JUDGMENT
C.M. Nayar, J.
(1) This bunch of writ petitions is directed against the orders of the Controlling Authority and the Appellate Authority, under the Payment of Gratuity Act, 1972, hereinafter referred to as the Act. These petitions raise the common question of law and I will proceed to dispose of the same by one common order.
(2) It will only be necessary to give broad facts, with regard to the firstpetition, to determine the nature of controversy between the parties. Respondent No. 1 joined the service of the petitioner company, which was at that time known as Birla Textiles on 1/01/1943. On Jan 2/01/1964 he was allotted quarter in the premises of the said Mill. The respondent retired from service on 16/06/1983. The petitioner alleged that respondent No. 1 was allotted quarter on the basis of the license fee of Rs. 3.75.00 per month, on the condition that he will vacate the accommodation within” 4 days of the cessation of the service, from the management, but he did not do so nor he obtained “No Objection Certificate” from the Estate Department, for clearance of hisdues. Therefore, his dues, including the gratuity amount, could not be released.The respondent No. 1 on 14/04/1986, applied to the Controlling Authority,under the Act, claiming a sum of Rs. 18,360.00, as gratuity amount and 9 percent compound interest on the last drawn pay of Rs. 800.00 per month. He also moved an application for condensation of delay in filing the application for directions for payment of his gratuity. The petitioner Management filed replies to both the applications. The Controlling Authority ordered the payment of gratuity on the ground, that there is no provision in the Act, where it is provided that in the event of failure of the vacation of the quarter by the workman,the amount of gratuity can be withheld. Taking into consideration the facts,stated in the order and 40 years of service, which respondent No. 1 had put in with the Company, respondent No. 1 was held entitled to payment ofRs. 17,076.92 as gratuity. The Controlling Authority further awarded payment of interest at the rate of 10 per cent on the said amount of gratuity. The petitioner company felt aggrieved by the order of the Controlling Authority, and filed an appeal under Section 7 of the Act. The Appellate Authority held that the Management failed to comply with the provisions of law, by not paying the amount of gratuity, due to the respondent No. 1 and the said gratuity amount cannot be withheld, simply on the ground of delay. The finding of the Controlling Authority that the amount of gratuity cannot be linked with the vacation of the quarter, was also affirmed by the Appellate Authority. The respondent No.I was held entitled to the payment of gratuity, as awarded by the Controlling Authority, along with 10 per cent simple interest.
(3) The same or similar relief was granted to the other respondent workmen and the petitioner company has impugned the same by means of this and other writ petitions before this Court. The petitioner company has stated that the gratuity of certain workmen was withheld because they did not vacate the company’s quarters, and some workmen were not entitled to the same because they had resigned from the service of the company and the workmen were also not entitled to the same because they had moved the Authority by means of belated applications.
(4) The following questions have been raised by learned Counsel for petitioner, for the consideration of this Court :
(I)The Controlling Authority, as well as, the Appellate Authority under the Act and the Rules framed there under, has no jurisdiction to accept an application for direction by the respondent, for adjudication on merits, when the application has admittedly been filed beyond the period of limitation, as specified in the Rules.(ii) The Authorities have further erred in exercising their discretion to condone the delay, as they did not consider the important aspect that the conduct of some of the workmen, in refusing to vacate the Company’s quarters, after the cessation of service,was improper and no discretion was liable to be exercised in their favor.(iii) The important question of law, which arises in some of the writ petitions is, whether, the respondent workmen have voluntarily resigned from their service and, as such, they were not entitled to claim gratuity under the Act, on the basis of the judgment of Punjab & Haryana High Court in. M/s Darshan EngineeringWorks, Amritsar v. The Controlling Authority, Amritsar andOthers, 1983 Labour Industrial Cases 1451, which held the provisions of Section 4 of the Act providing for payment of gratuity on resignation from service, after putting in only 5 years as qualifying period for the said payment as violative of Article 19 of the Constitution of India.(iv) The Controlling Authority, as well as, the Appellate Authority have clearly gone against the judgment of the Hon’ble Supreme court as reported in Charan Singh v. M/s. Birla Textiles & Am., , with regard to the interest. The said judgment categorically held that prior to the coming into force of Sub-section 3(A) of Section 7 of the Act, providing for the first time for payment of interest on the withheld amount of gratuity,there was a lacuna in the Act and the amended provisions having come into force with effect from 1/10/1987, could not be applied retrospectively by the Authorities. The law laid down by the Hon’ble Supreme Court is binding all over India, under Article 141 of the Constitution and the grant of interest in favor of the respondents, whose services came to an end prior to 1/10/1987, by applying the amended provisions of Section 7A, is illegal and without jurisdiction.(v) The wrongful withholding of the company’s quarters by some of the respondents, would clearly disentitle them to the grant of gratuity and as this amounts to breach of faith and trust, depriving the serving employees from the use of the quarter as the quarters had been constructed by the petitioner management even though ‘it was under no legal obligation to do so.
