2003(2) ALL MR 94
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

R.M. LODHA AND N.N. MHATRE, JJ.

Shri. V. U. Warrier Vs. Secretary, Oil & Natural Gas Commission & Anr.

Writ Petition No.3947 of 1994

15th February, 2003

Petitioner Counsel: Ms. SOBHANA GOPAL

Retiral benefits - Withholding of - Unauthorised occupation - Payment of pension and gratuity - Cannot be withheld even if the employee has remained in unauthorised occupation of employer's accommodation and become liable to pay damages under the allotment Rules for overstay.

Pension and gratuity become valuable rights and property in the hands of employees on their retirement and payment of pension and gratuity cannot be withheld even if the employee has remained in unauthorised occupation of employer's accommodation and become liable to pay damages under the allotment Rules for overstay. To recover damages from such retired employee for unauthorised occupation, the employer has to pursue appropriate remedy in law but the said amounts cannot be set off against pension and gratuity amount payable to retired employee. (1994) 6 SCC 589 and 2001 III CLR 262 - Referred to. [Para 5]

Cases Cited:
R. Kapur Vs. Director of Inspector (Painting and Publication) Income Tax, (1994) 6 SCC 589 [Para 3]
Gorakhpur University Vs. Dr. Shitla Prasad Nagendra, 2001(III) CLR 262 [Para 3]
State of Kerala Vs. M. Padmanabhan Nair, (1985)1 SCC 429 [Para 3]


JUDGMENT

R.M. LODHA, J. :- The Petitioner was holding the post of Additional Director (F&A) in Oil and Natural Gas Commission (ONGC) prior to his retirement. He retired from service on superannuation with effect from 28th February, 1990. While dealing with the aspect of payment of gratuity which was found payable to the Petitioner under 1969 Regulations, the amount of Rs.53,632/- was deducted towards unauthorised occupancy of official accommodation from 1st July, 1990 to 16th May, 1991 at the rate of Rs.5100/- being 75% of basic pay of Rs.6800/- per month. This action is impugned in the present Writ Petition.

2. Few facts are not in dispute. The Petitioner retired in service of ONGC as Additional Director (F&A). He retired on 28th February, 1990. Under the then existing Rules. Petitioner was entitled to retain the official accommodation upto the period of four months from the date of retirement and accordingly he was in authorised occupation of the official accommodation upto 30th June, 1990. The Petitioner vacated the official accommodation on 16th May, 1991. The Petitioner's prayer for retention of official accommodation beyond 30th June, 1990 was rejected. An amount of Rs.1,00,000/- was payable to the Petitioner towards gratuity under relevant Regulations. The dispute is whether the Respondents were competent and could in law set off the unauthorised occupancy charges of the official accommodation for the period from 1st July, 1990 to 16th May, 1991.

3. The learned Counsel for Petitioner contended that retiral benefits, particularly pension and gratuity are earned by an employee and on his retirement is entitled to get the same from the employer and the said valuable right cannot be adjusted or set off even if employee has unauthorisedly remained in possession of official accommodation after retirement. In this connection in support of her contention, the learned Counsel for Petitioner has strenuously placed reliance on (i) R. Kapur Vs. Director of Inspector (Painting and Publication) Income Tax and another, (1994) 6 SCC 589 and (ii) Gorakhpur University & others Vs. Shitla Prasad Nagendra (Dr.) & others, 2001(III) CLR 262. The learned Counsel also contended that by depriving the Petitioner his legitimate due amount of gratuity, the Respondents are liable to pay interest. In this connection, she relied upon the judgment of the Apex Court in State of Kerala Vs. M. Padmanabhan Nair, (1985) 1 SCC 429 and R. Kapur cited supra.

