Punjab-Haryana High Court
Dronachaarya College Of Engineering vs State Of Haryana And Others on 5 July, 2024
Bench: G.S. Sandhawalia, Vikas Bahl
Neutral Citation No:=2024:PHHC:083300-DB
Neutral Citation No.
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
(105) LPA-1501-2024 (O&M)
Decided on: 05.07.2024
Dronacharya College of Engineering ......Appellant(s)
Versus
State of Haryana & others ......Respondent(s)
CORAM : HON'BLE MR.JUSTICE G.S. SANDHAWALIA,
ACTING CHIEF JUSTICE
HON'BLE MR.JUSTICE VIKAS BAHL
Present: Mr.Viren Jain, Advocate
Ms.Komaljit Kaur, Advocate, for the appellant (s).
*****
G.S. Sandhawalia, Acting Chief Justice (Oral)
CM-3530-LPA-2024
1. Application for condoning the delay of 105 days in filing the
appeal is allowed, in view of the averments made in the application, duly
supported by affidavit of the official. Delay of 105 days in filing the
present appeal is hereby condoned.
2. CM stands disposed of.
LPA-1501-2024
3. Consideration in the present appeal is to the judgment dated
16.08.2023 passed by the Learned Single Judge whereby CWP-15806-
2023 had been dismissed. The resultant effect was that the application of
the employee whereby he was entitled for the payment of gratuity under
the Payment of Gratuity Act, 1972 which had been granted on 29.07.2022
(Annexure P-2) by the Controlling Authority which was duly affirmed by
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the Appellate Authority on 11.04.2023 (Annexure P-1) was further
approved.
4. The argument which has been raised by counsel for the
appellant is to the extent that the employee who retired in January, 2017
had filed the application in the year 2021. Thus, it is his contention that
since the vires was pending before the Apex Court in the case of
Independent School's Federation of India (Regd.) Vs. Union of India
& another 2022 (4) SCT 119, therefore the judgment would be applicable
from that date i.e. 29.08.2022 since the constitutional validity of Section
2(e) of the Payment of Gratuity (Amendment) Act, 2009 and insertion of
Section 13-A of the said Act was subject matter of consideration.
5. Learned Single Judge, while upholding the orders, noticed
that the issue of retrospective effect given to the amendment has been
upheld by the Apex Court in the above-said judgment and keeping in view
the fact that the notification under Section 1(3)(c) pertaining to an
education institution with ten or more employees being liable to pay
gratuity had been issued and the fact that the employees who had retired
post 1997 were entitled to payment and since it was a beneficial piece of
legislation, the orders were not interfered.
6. Counsel for the appellant has thus submitted that there was an
obligation of the employee to apply for the claim of gratuity and having
failed to do so, interest is not liable to be paid from the date of retirement.
It is thus submitted that the interest element which was to the tune of
Rs.5,53,333/- should not have been awarded, keeping in view the conduct
of the employee.
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7. A perusal of the application filed by the employee would go
on to show that it was mentioned that the resignation was sent on
17.01.2016 and the experience certificate was issued by the present
appellant on 18.02.2017. The averment was that the appellant had
requested in person to release the gratuity amount but the matter had been
filed and the amount had not been released. Request vide email dated
18.11.2020 had been sent and thereafter the amount was quantified to
Rs.10,46,894/- and the said claim was made along with interest vide the
claim application. The said averments have not been denied in the
response to the claim petition by the appellant. The only averment made
in reply to para no.7 is that there is no such provision for providing
gratuity to teacher under the Gratuity Act. Further the defence was that
more than 3 years had lapsed since 16.01.2017 and claim for payment of
gratuity was time-barred as it was to be applied within 30 days and had not
become payable. Thus, there was basic denial that it is a time-barred
claim in totality.
8. Under Section 4 of the Payment of Gratuity Act, 1972, the
gratuity is liable to be paid to an employee who has been terminated from
employment after he has rendered service for not less than 5 years; on his
superannuation or on his retirement or resignation. However, on his death
or disablement due to accident or disease, the condition of 5 years
continuous service is not necessary. As per Section 7, the employee is
liable for payment of gratuity and he has to send a written request to the
employer within such time and in such form as may be prescribed.
However, as per sub-section (2), as soon as gratuity becomes payable, the
employer shall, whether an application referred to in sub-section (1) has
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been made or not, determine the amount of gratuity and give notice in
writing to the person to whom the gratuity is payable and also the
controlling authority specifying the amount of gratuity so determined. The
further onus, as per sub-section (3) is to arrange to pay the amount of
gratuity within 30 days from the date it becomes payable to the person to
whom the gratuity is payable. The amount becomes payable along with
simple interest under sub-section (3-A). The proviso only gives a right to
deny claim of interest on delay in payment due to fault of the employee
and the employer having obtained permission in writing from the
controlling authority for the delayed payment on this ground.
9. It further provides that where there is any dispute in the
demand of gratuity payable to an employee under the Act or as to the
admissibility of any claim in relation to an employee for payment of
gratuity or as to the person entitled to receive the gratuity, the employer
shall deposit with the controlling authority such amount as he admits to be
payable by him as gratuity. Being a beneficial piece of legislation, it was
the bounden duty of the present appellant to have at least deposited the
amount with the controlling authority so that it could have protected its
interest which was mandatorily payable under the statute and on
adjudication of the issues passed necessary orders which include the
power of refund as per the entitlement clause. Having not done so and
only ground taken in defence that it is barred by limitation and now
defended on the ground that the matter was pending before the Apex Court
in Independent School's Federation of India (Regd.) (supra) could not
absolve the employer of the liability to pay interest.
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10. The statutory right of the payment to the employee and
having not deposited the same with the controlling authority within the
prescribed period, it was the bounden duty of the controlling authority to
direct payment of gratuity amount to the employee. In such
circumstances, only on account of pendency of the litigation before the
Apex Court would not absolve the employer of the liability to deposit the
same. Having not done so and having retained the amount, the appellant
is bound to pay the interest element. The Apex Court having rejected the
case of challenge of retrospective effect and all the interim orders which
were in force would no longer hold the field and therefore the argument
which has been raised that on account of the pendency of the litigation
before the Apex Court the amounts had not been paid would not help.
Once the said orders were vacated and the Apex Court had upheld the
amendment and rejected the argument of principle of retro-activity, the
Learned Single Judge thus fell in no error in upholding the orders passed
by the statutory authorities.
11. In such circumstances, in the absence of any illegality or
irregularity steming from the order of the Learned Single Judge, we are
not inclined to call upon the respondent-employee to contest the present
litigation on the element of interest entitlement. Resultantly, finding no
merit in the present appeal, the same is hereby dismissed.
(G.S. SANDHAWALIA)
ACTING CHIEF JUSTICE
05.07.2024 (VIKAS BAHL)
Sailesh JUDGE
Whether speaking/reasoned : Yes
Whether Reportable : No
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