GUJARAT WATER SUPPLY AND SEWERAGE BOARD vs JAYESHBHAI RATILAL MEHTA
- Court
- Gujarat High Court
C/SCA/14184/2026 JUDGMENT DATED: 27/10/2026
(GJHC240637382026)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 14184 of 2026
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE P. M. RAVAL
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Approved for Reporting Yes No
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GUJARAT WATER SUPPLY AND SEWERAGE BOARD
Versus
JAYESHBHAI RATILAL MEHTA & ORS.
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Appearance:
MR. HARDEEP L MAHIDA(7112) for the Petitioner(s) No. 1
KRISHNAN GHAVARIYA FOR MS ASHLESHA M PATEL(6127) for the
Respondent(s) No. 1
JWALANT VORA AGP for the Respondent(s) No. 2 and 3
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CORAM: HONOURABLE MR.JUSTICE P. M. RAVAL
Date : 27/10/2026
ORAL JUDGMENT
1. Issue Rule . Rule is fixed forthwith. Learned Advocates
waives service of rule for the respective parties. By consent of all
the parties, the matter is taken up for final disposal.
2. By way of the Petition filed under Articles 14,226 and 227 of
the Constitution of India, the Petitioner is challenging the order
dated 20.06.2026 passed in Gratuity Appeal No. 18/2026 passed
by the Appellate Authority – Ahmedabad confirming order dated
23.02.2024 passed in Gratuity Case no. 417/2023 passed by
Controlling Authority – Ahmedabad.
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3. Learned Advocate for the Petitioner would submit as
follows:-
3.1 That the present petitioner board is a statutory body
constituted under the provisions of the Gujarat Water Supply and
Sewerage Board Act, 1979 and is governed by the rules,
regulations and instructions issued by the State Government from
time to time
3.2 Learned Advocate would further submit that respondent No.
1 herein was appointed as an “Executing Engineer” on 8/10/1985
and retired on 30.11.2020 on attaining the age of
superannuation.
3.3 The gratuity the sum of Rs.18,50,000/- was paid on
06.01.2023 and Rs. 1,00,000/- on 13.07.2023. However, there
was some delay and therefore, respondent No. 1 claimed interest
on the delayed payment.
3.4 It is further submitted that the Respondent herein has
retired on 30.11.2020 and had filed application before the
controlling authority on 02.09.2023, hence there was delay on
the part of the respondent in claiming interest on the payment of
the gratuity however, both the controlling authority as well as the
appellate authority have committed serious error in granting
interest for the delayed period attributed to the present
respondent.
3.5 Learned advocate would further submit that both the
authority have not considered the fact that there was huge loss
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to the petitioner board on account of the negligence shown by
the respondent and for that purpose the departmental inquiry
was also pending against the Respondent and as per the civil
services rules, the service of the respondent was put an end by
way of compulsory retirement and as such, when the inquiry was
over, the petitioner board had paid the gratuity amount to the
present workman and as such there is no delay and therefore
ground of interest is not warranted and thus has argued to allow
the present petition.
3.6 Learned Advocate would fairly submit that no specific order
appears to have been passed by the competent authority
directing to withholding the gratuity amount of respondent No. 1
on the basis of the circular issued by the finance department
however, he has prayed that the interest rate of 10% per annum
deserves to be quashed and set aside since it is too excessive.
4. Per contra, appearing for respondent No. 1 would submit
that the respondent was served with the board for almost 35
years and retired after attaining age of superannuation on
30.11.2020 and was legally entitled to receive the gratuity under
the provisions of the Payment of Gratuity Act, 1972. However, the
petitioner having failed to pay the amount to the Respondent No.
1 within the prescribed period were liable to pay interest upon
each and having not paid so have committed breach of the
Payment of Gratuity Act, 1972 and hence had a preferred an
application before the controlling authority for payment of such
interest upon the delayed payment.
4.1 Learned advocate would further submit that both the
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Controlling Authority as well as the Appellate Authority after
having perused the documents on record and having considered
the case put up by the respective parties have ordered to grant
interest on the delayed payment as per the statutory provisions
under the Payment of Gratuity Act, 1972 and rules framed
thereunder and therefore respondent No. 1 is legally entitled to
receive such interest for the delayed payment of gratuity which is
to the tune of Rs. 19,50,000/-. Thus, it is argued that the
authorities having considered relevant factual aspects material
available on record and applicable statutory provisions of law and
no error either on facts or on law have been committed in
ordering the petitioner to pay the interest on the delayed
payment of gratuity and thus argued to reject the present
petition.
