Karnataka High Court
Sri V Byrappa vs Hmt Limited on 2 April, 2024
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NC: 2024:KHC:13492
WP No. 1283 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF APRIL, 2024
BEFORE
THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM
WRIT PETITION NO.1283 OF 2024 (S-RES)
BETWEEN:
1. SRI.V. BYRAPPA
S/O VENKATESWARAPPA
AGED ABOUT 68 YEARS
R/AT NO.S-56, SECTOR 1
HMT COLONY
JALAHALLI
BENGALURU - 560 013
2. SRI.G.R.VASUDEV
S/O LATE G.B.RAMAKRISHNA
AGED ABOUT 67 YEARS
R/AT NO.86, II MAIN
RAMANJANEYANAGAR
CHIKKALLASANDRA
Digitally signed by BENGALURU -560 061
CHAITHRA A
Location: HIGH
COURT OF 3. SRI.A.PURUSHOTHAMA
KARNATAKA S/O LATE KESHAVA HEBBAR
AGED ABOUT 71 YEARS
R/A NO.90, 'APOORVATHA'
JAYANAGAR HOUSING SOCIETY 3RD STAGE
GUBBALALA MAIN ROAD
OPP.SHOPWELL, SUBRAMANYAPURA POST
BENGALURU -560 061
4. SRI.K.M.MUNIBASAVARAJU
S/O LATE MUNIHUCHAPPA
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WP No. 1283 of 2024
AGED ABOUT 78 YEARS
R/AT NO.490, 6TH CROSS, 9TH MAIN
2ND BLOCK, HMT LAYOUT
VIDYARANYAPURA
BENGALURU -560 097
5. SHARANAPPA
S/O ADIVEPPA
AGED ABOUT 71 YEARS
RESIDING AT NO.461, 10TH CROSS
3RD BLOCK, HMT LAYOUT
VIDYARANYAPURA
BENGALURU - 560 097
(SENIOR CITIZEN BENEFIT ARE
NOT CLAIMED)
...PETITIONERS
(BY SRI. SUBRAMANYA BHAT M.,ADVOCATE)
AND:
1. HMT LIMITED
(GOVERNMENT OF INDIA UNDERTAKING)
REPRESENTED BY THE
CHAIRMAN AND MANAGING DIRECTOR
HMT BHAVAN, NO.59, BELLARY ROAD
BENGALURU - 560032
2. MANAGING DIRECTOR
HMT MACHINE TOOLS LIMITED
HMT BHAVAN
NO.59, BELLARY ROAD
BENGALURU - 560 032
3. GENERAL TECHNICAL MANAGER
HMT MACHINE TOOLS LIMITED (MBX)
BENGALURU COMPLEX
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WP No. 1283 of 2024
JALAHALLI
BENGALURU - 560 013
...RESPONDENTS
(BY SRI.SRIDHARAN NARAYAN HEGDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO DIRECTING THE
RESPONDENTS TO PAY INTEREST AT THE RATE OF 6
PERCENT P.A. ON THE DELAYED SETTLEMENT OF EL
ENCASHMENT BENEFITS AND SIMPLE INTEREST OF 10
PERCENT AND 15 PERCENT OF COMPOUND INTEREST ON
GRATUITY FROM THE DATE ON WHICH THE SAME FELL DUE
TILL THE DATE OF ACTUAL PAYMENT OF THE SAID
BENEFITS TO THEM AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The captioned writ petition is filed seeking
direction against respondents to pay interest at the rate of
6% p.a. on the delayed payment of earned leave
encashment benefits as well as simple interest of 10%
and 15% of compound interest on gratuity amount from
the date on which the same fell due till the date of actual
payment.
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2. The said petition is seriously contested by the
respondents by filing statement of objection.
3. Heard learned counsel appearing for the
petitioners and learned counsel appearing for the
respondents. Perused the records.
4. Petitioners are aggrieved by denial of interest
on the delayed payment of earned leave encashment
benefits as well as interest on the gratuity amount.
Petitioners' grievance is that petitioners were made to run
around pillar to post. This is 8th round of litigation. The
respondents have deposited leave encashment as well as
gratuity amount only in contempt proceedings. Though
respondents have paid leave encashment and gratuity,
petitioners are denied of interest. The petitioners claimed
that leave encashment was released after 11 years.
5. The Hon'ble Apex Court in the case of
JAGDISH PRASAD SAINI VS. STATE OF RAJASTHAN
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AND OTHERS1 has held that earned leave encashment
would be a part of salary and the right accrued to an
employee cannot be denied. The Hon'ble Apex Court was
of the view that the encashment of leave would be part of
terminal benefits.
6. On examining the records, I find some force in
the submissions made by the learned counsel appearing
for the petitioners.
7. The respondents pursuant to initiation of
contempt proceedings deposited an amount of
Rs.1,25,82,932/- together with accrued interest. This
amount was deposited pertaining to several employees.
