Authority: Calcutta High Court (High Court at Calcutta)

Order Date: 18.08.2026

Case Overview

  • Parties: Appellant Md. Ashadul Haque vs. The State of West Bengal and others, including Birbhum District Central Cooperative Bank Limited (respondent No. 5) and additional respondents (Nos. 3‑5).
  • Background: The appellant retired from Birbhum District Central Cooperative Bank Ltd on 31 January 2013 at age 60. In 2023 the bank issued an order dated 26 October 2023 alleging siphoning of public money and placed his retiral benefits in a suspense account pending determination of alleged loss. The bank formed a committee to investigate.
  • Reliefs Sought: The appellant filed a writ petition seeking (a) release of Provident Fund of Rs 10,31,313 with 10 % interest, (b) release of leave encashment of Rs 2,58,714 with 10 % interest, (c) release of gratuity of Rs 9,57,740 with 10 % interest, (d) setting aside the 26‑Oct‑2023 order, and (e) certification of records.
  • Single Judge Order (24 Jan 2025): Directed release of PF and leave encashment but refused to order gratuity payment until the pending criminal case was disposed.
  • Interim Development: On 07 April 2026, the bank paid the gratuity amount to the appellant.
  • Legal Issues on Appeal: Whether the appellant is entitled to interest on delayed gratuity payment; applicability of West Bengal Societies Rules 2011 (Rule 106, Appendix 5, Clause 19) and the West Bengal Cooperative Societies Act 2006; and whether Section 134C of the 2006 Act (autonomy of cooperative credit structure entities) can bar interest.
  • Key Submissions: Counsel for appellant cited Clause 19 of Appendix 5, which mandates gratuity under the Payment of Gratuity Act 1972. Counsel for the bank argued that Rule 106 excludes cooperative credit structure entities (effective 1 Feb 2013) and that Section 134C gives the bank autonomy to deny interest.
  • Statutory Provisions Referred: Payment of Gratuity Act 1972 – Sections 4, 7, 14; West Bengal Cooperative Societies Act 2006 – Sections 134A (overriding effect), 134C (autonomy); Rule 106 of West Bengal Societies Rules 2011.
  • Court Findings: The appellant retired before the 1 Feb 2013 amendment, so Rule 106 (including Clause 19) applied to him. The Payment of Gratuity Act 1972 overrides any inconsistent state provisions. Under Section 7(3‑A) of the 1972 Act, interest is payable on delayed gratuity at the rate notified by the Central Government (or 8 % p.a. if no notification). The bank’s claim of autonomy cannot defeat this statutory right.

Final Outcome

  • The order dated 24 January 2025 withholding gratuity pending criminal proceedings is set aside.
  • The bank is directed to pay interest on the gratuity at the rate notified by the Central Government for long‑term deposits; if no such notification exists, interest is 8 % per annum from the date of entitlement to the date of actual payment.
  • The bank must pay costs of Rs 50,000 to the appellant.
  • The bank must pay the interest amount and costs within three weeks of the order and furnish a copy of the Central Government notification and the interest calculation.
  • The appellant’s request for a stay of the judgment was rejected.

Topics: Retirement Benefits, Cooperative Banking Law