Case Note & Summary
The dispute arose from the appellant's claim for gratuity after resigning from the respondent firm, where he had been employed since April 1944. The employer failed to determine the gratuity amount, prompting the appellant to apply for payment. The statutory controlling authority determined the gratuity at Rs. 16,380 and directed the employer to pay it along with compound interest at 9%. However, the appellate authority confirmed the gratuity amount but set aside the interest order. The appellant contended that he was entitled to interest under the Interest Act and Section 34 of the Code of Civil Procedure. The Supreme Court analyzed the provisions of the Payment of Gratuity Act, particularly Sections 7 and 8, and concluded that interest on gratuity is only payable when the Collector issues a recovery certificate. Since the appellant had not approached the Collector for recovery, the court held that he was not entitled to interest. The appeal was dismissed without costs.
Headnote
A) Payment of Gratuity - Interest on Gratuity - Conditions for Admissibility - Payment of Gratuity Act, 1972, Sections 7, 8 - The court held that interest on gratuity is only admissible when the Collector issues a certificate for recovery of dues as a public demand. In this case, the appellant had not applied for recovery to the Collector, thus interest was not payable (Paras 745-746).
Issue of Consideration
Whether the appellant was entitled to interest on the gratuity due under the Payment of Gratuity Act, 1972.
Final Decision
The Supreme Court dismissed the appeal, holding that the appellant was not entitled to interest on the gratuity amount as the necessary conditions for its recovery had not been met.
Law Points
- Payment of Gratuity
- Interest on Gratuity
- Recovery of Gratuity
- Statutory Authority
- Code of Civil Procedure
