Gujarat High Court
Anantbhai Harjivandas Solanki vs Chief Officer, Nadiad Nagarpalika on 11 September, 2025
NEUTRAL CITATION
C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11981 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
✔
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ANANTBHAI HARJIVANDAS SOLANKI
Versus
CHIEF OFFICER, NADIAD NAGARPALIKA
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Appearance:
MR DG SHUKLA(1998) for the Petitioner(s) No. 1
MS MESHWA H BHATT(12872) for the Petitioner(s) No. 1
MR MEHUL SHARAD SHAH(773) for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 11/09/2025
ORAL JUDGMENT
1. Rule returnable forthwith. Learned advocate Mr.Mehul Sharad Shah has waived the service of notice of Rule on behalf of the respondent.
2. This petition is filed under Articles 226 and 227 of the Constitution of India, challenging the order passed by the learned Appellate Authority under the Payment of Page 1 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined Gratuity Act, whereby the order of the learned Controlling Authority in Gratuity Application No. 41 of 2022 has been confirmed. By the said order, the learned Controlling Authority directed the petitioner to pay interest at the rate of 10% from the date of filing of the application, i.e., 21.06.2022.
3. It is the case of the present petitioner that he was employed with Nadiad Nagarpalika as a Clerk in the Drainage Department, and retired from service on 31.12.2016, after completing 38 years and 8 months of service. According to the petitioner, he was entitled to receive gratuity amounting to Rs. 6,81,750/-. However, the respondent paid only Rs. 4,02,637/- towards gratuity. For the balance amount of Rs. 2,97,113/-, along with interest, the petitioner filed an application before the learned Controlling Authority on 21.06.2022. The learned Controlling Authority, while allowing the application, directed payment of interest at the rate of 10% from the date of the application. The said order was affirmed by the learned Appellate Authority, and the same is the subject matter of challenge in the present petition before this Court.
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4. Heard learned advocate Mr.D.G.Shukla for the petitioner and learned advocate Mr.Mehul Sharad Shah for the respondent.
5. Learned advocate Mr. Shukla submits that both the Authorities have committed an error in directing the present respondent to pay interest at the rate of 10% from the date of the application. Learned advocate Mr.Shukla submits that, as per the provisions of Section 7(3A) of the Payment of Gratuity Act, the petitioner would be entitled to interest from the date of his entitlement, i.e., from the date of superannuation. In support of his submission, learned advocate Mr. Shukla has relied on the decisions rendered by the Apex Court in the case of Kerala State Cashew Development Corporation Limited Versus N.Asokan, reported in (2009) 16 SCC 758, and H.Gangahanume Gowda Versus Karnataka Agro Industries Corporation Limited, reported in (2003) 3 SCC 40, and has submitted that, without considering these binding precedents, both the Authorities erroneously directed payment of interest from the date of the application, therefore, the present petition is required to be allowed Page 3 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined and interest from the date of his entitlement i.e. 31.12.2016 is required to be granted.
6. Per contra, learned advocate Mr. Shah, who appears on advance copy, submits that initially, as per the applicable gratuity rules, the petitioner was entitled to gratuity equivalent to 16.5 months' salary. However, subsequently, pursuant to the decision rendered by this Court in Special Civil Application No.8265 of 2016, it was held that employees who retired prior to 30.03.2017 would be entitled to gratuity equivalent to 25 months' salary. Learned advocate Mr.Shah submits that the petitioner was paid gratuity at the time of retirement. However, since the claim for the balance amount and interest was made after more than six years, the Authority was justified in awarding interest from the date of application. Learned advocate Mr.Shah submits that although a Letters Patent Appeal has been filed challenging the judgment and order passed in Special Civil Application No. 8265 of 2016, being Letters Patent Appeal No.699 of 2019, the same is pending adjudication. Nevertheless, as per his instructions, the Authority has decided not to challenge the impugned Page 4 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined order, having already paid or agreed to pay the interest from the date of application. Learned advocate Mr.Shah submits that since the application was filed only on 21.06.2022, no error has been committed by either of the Authorities in directing the payment of interest from the date of application. Therefore, he submits that the petition deserves to be dismissed.
