IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 20TH JUNE 2008 / 30TH JYAISHTA 1930 WP(C).No. 20629 of 2004(E) ------------------------------------ PETITIONER: ------------------- M/S. MEAT PRODUCTS OF INDIA LTD., EDAYAR, KOOTHATTUKULAM, ERNAKULAM DISTRICT-686 662 REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV. SRI.K.P.DANDAPANI (SR.) SMT.SUMATHY DANDAPANI (SR.) RESPONDENTS: ---------------------- 1. M.N.RAMACHANDRAN, M-98, MANATTU HOUSE, CHANGAMPUZHA NAGAR P.O., KOCHI-682 033. 2. DISTRICT LABOUR OFFICER (GRATUITY CONTROLLING AUTHORITY), ERNAKULAM. BY ADV. SRI.K.A.ABRAHAM FOR R1 SRI.S.S.NAIR FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20/6 /2008, THE COURT ON SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.20629 OF 2004 (E) -2- APPENDIX PETITIONER'S EXHIBITS 1. EXT.P1 - TRUE COPY OF THE ORDER DATED 5.12.1997 IN C.M.P. NO. 3886/97 IN O.P. NO. 21644/97 OF THIS HONOURABLE COURT 2. EXT.P2 - TRUE COPY OF THE JUDGMENT DATED 29.10.1999 IN WRIT APPEAL NO. 1728/1999 OF THIS HONORAUBLE COURT 3. EXT.P3 - TRUE COPY OF THE LETTER DATED 22.11.1999 ISSUED BY THE GOVERNMENT OF KERALA. 4. EXT.P4 - TRUE COPY OF THE JUDGMENT DATED 7.3.2000 IN O.P.NO.3078/2000 OF THIS HONOURABLE COURT. 5. EXT.P5 - TRUE COPY OF THE JUDGMENT DATED 21.7.2003 IN W.A.NO.2601/2000 OF THIS HONOURABLE COURT. 6. EXT.P6 - TRUE COPY OF THE APPLICATION NO.GC 46/2003 FILED BY THE 1ST RESPONDENT BEFORE THE 2ND RESPONDENT. 7. EXT.P7 - TRUE COPY OF OBJECTION FILED BY THE PETITIONER HEREIN IN GC 46/2003. 8. EXT.P8 - TRUE COPY OF THE ORDER DATED 3.5.2004 IN G.C. NO. 46/2003 BY THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS 1. EXT.R1(a) - PHOTOCOPY OF THE ORDER G.O.(MA)NO.304/97/AD DATED 25.11.1997. 2. EXT.R1(b) - PHOTOCOPY OF THE ORDER NO. PR2/121/1042 DATED 20.09.2003. 3. EXT.R1(c) - PHOTOCOPY OF THE ORDER NO. 17168/AHF2/04/AD DATED 1.7.2004. / TRUE COPY/ PA TO JUDGE rhs S.SIRI JAGAN, J ================== W.P (C) .No.20629 of 2004 ================== Dated this the 20th day of June, 2008. J U D G M E N T The petitioner is a Government Company of which the 1st respondent was an employee. The 1st respondent ought to have retired from the service of the petitioner on 30.9.1997 at the age of 58 years, as per the Regulations of the Company. But the 1st respondent filed a writ petition namely, O.P. No.21644/97 contending that he is entitled to continue in service till he is attains the age of 60 years. In that original petition, he obtained a stay of his retirement. On the basis of the stay order, the 1st respondent was continued to be paid salary up to 31.12.1998. On 10.12.1998 the interim order was modified to the following effect. “(1) Interim Order already passed shall continue. (2) Continuance of Interim Order shall be on condition that the petitioner shall vacate the quarter by 31-12-1998. (3) It is so on the further condition that the petitioner W.P (C) .No.20629 of 2004 - 2 - shall not draw salary for the months of January, 1999 onwards. Post on O.P. for hearing as Item No.I in the hearing list on 11.1.1999 as a last chance.” 2. This interim order continued to be in force till the dismissal of the original petition on 12.7.1999. Thereafter, the 1st respondent immediately filed Writ Appeal No. 1728/1999 against the decision in the Original Petition, which was dismissed on 29.10.1999. After the dismissal of the Writ Appeal the 1st respondent was paid gratuity due to him for his service in the petitioner - Company upto the date of original retirement, namely, 30.9.1997, on 24.12.1999. The 1st respondent filed a claim before the 2nd respondent seeking payment of interest on the gratuity amount paid to him from his date of superannuation till the date of payment of gratuity. By Ext.P8 order, the 2nd respondent directed as follows: “1. The applicant in G.C.46/2003 Sri. M. N. Ramachandran is entitled to get interest @ 10% from 1.1.1999 to 24.12.1999 on an amount of Rs.1,94,400/- and interest @ 10% from 1.1.1999 to 20.9.2003 on an amount of Rs.16,200/- for the delayed payment of W.P (C) .No.20629 of 2004 - 3 - gratuity. 2. The opposite party is directed to pay the above amount within 30 days from the date of receipt of this order.” 3. Ext.P8 order is under challenge before me at the instance of the petitioner - Employer. 