# Laxman Singh Bhadauriya v. Controlling Auth. Under the payment of Gratuity Act & Anr

- **Citation:** (2023) 4 ILRA 645
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-04-18
- **Case number:** Writ-C No. 18684 of 2010
- **Bench:** Umesh Chandra Sharma
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/laxman-singh-bhadauriya-v-controlling-auth-under-the-payment-of-gratuity-act-anr-49995
- **Pages:** 3

## Headnote

A. Payment of Gratuity Act, 1972 -
Section 7(3-A) - Notification dated
01.10.1987
-
Gratuity
-
Delayed
payment
-
10%
interest
rate
is
provided - However, award of 4%
interest
was
passed
-
Legality
challenged - Held, the respondent no. 1
has not given any basis or source for
payment of only 4% annual interest
instead of 10% annual interest as per
existing notification dated 01.10.1987
issued by the Central Government in
respect of Sec 7 (3-A) of the Payment
of Gratuity Act, 1972 - Payment of 4 %
interest is contrary and against the law.
(Para 8)
Writ petition allowed. (E-1)

## Text

4 All. Laxman Singh Bhadauriya Vs. Controlling Auth. Under the payment of Gratuity Act &
 Anr.
645
application under section 166 (3) of the
Motor Vehicles Act
on
grounds
of
limitation.

25. The writ petition stands allowed.

26. The Registrar General is directed
to forward a copy of this judgment to all
the Claims Tribunal functioning in the State
of U.P.
----------
(2023) 4 ILRA 645
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.04.2023

BEFORE

THE HON'BLE UMESH CHANDRA SHARMA, J.

Writ-C No. 18684 of 2010

Laxman Singh Bhadauriya ...Petitioner
Versus
Controlling Auth. Under the payment of
Gratuity Act & Anr. ...Respondents

Counsel for the Petitioner:
Sri S.N. Dubey, Sri Amit Kumar Srivastava, Sri
S.K. Singh Yadav

Counsel for the Respondents:
C.S.C.

A. Payment of Gratuity Act, 1972 -
Section 7(3-A) - Notification dated
01.10.1987
-
Gratuity
-
Delayed
payment
-
10%
interest
rate
is
provided - However, award of 4%
interest
was
passed
-
Legality
challenged - Held, the respondent no. 1
has not given any basis or source for
payment of only 4% annual interest
instead of 10% annual interest as per
existing notification dated 01.10.1987
issued by the Central Government in
respect of Sec 7 (3-A) of the Payment
of Gratuity Act, 1972 - Payment of 4 %
interest is contrary and against the law.
(Para 8)
Writ petition allowed. (E-1)
(Delivered by Hon'ble Umesh Chandra
Sharma, J.)

1. Heard Sri S.N.Dubey, learned
counsel for the petitioner and Sri Jitendra
Narain Rai, learned Additional Chief
Standing Counsel.

2. This writ petition has been filed for
the issuance of writ, order or direction in
the nature of Certiorari for quashing the
Award
dated
18.12.2009
passed
by
Respondent no. 1 so far it relates to 4%
interest and also for issuance of mandamus
directing the Respondent no. 2 to pay 10%
interest on the delayed payment of gratuity.

3. In brief, facts of the case are that
the
petitioner
was
clerk
in
District
Cooperative Bank, Ltd. Fatehpur, and
retired from the service on 31.01.2000. He
completed 29 years service but the
respondent no. 2 paid him less gratuity of 4
years and 10 months. He moved an
application on 16.08.2007 before the
Respondent no. 01 with the prayer that the
respondent no. 2 has paid less gratuity
therefore, he may be directed to pay Rs.
85,983/-. The case was registered as case
no. P.G. 13/2007 marked as annexure - 1 to
the petition. Respondent no. 2 filed written
statement and its photocopy is annexure - 2
to this petition. The petitioner filed the
rejoinder annexure - 3 to the petition.

4. The petitioner filed documentary
evidence and adduced oral evidence before
respondent no.1. The respondent no. 1 by
the judgment and order dated 18.12.2009
allowed
the
petition
directing
the
respondent no. 2 to pay Rs 34,632/-which
is annexure - 4 to the petition. The
respondent no. 1 while allowing the claim
646 INDIAN LAW REPORTS ALLAHABAD SERIES
of the petitioner awarded 4% interest which
is against the law. The petitioner had
prayed for and was entitled for 10% interest
on delayed payment.

5. Section 7 (3-A) of Payment of
Gratuity Act, 1972 provides that the
employer shall be liable to pay interest not
exceeding the rate notified by the Central
Government. The central Government by
notification dated 01.10.1987 has notified
that on delayed payment the rate of interest
would be 10% which is as under :

"NOTIFICATION NO. S.O 874 (E),
dated 1st October, 1987

Gazette of India, Extraordinary, dated
1.10.1987, Part II,

Section 3 (ii), P - 2

In exercise of the power conferred by
sub - section (3-A) of Section 7 of the
Payment of Gratuity Act, 1972, the Central
Government hereby specifies ten per cent
annum at the rate of simple interest
payment for the time being by the employer
to his employee in cases where the gratuity
is not paid within the specified period.