(5) I will now proceed to deal with the respective contentions of learned Counsel for petitioner.Limitation
(6) The learned Counsel has contended that the Controlling Authority has allowed the belated application erroneously and the fact that the Act, being social welfare legislation, cannot be a criteria for condoning the delay. In General Manager M/s Haji Latif Gani Bidi Manufacturers, Nagpur and Anotherv. Abdul Rashid and Another, , the Division Bench of the Bombay High Court, while dealing with the provisions of Payment of WagesAct, came to the conclusion that where, the Authority under the said Act,postpones the decision on the question of condensation of delay for consideration with the merits of the application under Section 15 of the Payment of Wages Act, there is not merely a procedural error but the order is in flagrant disregard of the Rules of procedure. The High Court would, therefore, interfere in the exercise of its powers, under Articles 226 and 227 of the Constitution,by quashing the order and to direct him to proceed in accordance with law.The condensation of delay in the present case is, therefore, against the provisions of law and cannot bs sustained. The period of limitation is specifically provided in Rule 10 of the Payment of Gratuity (Central) Rules, 1972, where in a claimant, in case of dispute, is required to move an application for direction before the Controlling Authority within 90 days of the occurrence of the cause.The said provision may be reproduced as follows : “10Application to controlling authority for direction-(1) If anemployer-(i) refuses to accept a nomination or to entertain an applications ought to be filed under Rule 7, or(ii) issues a notice under Sub-rule (1) of Rule 8 either specifying an amount of gratuity which is considered by the applicant less than what is payable or rejecting eligibility to payment of gratuity,or(iii) having received an application under Rule 7 fails to issue any notice as required under Rule 8 within the time specifiedtherein,the claimant employee, nominee or legal heir, as the case may be,may within ninety days of the occurrence of the cause for the application, apply, in Form ‘N’ to the controlling authority for issuing a direction under sub-section (4) of Section 7 with as many extra copies as are the opposite parties :Provided that the controlling authority may accept any application under this sub-rule, on sufficient cause being shown by theapplicant, after the expiry of the specified period.(2) Application under Sub-rule (1) and other documents relevant to such an application shall be presented in person to the controlling authority or shall be sent by registered post acknowledgmentdue.”
(7) Learned Counsel for respondents have contended that there is no provision under the Act, providing limitation for filing the application, except Rule 10, that the application for payment of gratuity may be filed within 90 days of the occurrence of the cause. It was further submitted that Rule 7(5) of the Rules leaves no manner of doubt that Legislature intended that the claimant’sapplication for gratuity of the employee, should not be dismissed on . and the Authority should be very liberal in condoning the delay. The relevant provision, incorporated in Rule 7(5) may be reproduced as follows: “(5)An application lor payment of gratuity filed after the expiry of the periods specified in this rule shall also be entertained by theemployer, if the applicant adduces sufficient cause for the delay in preferring his claim, and no claim for gratuity under the Act shall be invalid merely because the claimant failed to present his application within the specified period. Any dispute in this regard shall be referred to the controlling Authority for his decision.”
