Punjab State Electricity Board vs Manohar Lal Mittal and Others

Paramjeet Singh, J.—The instant petition under Articles 226 /227 of the Constitution of India has been filed against the order dated 10.5.2013 (Annexure P-1) passed by learned Civil Judge (Junior Division), Patiala, whereby the objections dated 19.3.2010 (Annexure P-2) filed in the execution proceedings have been dismissed and for further staying the operation of the impugned order separately passed on the even date on 10.5.2013 in which learned Civil Judge, Patiala, has ordered issuance of warrant of attachment for 4.7.2013 (Annexure P-3) on filing of list of property. Learned counsel for the petitioner contends that gratuity was paid on 10.10.2006. The interest was not calculated. However, subsequently interest was calculated on the amount of gratuity from 1.12.2000 to 10.10.2006 which comes out to Rs. 1,84,597/-. The same was paid to respondent No. 1 vide cheque No. 423427 dated 15.5.2009.

Learned counsel for the petitioner further refers to Sub-Section 3(A) of Section 7 of the Payment of Gratuity Act, 1972 (for short ''the Act'') which reads as under:-

3(A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in subsection (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.

The gratuity was paid on 10.10.2006, thereafter the interest has been calculated upto the date of payment of gratuity and the same has been paid as per the decree.

Learned counsel for respondent No. 1 has filed affidavit dated 22.7.2013 of respondent No. 1 in Court, which is taken on record. The learned counsel for respondent No. 1 vehemently contended that payment of gratuity became due on 1.12.2000 but it was paid on 10.10.2006 but no interest was paid on the same. Learned counsel for the respondent, however, admitted that interest amounting to Rs. 1,84,597/- on the amount of gratuity has been paid on 15.5.2009. As such there is considerable delay of almost three years in payment of interest on the delayed payment of gratuity.

I have considered the rival contentions of the learned counsel for the parties and perused the record.

Admittedly, the gratuity was paid on 10.10.2006 and the interest has been calculated as per the provisions of Sub-Section 3(A) of Section 7 of the Act. Virtually, the respondent is asking for interest on interest, which is not permissible under the provisions of law. As per the provisions of the aforesaid Section, respondent is entitled to only simple interest for the delayed period and the same has been paid.

In view of the above, this Court is of the considered opinion that orders passed by learned trial court are against the provisions of law. Hence, impugned orders dated 10.5.2013 (Annexures P-1 and P-3) passed by learned Civil Judge are set aside and the matter is remanded to the trial court to consider the matter afresh. Disposed of.