Kanknarrah Jute Pvt. Ltd. & Anr. v. State of West Bengal & Ors.

The Calcutta High Court dismissed an employer’s challenge to gratuity recovery orders in a dispute concerning compound interest on outstanding dues that included simple interest. The employer stated that it had paid the entire principal gratuity amount and that only part of the simple interest remained unpaid. It argued that Section 8 of the Payment of Gratuity Act, 1972 did not permit compound interest to be levied on that outstanding interest component. The Court held that Section 8 applies when the controlling authority issues a certificate for recovery of gratuity payable. The certificate follows the authority’s payment order, and the amount directed to be paid includes simple interest on the principal gratuity. Finding no scope for a different interpretation, the Court declined to interfere with the challenged orders.