6.1. Learned Advocate Mr. Shah further submitted the facts of the earlier litigation involving the issue of gratuity payment, stating that, Nadiad Municipal Employees Association had raised several Industrial Disputes wherein settlement was arrived at between the Union and the Nagarpalika and pursuant to which settlement award was passed by Industrial Tribunal on 18.02.1975 in Reference (I.T.) No. 174/1974. That, by way of settlement award, the employees attached with the Union were to be paid gratuity being one month's pay for each completed year of service (instead of 15 days as per Payment of Gratuity Act), subject to maximum 25 months' salary. That the Nadiad Nagarpalika had requested the government to send the Reference (I.T.) Nos. 174/1974 and 200/1977 to the Page 5 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined Industrial Tribunal to revise the payment of Gratuity at the rate of 16.5 Months' Salary, as the salary of the employees were revised after the implementation of Desai Pay Commission and Fifth Pay Commission. Thereafter the government had sent the above mentioned references to the Assistant Labour Commissioner, Nadiad. That upon notice no one remained present on behalf of union. That, vide communication dated 17.06.2004, the Learned Assistant Labour Commissioner, Nadiad had informed that the settlement award is terminated and thus, employees who retire after 04.12.2003 are not entitled to get the benefits of the settlement award. That by way of SCA/21865/2007 and SCA/610/2009, several employees of Nadiad Nagarpalika had challenged the order of Controlling Authority and Appellate Authority, rejecting the claim of gratuity at the rate of 25 months' salary on the basis of settlement award. That, the Hon'ble High Court vide order dated 18.08.2010 directed the Nagarpalika to pay gratuity at the rate of 25 Months' Salary, as per the settlement award. That, being aggrieved by the said order, the Nagarpalika had Page 6 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined preferred LPA/16198/2011 and the same was rejected vide order dated 20.04.2011. Thereafter, the Nagarpalika had preferred Special Leave Petition and the same was dismissed vide order dated 04.09.2013. Thereafter again, by letter dated 21.10.2019, the Nagarpalika had requested the Additional Secretary, Labour & Employment Department, Gandhinagar to refer the references to the Industrial Tribunal, Nadiad to that the settlement award is terminated with effect from 04.12.2003. That the Labour and Employment Department, Government of Gujarat by instruction dated 07.05.2014, by exercising power under S. 10 of the Industrial Dispute Act send the reference to the Industrial Tribunal to decide the issue whether the implementation of this Desai Pay Commission and the recommendation of 5th Pay Commission the settlement award is required to be terminated or not. That the reference was also made to decide the question whether it is in the interest of Justice to pay gratuity at the rate of 16 and half months' salary After acceptance/implementation of the 5th Pay Commission. Thus, as per the reference made by the State Page 7 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined Government, the Industrial Tribunal, vide order dated 30.03.2017, in Reference (I.T.) No. 39/2014 had terminated the settlement award passed in Reference (I.T.) Nos. 174/1974 from 04.12.2003. Thus, the Industrial Tribunal held that the employees were entitled to gratuity at the rate of 16 and half month's salary. That, being aggrieved by the award dated 30.03.2017 passed in Reference No. 39 of 2014, the Nagarpalika has preferred SCA/8265/2016. That, the Hon'ble High Court vide order dated 31.07.2018, had set aside and modified the award with a clarification and declaration that the award dated 18.02.1975 in Reference No. 174/1974 shall be stand terminated with effect from the date of award in Reference No. 39/2017 i.e. with effect from 30.03.2017 and not from 04.12.2003. That, against the said order the Nagarpalika has preferred LPA/699/2019 and the same is pending for adjudication before this Hon'ble High Court. However, Nagarpalika had decided to comply with the order passed by the learned Controlling Authority as well as the learned Appellate Authority under the Payment of gratuity Act.
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7. Having considered the arguments advanced by the learned advocates for the respective parties, certain undisputed facts are required to be noted, i.e. (1) the petitioner retired from service on 31.12.2016, upon completion of 38 years and 8 months of service; (2) the respondent paid an amount of Rs. 4,02,637/- towards gratuity, which was calculated based on 16.5 months' salary of the petitioner and (3) the application for payment of gratuity came to be filed by the petitioner on 21.06.2022 i.e. after the delay of around six years. As per the submission made by the learned advocate in paragraph 6.1, this Court has passed an order on 31.07.2018 setting aside the order passed in Reference No.39 of 2014 and held that the employees who retired from the service prior to 31.03.2017, would be entitled for the payment of gratuity of 25 months and considering the fact that the petitioner himself has approached the learned Controlling Authority after a delay of six years, seeking the difference of amount of gratuity, in the opinion of this Court the respondent cannot be penalized with interest for the delay on the part of the petitioner. Therefore, learned Authority is Page 9 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined justifying in granting the interest from the date of application.
8. The reliance which was placed by the learned advocate on the decision rendered by the Apex Court in the case of Kerala State Cashew Development Corporation Limited (supra) and H.Gangahanume Gowda (supra), if one would peruse, then it was the case before the Apex Court that no amount of gratuity was paid and in that background it was held that the mandatory requirement of section 7(3 A) of the Act is required to be followed and the interest from the date of entitlement is required to be awarded. In the instant case, the amount which was paid to the petitioner has not been disputed and for the difference of amount, the claim was raised. Hence, the said judgment is of no assistance to the petitioner. Therefore, petition being devoid of merits is required to be dismissed.
9. Resultantly, this petition is dismissed.
10. It is expected from the respondent that as they had decided to comply with the order passed by the learned Controlling Authority and the learned Appellate Authority, the same shall be complied within a period of Page 10 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025 NEUTRAL CITATION C/SCA/11981/2025 JUDGMENT DATED: 11/09/2025 undefined four weeks from today.
11. Rule is discharged.
(M. K. THAKKER,J) NIVYA A. NAIR Page 11 of 11 Uploaded by MRS. NIVYA ABHAY NAIR(HC01901) on Thu Sep 18 2025 Downloaded on : Thu Sep 18 21:53:30 IST 2025