Karnataka High Court
Karnataka State Road Transport ... vs The Deputy Labour Commissioner on 15 January, 2025
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NC: 2025:KHC:1449
WP No. 40267 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF JANUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO. 40267 OF 2014 (L-KSRTC)
BETWEEN:
KARNATAKA STATE ROAD
TRANSPORT CORPORATION,
TUMKUR DIVISION, TUMKUR,
REP. BY ITS DIVISIONAL CONTROLLER,
REP. BY ITS CHIEF LAW OFFICER.
...PETITIONER
(BY SMT H R RENUKA, ADVOCATE)
AND:
1. THE DEPUTY LABOUR COMMISSIONER
AND APPELLATE AUTHORITY
UNDER THE PAYMENT OF GRATUITY ACT
REGION-2, "KARMIKARA BHAVANA"
BANERGHATTA ROAD, BANGALORE-560029.
2. THE ASSISTANT LABOUR COMMISSIONER
Digitally
signed by AND CONTROLLING AUTHORITY
PRAMILA G V UNDER THE PAYMENT OF GRATUITY ACT
Location: DIVISION-II, "KARMIKARA BHAVANA"
HIGH COURT BANNERGHATTA ROAD, BANGALORE-560029.
OF
KARNATAKA 3. ZAHEER
S/O RAHAMAN SAB,MAJOR,
SINCE DECEASED, BY HIS LR'S
3(A). BIBIJAN,
W/O ZAHEER, ADULT,
-2-
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WP No. 40267 of 2014
NO.11, INDIRANAGAR,
OPP. TO RAILWAY STATION ROAD,
CHOLUR ROAD, GUBBI TALUK.
(AMENDED VIDE ORDER DT: 10.01.2023)
...RESPONDENTS
(BY SMT RASHMI RAO, HCGP FOR R1 AND R2,
SMT S B LAKSHMI, ADVOCATE FOR R3(A))
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE ORDER OF THE R-2 DTD 19.04.2010 VIDE ANNX-
C.QUASH THE ORDER OF THE R-1 DTD 31.07.2013 VIDE
ANNX-E.
THIS PETITION, COMING ON FOR HEARING, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
ORAL ORDER
This petition is filed challenging the order passed by
the Assistant Labour Commissioner as well as the order
passed by Deputy Labour Commissioner/Appellate
Authority. In terms of the order dated 19.04.2010 passed
by the Assistant Labour Commissioner, the petitioner of
this petition is directed to pay Rs.98,152/- towards arrears
of gratuity along with 10% interest on the said amount
within 30 days from the date of the receipt of the copy of
the order.
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2. This order passed by the Assistant Labour
Commissioner was called in question before the Deputy
Labour Commissioner/Appellate Authority. In terms of the
order dated 31.07.2013, the appeal is allowed in part.
The Appellate Authority has confirmed the order to pay
Rs.98,152/- towards the gratuity. However, the rate of
interest is reduced to 6% from 10%.
3. Aggrieved by the aforementioned order, the
petitioner/Corporation is before this Court. The
respondent employee accepted the order passed by the
Deputy Labour Commissioner/Appellate Authority.
4. Learned counsel appearing for the petitioner
would contend that petitioner was dismissed from service
on 03.12.2001 and on his dismissal, Rs.52,800/- was paid
to the dismissed employee towards gratuity and said
payment is made on 17.01.2002. Order of dismissal was
called in question by the employee before the Labour
Court. The said reference was allowed and employee was
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ordered to be reinstated and accordingly, he was
reinstated on 25.07.2006. On 08.12.2006, the employee
voluntarily retired from service. However, on
reinstatement he has not repaid the gratuity amount paid
to him on 17.01.2002. For this reason, the employer
withheld the service benefits payable to the employee.
