Chhattisgarh HC quashes appellate order on gratuity interest, restores controlling authority ruling in SECL case

News Citation : 2026 LN (HC) 290

April 30, 2026 : The High Court of Chhattisgarh has set aside an order of the appellate authority under the Payment of Gratuity Act, 1972 that had directed South Eastern Coalfields Limited to pay additional interest on gratuity to a retired employee, restoring instead the original order of the controlling authority.

In its order dated April 30, 2026, Justice Rakesh Mohan Pandey allowed a writ petition filed by South Eastern Coalfields Limited, holding that the appellate authority had exceeded its jurisdiction while deciding the employer’s appeal.

The case arose from a dispute over gratuity payments to a retired General Manager (Mining), who superannuated on April 30, 2018. At the time of his retirement, three departmental inquiries were pending against him. Following the conclusion of those proceedings later in 2018, penalties were imposed. Meanwhile, the employee approached the controlling authority for gratuity, and the company paid ₹20 lakh on December 27, 2018.

Subsequently, the controlling authority directed the employer to pay interest at 10 percent from the date of retirement until the date of payment. The company complied and later challenged this direction before the appellate authority.

In its January 24, 2020 order, the appellate authority modified the period for which interest was payable, extending it from the date gratuity became due April 30, 2018 until July 3, 2019, when the demand draft was prepared.

Challenging this, the company argued before the High Court that since it was the appellant, the appellate authority could either allow or dismiss the appeal but could not pass an adverse order enlarging its liability. The respondents, representing labour authorities, defended the appellate order as justified.

The High Court agreed with the company’s contention. It observed that the employee had not filed any appeal seeking enhancement or modification of the controlling authority’s order. In such circumstances, the appellate authority could not have altered the terms to the detriment of the appellant.

Holding the appellate authority’s reasoning legally unsustainable, the court quashed its order and restored the controlling authority’s decision dated February 25, 2019. The writ petition was accordingly allowed.

Case Reference : WPL No. 90 of 2020, The Chairman-cum-Managing Director, South Eastern Coalfields Limited vs Raj Kishore Manjhi and others. Counsels: For Petitioner: Mr. Vinod Deshmukh, Advocate; For Respondents No. 2 & 3: Mr. Abhishek Banjare, Advocate; For Respondent No. 1: None appeared, though served.