5. Heard learned advocate for the respective parties. Having
gone through the material available on record. The principal
questions which derives for consideration is to whether the
authorities below have committed any error in granting 10%
interest on the delayed payment of gratuity to the respondent
No. 1 herein.
5.1 It is an admitted fact that sum of Rs. 18,50,000/- towards
gratuity was paid on the gratuity the sum of Rs.18,50,000/- was
paid on 06.01.2023 and Rs. 1,00,000/- on 13/7/2023.
5.2 It also appears from the record that respondent no. 1 was
facing departmental inquiry and pursuant to which sum of Rs.
50,000/- was to be deducted from gratuity and such order came
th
to be passed 29 of August 2022 and that there is no pension
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payable in the board, there were no chances of recovery of the
said amount from the Respondent and under such circumstances,
the gratuity was paid at belated stage.
5.3 Be that as it may, both the authorities have considered
provisions of Section 4 sub Clause (6) of the Payment of Gratuity
Act 1972.
“(6) Notwithstanding anything contained in sub-section (1),—
(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 5[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 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.”
5.4 However, on reading of the said subsection, it is clear that
gratuity payable to an employee may be wholly or partially
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forfeited if the services of such employee have been terminated
for his misorderly conduct or an act which constitutes an offence
involving moral turpitude is committed by him in course of his
employment.
5.5 From the record of the case, it transpires that respondent
No. 1 has superannuated and is not terminated. What is alledged
is that a departmental inquiry was pending. Be that as it may,
that itself would not give the right to the board to withhold the
gratuity amount which was required to be paid within 1 month of
his superannuation and having found by both the authorities that
such amount was not paid as per the statutory provisions, the
grant of interest is justified and inasmuch as the employer is
required to determine the amount of gratuity payable and
arrange for its payment within the prescribed limit under the Act.
Whereas Section 7(3)(A) further provide for payment of simple
interest where the amount of gratuity is not paid within the
specified period prescribed under section Section 7(3)(A) subject
to certain exceptions stipulated in the said proviso.
5.6 Therefore, the statutory provision cast an obligation upon
the employer to pay the interest on delayed payment of gratuity
unless the condition prescribed thereunder are not satisfied.
Merely because the departmental inquiry was pending, would not
itself be sufficient to absolve the employer from the statutory
obligation to pay interest. More so, when deduction of gratuity is
permitted only when there is termination which is not the case on
hand. However, be that as it may, this finding may not be treated
as having said that the petitioner board is not entitled to recover
the amount from the respondent No. 1.
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5.7 Having said so and having perused the material available
on record and having gone through the impugned order passed
by the Controlling Authority and the Appellate Authority and
grant of interest is not a discretionary power but a statutory
obligation imposed by law upon the authorities and considering
the totality of the facts and circumstances of the case, no
interference is required at the hands of this court and having
failed to demonstrate any sufficient ground for warranting
interference with the rate of interest awarded by the authorities
below and as held by the Hon’ble Supreme court in the case of
Champaran Sugar Company Ltd Versus Joint Labour
Commissioner and Appellate Authority and others in Civil Writ
Jurisdiction Case No. 1090 of 1985, dated 11.11.1986, wherein, it
is held that the employee would be entitled for the interest over
the late payment of gratuity made in favour of the concerned
employees at the rate of 10% Simple Interest, no fault can be
attributed to the respondent No. 1 in as much as the payment of
gratuity the sum of Rs. 18,50,000 was paid on 06.01.2023 and
Rs. 1,00,000/- on 13.07.2023 after deducting Rs. 50,000/- from
the sum of Rs. 20,00,000/- to be placed towards gratuity.
Pursuant to which, present respondent had preferred an
application before the controlling authority on 02.01.2023. thus,
no delay can be attributed to the present respondent No. 1.
6. For the foregoing reasons, the present petition stands
dismissed. The order dated 20.06.2026 passed in Gratuity Appeal
No. 18/2026 passed by the Appellate Authority – Ahmedabad as
well as order dated 23.02.2024 passed in Gratuity Case no.
417/2023 passed by Controlling Authority – Ahmedabad is hereby
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confirmed and does not call for interference.
7. The respondent is at liberty to withdraw the amount of
interest in accordance with law after due verification from the
competent. Rule is discharged.
(P. M. RAVAL, J)
MMP
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