Central Coal Fields Ltd. v. Jitendra Kumar Sharma S/o Late Dr. Ram Prasad Sharma
2026-02-03
Deepak Roshan
body2026
DailyLaw.ai
JUDGMENT : DEEPAK ROSHAN, J. 1. Heard learned counsel for the parties. Brief Facts 2. While the respondent-writ petitioner Dr. Jitendra Kumar Sharma was functioning as Medical Superintendent at Bhurkunda Colliery, Barkasayal Area, he was implicated in a criminal case on charges of demand and acceptance of illegal gratification of Rs.500/- from one Badri Turi, a Piece Rated Worker. On 07.04.2003, being R.C. Case No.9(A)/2003(R) and a departmental proceeding was also initiated against him vide Memorandum of Charge as contained in Memo No. PM(A)OE/Disc.Case/JKS/03/21067-74 dated 27.12.2004. Dr. Jitendra Kumar Sharma superannuated from his services on 31.07.2013, however, on account of pendency of the departmental proceeding involving major penalty, the gratuity amounting to Rs.10.00 Lakh was deposed with the Assistant Labour Commissioner (Central), Hazaribagh vide Demand Draft bearing No.770389 dated 29.08.2013 vide letter No.31.08.2013 (Annexure 1). 3. The respondent-writ petitioner applied for release of the said amount before the Controlling Authority under the Payment of Gratuity Act -Cum- Assistant Labour Commissioner (Central), Hazaribagh being P.G. Application No. 36(10)/2014, wherein the said application was allowed vide order dated 13.02.2015 and the respondent was advised to apply in the prescribed format for withdrawal of the said amount, but no interest was awarded as the amount was already deposited with the Controlling Authority. 4. The Management preferred an appeal before the Appellate Authority being PGA (25)/2015 and the Appellate Authority allowed the said appeal vide order dated 31.12.2015 (Annexure 3). 5. Being aggrieved by the said order, the respondent-writ petitioner moved this Court in W.P. (L) No. 1063 of 2016 and this Court by an order dated 18.08.2022 directed CCL to disburse the amount of gratuity along with interest if not already paid, within 60 days. It appeared from the records that apparently while passing the order dated 18.08.2022, this Court lost sight of the fact that the gratuity was already deposited far back on 31.08.2013 with the Controlling Authority under the Payment of Gratuity Act, 1972 i.e. the Assistant Labour Commissioner (Central), Hazaribagh and as such, there was no occasion to direct payment of the said gratuity amount along with interest. 6. In such circumstances, the CCL filed the instant application seeking clarification of the said order to that extent.
6. In such circumstances, the CCL filed the instant application seeking clarification of the said order to that extent. The respondent had appeared and filed a detailed counter affidavit wherein the respondents admitted that he has already withdrawn the gratuity form the Controlling Authority Cum Assistant Labour Commissioner (Central), Hazaribagh on 20.09.2022 itself, however, claimed that he would still be entitled for interest. 7. Law in this regard is well settled. Admittedly, gratuity was not released in favour of the writ petitioner because of pendency of a criminal case involving moral turpitude and departmental proceeding for a major misconduct. 8. Section 4(6) of the Payment of Gratuity Act, 1972 reads as under:- “Notwithstanding anything contained in sub-section (i): (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused; (b) the gratuity payable to an employee may be wholly or partially forfeited- (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part; or (ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.” 9. Section 7 of the Payment of Gratuity Act, 1972 provides as under:- “7. Determination of the amount of Gratuity: (1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. (2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (i) has 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. (3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. (3-A) 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 shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, 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: Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the Controlling Authority for the delayed payment on this ground]. (4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the Controlling Authority such amount as he admits to be payable by him as gratuity. (b) Where there is a dispute with regard to any matter or matters specified in Clause (a), the employer or employee or any other person raising the dispute may make an application to the Controlling Authority for deciding the dispute. (c) The Controlling Authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and, if, as a result of such inquiry any amount is found to be payable to the employee, the Controlling Authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer. (d) The Controlling Authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.