(8) The Appellate Authority has also referred to the provisions of Section 7 of the Act which provides that “as soon as the gratuity becomespayable, the employer shall, whether an application referred to in Sub-section 1has 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 to the Controlling Authority, specifying the amount of gratuity, so determined. Sub-section 3of Section 7 of the Act further provides that the Employer shall arrange to pay the amount of gratuity, within such time as may be prescribed to the person to whom the gratuity is payable. The Appellate Authority came to the conclusion that the Management has failed to comply with the provisions of law by not paying the amount of gratuity, due to the respondent, or intimated to the Controlling Authority in this regard. The Management has also failed to reply to the application of the workman for payment of gratuity. The Controlling Authority also observed that the payment of gratuity, being a social legislation, cannot be with held on account of late filing of the application by the workmen. The Appellate Authority has come to the conclusion that the Management itself has failed to comply with the provisions of law, by ‘not paying the amount of gratuity due to the respondent workman.
(9) The question of providing the period of limitation for making an application under the Act was considered by the Division Bench of the Bombay High Court in J.V. Dalal v. Plastpeel Chemicals and Others, 1979(1) Llj 409.The Court did not accept the contention that no time was prescribed by law for the employees application to the Competent Authority. It was impossible to hold that the Act did not contemplate prescribing of the period of limitation.The facts in this case would however indicate that the petitioner therein did not make any application for condoning the delay before the Controlling Authority. The Bench, therefore, directed the Controlling Authority to consider on merits, if any application for condoning the delay was made by the petitioner. This judgment will, therefore, indicate that although the period of limitation may be prescribed by statute, it was open to the Controlling Authority condone the same on the facts & circumstances of each case.
(10) In Sitaram Ramcharan & Others v. Nagrashna (M.N.) Authority under the Payment of Wages Act for Ahmedabad Area) and Others, 1960(1) LLJ29, the Hon’ble Supreme Court was considering the point of limitation wherethe Authority considered the case under the Payment of Wages Act and held that the appellants therein had failed to prove sufficient cause for not making their applications within the prescribed period. Reference may be made to the following passage: “THE proviso with which we are concerned has prescribed the limitation of six months for the institution of the application itself and so the principle laid down in Lingley case (supra) can have no application to the question which we have to decide. Indeed, the present proviso is in substance similar to the provision in Section 5 of Limitation Act, and Mr. Phadke has fairly conceded that there is consensus of judicial opinion on the question of the construction of Section 5. It cannot be disputed that in dealing with the question of condoning delay under Section 5 of the Limitation Act the party has to satisfy the Court that he had sufficient cause for not preferring the appeal or making the application within the prescribed time, and this has always been understood to mean that the explanation has to cover the whole of the period of delay (vide Ram Narain\.JoShiParmeswar Narain Mahta and Ors, 1903 I.L.R. 30 Cal. 309). Therefore, the finding recorded by the authority that the appellants have failed to establish sufficient cause for their inaction between 2ndMay 1952, and the respective dates on which they filed their present applications is fatal to their claim. That is why we think it unnecessary to consider the larger question of law which Mr. Phadke sought to raise before us.”
(11) In Gopinathan Nair (A) v. N. Radha Bal and Others, 1988 (1) LLN1030, the Single Bench of Kerala High Court, while interpreting the provisions of Rules 7 and 10 of Kerala Payment of Gratuity Rules, 1973, held that the application for gratuity, filed beyond the period of limitation, can be treated as valid only for condensation of delay. Sufficient cause for delay is a condition precedent
for acceptance of application by the Controlling Authority and the employee therein, was held not entitled to gratuity, as no sufficient cause was shown for delay in filing the application. The same view was expressed by a Single Judge of the Madras High Court in Madura Coats Ltd., Tuticoriny.Assistant Commissioner of Labour, Peleyambattai and Ors., 1988(11) Lln 126.
