Discretionary Interest Rates for Gratuity Paid in Foreign Currency Are Not Subject to Revaluation Under Supervisory Jurisdiction.

The Petitioner, a retired employee, sought terminal gratuity with interest from the Union of India (UOI) following her retirement on October 31, 2000.

The Tribunal, via judgment dated February 27, 2024, awarded her terminal gratuity (US$ 23,879.94) with 1.5% simple interest per annum from November 1, 2000, to August 1, 2019.

The Petitioner filed the present writ seeking an enhancement of the interest rate to 12% p.a. and extension of the interest period until the actual date of payment.

1. Whether the Tribunal was justified in granting a 1.5% p.a. rate of interest on the accrued gratuity payment given that the payment was in US Dollars.

2. Whether the Tribunal was justified in restricting the interest period to August 1, 2019 (the date the UOI first offered the amount), rather than the date of actual payment.

Section 7(3A) of the Payment of Gratuity Act, 1972, which mandates the payment of simple interest on delayed gratuity unless the delay is attributable to the employee.

Gratuity is an "earned right" and not a bounty, as established in S.K. Dua v. State of Haryana and State of Kerala v. M. Padmanabhan Nair.

Principle that a High Court exercising supervisory jurisdiction under Articles 226/227 should not interfere with a Tribunal's discretionary choice of interest rates unless there is perversity or patent illegality, as followed in Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar and Municipal Corporation of Delhi v. Bijender Singh.

The Court evaluated the Tribunal’s reasoning for the 1.5% interest rate, noting that the Tribunal accounted for "contributory negligence" by both parties and the specific currency of payment.

The Court observed that because the gratuity was payable in US Dollars—a currency that had significantly appreciated against the Indian Rupee over 25 years—the Tribunal's decision to award a lower interest rate compared to standard Indian rates was a reasoned exercise of discretion.

Regarding the duration, the Court found the Tribunal’s decision to stop interest on August 1, 2019, reasonable, as that was the date the UOI offered the payment and the Petitioner declined to accept it due to the absence of interest.

The Court emphasized that in supervisory jurisdiction, it cannot substitute its own view for the Tribunal's balanced "equities" simply because another view is possible.

The Delhi High Court dismissed the writ petition, upholding the Tribunal's order.