Punjab State Co-Operative Supply And Marketing Federation Ltd. (Markfed) vs Appellate Authority Under The Payment Of Gratuity Act, 1972 And Others

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CWP-510 of 2022 (O&M) -
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
(202)
CM-5665-CWP-2022 in/and
CWP No.510 of 2022 (O&M)
Date of decision 11.11.2026
PUNJAB STATE CO-OPERATIVE SUPPLY AND MARKETING
FEDERATION LTD. (MARKFED) ...Petitioner
Versus
APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY
ACT, 1972 AND OTHERS ...Respondents
CORAM: HON’BLE MS. JUSTICE KIRTI SINGH
Present: Ms. Fury Jain, Advocate and
Mr. Sagar Jain, Advocate
for the petitioner.
Mr. Aditya Sharda, Advocate and
Mr. Piyush Khanna, Advocate
for respondents No.1 to 3.
Mr. Shiv Kumar, Advocate
for respondent No.4.

KIRTI SINGH, J. (ORAL)
1. The present writ petition has been filed under Articles 226/227
of the Constitution of India seeking issuance of a writ in the nature of
certiorari for quashing the order dated 12.06.2020 (Annexure P-12) passed
by the Appellate Authority under the Payment of Gratuity Act, 1972 (for
short, ‘the Act of 1972’)-cum-Incharge Deputy Chief Labour Commissioner
(Central), Chandigarh (respondent No.1), as also the order dated 06.05.2018
(Annexure P-9) passed by the Controlling Authority under the Act of 1972-
cum-Assistant Labour Commissioner (Central), Chandigarh (respondent
No.2).
SWARNJIT SINGH
2026.11.13 15:04
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CWP-510 of 2022 (O&M) -
2. Briefly stated, as per the pleaded case, the petitioner is a Co-
operative Society registered under the Punjab Co-operative Societies Act,
1961. Respondent No.4 joined the petitioner as an Assistant Accountant on
10.06.1980 and retired on superannuation on 31.12.2011. All the Assured
Career Progression Schemes (ACP Schemes) had been put on hold with
effect from 27.05.2009 by a communication dated 03.02.2010 of the State
Government. On 20.12.2011, the retirement order of respondent No.4 was
passed and, on the same day, the ACP Schemes were restored with
retrospective effect from 28.05.2009. The petitioner adopted the same vide
endorsement letter dated 23.12.2011.
3. Respondent No.4 was paid gratuity amounting to Rs.6,97,772/-
on 23.01.2012, calculated as per the instructions of the Punjab Government
prevalent at that time. On 09.04.2012, he was paid arrears of gratuity
amounting to Rs.51,014/- on account of the benefit of the ACP Scheme.
Thereafter, the petitioner revised the pay scales of certain categories of
employees in the Accounts Wing with retrospective effect from 01.12.2011
vide order dated 17.11.2014, and a further amount of Rs.22,397/- was paid to
respondent No.4 on 24.02.2015 as arrears of gratuity on account of the said
revision. Thus, a total amount of Rs.7,71,183/- was paid to respondent No.4
as gratuity.
4. On 22.02.2017, respondent No.4 filed a claim application
before the Controlling Authority (respondent No.2) seeking revision of the
gratuity under the Act of 1972. He acknowledged the receipt of
Rs.7,71,183/- and claimed a further sum of Rs.1,32,768/- along with interest
at the rate of 10%. During the pendency of the claim application, the
SWARNJIT SINGH
2026.11.13 15:04
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CWP-510 of 2022 (O&M) -
petitioner paid Rs.1,32,768/- to him on 09.08.2017, along with interest at the
rate of 9% amounting to Rs.66,716/-, i.e. a total sum of Rs.1,99,484/-.
5. The Controlling Authority, vide order dated 06.05.2018
(Annexure P-9), computed the gratuity payable at Rs.9,03,951/-. In the
findings, it recorded that three payments had been made, i.e. Rs.6,97,772/-
on 23.01.2012, Rs.51,014/- on 17.07.2017 and Rs.1,99,484/- on 09.08.2017.
It then calculated simple interest at the rate of 10% per annum on
Rs.2,06,179/- from 23.01.2012 to 17.07.2017 at Rs.1,13,393/- and on
Rs.1,55,165/- from 17.07.2017 to 27.09.2017 at Rs.2,976/-. Holding that the
petitioner was liable to pay Rs.2,71,534/- as against Rs.1,99,484/- already
paid, the Controlling Authority directed the petitioner to pay the balance sum
of Rs.72,050/- to respondent No.4 within thirty days.
