Calcutta High Court (Appellete Side)
Joydeb Dutta vs Food Corporation Of India & Ors on 23 June, 2025
2025:CHC-AS:1093
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
APPELLATE SIDE
Present:
The Hon'ble Justice Shampa Dutt (Paul)
WPA 7603 of 2025
Joydeb Dutta
Vs
Food Corporation of India & Ors.
For the Petitioner : Mr. Samiran Mandal,
Mr. Abhinaba Dan.
For the Respondent/FCI : Mr. Kamal Kumar Chattopadhyay,
Ms. Rimi Chatterjee,
Mr. Tanjir Ali.
Hearing concluded on : 11.06.2025
Judgment on : 23.06.2025
Shampa Dutt (Paul), J.:
1. The writ application has been preferred praying for direction upon the
respondents to release interest @ 10% per annum for delayed payment
of the gratuity amount from the date of retirement of the petitioner till
the date of actual payment of gratuity amount made by the respondent
i.e. on and from 29.12.2018 to 04.10.2023.
2. The petitioner’s case is that he was appointed as a Causal Labour
through a Contractor in Food Corporation of India, Food Storage Depot,
Bikna, District-Bankura and was serving the Food Corporation of India
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(hereinafter referred to as FCI) since 1989 onwards and retired from
service on attaining the age of 60 years on 28.12.2018.
3. The petitioner along with 58 others moved a writ petition (W.P. No.
1491(W) of 1997) praying for benefits and status of pay as a class IV
employee of the FCI wherein the Court on 23.06.1998 directed the Food
Corporation of India authorities including the then District Magistrate,
Bankura to pay wages to the writ petitioners including increments and
other allowances at per with the wages as of the Class-IV staff of the
Food Corporation of India. Two appeals were preferred, one by the FCI
and the other by the petitioners in the writ petition against the said
order, wherein the division bench upheld the order of the single bench.
4. FCI went up to the Supreme Court, where the Civil Appeal being No.
6064/6065 of 1998 was dismissed with cost on 28th September, 2000.
5. A contempt proceeding was then initiated for non compliance of the
order. By virtue of an order in the contempt proceeding, the petitioner
has been receiving the wages as received by the Class-IV employees of
FCI in scale-II.
6. The petitioner retired on superannuation on 28.12.2018 and was paid
provident fund dues but not the gratuity to which he claims he was
entitled.
7. The controlling authority vide order dated 19.01.2022 directed payment
of gratuity to the tune of Rs. 8,44,494/- in favour of the petitioner.
8. An appeal was preferred by the respondent/FCI which was dismissed
by the appellate authority on 27.12.2022 affirming the order passed by
the controlling authority.
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9. FCI then preferred a writ against the said order, which was dismissed
on 03.07.2023.
10. Gratuity amount was then deposited in the SBI account of the
petitioner on 04.10.2023 but without interest.
11. The controlling authority’s finding in its order dated 19.01.2022
as to interest is as follows:-
“8. In the light of the discussions supra, I find that the
Applicant is entitled for payment of gratuity and the
Employer has failed to make the payment as per the
provisions of the Payment of Gratuity Act, 1972 and
Rules made thereunder. Also, the Employer has not
deposited the gratuity amount with the Controlling
Authority. As regards interest on gratuity, no
specific prayer has been made by the Applicant
in this regard and also considering the facts of
the present case, it would be appropriate not to
pass any order imposing interest on the
Respondent Corporation for delay in payment.”
12. The appellate authority vide order dated 27th December, 2022 held
as follows:-
“It is admitted fact that the worker/respondent initially
served as contract labour through contractor and was
not given appointment order by the respondent
corporation, however, the appellant corporation has
paid wages/salary to the workman directly from 1989
as per direction of Hon’ble Supreme Court of India
dated 14.01.2010 in the status of Cat. IV(scale-II). It is
also admitted fact appellant corporation has remitted
provident fund contribution in respect of the respondent
worker to EPFO and the corporation directly was
extracting work from the respondent and was also
paid directly which implies that employee-employer
relation actually existed.
Besides, Payment of Gratuity Act, 1972 has
overriding effect even on the Regulations framed by
Food Corporation of India. Section 14 of the Act reads
as under:
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“The provisions of this Act or any rule made
thereunder shall have effect notwithstanding anything
inconsistent therewith contained in any enactment
other than this Act or in any instrument or contract
having effect by virtue of any enactment other than this
Act”.
On the basis of above facts and submission of
the parties and analysis, I do not find any merit to
interfere with the findings and decision of the
Controlling Authority who has delivered this decision
after keeping in view the documentary and oral
evidences presented before him.”
13. The High Court in WPA 6387 of 2023 vide a judgment dated
03.07.2023 held:-
“22. Admittedly the petitioner had paid wages directly
to respondent no. 4, for having employed him in the
petitioner’s establishment. Thus, payment of gratuity is
a natural consequence of the order dated 14th January
2010. Such a right to receive gratuity cannot be
interfered with in absence of a statutory prohibition. As
such the orders passed by the Controlling Authority
and the Appellate Authority do not appear to be
perverse or without jurisdiction. No case for
interference has been made out.
