M/s Central Coalfields Limited; a Government Company within v. Regional Labour Commissioner (Central), Dhanbad, an appellate

: Mr. Bhaiya Vishwajeet Kumar, Adv. : Mr. Nipun Bakshi, Advocate\ : Mr. Anil Kumar, A.S.G.I. : Mr. Shiv Kumar Sharma, C.G.C. 09/21.03.2023 1. 2. Heard the learned counsel for the parties. This writ petition has been filed for the following reliefs: - for quashing (Annexure 3) passed by “for issuance of a writ of or in the nature of Certiorari or any other the Order dated Writ(s)/Order(s)/Direction(s) the Regional Labour 01.08.2011 Commissioner (Central), Dhanbad, the respondent No. 1, in Case No. PG Appeal/(29)/2011 dismissing the said appeal and thereby upholding the Order dated 19.02.2011 (Annexure-1) passed by the respondent No. 2 under the Payment of Gratuity Act, 1972 and directed the Petitioner to pay the amount of difference of Gratuity to the tune of Rs. 2,05,476.00 to the respondent No. 3 which is not only wholly unlawful, illegal unjust, but also against the authoritative decision of the Supreme Court of India; And/Or For issuance of any such Writ(s)/Order(s)/Direction(s) as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case and for doing conscionable justice to the Petitioner.”

3. On 31.01.2023 as well as on 01.02.2023, following orders were passed in this case, which are quoted as under: - 2 “Order dated 31.01.2023 1) The learned counsel for the petitioner is present. He submits that the matter relates to adjustment of penal rent against the gratuity payable to the private respondent. The learned counsel has further submitted that the appellate authority has rejected the plea of the petitioner regarding adjustment of penal rent. 2) The private respondent superannuated in the month of January, 2008 and after superannuation he retained the quarters till April, 2011. The private respondent was occupying the quarters even till the date of passing of the order by the appellate authority on 01.08.2011. However, the petitioner had calculated the penal rent only till April, 2011. The learned counsel submits that the calculation of penal rent is not in dispute. He submits that in view of the judgment passed by the Hon'ble Supreme Court reported in (2001) 6 SCC 596, the petitioner is entitled to adjust the penal rent against to the private respondent including gratuity. He has also relied upon a judgment passed by this Court reported in 2003 (4) JCR 706 (Patna), Ranchi Bench (Mukh Ram Sharma Vs. Project and Development India Limited and Anr.) the dues payable 3) Learned counsel appearing for the respondents-Union of India submits that the impugned order is in accordance with law and the same does not call for any interference by this Court. 4) Learned counsel for the private respondent has referred the judgment passed by the Hon’ble Supreme Court reported in 2020 SCC Online SC 1063 and has submitted that the judgment passed in L.P.A. No. 19 of 2016 was subject- matter of the said SLP and considering the quantum of amount involved in the case, the Hon’ble Supreme Court did not interfere under Article 136 of the Constitution of India but has made observations with regard to Paragraphs 19 and 21 of the said judgment. The learned counsel has also relied upon the judgment passed by the Hon’ble Supreme Court reported in (2005) 5 SCC 245 and also the judgment reported in (1985) 2 SCC 1. 5) The learned counsel submits that in case a person is governed by the provisions of the Payment of Gratuity Act, the consequence of Section 13 thereof is required to be considered. He has submitted that Section 13 prohibits attachment of gratuity amount even against a decree of a 3 Court. Learned counsel has also submitted that under such circumstances, the penal rent cannot be permitted to be the payable amount of gratuity. The deducted petitioner has their own remedies under law. He also submits that in the present case as per the records, no proceeding was initiated against the petitioner under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, and, therefore, the penal rent was not even quantified by any competent authority. He also submits that adjustment of penal rent claimed by the petitioner is an unilateral exercise of power. 6) The learned counsel has also submitted that in terms of the scheme of the Payment of Gratuity Act, the authorities have no jurisdiction to enter into any other disputes except with regard to 3 Payment of Gratuity Act. Any other determination or any other claim cannot be a subject matter of consideration before the authorities under the Act. 7) In order to give opportunity of hearing to the learned counsel for the petitioner to respond to the aforesaid submissions, the matter is directed to be posted tomorrow (01.02.2023) for further hearing.” Order dated 01.02.2023 Learned counsel for the parties are present. 2. In furtherance of the arguments advanced yesterday, learned counsel for the respondents has referred to a judgment passed by Hon'ble Supreme Court reported in (2005) 5 SCC 245 para 17 to submit that in the said case, there was specific provision entitling the employer to recover the dues from the gratuity amount. He submits that there is no such corresponding provision mentioned in the writ petition or in the impugned order enabling the petitioner to recover penal rent from the gratuity amount. The learned counsel submits that on the face of Section 13 of the Payment of Gratuity Act, the penal rent could not have been adjusted. The learned counsel has further submitted the aforesaid submission, the records do not indicate whether any proceedings under the provisions of The Public Premises (Eviction of Unauthorized Occupants) Act, 1971 was initiated and any penal rent was ever quantified by any competent authority. For this, he has relied upon the judgment passed by this Court in L.P.A No.423 of 2018 with other analogous cases. that without prejudice 4

3. Upon this, learned counsel for the petitioner submits that the respondents is governed by NCWA VIII as is mentioned in the impugned order and he shall file supplementary affidavit to bring on record the enabling provision of the petitioner to adjust the penal rent from the gratuity amount. He also submits that he shall also bring on record if any proceedings was ever initiated against the petitioner under the provisions of aforesaid Act of 1971 and if so initiated, and if any order has been passed, the same will also be brought on record. 4. Learned counsel for the petitioner prays for and is allowed time till 15.02.2023 to file supplementary affidavit in the present case. 5. Post this case on 20.02.2023 under the heading for ‘Final Disposal’. 6. Let this matter be treated as part heard.”