(12) In the present cases, the applications by the employees were made before the Controlling Authority, beyond the period of limitation. For instance in Civil Writ No. 1110 of 1989, the respondent employee retired from the services of the petitioner company on 16/06/1983, after putting in more than40 years of service. He filed the Application on 14/04/1986. This respondent averred
that he sent latters to the management on 6/07/198 3/08/1983, . 16/10/1984 and 5/04/1986, but the Management did not give any reply to the aforesaid letters, nor paid the amount of gratuity. He further submitted that there was delay in filing the application, on account of ignorance of law. The Controlling Authority considered all these factors and holding that the Gratuity Act is a social welfare legislation and the workman cannot be deprived of the same on account of late filing of the application by the workman, decided the issue accordingly and held the workman entitled to the same. The Appellate Authority upheld the findings of the Controlling Authority and dismissed the appeals of the petitioners. The Controlling Authority, as well as, the Appellate Authority have exercised their discretion in condoning the delay. The exercise of discretion in condoning the delay is just and proper and no interference is’ called for in res pect of the same.Resignation
(13) Learned counsel for petitioners has argued that the workmen,who voluntarily resigned from the services of the company, cannot claim gratuity under the provisions of the Act. Reference is made to the Division Bench judgment of the Punjab & Haryana High Court in M/s Darshan Engineering Works, Amritsar v. The Controlling Authority, Amritsar and others,1983 Lab. I.C. 1451, wherein the relevant provisions of Section 4 of the Act, prescribing only 5 years as qualifying period for payment of gratuity on voluntary resignation, was held to be violative of Article 19 of the Constitution. The following passage s may be quoted herein ; “IN British Paints (India) Limited’s case (supra), their Lordships of the Supreme Court observed as under (atpp. 734-35):”We now turn to the gratuity scheme. Two points have been urged on behalf of the company in this connection. The tribunal has fixed five years minimum service in order to enable a workman to earn gratuity. This has been provided in the event of-(a) death of an employee while in service of the company, (b) discharge or voluntary retirement of an employee on grounds of medical unfitness,(c) voluntary retirement or resignation before reaching the age of superannuating
(d) retirement on reaching the age of superannuation, or (e) termination of service by the company for reasons other than misconduct resulting in loss to the company in money andproperty. The management objects to the minimum period being five years in the case of voluntary retirement or resignation before reaching the age of superannuation. It is contended that gratuity schemes usually provide for a longer minimum of service in the case of voluntary retirement or resignation before reaching the age of superannuating
. We think that there is substance in this connection.The reason for providing a longer minimum period for earning gratuity in the case of voluntary retirement or resignation is to see that workmen do not leave one concern after another after putting the short minimum service qualifying for gratuity. A longer minimum in the case of voluntary retirement or resignation makes it more probable that the workmen would stick to the company where they are working. That is why gratuity schemes usually provide for a longer minimum in the case of voluntary retirement or resignation.We may in this connection refer to the Express Newspaper (Private)Ltd v. Union of India, , where a short minimum for voluntary retirement or resignation was struckdown. Again in Garment Cleaning Works v. Its Workmen, SC 673 at p. 675)10 years minimum was prescribed to enable an employee to claim gratuity if he. resigned.In Management of Wenger & Co. v. Their Workmen, , a distinction was made between termination of service by the employer and termination resulting from resignation given by anemployee. In the first case, the minimum was fixed at 5 years, inthe second the minimum period was fixed at 10 years by this Court.In Express Newspaper (Private) Limited’s case (supra) the provisions contained in Section 5 of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955,prescribing 3 years’ as qualifying period for payment of gratuity on voluntary resignation was struck down as unconstitutional beingunreasonable. In the remaining cases discussed above, their Lordships examined the gratuity schemes directed to be introduced by the Industrial Tribunal. The schemes providing for 15 years’ as qualifying period for payment of gratuity on voluntary resignation were not interfered with. The schemes providing for less than 10years as qualifying period for payment of gratuity on voluntary resignation were modified and the qualifying period in such cases was increased to 10 years. It is in this background that we are to examine if Section 4 of the Act to the extent of providing gratuity on voluntary resignation is unconstitutional being ultra vires Article 19 of the Constitution or not.A gratuity is essentially a retiring benefit. payable to a workman which under the statute (Section 4 of the Act) has been made payable on voluntary resignation as well. Gratuity is a reward for good, efficient and faithful service rendered