WP(C) No.5028/2009 Page 1 of 21

IN THE GAUHATI HIGH COURT

(THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

PRINCIPAL SEAT AT GUWAHATI

(EXTRAORDINARY WRIT JURISDICTION)

WP(C) No.5028 of 2009

The Management of Tengapani Tea Estate …. … Petitioner

-Versus-

The Union of India and others. … … Respondents

BEFORE

HON’BLE MR. JUSTICE SUMAN SHYAM

For the petitioner : Mr. S. N. Sarma, Sr. Advocate. Mr. A. Zahid, Advocate.

For the respondents : Ms. A. Choudhury, Advocate.

Date of hearing : 09.03.2017. Date of Judgment : 07.04.2017.

JUDGMENT AND ORDER (CAV)

1. Heard Mr. S. N. Sarma, learned senior counsel assisted by Mr. A.

Zahid, learned counsel appearing on behalf of the writ petitioner. Also

heard Ms. A. Choudhury, learned counsel appearing for the

respondent No.4. None appears for the respondent Nos.1, 2 and 3.

WP(C) No.5028/2009 Page 2 of 21

2. By filing the instant writ petition, a challenge has been made to

the order dated 14.09.2009 (Annexure-7 to the writ petition) passed by

the Controlling Authority under the Payment of Gratuity Act, 1972 and

the Assistant Labour Commissioner (Central), Government of India,

Dibrugarh, inter alia, directing the writ petitioner to pay simple interest

at the rate of 10% per annum to the respondent No.4 on the gratuity

amount for the period from 07.12.2003 to 27.09.2008 i.e. the period

during which the gratuity had been withheld by the petitioner.

3. The facts of the case giving rise to the present writ petition,

briefly stated, are as follows :-

I. The petitioner is the owner of the Tengapani Tea Estate

situated in the district of Tinsukia, Assam and is, inter alia,

engaged in the business of plantation and manufacturing of

tea. For the purpose of running the said Tea Estate, a large

number of workers and employees had been engaged by the

petitioner and the conditions of service of such employees are

governed by the provisions of the Plantation Labour Act, 1951

and the Assam Plantation Labour Rules, 1956.

II. The respondent No.4 was an employee in the petitioner’s

Tea Estate who was due for retirement from service with effect

from 06.10.2003. However, despite attaining the age of

superannuation, respondent No.4 had insisted that he be

allowed to continue in service for further period. According to

WP(C) No.5028/2009 Page 3 of 21

the petitioner, the respondent No.4 was not entitled to any

extension of service and therefore, by issuing several

communications he was asked to collect his retirement dues

including the provident fund dues and gratuity amount.

However, instead of responding to the said letters issued by the

management of the Tea Estate, the respondent No.4 had

approached the Labour Court at Dibrugarh by filing an

application under Section 33-C(2) of the Industrial Disputes Act,

1947 raising a industrial dispute.

III. In the aforesaid application filed by the respondent No 4,

which was registered and numbered as Misc. Case No.1/2007, it

was, inter- alia, prayed that a direction be issued upon the

management of the Tea Estate to release the provident fund

and gratuity amount and also for a direction upon the

management to withdraw the criminal case pending before the

Court of SDJM, Tinsukia.

IV. During the pendency of the said application, an of court

settlement in respect of the dispute involved in Misc. Case

No.1/2007 was arrived at by and between the parties which

had led to both the parties filing a memorandum of settlement

before the Labour Court. In terms of the agreement recorded in

the memorandum of settlement, an award was passed by the

WP(C) No.5028/2009 Page 4 of 21

Labour Court on 16.09.2008 concluding the proceedings

initiated by the respondent No.4 before the Labour Court.

V. In terms of the award dated 16.09.2008, the petitioner had

paid an amount of Rs.92,462/- as gratuity settlement and a

further amount of Rs.3,42,753/- as provident fund settlement by

issuing Cheque bearing No.004288 dated 27.05.2008 and

Cheque No.448448 dated 31.07.2008, respectively. Besides the

above amount, a sum of Rs.2250/- was also paid to the

respondent No.4 as bonus –cum-ex gratia for the year 2003-04.

