Legal heirs of deceased employee to receive interest after 19-year delay in gratuity release
In a significant judgment, the Allahabad High Court has directed the State of Uttar Pradesh to pay simple interest at the rate of 10% per annum on the delayed gratuity payment to the legal heirs of Late Dr. Anwarullah Khan. The ruling comes after a prolonged delay of 19 years in the release of gratuity following Dr. Khan’s retirement as a Medical Officer in the Provincial Medical Services in 2005.
The case, adjudicated by Justice Karunesh Singh Pawar, highlighted the undue delay and subsequent legal battles faced by the petitioners, who are the children of the deceased. Dr. Khan retired on July 31, 2005, but his gratuity was withheld due to alleged outstanding house rent dues amounting to Rs.18,50,975/-. Despite a judgment in 2017 directing payment of gratuity, the amount was only credited to the petitioners' accounts on July 30, 2024.
The court noted that there were no proceedings initiated against Dr. Khan during his lifetime regarding unauthorized occupation or recovery of house rent, rendering the withholding of gratuity without valid justification. Furthermore, the court observed that the plea of outstanding dues had been previously rejected during contempt proceedings, and respondents could not reopen the issue.
The judgment referenced several precedents, including the Supreme Court's decision in "Neelima Srivastava v. State of Uttar Pradesh," emphasizing the doctrine of finality in judicial decisions. It also cited statutory provisions under the Payment of Gratuity Act, 1972, which mandates interest on delayed payments.
Justice Pawar concluded that the petitioners are entitled to the statutory interest prescribed for delayed gratuity payments. The court quashed the impugned order dated January 1, 2026, and directed the state to calculate and release the interest amount within three months.
This ruling underscores the legal obligation of timely settlement of retiral benefits and affirms the rights of employees and their heirs to statutory interest in cases of unwarranted delays.
Bottom line:-
Gratuity - Legal heirs entitled to simple interest at the rate of 10% per annum on delayed payment of gratuity, in compliance with statutory provisions and judicial precedents.
Statutory provision(s): Payment of Gratuity Act, 1972 Section 7(3A)
Mr. Saleem Anwar Khan v. State of U.P., (Allahabad)(Lucknow) : Law Finder Doc id # 2901046
