Jharkhand High Court, in M/s. Tata Steel Limited vs. The State of Jharkhand & Ors. [W.P.(L) No. 2120 of 2023], ruled that once the Central Government issues a notification fixing the rate of interest for delayed payments under the Payment of Gratuity Act, 1972 (“Gratuity Act“), the same cannot be altered without issuing a subsequent notification of the same kind. The employer contended that changes in rates of interest on long-term deposits would automatically apply to rates of interest payable under Section 7(3-A) of the Gratuity Act. The court upheld the notification, following due process, and stated that automatic changes in rates would violate the intent of the Gratuity Act. Therefore, the Controlling Authority was justified in imposing a penalty in accordance with the notification.
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