VI. After receiving the said amount from the management,

the respondent No.4 had approached the Authority under the

Payment of Gratuity Act, 1972 by filing an application dated

28.12.2008 with a prayer for payment of interest on the gratuity

amount of Rs.92,462/- for delay in payment of gratuity for the

period of about five years, i.e. from 06.10.2003 to the date of

application which was calculated as Rs.64,157.34 (approx.).

VII. After hearing the parties, the Controlling Authority had

passed the impugned order dated 14.09.2009 allowing the

prayer made by the respondent No.4 thereby awarding interest

on account of delay in payment of gratuity. Aggrieved by the

order dated 14.09.2009, the petitioner (management) is before

this Court by filing the present writ petition.

WP(C) No.5028/2009 Page 5 of 21

4. By referring to the provisions of Section 2 of the Payment of

Gratuity Act, 1972, Mr. S. N. Sarma, learned senior counsel appearing

for the writ petitioner, submits that the appropriate Government for the

purpose of the instant case would be the State Government of Assam

since the Tea Estate in question is located in the district of Tinsukia,

Assam and the conditions of services of its employees are also

governed by the provisions of the Plantation Labour Act and the

Assam Plantation Labour Rules, 1956. Mr. Sarma submits that the

respondent No.3 is an authority under the Central Government and

has not been appointed as the controlling authority by the State

Government of Assam. In such view of the matter, according to Mr.

Sarma, the respondent No.3 did not have the jurisdiction or

competence to entertain the application filed by the respondent No.4

under the provisions of Section 7 of the Payment of Gratuity Act, 1972.

5. By referring to the contents of the memorandum of settlement

entered into by and between the parties, Mr. Sarma submits that one

of the grievance expressed by the respondent No.4 before the Labour

Court was pertaining to non-payment of gratuity. By entering into the

memorandum of settlement, all the disputes by and between the

parties were finally settled covering all issues raised before the learned

Labour Court whereafter, the respondent No.4 had also accepted the

payments without raising any protest. On the basis of the

WP(C) No.5028/2009 Page 6 of 21

memorandum of settlement, the Labour Court had also passed a

compromise award dated 16.09.2008 finally resolving all the disputed

issues by and between the parties. Therefore, submits Mr. Sarma, in

view of the specific language employed in the memorandum of

settlement notifying that the dispute by and between the parties

stood fully and finally settled, it was not open for the respondent No.4

to once again approach a different authority making a claim for

payment of interest over the gratuity amount. The learned senior

counsel submits that the respondent No.4 having elected to pursue his

remedies before the Labour Court and the matter having been finally

resolved on the basis of a compromise decree, the subsequent claim

of the respondent No 4 for payment of interest would be barred under

the principles of waiver and estoppel.

6. By referring to the materials available on record, Mr. Sarma has

further submitted that the management had issued a number of

communications including the letters dated 31.10.2003, 12.11.2003 and

20.11.2006 asking the respondent No.4 to collect his gratuity but

despite receipt of such letters, the respondent No.4 did not turn up to

collect the gratuity amount. On the contrary, the respondent No.4

had continued to illegally occupy the company’s residential

accommodation even after his date of retirement thereby compelling

the management to file appropriate legal proceedings against him for

vacating the residential quarter. Under the Company Rules, submits

WP(C) No.5028/2009 Page 7 of 21

Mr. Sarma, the Management was entitled to recover rent at penal

rate for the period of illegal occupation of the residential quarter by

the respondent No.4 and the pendency of the litigations between the

parties concerning the aforementioned issues had created obstacles

in disbursement of the provident fund and gratuity dues in favour of

the petitioner. In any view of the matter, submits Mr. Sarma, the

respondent No.4 having himself defaulted in collecting the provident

fund dues and gratuity from the employer, cannot now turn around

and claim interest on the said amount, that too, by surpassing the

compromise settlement entered into by and between the parties. In

support of his aforementioned arguments Mr. Sarma has relied upon

and referred to the following decisions of the Supreme Court :-

1) (2001) 6 SCC 596 [Wazir Chand vs. Union of India and

others].

2) (1998)1 SCC 650 [P. Virudhachalam and others vs.

Management of Lotus Mills and another].

3) (2006)2 SCC 641 [National Insurance Co. Ltd. vs. Mastan

and another].

4) AIR 1960 SC 692 [Vijay Cotton Mills Ltd. vs. Workmen].

