- 1 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 8441 OF 2022 (L-PG) BETWEEN: DR. G MOHAN, AGED ABOUT 67 YEARS, 425, II FLOOR, 23RD CROSS, 7TH SECTOR, HSR LAYOUT, BENGALURU - 560102. …PETITIONER (BY SRI SREENIVASA T, ADVOCATE) AND: 1. PRINCIPAL, DR. B.R. AMBEDKAR MEDICAL COLLEGE, 24, K.G.HALLI, A.C.POST, BENGALURU - 560045. 2. THE APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT AND ASSISTANT LABOUR COMMISSIONER, KARMIKA BHAVANA, BANNERUGHATTA ROAD, BENGALURU - 560029. 3. THE CONTROLLING AUTHORIT UNDER PAYMENT OF GRATUITY ACT AND LABOUR OFFICER DIVISION -3 KARMIKA BHAVANA, BANNERUGHATTA ROAD, BENGALURU - 560045. …RESPONDENTS (BY SRI LAKSHMIPATHI D.G, ADVOCATE FOR SRI BALAGANGADHAR G S.,ADVOCATE FOR R1, SRI PRINCE ISAC, AGA FOR R2 AND R3) Digitally signed by C HONNUR SAB Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER ORDER MODIFYING THE ORDER DATED 16.01.2021 ANNEXURE-H PASSED BY THE APPELLATE AUTHORITY AND ASSISTANT LABOUR COMMISSIONER DIVISION-3, BENGALURU IN THE APPEAL NO. CR/24/2019. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE ORAL ORDER Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondents and the learned Government Advocate. 2. This petition is filed assailing the order dated 16.09.2021 passed by the Appellate Authority under the Payment of Gratuity Act, 1972, (for short 'Act of 1972'), wherein the Appellate Authority though allowed the petitioner's appeal declined to grant interest from 04.01.2005 to 27.02.2018. The petitioner is before this Court assailing the claim to the extent rejected by the Appellate Authority. - 3 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 3. Certain facts are not in dispute. The petitioner joined service under first respondent on 17.03.1986 as Tutor. The petitioner resigned on 31.12.2004 after serving 18 years 9 months. On 10.02.2018, petitioner filed Form No.1 requesting payment of gratuity. Since the gratuity was not paid, the petitioner approached the Controlling Authority with a prayer to direct first respondent to pay gratuity, in terms of endorsement dated 21.08.2019 declined to pass any orders on the premise that the petitioner is likely to file a writ petition before the High Court claiming gratuity. 4. Against the said order, appeal is filed before the Appellate Authority. After contest, the Appellate Authority allowed the appeal and directed first respondent to pay gratuity of Rs.3,54,419/- and interest from 27.02.2018 to 16.09.2021 @ 10% per annum which is computed on Rs.1,24,045/- and in all directed to pay Rs.4,78,464/-. The Appellate Authority also directed payment of 10% interest per annum on principal amount in case, the amount is not paid within 30 days. - 4 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 5. Section 7 of the Act of 1972 provides for determination and payment for gratuity. 6. There is no dispute that the petitioner worked under first respondent from 17.03.1986 and resigned on 31.12.2004. Since he has put in more than 5 years of service under the Act of 1972, the gratuity is payable to the petitioner. 7. Under sub-section (2) of Section 7 whether the application is filed by the employee or not, the employer shall determine the gratuity amount payable and shall issue 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. 8. Sub-section (3) of Section 7 puts an obligation on the employer to arrange payment of gratuity within 30 days from the date it become payable to whom the gratuity is payable. 9. Sub-section (3A) of Section 7 provides that in case the gratuity amount payable under sub-section (3) is - 5 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 not paid, then from the due date, the amount of gratuity payable shall carry interest at such rate not exceeding the rate notified by the Central Government. 10. The liability to pay interest is very much recognised under Sub-Section (3A) of Section 7. However, the proviso to sub-section (3A) provides that no such interest is payable if the delay is due to the fault of the employee and the employer has obtained permission in writing from the Controlling Authority. First respondent has not produced any records to show that it has obtained permission from the Controlling Authority to deny the interest payable on the gratuity amount payable to the petitioner. 11. There is no dispute that Central Government has notified fixing rate of interest @10% on delayed payment of gratuity. This being the position, the Appellate Authority is not justified in denying interest on payment of gratuity amount due to the petitioner. Since the petitioner resigned on 31.12.2004, the gratuity payable became due on - 6 - HC-KAR NC: 2025:KHC:22029 WP No. 8441 of 2022 31.01.2005. First respondent shall pay interest on Principal amount of gratuity amount of Rs.3,54,419/- along with interest @10% per annum from 31.01.2005 till the date of payment. The order shall be complied within 30 days from the date of receipt of the copy of this order. Hence, the Court passed the following: ORDER (i) Petition is allowed. (ii) The impugned order dated 16.09.2021 passed by the Appellate Authority at Annexure-H is modified. (iii) First respondent shall pay interest on Principal amount of gratuity amount of Rs.3,54,419/- along with interest @10% per annum from 31.01.2005 till the date of payment. Sd/- (ANANT RAMANATH HEGDE) JUDGE CHS List No.: 1 Sl No.: 53