Calcutta High Court rules gratuity cannot be withheld arbitrarily, awards interest on delayed payment

The Calcutta High Court's Division Bench has ruled that a cooperative bank cannot indefinitely withhold gratuity on grounds of administrative autonomy or pending criminal proceedings without explicit service rule authorization. The court considered a retiree of Birbhum District Central Cooperative Bank whose gratuity was delayed over a decade after his retirement on 31 January 2013.

The bench held that Section 7(3-A) of the Payment of Gratuity Act, 1972 mandates interest on delayed gratuity payments. The court awarded ₹50,000 as costs and directed statutory interest or 8 per cent per annum where applicable, establishing that employees are entitled to compensation for deprivation of legitimately earned money.

The judgment clarified that delayed payment of lawful dues is neither an act of grace nor compassion by the employer, but an employee's legal right. The bank had withheld retiral benefits citing alleged misconduct in an order dated 26 October 2023.