7. Resisting the arguments made on behalf of the writ petitioner,

Ms. A. Choudhury, learned counsel for respondent No.4, has forcefully

contended that the petitioner Tea Estate is owned by a company in

the name of “Gillanders Arbuthnot & Co. Ltd.” which is a group

company of the “Kothari Group” having operations in different parts

WP(C) No.5028/2009 Page 8 of 21

of the country. The said company owns tea gardens in Assam and

West Bengal and therefore, has branch offices in more than one State.

Under the circumstances, submits Ms. Choudhury, it cannot be said

that the Government of Assam is the appropriate Government within

the meaning of Section 2(a) of the Payment of Gratuity Act, 1972.

According to Ms. Choudhury, it is the Central Government which

would be the appropriate Government as per 2(a)(i)(b) of the Act of

1972 and therefore, it is the respondent No.3 alone who would be the

Authority competent within the meaning of Sections 7 and 8 of the

Payment of Gratuity Act, 1972 to entertain the application filed by the

respondent No.4.

8. Referring to the provisions of Section 7 of the Payment of

Gratuity Act, 1972, Ms. Choudhury submits that the right to receive

gratuity is a statutory right of a workman which cannot be denied to

him except in accordance with law. Similarly, if there is any undue

delay in payment of gratuity beyond the prescribed period of 30 days,

then as per Section 7(3-A) of the Act of 1972, the employer would be

liable to pay interest. Ms. Choudhury submits that Section 14 of the Act

of 1972 makes it clear that the provisions of the Act would override

other enactments. Since the right to receive interest is statutorily

conferred upon the workman,hence, such right, according to Ms

Choudhury, cannot be waived nor can the same be denied merely

because there was a compromise settlement of the disputes arrived

WP(C) No.5028/2009 Page 9 of 21

at by and between the parties in another proceeding. In support of

her aforesaid argument, Ms. Choudhury has placed reliance upon a

decision of the Supreme Court in the case of Allahabad Bank and

another vs. All India Allahabad Bank Retired Employees Association,

reported in (2010)2 SCC 44.

9. I have bestowed my anxious consideration to the rival

submissions made on behalf of the parties and have also gone

through the materials available on record.

10. After hearing the submissions of the learned counsel for both the

parties it is apparent that the challenge to the impugned order has

been made primarily on two counts – Firstly, that the respondent No.3

is not the competent authority having jurisdiction to entertain the

application filed by the respondent No.4 since only an authority

appointed by the Government of Assam would have jurisdiction to

entertain the matter, and secondly, in view of the settlement entered

into by and between the parties in connection with Misc. Case

No.1/2007, the claim for payment of interest subsequently raised by

the respondent No.4 was barred by the principles of waiver and

estoppel. So as to appreciate the first objection raised by the

petitioner, it would be necessary to refer to the provision of Section 2

of the Payment of Gratuity Act, 1972, which is quoted herein below :-

“ 2. Definitions.- In this Act, unless the context otherwise requires,--

(a) "appropriate Government" means,--

WP(C) No.5028/2009 Page 10 of 21

(i) in relation to an establishment-- (a) belonging to, or under the control of, the Central Government, (b) having branches in more than one State, (c) of a factory belonging to, or under the control of, the Central Government, (d) of a major port, mine, oilfield or railway company, the Central Government, (ii) in any other case, the State Government;”

11. The Tea Estate is not a legal entity nor is it a juridical person so as

to be able to institute the present writ petition. However, the

respondent has not questioned the maintainability of the writ petition

on such ground. Therefore, the company, which owns the Tea Estate

has to be treated as the actual petitioner in the present case. It

appears from the materials on record that Ms. Gillanders Arbuthnot &

Co. Ltd. is the owner of the Tengapani Tea Estate. It is not in dispute

that the office of the said company is located at Kolkata and it has a

branch office at Tinsukia. If that be the so, by the application of

Section 2(a)(i)(b) of the Payment of Gratuity Act, 1972, it is evident

that it is the Central Government which would be the “appropriate

government “ to appoint a Controlling Authority so as to entertain an

application filed under Section 7 of the Act of 1972. Such being the

position, the contention of Mr. Sarma that the respondent No.3 did not

have the jurisdiction or authority to entertain the application does not

merit acceptance by this court.