4. The contention of the petitioner is that they are not liable to pay interest, on the ground that it is not because of any fault of theirs that the delay was caused in payment of gratuity. According to them, when the 1st respondent filed an original petition and obtained a stay of his superannuation itself, the petitioner could not have legally paid any gratuity to the 1st respondent on the premise that he has already superannuated from service. In spite of the dismissal of the original petition itself he continued to fight the case by filing a writ appeal which was dismissed only on 29.10.1999. After dismissal of the Writ Appeal, within a very reasonable time, gratuity due to the 1st respondent was paid to the 1st respondent on 24.12.1999 is the contention W.P (C) .No.20629 of 2004 - 4 - raised before me. On the above contentions the petitioner challenges Ext.P8 order as illegal and unsustainable. 5. The petitioner has another contention that regarding the further amount of Rs.16,200/- also they are not liable to pay interest. According to them, that gratuity relates to the service of the 1st respondent in the Kerala Agro Industries Corporation, prior to joining the petitioner - Company which was sought to be clubbed with the service of the 1st respondent with the petitioner. The 1st respondent was not aware of the fact that he was entitled to gratuity in respect of the service put in by him before the Kerala Agro Industries Corporation. In fact, he filed O.P. No. 3078/2000 seeking gratuity computing that service also as eligible service. In that original petition, the 1st respondent's contention that he is entitled to count his previous service in Kerala Agro Industries Corporation was negatived by a learned Single Judge of this Court. He filed a writ appeal, namely, W.A. No.2601/2000, which was disposed of on W.P (C) .No.20629 of 2004 - 5 - 21.7.2003, in which his claim for computation of the previous service also was allowed for the purpose of gratuity. In that judgment there was a direction that the amount shall be paid within two months with interest as directed by the learned Single Judge in respect of other amount. According to the petitioner, therefore in respect of the latter amount of Rs.16,200/- mentioned in Ext.P8 also, the 1st respondent is not entitled to any interest since within two months from the date of judgment in the Writ Appeal, additional gratuity was also paid to him on 20.9.2003. 6. In answer to the above contentions the 1st respondent would contend that payment of interest is statutory as per the Payment of Gratuity Act. As per sub section 3(A) of Section 7 the employer is bound to pay interest on the gratuity amount from the date of retirement. The 1st respondent's date of retirement is 30.9.1997 and therefore he is entitled to gratuity from that date and if not paid, he is entitled to interest from that date. He would W.P (C) .No.20629 of 2004 - 6 - further submit that since he was drawing salary from the petitioner upto 31.12.1998 in respect of the amount of gratuity payable for the service in the petitioner - Company by Ext.P8 order interest was sanctioned only from 1.1.1999 till date of payment namely 24.12.1999, which according to the 1st respondent is perfectly in order. He also relies on a decision of the Supreme Court in H.Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd. 2003-I- LLJ 1119 which, according to the counsel for the 1st respondent, is an authority for the proposition that the payment of interest is automatic from the date on which the employee became eligible for gratuity. Regarding interest on the additional amount of gratuity of Rs.16,200/- also he raises the very same contentions. He therefore argues for sustaining Ext.P8 order. 8. I have considered the rival contentions in detail. 