6. The petitioner deposited the said amount of Rs.72,050/- with the
Controlling Authority on 17.07.2018 (Annexure P-10) as a pre-condition for
filing an appeal, and preferred an appeal under Section 7(7) of the Act of
1972 (Annexure P-11). The Appellate Authority, vide order dated 12.06.2020
(Annexure P-12), dismissed the appeal. It took the total gratuity payable
along with interest as Rs.10,20,320/- (Rs.9,03,951/- plus Rs.1,13,393/- plus
Rs.2,976/-), noted the gratuity already paid as Rs.9,48,270/- and held that the
balance of Rs.72,050/- was payable. Hence, the present petition.
7. Vide order dated 21.04.2022 passed in CM-5665-CWP-2022,
notice of the application was issued for the date already fixed in the main
petition i.e. 20.07.2022 and it was observed that it would be appreciated in
case status quo in respect of release of the amount in favour of respondent
No.4 is maintained by the authorities concerned till the next date of hearing.
SWARNJIT SINGH
2026.11.13 15:04
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integrity of this document

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CWP-510 of 2022 (O&M) -
8. Learned counsel for the petitioner submits that the impugned
orders suffer from errors apparent on the face of the record. She submits that,
though the particulars of payment recorded on the first page of the order
dated 06.05.2018 itself reflect the payments of Rs.51,014/- in April 2012 and
Rs.22,397/- in February 2015, the date of the second payment has been
wrongly noted as 17.07.2017 in the findings, while the payment of
Rs.22,397/- has been omitted altogether. The interest has consequently been
calculated on an incorrect basis. It is further submitted that the amount of
Rs.1,99,484/-, which comprised Rs.1,32,768/- towards differential gratuity
and Rs.66,716/- towards interest, has not been appropriately accounted for
while determining the outstanding liability. The Appellate Authority, it is
argued, has mechanically carried forward the same incorrect figures and
dates.
9. She further submits that the Controlling Authority failed to take
into consideration the actual dates on which the differential amounts of
gratuity had been paid and proceeded to calculate interest on the entire
outstanding amount for a period during which portions thereof had already
been paid. It is argued that the computation, therefore, does not reflect the
actual amount of gratuity remaining unpaid from time to time. Reliance has
been placed upon Parry and Co. Ltd. Vs. P.C. Pal, Judge, Second
Industrial Tribunal, Calcutta, AIR 1970 SC 1334, for the proposition that a
writ of certiorari is available where the error is apparent on the face of the
record, where the authority has acted in excess of its jurisdiction or where
the principles of natural justice have been violated.
10. The petitioner has also relied upon Kashmir Kaur Vs. State of
Punjab, CWP No.22501 of 2017, decided on 22.10.2019, and Subhash
SWARNJIT SINGH
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CWP-510 of 2022 (O&M) -
Chander Lekhi Vs. State of Punjab, CWP No.23315 of 2010, decided on
23.08.2011, on the point that interest on arrears consequent upon revision of
scales is payable from the date the amount became due, and upon K.G.
Kochar (Retd. GM) Vs. Union of India, CWP No.3644 of 2001, decided on
05.04.2002, by the Delhi High Court, to submit that the time taken to work
out and pay such arrears does not amount to undue delay. Reliance has
further been placed upon City Montessori School Vs. Appellate Authority
and Additional Labour Commissioner, Misc. Single No.4583 of 2017,
decided on 28.03.2018, by the Allahabad High Court, to contend that
proceedings under the Act of 1972 are summary in nature and observance of
the fundamental rule of affording a fair opportunity is essential.
11. It is also submitted that respondent No.4 himself appeared
before the Controlling Authority on 26.04.2021 and gave a written request
(Annexure P-13), stating that the gratuity paid by the petitioner was correctly
calculated and was acceptable to him, and that the Demand Draft deposited
by the petitioner may be returned. The petitioner thereafter requested the
Controlling Authority to release the deposit (Annexure P-14), but vide
communication dated 06.08.2021 (Annexure P-15), the Controlling
Authority declined the request on the ground that the appeal had been
dismissed by the Appellate Authority.
