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Judgment
K.K. Tated, J.—Heard learned Counsel for the parties. The present Civil Application is placed before this Court for hearing pursuant to the administrative order passed by the Honourable the Chief Justice dated 28.8.2012.
This application is preferred by original respondent No. 1 in Writ Petition No. 9039 of 2007 for direction to the respondent Nos. 1 and 2 original petitioner Nos. 1 and 2 in writ petition to pay the outstanding amount of Rs. l,16,757/- to the applicant and the writ petition be dismissed as infructuous.
Few facts of the matter are as under:
The applicant was working as an Assistant Teacher for the primary section from 12.6.1978 onwards and rendered continuous service on or upto 30.4.2001 for 23 years, till her retirement. As the respondent Nos. 1 and 2 failed to pay gratuity as demanded by the applicant, applicant filed application before the Controlling Authority under the Payment of Gratuity Act, 1972 and Deputy Commissioner of Labour, Mumbai claiming the gratuity amount from the respondent Nos. 1 and 2. The said application was decided by the Controlling Authority under the Payment of Gratuity Act, 1972 by its order dated 29.7.2003 holding that respondent Nos. 1 and 2 are liable to pay to the applicant the amount of gratuity of Rs. 1,45,497/ with simple interest of 10% p.a. from the date of retirement till realization of amount.
Being aggrieved by the said order, respondent-school preferred Appeal No. PGA/CA/277 of 2003 before the Appellate Authority under the Payment of Gratuity Act, 1972. The said appeal was decided by appellate authority by its order dated 6.10.2007 confirming the order of the Controlling Authority dated 29.7.2003. The appellate authority also confirmed that respondent school is liable to pay interest of 10% p.a. from the date on which the gratuity becomes payable to the date on which it is paid. Being aggrieved by the said order dated 6.10.2007, the respondent school preferred Writ Petition No. 9039 of 2007. The said writ petition was admitted by this Court (Coram: B.H. Marlapalle, J.) by order dated 17.12.2007 and granted interim relief in terms of prayer Clauses (c) and (d). Prayer Clauses (c) and (d) of the writ petition read thus:
(c) Pending hearing and final disposal of the petition operation and execution of the order dated 29th July, 2003 passed by the Controlling Authority and the order dated 6th October, 2007 passed by the Appellate Authority under the Payment of Gratuity Act be stayed.
(d) Pending hearing and final disposal of the petition the respondent No. 1 be restrained by an interim order and injunction of this Hon''ble Court from withdrawing the amount deposited by the petitioners.
Thereafter the applicant preferred Application No. 1181 of 2011 for allowing her to withdraw the amount deposited by the respondent-school with the Appellate Authority under the Payment of Gratuity Act, 1972, in view of change of circumstances. The said application was decided by this Court by order dated 7.7.2011 and allowed the applicant to withdraw a sum of Rs. 1,78,234/- deposited by the respondent-school along with accrued interest, if any.
The learned Counsel for the applicant submit that on the date of withdrawal of the amount, as per their calculation, additional sum of Rs. 1,16,757/- becomes due and payable by the respondent-school. These calculations are given by the applicant in the present Civil application in para 8 which read thus:
The applicant states that the applicant retired upon attaining age of superannuation on 1st May, 2001. The Applicant made an Application for gratuity by filing Form-1 on 18th July, 2001. The interest granted in favour of the applicant was 10% p.a. The respondent Nos. 1 & 2 have deposited the interest upto 31st July, 2003. The applicant is entitled to receive the interest amount from the date of retirement till the realisation of the amount. The calculation of the said dues is as under:
It is the case of the applicant that as per provisions of section 7(3A) applicant is entitled to interest @ 10% on the delayed payment of Gratuity amount. Section 7(3-A) reads thus:
(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3) the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits, as that Government may, by notification specify:
Provided that no such interest shall be payable if the delay in payment is due to the fault of the employee and the employer has obtained permission in writing from the Controlling Authority for the delayed payment on this ground.