4. Though an affidavit in reply has been filed by Respondents, nobody appears for Respondents to argue the matter.

5. Legal position is no more res integra that pension and gratuity become valuable rights and property in the hands of employees on their retirement and payment of pension and gratuity cannot be withheld even if the employee has remained in unauthorised occupation of employer's accommodation and become liable to pay damages under the allotment Rules for overstay. To recover damages from such retired employee for unauthorised occupation, the employee has to pursue appropriate remedy in law but the said amounts cannot be set off against pension and gratuity amount payable to retired employee In M. Padmanabhan Nair case, the Apex Court held thus :

"10. Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment."

6. The aforesaid judgment was considered by the Apex Court in R. Kapur and relying upon the aforesaid observations, in paragraph 11 of the judgment holds thus:

"11. The Tribunal having come to the conclusion that DCRG cannot be withheld merely because the claim for damages for unauthorised occupation is pending should in our considered opinion, have granted interest at the rate of 18% since right to gratuity is not dependent upon the appellant vacating the official accommodation. Having regard to these circumstances, we feel that it is a fit case in which the award of 18% is warranted and it is so ordered. The DCRG due to the appellant will carry interest at the rate of 18% per annum from 1-6-1986 till the date of payment. Of course this shall be without prejudice to the right of the respondent to recover damages under Fundamental Rule 48-A....."

7. In the present case, the following statement about the gratuity payable on retirement of the Petitioner has been given :


Total amount of Gratuity payable under the 1969 Regulations as amended: Less: Appropriations   Rs.100,000/-

(i) Outstanding House Building Advance/Loan as on 28-02-1990   Rs. 23,000/-
(ii) Cumulative overdue interest at 6% p.a. as on 28.2.90   Rs. 27,744/-
   
Net amount payable   Rs. 49,256/-
   
(iii) Permissive occupation of Staff Accommodation from 01.03.1990 to 30.06.1990 @ Rs.205/- p.m. i.e. 205 X 4 = Rs.820/-    

(iv) Unauthorised occupancy from 01.07.90 to 16.05.91 @ Rs.5100/- p.m. (being 75% of the basic pay of Rs.6800/- p.m.)
= Rs.53,632/- Rs.54,452.00
 

Deficit amount recoverable
(-)
Rs. 5,196.00
   

8. It would be thus seen that an amount of Rs.53,632/- has been sought to be adjusted/appropriated against unauthorised occupancy of the official quarters by the Petitioner for the period from 1st July 1990 to 16th May 1991 at the rate of Rs.5100/- per month being 75% of basic pay of Rs.6800/- per month which is clearly impermissible. The said amount obviously could not have been set off and was required to be paid by the Respondents to Petitioner on his retirement.

9. The Petitioner became entitled to the gratuity of Rs.1,00,000/- minus appropriation towards house building loan, penalty interest thereon and the due amount of unauthorised occupation of official accommodation as per the aforesaid statement as reflected from the affidavit in reply, the sum of Rs.50,076/- was liable to he appropriated from the amount of gratuity to which there is no dispute before us. The Petitioner was thus entitled to an amount of Rs.49,924/- towards gratuity. Having been wrongfully denied the said amount, in our considered view, the Petitioner shall be entitled to a reasonable interest which we quantify at the rate of 6% per annum.

10. Consequently, we dispose of the Writ Petition by following order :

(a) It is declared that appropriation of a sum of Rs.53,632/- towards unauthorised occupancy of the official accommodation by the Petitioner from 1st July 1990 to 16th May 1991 at the rate of Rs.5100/- per month was illegal. However, this will not preclude the Respondents from proceeding against the Petitioner for recovery of due amount of unauthorised occupancy of the official quarter for the period from 1st July 1990 to 16th May 1991 in accordance with law.

(b) The Petitioner is entitled to payment of Rs.49,924/- towards gratuity under the relevant Regulations along with interest at the rate of 6% per annum from 1st March 1990 until payment is made. We grant time of two months to Respondents for making the aforesaid payment to the petitioner.

(c) Since the Respondents have not chosen to appear today at the time of hearing of Writ Petition, we direct the parties to bear costs.

Certified copy expedited.

Petition allowed.