Gujarat High Court
Anantbhai Harjivandas Solanki vs Chief Officer, Nadiad Nagarpalika on 11 September, 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
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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
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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
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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
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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
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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
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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
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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
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four weeks from today.
11. Rule is discharged.
(M. K. THAKKER,J)
NIVYA A. NAIR