23. The writ application fails. The Controlling Authority
is directed to take immediate steps for disbursal of
gratuity in favour of the respondent no.4.”
14. Section 4 of the Payment of Gratuity Act lays down:-
“Section: 4 Payment of gratuity.- (1) Gratuity shall
be payable to an employee on the termination of his
employment after he has rendered continuous service
for not less than five years, –
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or
disease:
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Provided that the completion of continuous service of
five years shall not be necessary where the
termination of the employment of any employee is due
to death or disablement….”
15. The Controlling Authority decides the issue of gratuity under
Section 7(4) of the Act and the interest on gratuity is
decided/calculated as per Section 7(3-A) of the Act.
16. Section 7(3A) and Section 7(4) of the Act, as laid down:-
“Section 7(3A) If the amount of gratuity payable under sub-section
(3) is not paid by the employer within the period
specified in sub-section (3), the employer shall pay,
from the date on which the gratuity becomes payable
to the date on which it is paid, simple interest at
such rate, not exceeding the rate notified by the
Central Government from time to time for repayment of
long-term deposits, as that Government may, by
notification specify:
Provided that no such interest shall be payable if the
delay in the payment is due to the fault of the
employee and the employer has obtained permission in
writing from the controlling authority for the delayed
payment on this ground.
Section 7(4)(a)If there is any dispute as to the amount of gratuity
payable to an employee under this Act or as to the
admissibility of any claim of, or in relation to, an
employee for payment of gratuity, or as to the person
entitled to receive the gratuity, the employer shall
deposit with the controlling authority such amount as
he admits to be payable by him as gratuity.
Explanation.- [* * *]
[(b) Where there is a dispute with regard to any matter
or matters specified in clause (a), the employer or
employee or any other person raising the dispute may
make an application to the controlling authority for
deciding the dispute.]
[(c) The controlling authority shall, after due
inquiry and after giving the parties to the dispute
a reasonable opportunity of being heard,
determine the matter or matters in dispute and
if, as a result of such inquiry any amount is
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found to be payable to the employee, the
controlling authority shall direct the employer to
pay such amount or, as the case may be, such
amount as reduced by the amount already
deposited by the employer.]
[(d) The controlling authority shall pay the amount
deposited, including the excess amount, if any,
deposited by the employer, to the person entitled
thereto.
[(e)] As soon as may be after a deposit is made under
clause (a), the controlling authority shall pay the
amount of the deposit-
(i)to the applicant where he is the employee; or
(ii)where the applicant is not the employee, to the
[nominee or, as the case may be, the guardian of such
nominee or] heir of the employee if the controlling
authority is satisfied that there is no dispute as to the
right of the applicant to receive the amount of gratuity.”
17. Thus in this case the Controlling Authority was wrong in not granting
interest as the said provision is very clear in respect of payment of
interest on gratuity. The question of praying for the same does not arise
as the petitioner is entitled to it under the law.
18. The gratuity payable to the employee is the duty of the employer under
Section 4 and sub Section (2) of Section 7 of the Payment of Gratuity
Act.
19. In this case the petitioner was granted all benefits including retiral
benefits (Para 5(e) of the order dated 14.01.2020 passed in Civil Appeal
9472-9473 of 2003 by the Supreme Court).
20. The petitioner and other contract labours were granted wages at par
with of class-IV employee of FCI, since 1998 (as noted by the High
Court in CA 1632 of 1998 in W.P. 1491 of 1997 on 23.06.1998).
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21. In spite of such directions, affirmed up to the Supreme Court, the
FCI has gone into prolonged litigation leading to delay in payment
of gratuity.
22. Thus in view of Section 7(3A) of the payment of gratuity act, the
decision of the controlling authority in the order dated 19.01.2022
regarding the interest on gratuity being not in accordance with law is
liable to be set aside as the said provision does not provide for any
discretion regarding grant of interest.
23. The petitioner has relied upon the judgment of Calcutta High Court
single bench in Atul Chandra Mahata vs State of West Bengal &
Ors. in WP 10925(W) of 2003 decided on 27.11.2003, wherein the
Court granted interest on the delayed payment of gratuity.
24. The writ petition is thus allowed.
25. The order of the controlling authority to the extent of refusal of
interest is set aside.
26. Order of the Controlling Authority dated 19.01.2022 and the
Appellate Authority dated 27.12.2022 stand modified accordingly.
27. The FCI/Respondent shall pay interest at the statutory rate on and
from 29.12.2018 till 04.10.2023 within 30 days from the date of
communication of this order failing which, the FCI/Respondent shall be
liable to pay further interest on the interest awarded @ 18% per annum
till payment.
28. WPA 7603 of 2025 is disposed of.
29. There will be no order as to costs.
30. All connected applications, if any, stand disposed of.
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31. Interim order, if any, stands vacated.
32. Urgent Photostat certified copy of this Judgment, if applied for, be
supplied to the parties expeditiously after due compliance.
(Shampa Dutt (Paul), J.)