He states that applicant received amount of Rs. 1,78,234/- on 9.8.2011. Therefore, respondent-management is liable to pay interest @ 10% p.a. from 1.8.2003 to 9.8.2011, He states that the respondent-management deposited the amount of Rs. 1,78,234/- before the Competent Authority as per order dated 29.7.2003, the same was not withdrawn by the applicant in view of the stay obtained by the respondent-management. Therefore, the applicant is entitled to 10% interest as per the Payment of Gratuity Act, 1972 @ 10% till the date of payment i.e. 9.8.2011.
In support of his contention, he relies on the judgment of the Apex Court in the matter of H. Gangahanume Gowda Vs. Karnataka Agro Industries Corpn. Ltd., . The Apex Court in that authority held that the mandatory provision of payment of interest contained in section 7(3-A) no discretion is available to exempt or relieve the employer from payment of interest except where the delay is due to fault of employee. He further relies on the judgment of our High Court in the matter of Principal, Vidarbha Ayurved Mahavidyalaya and Hospital and Another Vs. Kausalyabai Raghuwanshi and Another, . Our High Court in this authority held that the deposit of the amount of Gratuity before the Appellate Authority in Appeals would not absolve the liability of the employer from paying interest. Para 12 of that authority reads thus:
The above provisions clearly mandate the employer to pay gratuity to the person to whom it is payable whether such application claiming gratuity is made or not and further provides that such payment must be made within 30 days from the date it becomes payable and in case the payment is not made within 30 days the employer has to pay interest not exceeding the rate as may be notified by the Central Government. A bare reading of the above provisions clearly discloses that in the event the employer does not pay the gratuity payable under the Act, within the prescribed time, he is liable to pay interest thereon in terms of sub-section (3-A) of section 7 of the Act. I am, therefore, unable to accept the submission of Mr. Deshpande, learned Counsel for the petitioners that the deposit of the gratuity amounts before the appellate Court in appeals preferred by the petitioners would absolve them from the payment of interest from the date of deposit. Mere deposit of the amount before the Appellate Authority would not disentitle the person entitled to claim gratuity from claiming interest on the gratuity payable under the Act. I, therefore, find no merit in the submission of Mr. Deshpande. I am in respectful agreement with the view taken by the learned Single Judge of Allahabad High Court in Rajendra''s case (supra), relied upon by Mr. Harkare in which it has been held that the deposit of the amount with the appellate authority would not absolve the employer from paying interest once it is established that the employer has failed to discharge the obligation cast upon it by sub-sections (2) and (3) of section 7 of the Act. In the present petitions, admittedly the petitioners have not discharged their obligation in terms of sub-sections (2) and (3) of section 7 of the Act. Therefore, there is no illegality or perversity in the order passed by the respondent No. 2.
On the basis of these submissions, the learned Counsel for the applicant states that respondent Nos. 1 and 2 are liable to pay interest @ 10% p.a. u/s 7(3-A) of the Payment of Gratuity Act, 1972 to the applicant till the amount received by the applicant i.e. upto 9.8.2011.
On the other hand, the learned Counsel for respondent Nos. 1 and 2 vehemently opposed the present Civil Application. They filed affidavit in reply dated 3.1.2012. It is the contention of the respondent. High School that once the amount is deposited with the competent authority then they are not liable to pay interest @ 10% as per section 7(3-A) of the Payment of Gratuity Act. It is the contention of the respondent that they deposited sum of Rs. 1,78,234/- with the competent authority as per order dated 29.7.2003 along with interest @ 10% p.a. Therefore, they are not liable to pay interest as claimed by the applicant in the present proceedings. He further submits that without admitting the liability of the payment of interest, if this Court comes to the conclusion that applicant is entitled interest till the date of payment, then applicant has to prefer appropriate application for execution of the order. Applicant cannot claim and/or seek direction against respondent. High School Management to deposit and/or pay the outstanding interest amount of Rs. 1,16,757/- by way of present Civil Application. He further states that admittedly, these respondents deposited the amount before the Competent Authority. He submits that it is settled law that once the amount is deposited then, judgment debtor is not liable to pay further interest. He further states that respondent Nos. 1 and 2 High School are running Education Institution where more than 50% students studying are belonging to backward class category. Fees of the said 50% students are supposed to be reimbursed by the Social Welfare Department of the Government of Maharashtra. However, since June, 2007, respondent Nos. 1 and 2 are not getting the reimbursement from the Social Welfare Department. As on this date, nearly Rs. 1 crore is to be received by the respondent Nos. 1 and 2 from the State of Maharashtra. On account of non receipt of the fund by the respondent Nos. 1 and 2, they are in grave difficulty. Respondent Nos. 1 and 2 have taken huge amount of bank loan to meet the expenses of School such as salary of staff, teachers and other expenses. Respondent Nos. 1 and 2 are unable to repay the bank loan in time and therefore, paying penal interest. He further states that the respondent Nos. 1 and 2 have filed writ petition No. 1724 of 2010 in this Honourable Court inter alia seeking direction to the State Government to release the said amount. The said Writ Petition is still pending. He states that in view of the aforesaid helpless situation, respondent Nos. 1 and 2 are unable to pay any further amount to the applicant and she is also not entitled for the same. Therefore, there is no substance in the present Civil Application and same be dismissed with costs.
