25-year service, two year wait for gratuity, pension:
Bombay High Court rules retired employee must get 10% interest for delay
Sep 23, 2025
Synopsis
A retired teacher in Pune, denied her gratuity after 25 years of service, sought intervention from the Bombay High Court. The court, referencing the Payment of Gratuity Act and a Supreme Court precedent, mandated immediate release of her gratuity with 10% annual interest for the delay. The court also directed expedited processing of her pension papers.
A retired teacher from Pune had to approach the Bombay High Court to address her concerns about not receiving her gratuity and other pension benefits, even after serving 25 years at a Maharashtra government college. She has a master’s degree in Hindi language and a B.Ed. degree and in 1998 was appointed as a part-time Hindi teacher. This was a fully funded and sanctioned post according to an advertisement that appeared in the Loksatta newspaper in 1998.
The Regional Deputy Director of Education, Pune approved her appointment until April 15, 1999. After that, from 2000 till 2018, due to the limited tenure of the initial approval, the management issued her fresh appointment orders as a part-time teacher on a year-to-year basis from 1999-2000 to 2018- 2019. All these appointments were approved by the Regional Deputy Director of Education, Pune.
When another teacher retired on June 17, 2019, the position of a full-time assistant teacher became vacant and she was appointed to fill it. So, starting in 2019, she worked as a full time assistant teacher in the same college.
On September 7, 2023, the Regional Deputy Director of Education, Pune, accorded approval to her appointment as an Assistant Teacher with effect from June 17, 2019. On September 30, 2023, she retired. Three days before her retirement, she asked the college management to compute and release the gratuity amount on the date of her retirement. Getting no satisfactory reply, she followed up on April 12, 2024, urging the college management again to release her gratuity amount and process the pension papers. Still she got no reply. Feeling aggrieved, she filed a case in the Bombay High Court.
The Bombay High Court looked into the law and ordered that her gratuity payment should be released immediately with 10% interest per annum from October 30, 2023, till actual payment.
Check out the details below to get a grasp on this case and find out why she won the case in Bombay High Court.
Analysis of the Bombay High Court
Justices Ravindra V. Ghuge and Ashwin D. Bhobe of the Bombay High Court in their judgement (2025:BHC-AS:14501-DB) dated March 28, 2025, said that she rendered service as a part-time teacher from July 20, 1998 up to June 2019 and thereafter, as a full time Assistant Teacher w.e.f. June 17, 2019 up to September 30, 2023 i.e. the date of superannuation (retirement).
Her appointment as a part-time teacher and as a full-time Assistant Teacher had the approval from the Competent Authority, are facts which are not in dispute.
The Bombay High Court said that Respondent Nos.1 and 2 (college and education society) forwarded the proposal for pension to the Deputy Director of Education Pune, vide communication dated December 30, 2024 and her entitlement to the gratuity amount are also facts which are not in dispute.
Bombay High Court said: “Despite the above said, neither the gratuity nor the pensionary benefits are paid to the Petitioner (her), thereby compelling the Petitioner to approach this Court.”
Supreme Court said: It is the duty of the state to voluntarily pay the gratuity amount to the employee rather than to force the employee to approach the court to get his genuine claim
The Bombay High Court cited a Supreme Court case (Netram Sahu Vs. The State of Chhattisgarh) where the court held that the provisions of the Payment of Gratuity Act, 1972 being a welfare legislation meant for the benefit of the employees who serve their employer for a long time, it is the duty of the state to voluntarily pay the gratuity amount to the employee rather than to force the employee to approach the court to get his genuine claim.
“Gratuity” under the provisions of the Payment of Gratuity Act, 1972, is payable to an employee on termination of his employment after having rendered continuous service for not less than five years. The due date for payment of gratuity would be after one month, either upon superannuation or retirement or resignation or death or disablement due to accident or disease.
Bombay High Court: The college and education society are under legal obligation to pay gratuity
The Bombay High Court said that in the view of the law on payment of gratuity, the Respondent Nos.1 and 2 (college and society) were under a legal obligation to pay the gratuity amount to the Petitioner (her) on October 30, 2023 i.e. within one month from the date of her retirement.
The Bombay High Court said that records placed before them do not justify the delay caused by the Respondents (college and education society) to pay the gratuity amount to the Petitioner (her) within the time specified by law.
Bombay High Court said: “Assuming that there was any dispute inter se between the Management and the Respondent Authorities (college and education society), in the context of payment of the gratuity amount, then in such an event the Respondent Authorities should have paid the gratuity amount to the Petitioner (her) and if any fault being found on the part of the Management, then the Respondent Authorities could have taken steps to recover the said amount from the Management. At any rate, the Petitioner could not be denied of the gratuity amount on the date of her entitlement.”
Bombay High Court final judgement
The Bombay High Court said that in light of these discussions, they hold that the delay in payment of the gratuity amount to the Petitioner (her) caused by the Respondents (college and education society) is unjustified and arbitrary.
Bombay High Court said: “Consequently, we direct the Respondent Nos.1 and 2 to pay the gratuity amount due and payable to the Petitioner within a period of 30 days from today.”
Bombay High Court orders payment of interest for delayed gratuity payment
The Bombay High Court said that since it is already proved that there is a delay in payment of the gratuity amount to the Petitioner (her), being unjustified and the Petitioner being compelled to approach this Court the Respondent Nos.1 and 2 are liable to pay interest.
The Bombay High Court said: “The question is the rate of interest that would be payable on the said amount. Section 7(3A) of the Payment of Gratuity Act, 1972 deals with such an eventuality.”
The Bombay High Court said that the Ministry of Labour, Government of India, in exercise of powers conferred by Sub-section (3A) of Section 7 of the Payment of gratuity Act, 1972 by notification dated October 1, 1987 notified 10% as the rate of simple interest payable by the employer to his employee in cases where the gratuity is not paid within the specific period.
The Bombay High Court also said that recently, the Supreme Court has held in its order dated 3rd March, 2025 passed in SLP No.4468 of 2022 holding that interest on the delayed payment of gratuity, has to be @ 10%, without any excuse.
Bombay High Court said: “Therefore, We hereby direct the Respondent Nos.1 and 2 to pay the amount of gratuity payable to the Petitioner with interest component of 10% p.a. from 30.10.2023 till actual payment.”
Bombay High Court said that her second grievance is with regard to submission of pension papers and release of pension and post retirement benefits. Though, there appears to be a delay in processing the pension papers of the Petitioner, however, the documents placed on record by the Respondent Nos. 1 and 2, marked as ‘X-1’ and ‘X-2’ refer to the explanation for delay.
Bombay High Court said: “We accept the explanation offered by the Respondent Nos.1 and 2 (college and education society), more so in view of the stand now taken by the Respondent Nos.1 and 2. We, therefore, direct the Respondent Nos.1 and 2 to take steps to process the pension papers and to comply with any deficiencies, if any notified by the Respondent Authorities. We expect the Respondents to expedite the process and ensure that the pensionary benefits are released to the Petitioner (her) at the earliest.”
Judgement: “The Writ Petition is partly allowed in the above terms and Rule made partly absolute accordingly”
[The Economic Times]
