M.A. Rehaman vs The Deputy Labour Commissioner and Appellate Authority Region - II, The Assistant Labour Commissioner and Controlling Authority under the Payment of Gratuity Act Division - III and The Divisional Controller KSRTC, Kolar Division

Ram Mohan Reddy, J.—The lis brought before the Court lies in a narrow compass. Petitioner, a retired employee of the third respondent-Road Transport Corporation aggrieved by the orders dated 2.12.2010 Annexure-A of the Controlling Authority and 16.7.2012 Annexure-B of the Appellate Authority insofar as it relates to dismissal of the petitioner''s appeal under the Payment of Gratuity Act, 1972 (for short ''the Act''), has presented this petition.

There is no dispute that on the termination of services of the petitioner-workman during the year 1995, a sum of Rs. 40,733/- was paid towards gratuity. Petitioner when reinstated into service during June 2000, was required to refund the amount received as gratuity together with interest at 14% per annum in view of the Circular issued by the respondent-Corporation in the matter of payment of interest on the amount of gratuity when repaid, on reinstatement.

It appears that the petitioner when reinstated, the amount paid towards gratuity was recovered in installments from out of monthly wages commencing from June 2000 to December 2001, totaling to Rs. 40,740/-. On the petitioner''s superannuation on 31.8.2005, the respondent-Corporation deducted Rs. 39,928/- from out of the gratuity amount which led to filing an application under the Act before the Controlling Authority. The Controlling Authority, by order dated 2.12.2010 Annexure-A confirmed the deduction but determined Rs. 2,80,594/- as gratuity, from out of which Rs. 2,29,460/- was deducted and a direction was issued to the respondent to pay Rs. 51,134/-. That order when carried in appeal, both by the petitioner, and the respondent, the appeals were dismissed, by common order dated 16.7.2012 affirming the order of the Controlling Authority over the deduction of Rs. 39,928/- towards interest on Rs. 40,740/- paid as gratuity during the year 1995 when the petitioner was terminated from service. Hence this petition by the workman.

Learned Counsel for the petitioner though submits that the rate of interest at 14% p.a. is on the higher side, the submission is unacceptable since the circular under which the said interest rate is prescribed is not called in question.

Learned Counsel for the respondent-Corporation, submits, that a recalculation of interest at 14% per annum from the year 1995 up to December 2001 on Rs. 40,740/- paid to the petitioner, and recovered in installments on reducing balance basis, after reinstatement during June 2000, the amount due towards interest is Rs. 34,953/- and not Rs. 39,928/-.

In that view of the matter, petitioner is entitled to the difference of the amount towards interest, that is, Rs. 39,928/- - Rs. 34,953/- = Rs. 4,975/-, together with interest at 10% per annum from 31.8.2005 the date of deduction up to the date of payment and accepting the same as 8 years, petitioner is entitled to Rs. 3,980/- totaling to Rs. 8,955/-. Learned Counsel for the respondent-Corporation submits that if granted a week''s time, the amount would be deposited with the Controlling Authority.

In the result, this petition is allowed-in-part. The order of the Controlling Authority is quashed. The appeal is allowed in part. The order of the Controlling Authority is modified entitling the petitioner to Rs. 8,955/- and if such a deposit is made within a week from today, the Controlling Authority is directed to effect payment to the petitioner.