(2) This notification shall come into
force on the date of its publication in the
official gazette."

6. Thus the petitioner was entitled for
10% interest on the delayed payment as per
Section 7 (3-A) of Payment of Gratuity Act,
1972 but respondent no. 1 has awarded only
4% interest which is illegal. The respondent
no. 1 has not recorded any findings as to why
10% interest has not been awarded. The order
passed by respondent no. 1 is illegal and
unjust. The petitioner has got no equally
efficacious and alternatively remedy except
to invoke the extraordinary writ jurisdiction
of this Hon'ble court under Article 226 of the
Constitution of India hence, this petition has
been instituted.

7. As per office report no undelivered
registered notice and acknowledgment have
been received back hence opposite party
no. 2 is presumed to be sufficiently served
through notice. No counter affidavit and
vakalatnama has been filed. Hence heard
learned counsel for the applicant S.N
Dubey , Amit Kumar Srivastava, Shri S.K
Dubey for petitioner and learned standing
counsel for the respondent and perused the
record.

8. The petitioner has annexed all the
relevant papers along with the notification
of the Central Government which are
referred in the petition. There is no
evidence that respondents have challenged
the order dated 18.12.2009 before the
competent authority or the court. Hence,
the finding in favor of the petitioner in
respect of the claim has become absolute. It
is the petitioner who has grievance
regarding payment of less percentage of
interest on the ground that in case of
delayed payment of gratuity there is
provision of Central Government to pay
10% simple interest for the period of delay.
The petitioner has challenged the order of
respondent no. 1 in respect of direction of
payment of only 4% interest in place of
10% for the period of delay in payment of
gratuity. When notice was properly sent to
the respondent no. 2, it was its duty to
appear and file counter affidavit against the
petition, but it refrained from its duty. Such
act of respondent no. 2 shows that
respondent no. 2 has no objection with
regard to the case/objection raised by the
petitioner. The claim of the petitioner finds
support form the aforesaid notification of
Central Government according to which in
case the gratuity is not paid within the
specified period, employer would pay 10%
per annum simple interest. The respondent
no. 1 has not given any basis or source for
4 All. B.N.S.D. Shiksha Niketan Uchchtar Madhyamik Vidyalaya Vs. The Regional Provident
 Fund Commiss. & Anr.
647
payment of only 4% annual interest instead
of 10% annual interest as per existing
notification dated 01.10.1987 issued by the
Central Government in respect of Sec 7 (3A) of the Payment of Gratuity Act,1972.
Thus, this court comes to the conclusion
that the order and judgment passed by the
respondent no. 1 in respect of payment of 4
% interest is contrary and against the law.
Hence, this writ petition is liable to be
allowed.

ORDER

This writ petition is allowed and the
award
dated
18.12.2009
passed
by
respondent no. 1 so far as it relates to
payment of 4% interest is hereby quashed
and is modified to the extent that
respondent no. 2 shall pay 10% interest on
the delayed payment of gratuity for a
period of 4 years and 10 months. It is
directed that respondent no. 2 shall pay the
interest amount as ordered above within a
period of 1 month from the date of
production of a certified copy of this
judgment.
----------
(2023) 4 ILRA 647
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.03.2023

BEFORE

THE HON'BLE UMESH CHANDRA SHARMA, J.

Writ-C No. 48699 of 1999

B.N.S.D.
Shiksha
Niketan
Uchchatar
Madhyamik Vidyalaya ...Petitioner
Versus
The Regional Provident Fund Commiss. &
Anr. ...Respondents

Counsel for the Petitioner:
Sri Rajesh Tewari

Counsel for the Respondents:
S.C., Sri Nishant Mehrotra, Sri Vijay Kumar Singh

Civil Law-Employees Provident Fund &
Miscellaneous
Provisions
Act,
1952Section 14-B-Writ petition filed seeking
quashing of the order passed by whereby
damages u/s 14-B levied on the belated
payment
in
depositing
the
PF
contribution-Damages u/s 14-B of EPF Act
are penal in nature-Once the petitioner
admitted the applicability of the Act from
the date of coverage then he is liable to
pay penal damages for the delayed
compliance-Object
of
imposition
of
penalty u/s 14-B is not merely "to provide
compensation for the employees"- It is
meant to penalise defaulting employer as
also to provide reparation for the amount
of loss suffered by the employees. (Para
9-20)

Writ petition dismissed. (E-15)

List of Cases cited:

1. Organo Chemical Industries & anr. Vs UOI &
ors., (1979) 4 SCC 573

2. Hindustan Times Ltd. Vs U.O.I & ors. , (1998)
2 SCC 242

3. M/s D.A.V. College & ors. Vs Regional
Provident Fund Commissioner & ors., [1988
(Suppl) SCC 518]

4. Horticulture Experiment Station Gonikoppal,
Coorg Vs Regional Provident Fund Organization,
(2022) 4 SCC 516

(Delivered by Hon'ble Umesh Chandra
Sharma, J.)

1. Heard Shri Rajesh Tewari, learned
counsel for the petitioner and Shri Nishant
Mehrotra
learned
counsel
for
the
respondents.

2. The present writ petition has been
filed seeking quashing of the order dated