Case Note & Summary
The case involved a writ petition under Article 226 of the Constitution filed by K. Pandi, a former salesman of the Nattarasankottai Primary Agricultural Co-operative Bank, who retired on 31 May 2022 after serving from 1 December 1986. Upon retirement, the society computed his total gratuity and leave encashment at Rs.6,09,202 and passed a resolution on 28 March 2023 acknowledging no dues. However, only Rs.70,000 was paid in installments between September 2023 and June 2024, leaving a balance of Rs.5,34,202. The petitioner submitted a representation on 29 September 2024 seeking payment of the remaining amount along with General Provident Fund dues, but no action was taken. He therefore approached the High Court for a writ of mandamus directing the respondents to disburse his retirement benefits. The respondents, represented by the Additional Government Pleader, admitted the liability but pleaded financial crisis of the society as the reason for delay. The Court noted that the petitioner’s entitlement was undisputed and that the employer’s financial difficulties could not defeat the right to statutory payments. Relying on settled principles that gratuity and leave encashment are not bounties but legally enforceable dues, the Court allowed the petition and directed the fourth respondent to pay the balance sum of Rs.5,34,202 together with interest at 6% per annum from the date of retirement until actual payment, within eight weeks. The petitioner was also asked to serve a copy of the order on the higher officials for monitoring compliance.
Headnote
A) Service Law - Retirement Benefits - Entitlement to Gratuity and Leave Encashment - Constitution of India, Article 226 - The petitioner, a retired salesman of a primary agricultural co-operative bank, claimed balance gratuity and leave encashment after the employer admitted liability and had made partial payment. The respondents cited financial crisis as reason for non-payment. The Court held that financial constraints do not justify withholding of statutory retirement benefits and issued a writ of mandamus directing payment of Rs.5,34,202/- with 6% interest per annum from the date of retirement, within eight weeks. (Paras 2-5)
Issue of Consideration
Whether a writ of mandamus can be issued directing a co-operative society to pay admitted retirement benefits despite its financial constraints.
Final Decision
The writ petition is allowed. The fourth respondent is directed to pay the balance amount of Rs.5,34,202 together with interest at 6% per annum from the date of retirement till the date of payment, within eight weeks from the date of receipt of a copy of the order. The petitioner is also directed to submit a copy of the order to respondents 1 to 3 for necessary action in case of non-compliance.
Law Points
- Employer cannot withhold gratuity and leave encashment on ground of financial crisis
- retirement benefits must be paid upon superannuation
- writ of mandamus maintainable to enforce payment of admitted dues