I have heard the arguments of both the Counsel at length. Admittedly, applicant at present, is entitled to Gratuity from respondent Nos. 1 and 2. Once it is held by this Court in Civil Application No. 1181 of 2011 that applicant is entitled to the benefit under the provisions of Payment of Gratuity Act, 1972 then all the provisions of Payment of Gratuity Act, 1972 are applicable.
In the present matter, as respondent Nos. 1 and 2 failed to pay gratuity to the applicant, applicant filed application No. PGA/CA/227/2001 before the Controlling Authority under the Payment of Gratuity Act, 1972. The said application was decided by the Controlling Authority on 29.7.2003 holding that the applicant is entitled Gratuity of Rs. 1,45,497/- along with simple interest @ 10% p.a. from the date of her retirement till realisation of the amount. The said order was confirmed by the Appellate Authority under the Payment of Gratuity Act, 1972 by order dated 6.10.2007.
At the time of filing the appeal before the Competent Authority, respondent Nos. 1 and 2 deposited a sum of Rs. 1,78,234/- as per order dated 29.7.2003 along with interest. Thereafter, respondents preferred Writ Petition No. 9039 of 2007. In the said writ petition, this Court granted ad interim relief in terms of prayer Clauses (c) and (d). Because of restraining order from this Court, applicant could not withdraw the said amount. Thereafter, this Court by order dated 7.7.2011 allowed the applicant to withdraw the said amount.
One thing is clear that payment of interest u/s 7(3-A) of the said Act is mandatory provision. If the amount is not received by the applicant because of prohibitory order from this Court, then, it cannot be held that applicant is not entitled to interest on the said amount. The amount deposited by the respondent was not unconditional. Same was deposited by the respondent High School and stay was obtained restraining applicant to withdraw the said amount. The applicant received the amount on 9.8.2011. Therefore, till this date, the applicant is entitled to interest. The authorities cited by the applicant in the matters of H. Gangahanume Gowda v. Karnatake Agro Industries Corporation Ltd., (supra), and Principal Vidarba Ayurved Mahavidyalaya and Hospital Amravati and another v. Kausalyabai W/o. Prahladrao Raghuvanshi and another, (supra), fully covered the issue involved in the present Civil Application i.e. payment of interest under the said Act is a liability of respondent Nos. 1 and 2 and that is up to the date of payment.
It is not necessary for the applicant to file execution for recovery of the said amount because the present writ petition is still pending before this Court and the present Civil Application is preferred in the pending writ petition. Though respondent Nos. 1 and 2 pointed out their financial crises, that cannot relieve the respondents from payment of interest under the said Act. In the above mentioned facts and circumstances and the law laid down by the Apex Court and our High Court, applicant is entitled to 10% interest on the amount of gratuity payable by the respondent Nos. 1 and 2 till the date of payment. Hence, following order:
a. Respondent Nos. 1 and 2 are directed to pay a sum of Rs. 1,16,757/- to the applicant within 12 weeks from today subject to calculation, if any.
b. Payment of this amount is subject to the outcome of the pending writ petition No. 9039 of 2007.
c. Civil Application is disposed of accordingly.
d. No order as to costs.