Employee raised a dispute before the Assistant Labour
Commissioner. In terms of the order dated 19.04.2010,
the Assistant Labour Commissioner passed an order to pay
Rs.98,152/- towards gratuity along with interest @ 10%
p.a. Said order was called in question by the
employer/KSRTC. The appeal allowed in part as indicated
above reducing the rate of interest from 10% to 6%.
5. Learned counsel appearing for the petitioner
would contend that in terms of the circular issued by the
petitioner/Corporation, in case of reinstatement, the
employee is required to redeposit the gratuity amount with
the employer along with interest @14% per annum. Since
the employee did not deposit the amount on
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reinstatement, the employer is justified in making a
demand for the said amount along with interest @ 14%
per annum. Thus, it is the contention that the impugned
orders are unsustainable to the said extent.
6. Learned counsel appearing for the respondent
would contend that the petitioner has made untenable
claims. The rate of interest in the interest component of
Rs.43,112/- mentioned in paragraph No.3 of the writ
petition is not forthcoming. The interest claim on
Rs.2,25,548/- is totally unjustifiable as such, would urge
that the petition to be dismissed.
7. Learned counsel for the respondent would also
contend that the petitioner is not entitled to 14% interest
on the delayed redeposit of the gratuity amount in view of
the judgment in W.P. No.36549/2011.
8. This Court has considered the contentions
raised at the bar and perused the records.
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9. There is no dispute that there is a circular dated
13.03.2000 which enables the employer to claim 14%
interest in case there is a delay in depositing the gratuity
amount on reinstatement. There is no dispute that on
termination from the service, the employer has paid
Rs.52,800/- to the employee on 17.01.2002. There is no
dispute that on 25.07.2006, the employee was reinstated.
In view of the circular dated 13.03.2000 referred to above,
the employee is required to deposit the gratuity amount
which was retained by him after the payment made to him
consequent to his dismissal as he was reinstated later.
Since the amount is not deposited, the circular would
mandate that the employee has to redeposit the amount
with 14% interest.
10. Though the learned counsel appearing for the
respondent would contend that the employer at the most
can charge 11% interest in view of the judgment in W.P.
No.36549/2011, what is required to be noticed is that in
the said case, the Court has not adjudicated on the
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interest chargeable by the employer in all the cases. That
was the case where the Court was considering the interest
payable for a period from 30.10.1999 to 04.10.2006 and
has rightly contended by the learned counsel for the
petitioner in page 10 of the said judgment, the Court has
noticed that instead of charging 14% per annum as per
the circular, the employer has chosen to charge only 11%
per annum. The concession given in one case if it is an
erroneous concession cannot be made applicable in all the
cases when the circular itself would state that 14% is the
interest chargeable.
11. It is also noticed that rate of interest is reduced
from 14% to 11% in the year 2007. In this case, this
Court is concerned with the interest payable for the period
between 2002 to 2006. As per the circular dated
13.03.2000 as already noticed in the W.P. No.36549/2011,
the interest payable would be 14% per annum. Hence, the
employer is entitled to claim interest on Rs.52,800/-
@14% per annum for the relevant period. On calculation,
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the said amount comes to Rs.36,960/-. Under these
circumstances, the impugned orders to the said extent are
unsustainable and set-aside.
12. It is submitted by the learned counsel
appearing for the petitioner that the amount is already
deposited before the Authority and it is further stated that
the amount is kept in bank deposit. Hence, the following:-
ORDER
i) Writ petition is allowed-in-part.
ii) Out of the amount in deposit, Rs.36,960/- shall
be released in favour of the petitioner.
ii) Rs.65,192/- along with interest @ 6% per
annum from 20.03.2008 till 06.07.2010 be
released in favour of the 3rd respondent.
iii) It is further made clear that in case the amount
is kept in bank, the proportionate interest on
Rs.65,192/- earned from the bank deposit shall
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go to the 3rd respondent and interest earned on
Rs.36,960/- shall go to the petitioner.
Sd/-
(ANANT RAMANATH HEGDE)
JUDGE
CHS
