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Gratuity payable for all days worked till superannuation: HC
February, 06th 2007

Non-payment of gratuity to a worker for all days worked till date of superannuation was against the provisions of Payment of Gratuity Act, 1972, Madras High Court has ruled.

Directing a Chennai-based company to pay dues to him for nine days in July 1998 also, a single judge had earlier said that the worker's claim for payment of interest on delayed payment could not be accepted as issue had come up before Court for first time.

Appellant P. Selvaraj joined services in Shardlow India Ltd, Chennai, and reached superannuation on July 9, 1998. He was paid gratuity for period ended June 1998. Aggrieved, he filed a writ petition praying for payment of gratuity for period ended July 9.

The company said that since cost of living index figures were not available when gratuity was paid and the worker had accepted payment after signing receipt. Hence his claim for July could not be accepted.

The single judge, who heard petition, accepted the contention of company and said the worker had no justification to claim the amount. Hence, present writ appeal against order of single judge.

The Bench comprising Chief Justice Mr A.P. Shah and Mr Justice K. Chandru said that Gratuity Act was a beneficial piece of legislation and it should receive interpretation consistent with principles of equity and fair play.

Therefore, term `last drawn wage' found in Section 4(2) of Act should receive its full meaning and it could not give any fractured interpretation.

If there was a bona fide delay in payment of gratuity (due to non-availability of cost of living index figures) at best management might not be accused of any deliberated delay.

Even otherwise, Act provided for time limit of 30 days to settle payment to worker.

The order of single judge was erroneous and contrary to provisions of Act, the Bench held. The writ appeal shall stand allowed and order of single judge would stand set aside.

The first respondent (Company) was directed to pay appellant difference in gratuity payable to him within 4 weeks.

Though appellant had claimed interest on delayed payment, since this issue had come up before Court for first time, the Bench said they were not inclined to order any interest on gratuity amount to be paid to him.

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