Case Note & Summary
The dispute arose from the appellant's retirement from Punjab National Bank (PNB) and the subsequent withholding of his gratuity and other retirement benefits due to pending criminal proceedings against him. The appellant, who had served the bank since 1958 and retired on 31.10.1996, was accused of conspiracy related to a loan sanctioned to the wife of a government official. After a trial, he was acquitted on 31.10.2009, but his gratuity was withheld until 12.2.2010. The appellant sought interest on the delayed payment, arguing that the withholding was unjustified as he was not at fault. The High Court initially ruled in his favor, awarding interest at 8%, but the PNB appealed, leading to a partial reversal where interest on gratuity was denied. The Supreme Court analyzed the relevant provisions of the Payment of Gratuity Act, 1972, and concluded that the appellant was entitled to interest under Section 7(3A) due to the delay in payment not being attributable to any fault of his. The court emphasized that the Gratuity Act's provisions supersede the bank's regulations, ensuring the employee's right to interest on delayed gratuity payments. The court directed PNB to pay the appellant interest at the rate notified by the Central Government or at 8% as previously awarded, along with costs of Rs.50,000. The case was disposed of in these terms.
Headnote
A) Employment Law - Gratuity Payment - Right to Interest - Payment of Gratuity Act, 1972, Section 7(3A) - The court held that the appellant was entitled to interest on delayed payment of gratuity as the withholding was not due to any fault of his, following his acquittal in criminal proceedings. The provisions of the Gratuity Act take precedence over the bank's regulations, ensuring the employee's right to interest on delayed gratuity payments (Paras 21-22).
Issue of Consideration
Whether the appellant is entitled to interest on delayed payment of gratuity withheld due to pending criminal proceedings.
Final Decision
The Supreme Court directed the PNB to pay interest on the delayed gratuity at the rate notified by the Central Government or at 8%, along with costs of Rs.50,000, within one month of the order.
Law Points
- Gratuity payment
- interest on delayed payment
- employee rights
- criminal proceedings
- regulatory provisions