12. Coming to the next question raised in the writ petition, what

must be noted herein is that the issue involved in Misc. Case No.1/2007

WP(C) No.5028/2009 Page 11 of 21

was pertaining to the claim of the petitioner for payment of provident

fund dues and gratuity amount to which he was entitled to under the

law. It is in the context of the claim made by the respondent No.4 in

the application filed in Misc. Case No.1 of 2007 that the parties had

entered into a settlement which was reduced in writing in the form of

a memorandum of settlement. The terms and conditions contained in

the memorandum of settlement is extracted herein below for ready

reference :-

“Terms of Settlement :

1. That it was agreed between the parties that Sri N. N.

Gogoi would collect his retirement dues i.e. P.F. and

Gratuity and bonus for the year 2003-2004.

2. That the Management has agreed to allow Sri N. N.

Gogoi to stay in the company quarter till 30th

November 2008 and Sri N. N. Gogoi has agreed to

vacate the quarter on or before 30th November

2008 which he was supposed to vacate

immediately after retirement.

3. That it was agreed between the parties that Sri N. N.

Gogoi would be paid an amount of Rs.92,462

(Ninety Two Thousand Four Hundred Sixty Two) as

gratuity settlement and an amount of Rs.3,42,753

(Three Lac Forty Two Thousand Seven Hundred Fifty

Three) only as for P.F. settlement and accordingly

one cheque being No.004288 dt. 27.05.2008 for

gratuity settlement and another being cheque

No.448448 dt 31.07.2008 for P.F. settlement is being

paid to Sri N. N. Gogoi, the workman and he has

accepted. Also a cash money of Rs.2250 (Two

WP(C) No.5028/2009 Page 12 of 21

Thousand Two Hundred Fifty) only is being paid to

him as bonus cum ex-gratia for the year 2003-2004.

4. That this settlement fully and finally settles the issue

raised before the Hon’ble Labour Court (Misc Case

No.1/2007).

5. That both the parties would submit this full and final

settlement before the Hon’ble Labour Court,

Dibrugarh for treating the issue as raised under the

aforesaid Misc. Case No.1/2007 as amicably settled

by and between the parties outside the court.”

13. A plain reading of the memorandum of settlement, more

particularly clauses 4 and 5 thereof, would go to show that the

settlement arrived at by and between the parties was only in respect

of the issues raised in Misc. Case No. 1 of 2007. It must be noted here-in

that the claim for payment of interest due to delay in payment of

gratuity was neither raised in Misc. Case No. 1 of 2007 nor was the

same dealt with in the memorandum of settlement.

14. Section 7 of the Payment of Gratuity Act, 1972 lays down the

procedure for determination of the amount of gratuity. Section 7(3)

provides that the employer shall arrange to pay the gratuity within

thirty days from the date it becomes due and payable to the person

to whom the gratuity is payable. Sub-Section (3-A) of Section 7 creates

an obligation upon the employer to pay interest if there be any delay

in payment of gratuity. Section 7 of the Act of 1972 is quoted herein

below for ready reference :-

WP(C) No.5028/2009 Page 13 of 21

“7. Determination of the amount of gratuity.-(1) A person who is

eligible for payment of gratuity under this Act or any person

authorised, in writing, to act on his behalf shall send a written

application to the employer, within such time and in such form, as

may be prescribed, for payment of such gratuity.

(2) As soon as gratuity becomes payable, the employer

shall, whether an application referred to in sub-section (1) has

been made or not, determine the amount of gratuity and give

notice in writing to the person to whom the gratuity is payable and

also to the controlling authority specifying the amount of gratuity

so determined.

[(3) The employer shall arrange to pay the amount of

gratuity within thirty days from the date it becomes payable to the

person to whom the gratuity is payable.

(3-A) 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.]

(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.

[(b) Where there is a dispute with regard to any matter or

mattes specified in clause (a), the employer or employee or any

WP(C) No.5028/2009 Page 14 of 21

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 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.

(5) For the purpose of conducting an inquiry under sub-

section (4), the controlling authority shall have the same powers as

are vested in a court, while trying a suit, under the Code of Civil

Procedure, 1908 (5 of 1908), in respect of the following matters,

namely:--

(a) enforcing the attendance of any person or examining

him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses.