9. It is not disputed before me that as per the regulations of the petitioner - Company, the age of W.P (C) .No.20629 of 2004 - 7 - retirement was 58 years, which the 1st respondent attained on 30.9.1997. But he raised a contention that the said regulation was invalid and filed O.P. No.21644/1997, in which he obtained an interim order against the termination of his service on attaining 58 years. On the basis of that stay order he continued to draw salary from the petitioner - Company till 31.12.1998. Thereafter, by virtue of the modification of the interim order in CMP No. 38876/1997, the petitioner was denied salary from January 1999 onwards. But the interim order of stay against his superannuation continued. That stay continued till the dismissal of the original petition on 12.7.1999. Immediately thereafter, the 1st respondent filed a writ appeal which was dismissed only on 29.10.1999. Gratuity due to the petitioner was paid on 24.12.1999. Therefore, the delay in payment of gratuity is merely on account of the original petition and the writ appeal, which was the creation of the 1st respondent himself. After having fought a case against W.P (C) .No.20629 of 2004 - 8 - his superannuation from service, the 1st respondent cannot now contend that he should be paid interest on the gratuity for delayed payment of the same. The petitioner could not have paid gratuity to the 1st respondent unless and until the case filed by the 1st respondent against his superannuation was finally decided, because until then the question as to whether the 1st respondent can continue in service till 60 years was still uncertain. In fact the 1st respondent could not have accepted the gratuity if offerred to him because it would adversely affect his case. If the petitioner could not have paid the gratuity and the 1st respondent could not have received the same, the question of payment of gratuity and consequently the question of delay in payment thereof does not arise. Interest can run only from the date on which the petitioner could have legally paid the gratuity, which in this case was within a reasonable time after dismissal of the writ appeal. In the above circumstances I am of opinion that the 1st respondent is not entitled to interest on the amount of W.P (C) .No.20629 of 2004 - 9 - gratuity since there was no fault on the part of the petitioner in the matter of payment of gratuity, in so far as immediately after the litigation was concluded the petitioner had paid the gratuity due to the 1st respondent. As such, the direction to pay gratuity of Rs. 1,94,400/- from 1.1.1999 to 24.12.1999 in Ext.P8 order is clearly unsustainable. 10. In respect of the claim for interest on additional amount of gratuity of Rs.16,200/-, paid in respect of the 1st respondent's previous service in Kerala Agro Industries Corporation also the same yardstick applies. The 1st respondent filed an original petition seeking computation of that service also for the purpose of gratuity in March 2000 which was dismissed on 7.3.2000 by a learned Single Judge. It was taken in appeal before a Division Bench, as writ appeal No. 2601/2000 in which the Division Bench delivered judgment dated 21.7.2003, upholding the claim of the 1st respondent for gratuity taking into account that period of W.P (C) .No.20629 of 2004 - 10 - service also. In that judgment, there was a direction to pay the amount within two months. That amount was also paid within the time stipulated by this Court. In fact in Ext.P5 judgment the Division Bench directed payment of interest as directed by the learned single judge. In Ext.P4 judgment, the learned single judge did not accept the claim of the petitioner for gratuity. Therefore, the question of single judge directing interest also does not arise. In fact in Ext. P4 judgment 1st respondent's claim for interest on provident fund amount was rejected on the ground that the amount could not be paid only because of the pendency of the earlier litigation on the age of retirement. Therefore, in respect of that additional amount of gratuity also, I cannot hold that the 1st respondent is entitled to interest. In view of the peculiar circumstance of this case, I am not satisfied that the decision cited by the Counsel for the 1st respondent is applicable, the facts of which are clearly distinguishable. In the above circumstances, I am satisfied that Ext.P8 W.P (C) .No.20629 of 2004 - 11 - order whereby the petitioner has been directed to pay interest on the gratuity amounts to the 1st respondent is not sustainable. Accordingly, Ext.P8 is quashed. The writ petition is allowed as above. S.SIRI JAGAN, JUDGE rhs