Gratuity not a bounty, to be withheld at sweet will or whim of employer: Karnataka HC

Read Time: 07 minutes

The Karnataka High Court has said gratuity is not a bounty which can be withheld at the sweet will or whim of the employer as it pulled up the state government for its callousness by making a retired employee suffer for close to two decades without the retirement benefit.

"The State can as well ignore the plea of a citizen for payment of gratuity, as it has nothing to lose, but if an employee whose retirement is dependent on receipt of terminal benefits, gratuity, of which is one, is delayed or denied, he would be condemned to penury, and be driven to impecuniosities, having no money to fall back upon, at the advancing old age. This act of the State is sans countenance," a single judge bench of Justice M Nagaprasanna said.

The court directed the state government to pay gratuity sum of Rs 4,09,550 from September 30, 2007 as per the order by the Controlling Authority, which has final as respondent authorities did not challenge it. The bench also said the petitioner is entitled to interest at the rate of 10% per annum or at higher rates as notified by the Central Government from time to time.

"In the event, the petitioner would not be paid gratuity within 30 days from the date of receipt of a copy of the order, the petitioner would become entitled to penalty apart from interest at the rate of 10% per annum at the rate of Rs 1,000 for every day, day on day; month on month, till the gratuity amount reaches the petitioner," the bench said.

The petitioner was appointed as a First Division Clerk at the Postpartum Centre attached to the Jawarharlal Nehru Medical College, Belgaum on December 01, 1973. After 34 years of service, he got superannuated in 2007.

He sought gratuity in terms of the Payment of Gratuity Act, 1972 as determined by the Controlling Authority.

The court was told his gratuity was not paid in view of a pending dispute on regularisation of his services as he was working at the Postpartum Centre created under the Centrally sponsored scheme of the Family Welfare Department of the year 1969. 

The bench, however, said upon retirement, the petitioner ought to have been paid gratuity, within 30 days which was not done. 

"In the case at hand, 11 years have passed by, pursuant to the directions issued by the Controlling Authority for payment of gratuity and 16 years have passed by with the petitioner attaining the age of superannuation. Therefore, it is not delay alone, but culpable delay on the part of the respondent in not paying the amount of gratuity that the petitioner was at all time entitled to," the bench said.

The court said the State treating its employee of not paying gratuity, a terminal benefit for the last 16 years depicted apathy towards the citizens, particularly of the retired employees, whose voices have become feeble by progression of age.
"Thus, callousness is displayed, not for a year or two but close to two decades by denying the gratuity to an employee who was always entitled to it, as a retirement benefit," the bench said.