(d) The Controlling Authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto. (e) As soon as may be after a deposit is made under Clause (a), the Controlling Authority shall pay the amount of the deposit- (i) to the applicant where he is the employee; or (ii) where the applicant is the employee, to the 1[nominee or, as the case may be, the guardian of such nominee or] heir of the employee if the Controlling Authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity. (5) For the purpose of conducting an inquiry under Sub-Section (4), the controlling authority shall have the same powers as are vested in a Court, while trying a suit, under the Code of Civil Procedure,1908 (5 of 1908), in respect of the following matters namely:- (a) enforcing the attendance of any person or examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; (d) issuing commissions for the examination of witnesses. (6) Any inquiry under this Section shall be a judicial proceeding within the meaning of Sections 193 and 228, and for the purpose of Section 196, of the Indian Penal Code, 1860 (45 of 1860). (7) Any person aggrieved by an order under sub-section (4), may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf: Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under subsection (4), or deposits with the appellate authority such amount.
(8) The appropriate Government or the appellate authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority. 10. Apparently, the amount payable towards gratuity was already deposited before the Controlling Authority under the Payment of Gratuity Act, 1972 immediately after superannuation of the respondent-writ petitioner on 31.08.2013 itself. 11. The Hon’ble Supreme Court in the case of Charan Singh v. Birla Textiles, (1988) 4 SCC 212 has held as under:- “3. We have heard learned counsel for both parties in regard to payability of interest. Relevant portions of Sections 7 and 8 of the Act, as they stood in 1983, when the cause of action arose, may now be extracted: “7. Determination of the amount of gratuity.— (1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity. (2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has 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. (3) 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. (4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity. Explanation.—Where there is a dispute with regard to any matter specified in this clause the employee may make an application to the controlling authority for taking such action as is specified in clause (b). 8.
Explanation.—Where there is a dispute with regard to any matter specified in this clause the employee may make an application to the controlling authority for taking such action as is specified in clause (b). 8. Recovery of gratuity.—If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto.” The provisions of Section 7 have been amended twice, first by Act 25 of 1984 with effect from July 1, 1984 and again by Act 22 of 1987. The 1987 Amendment has substituted sub-section (3) and added sub-section (3-A) in Section 7 to the following effect: “(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. (3-A) 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 shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, 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..........” The controlling authority had directed interest as provided in Section 8 to be paid which the appellate authority had vacated. From the facts of the case, it is clear that the stage for action under Section 8 had not been reached inasmuch as the appellant had not applied for recovery of gratuity to the Collector. It is only when the Collector issues a certificate for recovery of the dues as a public demand that interest as provided under Section 8 is admissible. 4. 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.
It is only when the Collector issues a certificate for recovery of the dues as a public demand that interest as provided under Section 8 is admissible. 4. 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 (3-A) in Section 7. That provision has prospective application. 5. Learned counsel for the appellant tried to rely upon the provisions of the Interest Act and the provisions of Section 34 of the Code of Civil Procedure. We do not find any support for the appellant's stand from either of the provisions. Admittedly, no notice was given demanding interest and the controlling authority is not a court for falling back on Section 34 of the Code. We are satisfied in the facts of the case that the appellant was not entitled to interest on the amount of gratuity found due to him. Since that was the only matter agitated in the appeal with the conclusion indicated, this appeal has to fail and is dismissed.” 12. In the instant case, as the gratuity was already deposited; the operative portion of the order dated 18.08.2022 is required to be modified to the extent that the respondent be permitted to withdraw the amount of gratuity lying deposited with the Controlling Authority, Payment of Gratuity Act, 1972 Cum Assistant Labour Commissioner (Central), Hazaribagh, if not already withdrawn. 13. Consequently, the instant C.M.P. No. 737 of 2022 stands disposed of. 14. So far as the Contempt application being Cont. Case (Civil) No. 28 of 2023 is concerned, same has been filed alleging non-compliance of the order dated 18.08.2022 passed in W.P. (L) No. 1063 of 2016. 15. As it is an admitted fact that the amount of gratuity payable to the petitioner in the Contempt application was already deposited with the Assistant Labour Commissioner (Central), Hazaribagh far back on 31.08.2013 itself and the said amount was already withdrawn by the present petitioner on 18.08.2022, no case of contempt under any stretch of imagination can be said to be made out and accordingly, the Contempt application is liable to be dropped. Pending I.A.s, if any, also stands closed.