for a considerableperiod. It is necessary that a long minimum period for earning gratuity in the case of voluntary resignation should be prescribed to curb the tendency on the part of the workman to change employment frequently after putting in minimum service qualifying for gratuity. A workman gains experience during his tenure ofemployment. An experienced workman is capable of securing another employment with better emoluments. He can also be tempted by other employers with more lucrative salary. The exit of an experienced workman would surely be a loss for his employer. It has been aptly observed by their Lordships of the Supreme Court in British Paints (India) Limited’s case (supra) that “a longer minimum in the case of voluntary retirement or resignation makes it more probable that the workmen would stick to the company where they are working. That is why gratuity schemes usually provide for a longer minimum in the case of voluntary retirement orresignation.Keeping in view the intrinsic object for making provision for payment of gratuity to a workman on his voluntary resignation and the ratio of the decisions of the Supreme Court detailed above, there is no escape from the conclusion that the minimum period of qualifying service for five years by a workman for being eligible for gratuity on voluntary resignation under Section 4 of the Act cannot be stamped (as ?) sufficient long minimum .in the context of making him stick to his existing employer and it does impose an unreasonable restriction on the fundamental right of the employer to carry on business and is, therefore, violative of Article 19 of the Constitution.”
The above judgment of the Division Bench was followed by a subsequent judgment of the Single Bench in Victory Public Hill Motor Transport Co. (P),Ltd. v. Controlling Authority Under Payment of Gratuity Act and Others (1986)69 F.J.R. 401.
(14) In the Management of Wenger & Co. and Others v. TheirWorkmen, . the Hon’ble Supreme Court dealt with the question of resignation and it was held that “a distinction must be made between the termination of service, caused by the employer, and the termination resulting from the resignation, given by the employee for the eligibility of the employee to receive the gratuity. It was provided that for termination of service, caused by the employer, the minimum period of service for payment of granting gratuity would be 5 years. If the termination of service is the result ofmisconduct, which has caused financial loss to the employer, the loss should be first compensated from the gratuity payable to the employee and the balance,if any, should be paid to him. If, the employee resigns, he would be entitled to get gratuity only if he has completed 10 years of service or more.” The Supreme Court, therefore, provided in regard to resignation that if the employeeresigns, he would be entitled to gratuity only if, he has completed 10 years service or more. In the present case, the respondent workman, admittedly,has put in large number of years and it has been conceded by the Counsel’for petitioner that none of the workmen have put in less than 10 years ofservice.
(15) In Express Newspaper (Private) Ltd. and Another v. The Union of India and Others, , the Hon’ble Supreme court referred to various judgments of the Court and noticed that even in thosecases, where gratuity was awarded on the employee’s resignation from service,it was granted only after the completion of 15 years continuous service and not merely on a minimum of 3 years service as in that case. The gratuity being a reward for good, efficient and faithful service rendered for a considerableperiod, there would be no justification for awarding the same, when anemployee voluntarily resigns and brings about a termination of his service except in exceptional circumstances. In that context, the Court concluded that there will be no justification, whatever for awarding gratuity after a period of only 3 years and any such provision of the type, which has been made in Section 5 of the Act, would certainly be unreasonable, as it imposes a unreasonable restriction on the petitioners’ right to carry on business and was held liable to be struck down as unconstitutional.
(16) The present cases would be covered by the judgments of theHon’ble Supreme Court in Management of Wenger & Co. (supra) and Express Newspaper (Private) Ltd. and Another (supra), as the workmen have put in not less than 10 years of service and even much more and they cannot be deprived of their statutory right of gratuity; simply on the ground that they voluntarily resigned their positions. There is no force in the contention of the Counsel for petitioner and the same is accordingly rejected.Non Vacation of Company’s Quarters
(17) Learned Counsel for the petitioner has contended that some of the workmen did not vacate the quarters of the company, as allotted to themand, therefore, withholding of the gratuity was justified. The Controlling Authority observed in his order that there was no provision in the Act,where it was provided that in the event of failure of the vacation of the quarter by the employee, the amount of gratuity can be withheld. The said finding was upheld by the Appellate Authority. The Counsel has reiterated that the quarters were allotted to the concerned employees and regular deductions were made from their wages and, therefore, the employees were under legal obligation to vacate the said quarters before the gratuity amount could be disbursed to them.
