Retired Markfed Employee Says He Won’t Pursue Further Gratuity Claim; P&H HC Sets Aside ₹72,050 Order Over Interest-Calculation Errors

In brief

The question

1. Whether the statutory authorities’ determination of the further gratuity and interest liability of Rs. 72,050 could be sustained despite errors in recording and accounting for payments and their dates

The court held

The Court held that the orders of the Controlling and Appellate Authorities could not be sustained because the interest computation rested on material errors and the appellate order failed to address them

It also directed

It set aside both orders and directed the Controlling Authority to release the Rs. 72,050 deposited by MARKFED to MARKFED within four weeks of receiving a certified copy of the judgment. The writ petition was allowed accordingly.

01Facts

Respondent No. 4 retired from MARKFED on 31 December 2011.

¶ 2

After successive pay-related revisions, MARKFED paid him gratuity in several instalments, including Rs. 6,97,772, Rs. 51,014, Rs. 22,397 and, later, Rs. 1,32,768 with Rs. 66,716 as interest

¶ 2–4, 17–18

Respondent No. 4 sought further gratuity and interest before the Controlling Authority, which calculated a further liability of Rs. 72,050; the Appellate Authority affirmed that determination

¶ 4–6

MARKFED challenged both orders, alleging that the authorities had used incorrect payment dates, omitted the Rs. 22,397 payment and miscalculated interest

¶ 8–11

During the proceedings, respondent No. 4 submitted a written request accepting the amount paid and asking that MARKFED’s deposited demand draft be returned

¶ 22–23

02Issues

i.1. Whether the statutory authorities’ determination of the further gratuity and interest liability of Rs. 72,050 could be sustained despite errors in recording and accounting for payments and their dates

¶ 14

ii.2. Whether respondent No. 4’s subsequent written request accepting the payment and stating that he would not pursue the matter affected the relief to be granted

¶ 14, 22–24

03Law Applied

Section 7(3A) of the Payment of Gratuity Act, 1972 requires simple interest, at the rate notified by the Central Government and subject to the statutory exception, where gratuity is not paid within the prescribed period; interest must be calculated by reference to the amount unpaid and the period for which it remained unpaid

¶ 15

Under Section 7(4), the Controlling Authority must determine the dispute after inquiry and give the parties a reasonable opportunity to be heard

¶ 15

A writ of certiorari may issue for an error apparent on the face of the record, excess of jurisdiction or breach of natural justice, as recognised in Parry and Co. Ltd. v. P.C. Pal, Judge, Second Industrial Tribunal, Calcutta, AIR 1970 SC 1334

¶ 16

In exercising jurisdiction under Articles 226 and 227, the High Court does not sit as an appellate court to reappreciate evidence; interference is warranted for an apparent error, jurisdictional infirmity or violation of natural justice

¶ 25

Provisions in the judgment · 1

PAYMENT OF GRATUITY ACT, 1972 Section 7

04Reasoning

The Controlling Authority’s own order recorded the payments of Rs. 51,014 in April 2012 and Rs. 22,397 in February 2015, but its calculation treated the former as paid in July 2017 and omitted the latter

¶ 17

It also calculated interest on amounts after parts of the gratuity had been paid, and included a period after the final payment in its interest calculation

¶ 18–19

Because interest liability depends on the amount actually outstanding over time, those errors materially affected the result; the Appellate Authority repeated the same errors without addressing MARKFED’s specific grounds

¶ 20–21

The Court also considered respondent No. 4’s written acceptance and request not to pursue further claims, concluding that, in the circumstances, another round of adjudication for recalculation would serve no useful purpose

¶ 22–24