(6) Any inquiry under this section shall be a judicial

proceeding within the meaning of sections 193 and 228, and for

the purpose of section 196, of the Indian Penal Code (45 of 1860)

WP(C) No.5028/2009 Page 15 of 21

(7) Any person aggrieved by an order under sub-section

(4) may, within sixty days from the date of the receipt of the order,

prefer an appeal to the appropriate Government or such other

authority as may be specified by the appropriate Government in

this behalf:

Provided that the appropriate Government or the

appellate authority, as the case may be, may, if it is satisfied that

the appellant was prevented by sufficient cause from preferring

the appeal within the said period of sixty days, extend the said

period by a further period of sixty days:

[Provided further that no appeal by an employer shall be

admitted unless at the time of preferring the appeal, the

appellant either produces a certificate of the controlling authority

to the effect that the appellant has deposited with him an

amount equal to the amount of gratuity required to be deposited

under sub-section (4), or deposits with the appellate authority such

amount.]

(8) The appropriate Government or the appellate authority,

as the case may be, may, after giving the parties to the appeal a

reasonable opportunity of being heard, confirm, modify or reverse

the decision of the controlling authority.”

15. From the scheme of Section 7 of the Act of 1972 it is, thus,

apparent that the duty to pay gratuity is cast upon the employer and

such duty is required to be discharged within thirty days from the date

on which it becomes due and payable. It is the admitted case of the

petitioner that the respondent No 4 had retired from service on

attaining the age of superannuation, with effect from 06.10.2003. The

prayer for extension of service made by the respondent No 4 was also

rejected by the management. Therefore, in view of the categorical

WP(C) No.5028/2009 Page 16 of 21

mandate of sub-section 3 of section 7 of the Act of 1972, it was

incumbent upon the Management to pay the Gratuity amount due to

the respondent No 4 with thirty days from his date on which it had

become due i.e. the date of his retirement, which had admittedly not

been done in the present case.

16. Mr. Sarma, learned senior counsel, appearing on behalf of the

petitioner has made an attempt to justify the withholding of the

gratuity on the twin grounds that a criminal proceeding seeking

vacation of the quarter occupied by the respondent No 4 was still

pending where the Company had a right to recover penal rent and

secondly that the respondent No. 4 himself did not come forward to

receive the amount despite letters having been issued to him by the

Management.

17. It must be remembered that the Payment of Gratuity Act, 1972

is a beneficial piece of legislation, the object of which is to regulate

the payment of gratuity to the industrial workers and is a complete

code containing the various provisions governing the rights and

obligations of the employer and employee in that regard. Section 7(3)

of the Act of 1972 prescribes the time frame within which the payment

of gratuity is to be made. Section 14 of the Act lays down that the

provisions of the Act of 1972 would over-ride any other act, instrument

or contract which is inconsistent with the provisions of the Act. The

duty to make payment of Gratuity within the time frame prescribed by

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the Act is a statutory duty, the performance of which cannot be

denied or delayed by the Management in a manner inconsistent with

the Act of 1972.

18. As has been mentioned above, in the present case, the

payment of gratuity was withheld by the Management owing to the

pendency of the criminal proceeding against the respondent No 4.

However, having regard to the scheme of the Act of 1972, the mere

fact that a co-lateral proceeding seeking vacation of the Quarter

occupied by the employee with a claim for recovery of penal rent

was pending at the relevant point of time cannot be said to be a

valid ground to withhold the gratuity amount due and payable to the

employee as per the provisions of the Act of 1972.

19. Assuming that the respondent No. 4 did to turn up to receive

the gratuity despite receipt of the letters dated 31.10.2003, 12.11.2003

and 20.11.2006 even in that case there is no explanation as to why the

permission as per proviso to section 7 (3-A) of the Act of 1972 had not

been taken by the Management from the competent authority for

delaying the payment of gratuity on the ground that such delay was

on account of the fault of the employee. Taking note of such lapses

on the part of the petitioner, the respondent No3 had issued the

direction to pay interest by the impugned order dated 14.09.2009.