(18) In Kareparambil T. Lakshmanan and Others v. Air India, 1986 (52)F.L.R. 327, the learned Single Judge of the Bombay High Court refused to give relief to the workman, on his refusing to vacate the official accommodation. He held : “it is impossible to imagine that the employer should be forced to give such facilities to a recalcitrant employees, who were openly flouting the undertaking given by them. In my judgment, exercise of discretionary power in favor of such petitioners would lead to chaos in the administration and I, therefore, refuse to assist the petitioners.”
(19) In Ramlal Chimanlal Sharma v. M/s. Elphinstone Spinning and Weaving Mill Co. Ltd and Another, 1984 Lab I.C. 1703, it was held ; “THE Submission of Shri Boghani that the petition should not be entertained as the petitioner has come to the Court with unclean hands cannot be accepted. The learned Counsel submitted that the petitioner is in occupation of the premises belonging to the employer and which were allotted to him while he was in employment. The learned Counsel relied upon the agreement signed by the petitioner while securing the possession of the premises on 13/01/1967and submitted that in spite of the retirement, the petitioner has declined to vacate the premises and has raised a false claim of tenancy driving the employer to institute proceedings for eviction inthe Court of Small Causes. Shri Boghani submits that the petitioner not only sat tight over the premises, but has not paid a single paisa to the employer for his wrongful occupation right from the year1973 onwards. Shri Boghani submits that in view of the conduct of the petitioner he should not be granted any relief in these proceedings. The contention cannot be accepted, because the right to the amount of gratuity is not circumscribed or made dependent on the conduct of the employee subsequent to the date of his retirement.A right to secure gratuity amount cannot be defeated or cannot be used as lever by the employer for securing back possession of the premises from the petitioner. It is not permissible under the Payment of Gratuity Act to withhold the amount for any reason,and if my judgment, even though the conduct of the petitioner in holding back possession of the premises is not very praise worthy still that is not a sufficient reason to deprive him of the right of gratuity. I put my displeasure to the learned Counsel appearing for the petitioner and on taking instructions. Miss Pradhan stated that the petitioner is willing to give an undertaking to this Court that he would vacate the premises and hand over vacant and peaceful possession to the employer within a period of three months from the date of receipt of gratuity amount, if so ordered. . Miss Pradhan stated that the petitioner is willing to file an undertaking in this Court to that effect. In these circumstances, it would not be proper to deprive the petitioner of the right to claim gratuity.”
(20) The learned Counsel for respondents has argued that no-doubt,the holding of the quarter was not a praiseworthy act on the part of the employee, even then it is not a sufficient ground to deprive him, with regard to the right of gratuity and interest. The remedy, in any case, lies with the Civil Court. I am also informed that civil proceedings are going on between the parties and an application, filed by the petitioner management, under Section 630 of the Companies Act, with regard to the respective quarters is also pending before the Metropolitan Magistrate.
(21) I am also informed that only some employees have retained the company quarters and the matter is subjudice in the different Courts. I will express my strong displeasure at the attitude of those employees, who have left the service of the company but continue to retain the company’s quarters.The only defense, which is being put by Counsel for the respondent is that the Management is proceeding according to law and no relief can be granted in the present writ petitions.
