Interest on withheld Gratuity on acquittal in criminal case – Sections 7(3A) and 14 of Payment of Gratuity Act 1972

The petitioner – Carpenter in Railways was appointed on 6.3.1983 and retired on superannuation on 31.12.2006.  On retirement, he was given retiral benefits.  However, the gratuity and commutation of pension was withheld on account of pendency of criminal case.

By the memo dated 7.5.2007, the petitioner was informed that payment of withheld gratuity amount would depend on the result of criminal case.

By the judgment dated 30.6.2018, the petitioner was acquitted.

The gratuity amount of Rs.1,00,926/- was paid on 19.4.2019  but without interest.  The Central Administrative Tribunal rejected the claim for interest on withheld interest.

The gratuity was withheld without any fault of the petitioner. Therefore, the petitioner is entitled to interest. The respondents on their own withheld gratuity.   The High Court directed to pay simple interest at 10% from the date of retirement till actual payment.

Judgment dated 21.3.2024 in WP CT No.154 of 2023 – Md. Farid Vs. Union of India and others