In Shiv Kumar Bahadur Singh v. the State of U.P., the Allahabad High Court ordered the payment of the full amount of gratuity along with interest (if the petitioner is eligible for interest) within 4 months to the petitioner even after the corporation suffered from unstable financial conditions.
In the instant case, the petitioner sought a writ of mandamus against the opposite parties for direction to pay the full amount of gratuity accompanied by interest, in accordance with section 4 of the Payment of Gratuity Act, 1972. The opposite parties paid ₹19,200/- to the petitioner but denied paying the remaining gratuity amount of ₹3,06,000/- and statutory interest to the petitioner due to its precarious financial condition. The petitioner was informed that such payment would be made in the future whenever funds will be available to the corporation.
It was apparent that the corporation did not deny its liability to pay pensions to its retired employee. However, the precarious financial condition of a corporation is not a ground to even delay payment of pensionary benefits to a superannuated employee. The Court placed reliance on D.S. Nakara v. Union of India wherein it was held that pensionary benefits are not a bounty to be given when the sweet will of the employer permits. Moreover, in Kapila Hingorani v. the State of Bihar, it was also held that the precarious financial condition of an employer is not a good enough ground to delay or refuse the payment of pensionary benefits to a retired employee.
Pensionary benefits are rights accrued to retired employees and such rights cannot be subjected to the sweet will of the employer.
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