(22) The Division Bench of this Court on 7/12/1988, in C.W.PNo. 2149/88 (Birla Textiles v. Bhagwat Singh) also dealt with the contention of the management and concluded that there was no condition which will entitle the management to withhold the payment of gratuity in the event of quarter being not vacated. No rule or condition of service was brought to the notice of the Bench to hold otherwise. The relevant passage of the interim order may be reproduced as follows : “IT is also urged that the Management has a right to withhold the gratuity payable to the employee, who has not vacated the allottedquarter. We have seen the copy of the letter dt. 15/04/1962.There is no condition -in that letter, the petitioner is entitled to withhold the payment of gratuity in the event of the quarter being not vacated. No rule or condition of service has been brought to our notice which entitles the petitioner to withhold the amount of gratuity in the event of quarter not being vacated.”
(23) In the circumstances of these cases, the findings of the Controlling Authority, as well as, Appellate Authority are affirmed and gratuity of the employees cannot be withheld for the non vacation of the company’squarters.
(24) The contention, raised by Counsel for the petitioner, in this regard is that the Hon’ble Supreme Court having held in the case of Charm Singh(supra), that prior to the coming into force of Sub-section 3 of Section 7 of the Act, providing for the first time for payment of interest, on the withheld amount of gratuity, there was a lacuna in the Act and the amended provisions have prospective effect only w.e.f. 1/10/1987. The law, laid down by the Supreme Court, has been clearly ignored by the Controlling Authority, as well as, .by the appellate authority. In Charan Singh’s case(supra) the services of the employee had come to an end on 24/05/1983 and there after, since his gratuity was not paid to him, he had filed an application for direction before the Controlling Authority, which was allowed along with compound interest, but the Appellate Court in the appeal, filed by the management, struck down the order, as regards payment of interest only and Charan Singh thereafter approached the Hon’ble Supreme Court. During the pendency of the appeal, the amended provisions came into force with effect from 1/10/1987 and the Court came to the conclusion that the said provision was prospective and dismissed the appeal of Charan Singh. It may be noticed that the determination was made by the Controlling Authority on 3/12/1984, before the amended Act came into force. I may refer to the following paragraph in the judgment of the Supreme Court in Charan Singh’s(supra) case: “THERE was no provision in the Act for payment of interest when the same was quantified by the controlling authority and before the Collector was approached for its realisation. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of Sub-section (3A)in Section 7. That provision has prospective application.”
(25) In the present case, the Controlling Authority determined the amount, payable to the petitioner vide order dated 23/02/1988, i.e.subsequent to the date of passing of the amended provisions with regard tointerest. The Appellate Authority upheld the grant of simple interest at the rate of 10 per cent by order dated 13/03/1989.
(26) In Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd., and Ors.., , the Hon’ble Supreme Court granted the interest at the rate of 15 per cent per annum, from .the date amount of gratuity fell due till payment and full costs of the case throughout.
(27) The pension and gratuity as held by the Hon’ble Supreme Court in State of Kerala and Others v. M. Padmanabhan Nair, , are no longer any bounty to be distributed to the employees on their retirement but are valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment.The Supreme Court has further held that the penalty to pay penal interest on these dues, at the current market rate, commences at the expiry of 2 months from the date of retirement. The present case speaks of total inaction on the part of the petitioners as they continued to withhold the payments of gratuity to various employees, who worked in the establishment for years. The employees had to run from one Court to the other and could only get some respite when the matters came before this Court on several writ petitions, filed by the petitioner management. The gratuity amounts were directed to be released by orders of this Court. The management, has, therefore, escaped with simple interest at the rate of 10 per cent in most cases and no penal interest has been awarded by the Controlling Authority, as well as, by the Appellate Authority. There is no force in this contention of the petitioner and the same is rejected. The respondents, in all the cases, are, therefore, held entitled to the amount of gratuity as awarded, along with simple interest at the rate of 10 per cent per annum. The last contention, which is sought to beraised, for the first time in this Court is, that in some cases, the amount of interest will turn out to be more than the gratuity amount and this is violative of the proviso to Section 8 of the Act. The point was never urged before the Authorities below and no material has been placed on record. It is not necessary for me to entertain this plea, which is raised for the first time.
(28) The writ petition is accordingly dismissed and the Rule is discharged. There shall be no order as to costs. — *** —