Gratuity Can Be Withheld For Recovery Of Dues From Employee: Supreme Court Judgment

 Gratuity Can Be Withheld For Recovery Of Dues From Employee: Supreme Court Judgment

Gratuity Can Be Withheld For Recovery Of Dues From Employee: Supreme Court

The Supreme Court has observed that gratuity can be withheld for recovery of dues from an employee. In this case, the Jharkhand High Court had rejected the contention raised by Steel Authority Of India Ltd., that the Company was entitled to withhold the gratuity of the employee from its retired employee for non-vacation of the company’s accommodation and no interest was payable on the same. The High Court, to hold thus, had relied on a 2017 Supreme Court judgment in Ram Naresh Singh Vs. Bokaro Steel Ltd. & Ors.

M/S Steel Authority Of India Ltd. vs Raghbendra Singh on 15 December, 2020

ITEM NO.6 Court 9 (Video Conferencing) SECTION XVII

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 11025/2020

(Arising out of impugned final judgment and order dated 13-02-2020 in LPA No. 19/2016 passed by the High Court Of Jharkhand At Ranchi)

M/S STEEL AUTHORITY OF INDIA LTD. Petitioner(s)

VERSUS

RAGHBENDRA SINGH & ORS. Respondent(s)

(FOR ADMISSION and I.R. and IA No.91839/2020-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT and IA No.91840/2020-EXEMPTION FROM FILING O.T. and IA No.91838/2020-PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES )

Date : 15-12-2020 This petition was called on for hearing today.

CORAM :

HON’BLE MR. JUSTICE SANJAY KISHAN KAUL
HON’BLE MR. JUSTICE DINESH MAHESHWARI
HON’BLE MR. JUSTICE HRISHIKESH ROY

For Petitioner(s)

Mr. Dhruv Mehta, Sr. Adv.
Mr. Yashraj Singh Deora, AOR
Ms. Sonal Mashankar, Adv.
Ms. Shivangi Sud, Adv.

For Respondent(s)

UPON hearing the counsel the Court made the following
O R D E R

We have heard learned senior counsel for the petitioner and it appears that the grievance of the petitioner is qua the broad observations made in paras 19 and 21 in respect of the right to retain quarters since the dues were not paid. The fact remains that the quarter was never vacated and this resulted in proceedings under the Public Premise (Eviction of Unauthorized Occupants) Act, 1971 which culminated against the employee and had attained finality. But the entitlement of the respondent under a Scheme of the petitioner cannot be doubted. We are informed that the scheme no more exists. The amount in question is also quite small and thus, we feel it is not a fit case for interference under Article 136 of the Constitution of India.

We, however, set aside the observations made in paras 19 and 21 qua the principles of penal rent being charged as we are of the view that if an employee occupies a quarter beyond the specified period, the penal rent would be the natural consequence and such penal rent can be adjusted against the dues payable including gratuity. This is so in view of the judgment in Secretary, ONGC Ltd. v. V.U. Warrier – (2005) 5 SCC 245 and the reliance placed in the impugned judgment on the case of Ram Naresh Singh v. Bokaro Steel Plant [Civil Appeal No.4740/2007] dated 31.03.2017 is misplaced as is not even a judgment but an order in the given facts of the case.

The Special Leave Petition is dismissed in terms aforesaid.

Pending applications stand disposed of.

(ASHA SUNDRIYAL)
ASTT. REGISTRAR-cum-PS

(ANITA RANI AHUJA)
ASSISTANT REGISTRAR