Supreme Court held that gratuity money of an employee can be withheld and forfeited in case of recovery of dues such as overstaying in official accommodation.
FULL TEXT OF THE SUPREME COURT JUDGMENT
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.