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Madras High Court Directs To Pay Difference of Interest Amount on Belated Payment of Gratuity and Earned Leave, Otherwise Can Be Discriminatory to Petitioner

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Case: N.S. Anbalagan v. The Joint Registrar of Co-operative Societies & Others

Facts of the Case

The Petitioner was the employee of the Third Respondent’s Co-operative Bank. The surcharge proceedings were initiated against the Petitioner while he was in service came to be dropped. The Petitioner was also acquitted from the criminal case against him. 

In the meantime, the First respondent, The Joint Registrar of Co-operative Societies, had passed orders on 31.03.2015 in a revision petition. It held that the Petitioner was entitled to be paid with the provident fund and gratuity with a consequential direction to the Third Respondent to disburse the same. 

Arguments before the Court

In the counter affidavit filed by the Third Respondent, it was stated that the terminal benefits of Rs. 18,44,681 was disbursed between 16.06.2015 and 21.07.2015. While calculating the terminal benefits, the interest on the outstanding dues were paid at the rate of 8.5% p.a. for the EPF and gratuity. 

The Petitioner was thus aggrieved against the percentage of interest payable to the petitioner as well as non-payment of salaries when the Petitioner was holding the charge of the Secretary of the third respondent bank.    

The third respondent had submitted that on earlier occasions, the third respondent bank had paid interest on the belated payment of the terminal benefits to an employee of the bank at the rate of 12% p.a.

Court’s Observations

The Court had observed that as far as the salaries concerning the claim for the post of secretary was concerned, it was brought to the notice of the court that the Petitioner was never appointed as Secretary of the Third respondent’s bank. However, he was only holding the post as in-charge. Thus this was undisputed. If the petitioner was not appointed as the Secretary he would not have been justified in claiming the arrears of payment for being the in-charge post of Secretary.

About the rate of interest payable on the belated retirement dues, the court observed that it is fairly contended by the third respondent bank.  It was by submitting a working sheet and the written instructions of the third respondent bank before the court which evidenced that one Mr. R. Murugan was paid interest on the belated payment of gratuity and earned leave at the rate of 12% p.a. 

While the interest paid to the petitioner at the rate of 8.5% could be termed as discriminatory. The petitioner was thus entitled to payment of interest at the rate of 12% p.a. on the belated settlement of the terminal benefits on par with the similarly placed former employee.

Court’s Decision

The Court, referring to the above observations, directed the third respondent to pay the difference of interest amount between 8.5% to 12%. Also, on the belated payment of the gratuity and earned leave from the date on which it was due respectively till the date of actual disbursement. It was directed to be completed within four weeks from the date of receipt of a copy of the order. The writ petition was thus ordered accordingly. 

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