IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE TWENTY SIXTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE A.GOPAL REDDY and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT APPEAL NO : 405 of 2006 AND WRIT PETITION NO.4378 OF 2001 WRIT APPEAL NO : 405 of 2006 (Writ Appeal under Clause 15 of the Letters Patent against the Order dated 09/03/2006 in WP NO : 4378 OF 2001 on the file of the High Court.) Between: VST Industries Ltd., Rep.Corporate General Counsel &Power of Attonary Holder mr. Sanjay Khanna, Azamabad, Hyderabad. ..... APPELLANT AND 1 Controlling Authority under the Payment of Gratuity Act 1972 Asst. Commissioner of Labour, Hyderabad-III. T.Anjaiah Karmika Bhavan, RTC., Cross Roads, Hyderabad - 500 020. 2 T.Narsaiah, C/o. Sri A. Sanjeeva Reddy. H.No.2-2-185/3/A, Opp: Community Hall, Bharatnagar, Amberpet, Hyderabad-500 013. .....RESPONDENT(S) Counsel for the Appellant:MR.M.PANDURANGA RAO Counsel for the Respondent No.: GP FOR LABOUR The Court made the following : THE HON'BLE MR JUSTICE A.GOPAL REDDY and THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT APPEAL No.405 OF 2006 AND WRIT PETITION NO.4378 OF 2001 JUDGMENT: (Per Hon’ble Sri Justice A.Gopal Reddy) The appellant Company-writ petitioner obtained a Rule from this Court in W.P.No.4378 of 2001 calling upon the respondents as to why a writ in the nature of Certiorari cannot be issued under Article 226 of Constitution of India calling the records pertaining to the proceedings of ﬁrst respondent dated 6.2.2001 passed in P.G.Case No.15 of 1999 and to quash the same. The 2nd respondent-employee on being removed from service by the appellant-Company raised an industrial dispute under Section 2- A(2) of the Industrial Disputes Act (for short ‘the Act’) before the Labour Court-I, Hyderabad in I.D.No.604 of 1993. The Labour Court-I passed an award on 2.5.1995 holding that the appellant- Company correctly removed the 2nd respondent from service as the Company also lost conﬁdence on him and therefore, the question of reinstatement does not arise, but however, exercising the discretion under Section 11-A of the Act, held that the termination of service is disproportionate to the oﬀence committed by the 2nd respondent and accordingly modiﬁed the dismissal order into an order of discharge from service on 28.12.1989 and thereby he is entitled to all the retirement beneﬁts as though he retired from service on attaining the age of superannuation. On passing the award, the appellant-Company paid all the terminal beneﬁts including the gratuity payable to the 2nd respondent on 29.9.1995. Since there is a delay in payment of gratuity amount, the 2nd respondent moved the Controlling Authority under the payment Gratuity Act, 1972 and Assistant Commissioner of Labour, Hyderabad-III in P.G.Case No.15 of 1999 claiming interest on such delayed payment. The Controlling Authority by order dated 6.2.2001 held that the 2nd respondent is entitled to simple interest for the period from 21.12.1989 to 7.9.1995 at the rate prevailing in the year 1995 on the principle amount of gratuity i.e. Rs.34,414.38 ps. It is that order, which is impugned in the Writ Petition. Learned Single Judge of this Court by order dated 9.2.2006, referring to the decision of the Apex Court in H. Gangahanume Gowda v. Karnataka Agro Industries Corpn. Ltd., ((2003) 3 SCC 40), dismissed the Writ Petition holding that when the appellant-Company did not choose to assail the award of the Labour Court and allowed it to attain ﬁnality and having paid the gratuity in terms of the award, it is liable to pay interest for such delayed payment. Heard the learned counsel for the appellant, learned Government Pleader for Labour for respondent No.1 and Sri A. Sanjeeva Reddy, learned counsel for respondent No.2. Under sub-Section (3) of Section 7 of Payment of Gratuity Act, 1972, the employer shall 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. Sub-section 3(A) of the said Act envisages that 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 is liable to pay 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. Admittedly, the 2nd respondent is entitled to gratuity amount only either on attaining the age of superannuation i.e. in December, 1993 or from the date of the award passed by the Labour Court, where the dismissal order has been modiﬁed into a discharge, but he is not entitled to interest from the date of his dismissal from service by the appellant-Company. Since the entitlement to receive the amount by the 2nd respondent arose only on Labour Court modifying the order of dismissal, at the most he is entitled for payment of gratuity amount from the date of attaining superannuation, but not from the date of his dismissal by the appellant-Company. In view of the above, the impugned order passed by the Controlling Authority under Payment of Gratuity Act, 1972 & Assistant Commissioner of Labour, Hyderabad-III holding that the 2nd respondent is entitled to simple interest for the period from 21.12.1989 to 7.9.1995 cannot be sustainable and the same is accordingly set aside. The Writ Petition is allowed to the said extent. To have a quietus to the litigation, we direct the appellant-Company to pay a sum of Rs.10,000/- (Rupees ten thousand only) to the 2nd respondent towards interest for the delayed payment of gratuity amount within a period of four (4) weeks from the date of receipt of a copy of this order. The Writ Appeal is accordingly disposed of. There shall be no order as to costs. ________________ A. GOPAL REDDY, J. ______________________ 26th SEPTEMBER, 2008 VILAS V. AFZULPURKAR, J. Tsr. Copy to 1 The Controlling Authority under the Payment of Gratuity Act 1972 Asst. Commissioner of Labour, Hyderabad-III. 2. Two C.Cs. Government Pleader for Labour, High Court Buildings, Hyderabad (OUT). 3. Two C.D. copies.