12. Per contra, learned counsel for the respondents opposes the
petition.
13. I have heard learned counsel for the parties and perused the
relevant material on record.
14. The principal questions that arise for consideration are whether
the amount of Rs.72,050/-, directed to be paid by the order dated 06.05.2018
SWARNJIT SINGH
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CWP-510 of 2022 (O&M) -
and affirmed by the order dated 12.06.2020, can be sustained on the basis of
the computation undertaken by the statutory authorities and what is the effect
of the written request made by respondent No.4 on 26.04.2021.
15. The statutory position may be noticed at the outset. Under
Section 7(3A) of the Act of 1972, where the amount of gratuity payable is
not paid within the prescribed period, the employer is liable to pay simple
interest at the rate notified by the Central Government, subject to the
statutory exception contained therein. The liability to pay interest is,
therefore, relatable to the period for which the amount of gratuity remained
unpaid after it became payable. The computation must necessarily take into
account the amount outstanding from time to time and the dates on which
payments were actually made. Further, under Section 7(4) of the Act, the
Controlling Authority is required to determine the dispute after due inquiry
and after affording the parties a reasonable opportunity of being heard.
16. In Parry and Co. Ltd. Vs. P.C. Pal, Judge, Second Industrial
Tribunal, Calcutta, AIR 1970 SC 1334, the Hon'ble Supreme Court
recognised the availability of a writ of certiorari where the error is apparent
on the face of the record, where the authority has acted in excess of its
jurisdiction or where the principles of natural justice have been violated.
17. A perusal of the order dated 06.05.2018 (Annexure P-9) shows
that the Controlling Authority itself recorded, in the particulars of the claim
on the first page, that respondent No.4 had been paid gratuity of
Rs.6,97,772/- in January 2012, Rs.51,014/- in April 2012, Rs.22,397/- in
February 2015 and Rs.1,99,484/- on 09.08.2017. However, in the findings
recorded on the second page, the second payment of Rs.51,014/- has been
noted as having been made on 17.07.2017 and the payment of Rs.22,397/-
SWARNJIT SINGH
2026.11.13 15:04
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CWP-510 of 2022 (O&M) -
has been left out altogether. The computation of interest has been carried
forward on that footing. These are not errors requiring any elaborate
examination of evidence. They are apparent from the order itself and the
payment particulars forming part of the record.
18. The error is material and has a direct bearing on the
determination of the amount payable. The gratuity computed by the
Controlling Authority is Rs.9,03,951/-. After deducting the payment of
Rs.6,97,772/- made on 23.01.2012, the balance of Rs.2,06,179/- remained.
This balance is accounted for by the subsequent payments of Rs.51,014/- on
09.04.2012, Rs.22,397/- on 24.02.2015 and Rs.1,32,768/- on 09.08.2017.
These three amounts together total Rs.2,06,179/-. The last payment was
made along with interest of Rs.66,716/-, making the aggregate payment of
Rs.1,99,484/-. Thus, the principal amount of gratuity, as determined by the
Controlling Authority itself, stood paid by 09.08.2017.
19. The computation of interest in the order dated 06.05.2018
cannot be sustained. The interest of Rs.1,13,393/- has been charged on the
entire balance of Rs.2,06,179/- from 23.01.2012 to 17.07.2017, as if the
whole of it remained unpaid throughout, despite the payments made on
09.04.2012 and 24.02.2015. The second component of interest, amounting to
Rs.2,976/-, has been charged on Rs.1,55,165/- up to 27.09.2017, although the
final payment had already been made on 09.08.2017. The payment of
Rs.22,397/- has not been given credit for at all. Further, the amount of
Rs.1,99,484/-, which includes interest of Rs.66,716/- already paid, has been
dealt with in a manner that does not properly distinguish between the
principal amount of gratuity and the interest paid thereon. An order
SWARNJIT SINGH
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CWP-510 of 2022 (O&M) -
determining the liability on such an erroneous factual and computational
basis cannot be sustained.
20. It is clarified that the mere fact that the amounts of Rs.51,014/-
and Rs.22,397/- had been paid before the filing of the claim application
would not, by itself, exclude the statutory liability to pay interest under
Section 7(3A) of the Act of 1972. The entitlement to interest has to be
determined with reference to the date on which the gratuity became payable
and the date on which the corresponding amount was actually paid, subject
to the statutory conditions. In fact, the petitioner's own order sanctioning the
differential gratuity also records payment of interest from the date of
retirement. The infirmity in the impugned computation, therefore, lies in its
failure to account for the actual payments and their respective dates, and not
merely in the inclusion of the earlier differential amounts while considering
interest.