After this Court dropped contempt proceedings, the
respondents have withdrawn amount. If deposit was
made in the contempt proceedings along with accrued
interest and the said amount was kept in FD in judicial
deposit and the interest was accrued on such deposits, the
2022 SCC Online 1298
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respondents having withdrawn the amount, now cannot
deny interest. The action of respondents and their
conduct is found to be unreasonable and not justified. The
application filed by the respondents in contempt
proceeding is placed on record. It would be useful for this
Court to cull out the said application filed under Section
151 of CPC., which reads as under;
"For the reasons sworn to in the
accompanying affidavit, the respondents
respectfully pray that this Hon'ble Court be
pleased to order refund of the amount in deposit
in a sum of Rs.1,25,82,932/- (Rupees One Crore
Twenty Five Lakh Eighty Two Thousand Nine
Hundred Thirty Two Only) together with accrued
interest to the respondents/accused, in view of
the order dated 20.09.2019 passed by the
learned single Judge allowing Review Petition
Nos.538/2017 & 543-544/2017 in
W.P.Nos.45250/45252/2014 and Review
Petition Nos.547/2017 and 576-579/2017 in
W.P.Nos.27796-27800/2014, in the interest of
justice and equity."
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8. On perusal of the above said paragraph, it
indicates that respondents have deposited amount with
accrued interest pursuant to order dated 20.09.2019
passed by the learned Single Judge while allowing the
Review Petition No.547/2017.
9. If these significant details are taken into
consideration, this Court is of the view that the
respondents cannot deny the interest on the ground that
the respondents/company is declared as sick company.
Reliance placed on the judgment rendered by the Punjab
and Haryana High Court in the case of GOPI CHAND AND
OTHERS VS. THE H.M.T LIMITED AND OTHERS in CIVIL
WRIT PETITION NO.5995/2011 by the learned counsel
appearing for respondents has no application to the
present set of facts.
10. In the present case on hand, the respondents
apart from denying leave encashment have also denied
interest on the gratuity. In the present case on hand,
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there is a delay of three years in settling the gratuity. The
Central Government vide Notification No.S.O.874(E) dated
01.10.1987 exercising powers under Section (3-A) of
Section 7 of the Payment of Gratuity Act, 1972 has
contemplated 10% interest p.a. to an employee where
gratuity is not paid within specified period.
11. There are no valid reasons and satisfactory
explanation forthcoming from the respondents in not
settling gratuity amount to which petitioners are legally
entitled. If materials on record clearly gives an indication
that delay is caused by respondents in not settling gratuity
amount of petitioner No.3. Therefore, in terms of the
above said Notification and memo of calculation furnished
by the learned counsel appearing for the petitioners,
petitioner No.3 is entitled for the balance amount of
Rs.68,488/- along with interest at the rate of 10% p.a. on
the delayed payment of gratuity. Petitioner Nos.1, 2, 4
and 5 have already received interest on the delayed
payment of gratuity.
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12. This Court has also taken note of the memo
of calculation furnished by the learned counsel appearing
for the petitioners and the same is extracted as under;
INTEREST ON DELAYED PAYMENT OF GRATUITY
Rank of Due Date Date of Amount Delay in Amount of
the Payment Paid years Interest
Parties
P3 01.07.2010 18.04.2016 3,72,240/- 5 years 9 77,550/-
months
Balance Payable Rs.68,488/-
INTEREST ON DELAYED PAYMENT OF EL ENCASHMENT
Rank of Due Date Date of Amount Delay in Amount of
the Payment Paid years Interest
Parties
P1 01.06.2013 04.10.2023 34,931/- 10 years 20,958/-
P2 01.07.2013 04.10.2023 87,843/- 10 years 52,705/-
P3 01.07.2010 04.10.2023 1,23,304/- 13 years 96,177/-
P4 01.05.2013 04.10.2023 1,31,261/- 10 years 78,756/-
P5 01.04.2013 04.10.2023 1,50,636/- 10 years 90,381/-
13. Upon careful examination of the provided
table, it is evident that due dates for payment of leave
encashment to petitioner Nos.1 to 5 were 01.06.2013,
01.07.2013, 01.07.2010, 01.05.2013 and 01.04.2013
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respectively. However, the actual payment to the
petitioners was made on 04.10.2023. This significant delay
resulted in a considerable period of 10 years for petitioner
Nos.1, 2, 4 and 5 and 13 years for petitioner No.3. It is
also evident that due date for payment of gratuity to
petitioner No.3 was 01.07.2010. However, the actual
payment to the petitioner No.3 was made on 18.04.2016.
This significant delay resulted in a considerable period of
5 years 9 months for petitioner No.3. Such prolonged
delay in disbursing leave encashment rightfully due to the
petitioners has caused them significant financial hardship
and inconvenience. Consequently, it is imperative for the
respondents - Corporation to acknowledge and rectify this
delay by compensating petitioners for the interest accrued
during the extended period of non-payment.
14. For the reasons stated supra, this Court
proceeds to pass the following;
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ORDER
(i) The writ petition is disposed off
directing the respondents - Corporation to
pay interest on the delayed payment of
earned leave encashment at 6% p.a. on
Rs.34,931/-, Rs.87,843/-, Rs.1,23,304/-,
Rs.1,31,261/- and Rs.1,50,636/- respectively
from the date it fell due till the date the
payment is made to the petitioners.
(ii) The respondents - Corporation is
hereby directed to pay balance amount of
Rs.68,488/- along with interest at the rate of
10% p.a. in respect of the delayed payment
of gratuity amount to petitioner No.3.
(iii) The respondents - Corporation
shall comply with this order within six months
from the date of receipt of a copy of this
order.
(iv) Pending applications, if any, are
also disposed off.
Sd/-
JUDGE
NBM
