Odisha high court upholds 10% interest on delayed gratuity for retired bank officer

Cuttack: Criticising the Odisha State Cooperative Bank, Bhubaneswar, and its counsel, Orissa high court has upheld a 10% interest on delayed payment of gratuity to a retired bank officer, while imposing a cost of Rs 20,000 on the bank for “wasting” judicial time.The bench of Justice Sanjay Kumar Mishra on Tuesday dismissed the bank’s petition challenging orders of the controlling and appellate authorities under the Payment of Gratuity Act, 1972, which had directed payment of gratuity with 10% interest to Managobinda Barik, who retired as deputy general manager in Feb 2012.During the hearing, the court questioned the conduct of the bank’s counsel for allegedly not drawing a coordinate bench’s attention to a prior binding HC judgment delivered on Dec 24, 2024, in a similar case concerning the same bank.“Though he claimed that it was brought to the notice of the bench, it is revealed from the said order… there is no reference to the judgment….Hence, the submission made by learned counsel for the petitioner seems to be incorrect,” Justice Mishra observed.In a stern reminder on legal ethics, he remarked, “A lawyer should be fair enough while arguing a matter before any court, including constitutional courts, and should not suppress any fact as well as law… Once a lawyer loses the trust of the court… such impression… may affect the fate of his other clients.”

Justice Mishra noted that a coordinate bench’s order dated Sept 9, which limited interest to 6%, had ignored Section 7(3A) of the Act and the central notification dated Oct 1, 1987, mandating 10% interest. Declaring that the ruling was ‘per incuriam’ (through ignorance), Justice Mishra held, “Admittedly… the rate of interest payable to an employee… is to be 10% from the date the gratuity becomes payable till the date of actual payment.

”While upholding the appellate authority’s order of Feb 8, 2019, Justice Mishra said the bank had failed to resolve the issue through mediation “for reasons best known to it”.Justice Mishra also said that Rs 20,000 be paid to Barik within six weeks “for wasting the judicial time of this court so also to compensate the hardship caused to a retired employee, who had to fight out a long legal battle to get his legitimate admissible dues of gratuity”.