Delhi High Court
National Institute Of Fashion ... vs Ram Saran on 25 January, 2019
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 25.01.2019
+ W.P.(C) 4513/2018 & CM APPL. 17341/2018
NATIONAL INSTITUTE OF FASHION TECHNOLOGY
..... Petitioner
Through Mr.Pratap Shaker with Ms.Rishu
Agarwal, Advs.
versus
RAM SARAN ..... Respondent
Through None.
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
REKHA PALLI, J (ORAL)
1. Vide the present petition, the petitioner impugns order dated
29.01.2018 passed by the Appellate Authority in Gratuity Appeal
No.36(29)/2017 P.A. DYC in Claim Petition No.ALC-
II/36(61)/2016/2016-AKB, whereby the petitioner's appeal against
the order passed by the Controlling Authority under the Payment of
Gratuity Act, 1972 (hereinafter referred to as Act) has been rejected.
The Controlling Authority had vide its order dated 30.08.2017
directed the petitioner to pay to the respondent simple interest @ of
10 % per annum for the delay in releasing the amount of Rs.
Rs.95,792/- payable to him as gratuity.
2. Learned counsel for the petitioner does not dispute the fact that
there was a delay in releasing gratuity to the respondent, but contends
that there was no wilful default on the part of the petitioner in
remitting the gratuity as the petitioner/Institute had to take a
considered decision whether its employees should be granted gratuity
as per the Act. He further submits that once a decision was taken by
the petitioner/organisation on 29.10.2015 to pay gratuity to its
employees as per the provisions of the Act, the petitioner immediately
remitted the gratuity amount to the respondent on 15.01.2016. He,
therefore, prays that the award of interest, in these circumstances is
wholly unwarranted.
3. I have considered the submissions of the learned counsel for the
petitioner and also perused the records.
4. In the light of the admitted position that the petitioner was
always governed by the mandatory provisions of the Act, which it
decided to follow only after if Board of Governors to pass a resolution
on 29.10.2015 deciding to adopt the Act cannot be a reason to deny
statutory interest to the petitioner on account of delay in his gratuity
being released to him.
5. Before dealing with the contentions of learned counsel for the
petitioner, it would be appropriate to refer to Section 7(3) and 7(3A)
of the Act, which reads as under:-
"7. Determination of the amount of gratuity.--
[(3) The employer shall arrange to pay the amount of
gratuity within thirty days from the date it becomes
payable to the person to whom the gratuity is payable.
(3A) 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 the
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.]"
6. Even otherwise, interest imposed is not always by way of a
penalty, but is also way of compensation to the person who is
deprived of the amount payable to him, once it is evident that the
statute itself mandates grant of interest on the delayed amount of
gratuity by use of the word 'shall' in Section 7(3A). In the present
case, the amount due and payable to the respondent on or within 30
days from 06.03.2014 as per the Act, was released to him only on
15.01.2016 and, thus, was definitely deprived from using the said
amount from 06.03.2014 till 15.01.2016 and in these circumstances,
the grant of interest to him by the Controlling Officer, as upheld by
the Appellate Authority was fully justified and I find no infirmity
with the orders passed by the Controlling Authority as upheld by the
Appellate Authority.
7. The present petition being meritless is dismissed alongwith the
pending application.
(REKHA PALLI)
JUDGE
JANUARY 25, 2019
sr
