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Interest is payable on delayed payment of gratuity. - The Payment of Gratuity Act, 1972

Employer declined to pay gratuity to the appellant since the appellant had not vacated the allotted official quarter. However, an amount of Rs. 10.00 lacs was deposited by the employer before the Controlling Authority. Controlling Authority allowed to release the amount of gratuity but declined to pay interest on the ground that the conduct of the appellant by not vacating the official quarter is not appreciatable. Appellate Authority as well as Learned Single Judge upheld the finding of the Controlling Authority. Since section 13 of the Act gives total immunity to gratuity from attachment and Section 14 of the Act gives an overriding effect upon the provisions contained in any other enactment, no leave has been granted under the proviso to sub-5, (3A) of Section 7 of the Act, attributing the delay of gratuity to the employee, statutory interest cannot be denied. Interest at the rate of 8% per annum be paid by the employer if the payment is made within four weeks, failing with rate of interest would be payable at the rate of 10% per annum.

-Karnail Singh vs. General Manager, Bishrampur Area of SECL, Surajpur & Ors. 2017 II CLR 372 (Chhtgarh H. C.)

The Payment of Gratuity Act,1972

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