority of law and without application of mind. After service of notice in the writ petitions, the respondent-Corporation realizing that it was not possible to support the said order of suspension, withdrew the same by an order dated 21.5.1999. Taking note of the order dated 21.5.1999 revoking the suspension, the High Court disposed of the writ petitions as having become infructuous, however, reserving liberty to the writ petitioner to approach the High Court for seeking approp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal was dismissed. The learned counsel for the appellant urged that claim for interest on belated payment of gratuity is a statutory right as envisaged under Sections 7 and 8 of the Act; the High Court committed an error in denying the same to the appellant on the ground of discretion on the facts and circumstances of the case. According to the learned counsel, when the appellant on fact was found to be entitled to interest, he should not have been denied the same. The learned counsel for the respondent-Corporation argued in support and justification of the impugned order. In order to appreciate the above contentions urged, it is necessary to notice the provisions of the Payment of Gratuity Act, 1972 (for short 'the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector who shall recover the same, together with compound interest thereon at such rate as the Central Government may, by notification, specify, from the date of expiry of the prescribed time as arrears of land revenue and pay the same to the person entitled thereto; Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate. Provided further that the amount of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, under the proviso to Section 7(3A), no interest shall be payable if delay in payment of gratuity is due to the fault of the employee and further condition that the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. Under Section 8, provision is made for recovery of gratuity payable under the Act, if not paid by the employer within the prescribed time. The Collector shall recover the amount of gratuity with compound interest thereon as arrears of land revenue and pay the same to the person entitled. A penal provision is also made in Section 9 for non-payment of gratuity. Payment of gratuity with or without interest as the case may be does not lie in the domain of discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rections to the respondent-Corporation to settle the full salary and allowances for the period of suspension, gratuity, cash equivalent to leave salary, deferred leave, concession amount etc. As regards the claim of interest on gratuity, the learned Single Judge held as under:- Since there was a doubt as to whether the petitioner is entitled to the gratuity, cash equivalent of leave salary etc., in view of the divergent opinion of the Courts during the pendency of an enquiry proceeding of a retired employee, in my view, the petitioner is not entitled to the relief of interest for the belated payment of gratuity and other amounts. It is clear from what is extracted above from the order of learned Single Judge that interest on delayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on exercised by the learned Single Judge could not be said to be arbitrary. In the first place in the light of what is stated above, the learned Single Judge could not refuse the grant of interest exercising discretion as against the mandatory provisions contained in Section 7 of the Act. The Division Bench, in our opinion, committed an error in assuming that the learned Single Judge could exercise the discretion in the matter of awarding interest and that such a discretion exercised was not arbitrary. In the light of the facts stated and for the reasons aforementioned, the impugned order cannot be sustained. Consequently, it is set aside. The respondent is directed to pay interest @ 10% on the amount of gratuity to which the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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