Q:I was an officer in a public sector enterprise and took voluntary retirement in 1996. But, my dues weren’t cleared. I filed a case against my employer in 1998 and after a protracted legal battle, the Calcutta High Court passed an order in August 2006 directing my employer to pay my dues and to pay the interest on the gratuity. When my advocate demanded compliance of the same, the firm’s advocate stated that they would pay the interest only if I gave an undertaking that I was receiving the money as final settlement. The company didn’t give the break up of interest and principal. Despite repeated requests, the company has not paid my dues. I had also filed a civil suit (pending) in the Durgapur District Court. I am afraid that an action of contempt of court will drag the issue for another five or six years. Should I take the interest amount with the undertaking or proceed in court?
Name withheld
A: Gratuity is payable to eligible employees upon their superannuation or retirement as a lump sum payment. It is, as it were, a kind of reward for meritorious and unblemished service. Under the Payment of Gratuity Act 1972, the employer is required to determine the amount of gratuity (in accordance with the statutory formula in the Act) and pay the same within 30 days of the date of its accrual. The Act provides for payment of simple interest at a notified rate in case payment is delayed. The statute also provides for a mechanism for resolving disputes regarding the payment of gratuity or interest through a competent authority, but since you have obtained an order of the high court in this regard, you will have to approach the high court to vent your grievances. You haven’t mentioned whether the court specified the rate of interest or the amount of gratuity payable to you. It is not clear whether the company is offering you less money than what is due to you or not. If the amount is correct according to you, you should accept the payment by giving the undertaking. Such undertaking would then merely be a procedural formality. But you may have to consider the possible effect such an undertaking might have on the pending civil case.
Of course, if the amount offered is less, you have no option but to bring the facts to the attention of the court so that its order can be enforced. It would then appear that the company is seeking to impose conditions extraneous to those in the court order and this would amount to willful disobedience. Though “contempt” actions are concerned with punishing the contemnor rather than executing an order, it is usual practice to execute orders passed by the court in its writ jurisdiction by filing contempt proceedings. Usually such proceedings are heard expeditiously.
Thus, in either case, the most practical thing for you to do is to file proceedings in contempt before the high court stating all the facts. You may ask your advocate to pray for interim relief on the first date of hearing so that you are allowed to accept the money already offered by the company without prejudice to the outcome of the contempt proceedings or to the pending proceedings before the district court. If this is duly recorded in the order of the court itself, you will neither be “out of pocket” for a long time, nor will the fate of your pending suit be jeopardised.
It is pertinent to note that the Supreme Court has repeatedly made it clear that gratuity (like pension) is not a bounty distributed at the sweet will of the employer but is now statutorily payable. Thus, in cases where there is culpable delay on the part of the employer to pay this sum, the courts can even order the employer to pay interest at the current market rate of interest till actual payment is made.
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