WP(C) No.5028/2009 Page 18 of 21

20. In the case of National Insurance Co. Ltd. (supra ) relied upon

by Mr. Sarma, the Supreme Court had held that the “ doctrine of

election” is a branch of “ rule of estoppels” in terms of which, a person

may be precluded by his action or conduct or silence, when it is his

duty to speak, from asserting a right which he otherwise would have

had. In that case the question that arose for decision of the Supreme

Court was as to whether, while defending an action initiated under

the provision under Workmen’s Compensation Act, 1923, it was open

for the insurer to raise a defence under sub-section (2) of section 149

of the Motor Vehicles Act, 1988. It was in that context that the

Supreme Court had observed that a right to defend a claim petition

arising under one statute cannot be held to be applicable in a claim

petition arising under different statute unless there exists express

provisions there for. It was further held that a party to a lis , having

regard to different provisions of the two acts, cannot enforce liabilities

of the insurer under both the Acts. However, as noted above, the fact

situation in that case was completely different and therefore, the ratio

of the aforesaid decision relied upon by the learned Senior Counsel, in

the opinion of this Court, would have no application in facts of the

present case.

21. Mr. Sarma has also relied upon the decision of the Supreme

Court in the case of Wazir Chand (supra) to contend that penal rent

can be charged by the Management in case of un-authorised

WP(C) No.5028/2009 Page 19 of 21

occupation of the quarter. But the issue in this proceeding is not

whether penal rent can be charged or not but it is whether, the

withholding of the gratuity of the respondent No. 4 under the

circumstances noted above would invite interest under section 7(3-A)

of the Act of 1972.

22. In a Constitution bench decision of the Supreme Court rendered

in the case of Supdt. Of Taxes v Onkarmal Nathmal Trust reported

(1976) 1 SCC 766, it has been observed that waiver is either a form of

estoppel or election. The doctrine of estoppel by conduct means that

where one, by word or conduct, willfully causes another to believe in

the existence of certain state of things and induces him to act on that

belief, or to alter his own previous position, the former is concluded

from averring against the latter, a different state of thing as existing at

that time. It has been further observed that there is no common law

estoppel founded on a statement of future intention and the doctrine

is applied to cases where a promisor has been estopped from acting

inconsistently with a promise not to enforce an existing legal

obligation.

23. The right of a workman to receive gratuity, including interest

due to delayed payment thereof, is a benefit under the Act of 1972.

Therefore, in order to succeed in the plea of waiver, it must be

established that the respondent No.4 had waived such benefit at the

time of signing of the memorandum of settlement and had elected to

WP(C) No.5028/2009 Page 20 of 21

surrender his claim against the employer for recovery of interest due to

delayed payment of gratuity. But from a reading of the memorandum

of settlement, it appears that not to speak of forgoing the interest

claim, the respondent No.4 was not even aware of such a benefit

available to him under the statute. The question of waiver of a benefit

which was not within the knowledge of the respondent No.4,

therefore, cannot arise in the eye of law. Moreover, there is no promise

on the part of the respondent No.4 not to claim any benefit not

covered under the terms of settlement. Even assuming that the parties

to the memorandum of settlement were aware of the benefit

available under section 7 (3-A) of the Act of 1972, even in that case,

by operation of section 14 of the Act of 1972, such a clause would not

be enforceable against the respondent No.4, the same being

inconsistent with the provisions of Act of 1972.

24. There can be hardly any doubt regarding the fact that an

Award passed by the Labour Court in a proceeding under section 33–

C of the Industrial Dispute Act, 1947 based on a memorandum of

settlement would be final and binding upon both the parties. But such

finality can be attached to only those issues which were expressly

included in the memorandum of settlement. Since the issue regarding

payment of interest due to delay in payment of gratuity was not an

issue included in the memorandum of settlement, hence, the

respondent No. 4 cannot be precluded from instituting appropriate

WP(C) No.5028/2009 Page 21 of 21

proceeding for recovery of such benefit which was available to him

under the statute. I, therefore, find sufficient force in the submission of

Ms. Choudhury that in the facts and circumstances of the present

case, notwithstanding the award dated 16.09.2008, the right of the

respondent No. 4 to claim interest as per section 7 (3-A) of the Act of

1972 would survive.

25. Since there is no dispute regarding the quantum in this case,

hence, there is no necessity for this court to go into the said aspect of

the matter.

26. For the reasons stated herein above, I am of the view that the

writ petition is devoid of any merit and the same is accordingly

dismissed.

There would be no order as to cost.

JUDGE

T U Choudhury