38.6c New Delhi, India, Sunday, April 21, 2024
Judiciary

Supreme Court Rules that Gratuity can be withheld for recovery of dues [READ ORDER]

By Dev Kumar Patel      29 December, 2020 07:11 PM      0 Comments
Supreme Court Rules that Gratuity can be withheld for recovery of dues [READ ORDER]

The Supreme Court observed that gratuity money of an employee can be withheld and forfeited in case of recovery of dues such as overstaying in official accommodation.

A bench headed by Justice Sanjay K Kaul held that there is no prohibition against recovering dues including penal rent -- the rent with the penalty for overstaying in official accommodation -- from an employee’s gratuity.

The bench, comprised of Justices Dinesh Maheshwari and Hrishikesh Roy while referring the view in Secretary, ONGC Ltd. v. V.U. Warrier - (2005) 5 SCC 245 held 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," 

A Division Bench had in 2017 ruled unfavourably against confiscating the gratuity of an employee on account of overstaying in official quarters after his retirement. The Bench had ordered immediate release of his gratuity and held only normal and not penal rent should be charged for the period overstayed.

The Bench headed by Justice Kaul, however, held that any reliance on the case of Ram Naresh Singh v. Bokaro Steel Plant [Civil Appeal No.4740/2007]is misplaced since it is not even a judgment, but just an order on the given facts of that case. The said order cannot be treated as a precedent.

The order by the Jharkhand high court snubbed an attempt by the Steel Authority of India Ltd (SAIL) to recover penal rent amounting to 1.95 lakh from an employee, who did not clear his dues and overstayed in the official accommodation in Bokaro after his retirement in 2016.

The high court relied upon the Ram Naresh Singh v. Bokaro Steel Plant [Civil Appeal No.4740/2007], and said that the SAIL must release the employee’s gratuity immediately. However, it allowed the SAIL to raise a demand for normal rent.

The Supreme Court has now set aside the part of the high court order that held that the SAIL could not recover the dues from the gratuity amount. 

However, Supreme Court dismissed the writ petition observing that 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.

 

[READ ORDER]



Share this article:



Leave a feedback about this
TRENDING NEWS

sc-orders-medical-examination-of-yr-old-rape-survivor-seeking-to-terminate-her-week-pregnancy
Trending Judiciary
SC orders medical examination of 14-yr-old rape survivor seeking to terminate her 28-week pregnancy

Supreme Court orders medical examination of 14-year-old rape survivor seeking termination of 28-week pregnancy. Decision to be made after evaluating impact on her health.

20 April, 2024 11:00 AM

TOP STORIES

need-to-safeguard-judiciary-from-unwarranted-pressures-21-ex-judges-write-letter-to-cji
Trending Legal Insiders
Need to safeguard judiciary from unwarranted pressures: 21 ex-judges write letter to CJI

21 ex-judges write to CJI Chandrachud urging protection of judiciary from pressures undermining its integrity and autonomy.

15 April, 2024 12:17 PM
sc-notice-to-ed-declines-early-date-on-plea-by-delhi-cm-arvind-kejriwal-against-arrest
Trending Judiciary
SC notice to ED; declines early date on plea by Delhi CM Arvind Kejriwal against arrest

SC issues notice to ED, declines early hearing on Delhi CM Kejriwal's plea against arrest in liquor scam.

15 April, 2024 03:08 PM
call-for-chapters-gender-based-violence-and-religion
Trending Law School
Call For Chapters: Gender-Based Violence and Religion

Calling For Book Chapters: As an editor, Dr. Amit Anand, Assistant Professor, School of Legal Studies, REVA University, Bengaluru, is inviting people to contribute to a book, entitled "Gender-Based Violence and Religion." This book is scheduled to be published by Cambridge Scholars Publishing.

15 April, 2024 04:21 PM
cannot-stop-any-public-rally-bombay-hc-says-on-allegation-that-ram-navami-processions-deliberately-pass-through-muslim-majority-areas
Trending Top Stories
Cannot stop any public rally, Bombay HC on allegation that Ram Navami processions deliberately pass through Muslim-majority areas

The Bombay High Court calls upon the Maharashtra Police to ensure that no law and order issues occur during a Ram Navami rally in a Muslim-majority area in Mumbai.

15 April, 2024 06:36 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email