21. Further, the order dated 12.06.2020 (Annexure P-12) records the
grounds taken by the petitioner against the computation made by the
Controlling Authority. However, the specific error relating to the dates of
payment and omission of the amount of Rs.22,397/- has not been
appropriately addressed. The Appellate Authority has simply held that the
calculation of the Controlling Authority is correct and adopted the same
figures, including the amount of Rs.9,48,270/- as gratuity already paid,
which is the aggregate of Rs.6,97,772/-, Rs.51,014/- and Rs.1,99,484/-. The
payment of Rs.22,397/- has again been left out. The Appellate Authority was
required to examine the specific grounds raised against the computation and
could not have affirmed the impugned order without addressing these
SWARNJIT SINGH
2026.11.13 15:04
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material discrepancies. The appellate order, therefore, also suffers from the
same fundamental infirmity.
22. That apart, the written request dated 26.04.2021 (Annexure P-
13) is also a relevant subsequent development. Respondent No.4, in his own
writing, stated that the gratuity amount paid by Markfed was, to the best of
his understanding, correctly calculated and acceptable to him. He further
stated that any calculation error could have occurred in the offices of the
Controlling Authority and the Appellate Authority, that he would not pursue
any matter on the particular subject and that the Demand Draft deposited by
Markfed may be returned or refunded. The said request was signed by
respondent No.4 and bears the signatures of witnesses who were present at
the time.
23. The aforesaid written request was followed by a communication
dated 26.04.2021 (Annexure P-14) from the petitioner seeking release of the
Demand Draft deposited with the Controlling Authority. However, vide
communication dated 06.08.2021 (Annexure P-15), the Controlling
Authority declined the request solely on the ground that the appeal had been
dismissed by the Appellate Authority. The effect of the subsequent written
request made by respondent No.4, whereby he expressly accepted the
amount paid by the petitioner and stated that he would not pursue the matter
any further, was not examined.
24. In the peculiar facts of the present case, the subsequent written
request assumes significance. Respondent No.4 has expressly accepted the
amount paid by the petitioner and has sought return of the Demand Draft
deposited by it. The request is not merely an acknowledgment of receipt of
payment; it also records his categorical intention not to pursue any further
SWARNJIT SINGH
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claim in respect of the subject matter. In these circumstances, and
particularly when the very computation forming the basis of the impugned
orders suffers from apparent errors, no useful purpose would be served by
directing the parties to undergo another round of adjudication for
recomputation of the amount. The subsequent written request of respondent
No.4 also makes it evident that he does not seek to pursue any further claim
in respect of the gratuity paid by the petitioner.
25. It must also be borne in mind that this Court, while exercising
supervisory jurisdiction under Articles 226/227 of the Constitution of India
over the orders of statutory authorities, does not sit in appeal over findings of
fact, nor does it re-appreciate evidence merely to substitute a different view.
Interference is warranted where the impugned order suffers from an error
apparent on the face of the record, jurisdictional infirmity or violation of the
principles of natural justice. In the present case, the petitioner has
demonstrated material errors in the computation itself, which have been
perpetuated by the Appellate Authority without proper consideration of the
grounds raised in appeal.
26. In view of the aforesaid discussion, this Court is of the
considered view that the orders dated 06.05.2018 (Annexure P-9) and
12.06.2020 (Annexure P-12) cannot be sustained. The impugned orders are
accordingly set aside. Consequently, the amount of Rs.72,050/- deposited by
the petitioner with the Controlling Authority (Annexure P-10) shall be
released to the petitioner by respondent No.2 within a period of four weeks
from the date of receipt of a certified copy of this order.
SWARNJIT SINGH
2026.11.13 15:04
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CWP-510 of 2022 (O&M) -
27. Consequently, the present writ petition is allowed in the
aforesaid terms. The application, CM-5665-CWP-2022, also stands disposed
of.
28. Pending civil miscellaneous application(s), if any, also stand
disposed of.
(KIRTI SINGH)
JUDGE
11.11.2026
SwarnjitS
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
SWARNJIT SINGH
2026.11.13 15:04
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integrity of this document