AVNISH PRAFULCHANDRA VAISHNAV vs STATE OF GUJARAT
- Court
- Gujarat High Court
C/LPA/494/2026 JUDGMENT DATED: 29/07/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 494 of 2026
In
R/SPECIAL CIVIL APPLICATION/6038/2023
With
R/LETTERS PATENT APPEAL NO. 381 of 2026
In
R/SPECIAL CIVIL APPLICATION NO. 6036 of 2023
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AVNISH PRAFULCHANDRA VAISHNAV
Versus
STATE OF GUJARAT & ORS.
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Appearance:
BHAVIN B THAKAR(9371) for the Appellant(s) No. 1
MR ANTRIX KAPADIA, AGP for the Respondent(s) No. 1,2
MR BY MANKAD(440) for the Respondent(s) No. 3
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CORAM: HONOURABLE MR.JUSTICE N.S.SANJAY GOWDA
and
HONOURABLE MR.JUSTICE J. L. ODEDRA
Date : 29/07/2026
COMMON ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE N.S.SANJAY GOWDA)
1. RULE . Learned Assistant Government Pleader for
respondent- State and learned counsel Mr. B.Y. Mankad
for respondent Municipality waive service of Rule.
2. The appellants herein retired in 2018. However, 10%
of their provident fund was withheld on the ground that
they had been paid certain sums in excess of their
entitlement.
3. The respondent municipality had called upon the
Provident Fund authorities to withhold 10% of the
Provident Fund, and accordingly, 10% of the PF that the
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C/LPA/494/2026 JUDGMENT DATED: 29/07/2026
appellants were entitled to was withheld.
4. Ultimately, the appellants approached this Court
contending that the withholding of provident fund by the
authorities was illegal and this Court, by an order dated
15.02.2022 in Special Civil Application No.4726 of 2021,
held that the respondents were not entitled to recover
any amount from the provident fund of the appellants.
Thereafter, this Court observed that it was open for the
appellants to approach the competent authority by way of
a representation in respect to their claim for interest on
this withheld amount.
5. Accordingly, the appellants approached the Regional
Commissioner and the Regional Commissioner, by his
order dated 19.11.2022, rejected this claim for interest
on the ground that there was no provision for payment of
interest.
6. Being aggrieved by the said order, the appellants
approached the learned Single Judge and the learned
Single Judge, by the impugned order, has placed reliance
on the judgment rendered in Letters Patent Appeal
1094/2022, which was a case in relation to the grant of
interest on the dearness allowance that had been
recovered. The Division Bench was dealing with a case
where the recovery of dearness allowance was found to
be bad and the same was ordered to be refunded along
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C/LPA/494/2026 JUDGMENT DATED: 29/07/2026
with 6% interest. In that background, the Division Bench
held that the payment of interest would be not
permissible since in the case of State of Punjab and
others v. Rafiq Masih (White Washer) reported in
(2015)4 SCC 334 , the Supreme Court had not granted
interest on the amounts that had been recovered.
7. In our view, this judgment can have no application
since a claim for refund of dearness allowance recovered
unlawfully cannot be equated with the withholding of a
provident fund, even though the withholding of the
provident fund was on the ground that some excess
amounts had been paid to the employees.
8. In our view, it is a mandate of the law that whenever
a provident fund is wrongfully withheld, the liability to
pay interest would automatically accrue.
9. Since admittedly, the respondents had requested the
authorities not to disburse the provident fund in full and
it was found that this action was improper, it is obvious
that the authorities would be liable to pay interest on this
provident fund that had been withheld.
10. Since the withholding of provident fund was at the
instance of the municipality, they would be liable to pay
interest @ 9% per annum for the period during which this
10% provident fund amount or any other provident fund
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C/LPA/494/2026 JUDGMENT DATED: 29/07/2026
amount was withheld. This amount shall be paid by the
municipality within a period of EIGHT WEEKS.
11. It is, however, open for the municipality to approach
the PF authorities and call upon them to reimburse this
9% interest or at least the statutory rate of interest since
the PF authorities would have utilized the money that
they have withheld for a beneficial purpose and would
have earned interest on the said amount.
12. If such a request is made to the PF authorities, the
same shall be considered and disposed of within a period
of EIGHT WEEKS.
13. With the aforesaid observations and directions, the
present Letters Patent Appeals stand DISPOSED OF. Rule
is made absolute to the aforesaid extent.
Direct Service is permitted.
Sd/-
(N.S.SANJAY GOWDA,J)
Sd/-
(J. L. ODEDRA, J)
OMKAR
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