4. Today, when the case is taken up, the learned counsel for the petitioner, on instructions, has fairly submitted that there is no provision under NCWA-VIII or any circular or rule of the petitioner entitling the petitioner to adjust the penal rent against the gratuity payable to the employees. The learned counsel has further submitted that in the present case, no proceeding for assessment of damage in the form of penal rent has been initiated against the private respondent for realization in terms of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971. 5. The learned counsel for the petitioner has also given a list of dates. 6. The learned counsel appearing on behalf of the respondents submits that the case of the petitioner is squarely covered by the judgment passed by the Hon’ble Supreme Court in the case reported in (1985) 2 SCC 1 (Calcutta Dock Labour Board & Another vs. Smt. Sandhya Mitra & Others). The learned counsel has also submitted that in another judgment passed by the Hon’ble Supreme Court reported in (2005) 5 SCC 245 (Secretary, ONGC Ltd. & Anr. Vs. V. U. Warrier), there was specific provision under the rule enabling adjustment of penal rent against the gratuity, but there being no such corresponding provisions, the plea of the petitioner as raised in the 5 writ petition seeking adjustment of penal rent is not sustainable in the eyes of law. The learned counsel has further referred to Section 13 of the Payment of Gratuity Act, which creates a legal embargo on attachment of gratuity even in execution of a court’s decree. 7. The learned counsel has also referred to the judgment passed by the Hon’ble Supreme Court reported in 2020 SCC Online 1063 (Steel Authority of India vs. Raghbendra Singh) and has submitted that the Hon’ble Supreme Court has again relied upon the judgment passed in the case reported in (2005) 5 SCC 245 (supra) and has deleted paragraph 19 and 21 of the judgment passed in L.P.A. No. 19/2016, wherein it was observed that regular rent instead of penal rent was to be realized. 8. After hearing learned counsel for the parties and considering the facts and circumstances of this case, it is not in dispute that the respondent No. 3 has superannuated from the service of the petitioner on 31.01.2008 and the respondent No. 3 was paid Rs. 3,50,000/- which was deposited with the controlling authority on

01.02.2009. There were certain service benefits also which remained payable to the respondent No. 3. On 11.02.2009, the payable gratuity upon revision was assessed to be Rs. 5,55,475.58 and accordingly, only Rs. 02,05,476 remained due. The respondent No. 3 claimed the differential amount by filing Form-N and vide order dated 19.02.2011, the claim of the respondent No. 3 was allowed against which the petitioner filed appeal being P.G. Appeal No. 29/2011 and the same was dismissed. The only grievance of the petitioner is that the penal rent was to be adjusted against the dues of the gratuity amount. The claim of the petitioner was rejected by the appellate authority by holding that as per the provisions of Payment of Gratuity Act, 1972, the penal rent etc. could not be adjusted. 9. In the judgment passed by the Hon’ble Supreme Court reported in (1985) 2 SCC 1 (supra) at paragraph 6, the Hon’ble Supreme Court has considered the impact of Sections 13 and 14 of the Payment of Gratuity Act and has held that Section 14 has overriding effect and 6 Section 13 gives total immunity to gratuity from attachment. Paragraph 6 of the aforesaid judgment is quoted as under: - “We may point out that by Central Act No. 25 of 1984 Section 13 has been amended with effect from July 1, 1984, and the amended section reads thus:- "No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5 shall be liable to attachment in execution of any decree or order of any civil, revenue, or criminal court." the Act the amendment is not relevant In the absence of any notification within the meaning of s. 5 of consideration. Section 14 has overriding effect and Section 13 gives total immunity to gratuity from attachment. The preamble of the Act clearly indicates the legislative intention that the Act sought to provide a scheme for payment of gratuity to all employees engaged in, inter alia, ports and under this Act gratuity was payable to workers like Md Safiur Rehman. The gratuity which was payable to him squarely came within the purview of the Act and, therefore, become entitled to immunity under s. 13 thereof.”

10. This Court further finds that the matter regarding adjustment of penal rent against gratuity was subject matter of consideration in the judgment passed by the Hon’ble Supreme Court reported in (2005) 5 SCC 245 (Supra) in paragraph 17 to 20, wherein it has been recorded that in the concerned rule, there was specific provision regarding adjustment of rent against gratuity and in such circumstances, the Hon’ble Supreme Court was of the view that the penal rent could be adjusted against the payable gratuity. However, in the present case, the learned counsel for the petitioner, on instructions, has fairly submitted that there is no such provision in the service rules of the petitioner enabling such adjustment. It further appears that even before the authorities passing order under Payment of Gratuity Act, which is impugned in the present proceeding, no such provision was produced by the petitioner showing their right to adjust any penal rent against the payable gratuity. 11. In the judgment passed by this Court in L.P.A. No. 19/2016, the appellants had specifically relied upon the judgment passed by the 7 Hon’ble Supreme Court dated 31.03.2017 in Civil Appeal No. 4740/2007 (Ram Naresh Singh vs. Bokaro Steel Limited & Others) and this Court at Paragraph 12 has held that when the gratuity and the retiral dues of an employee were unpaid from the respondent SAIL, the Hon’ble Apex Court has held that the said amount is to be released along with the interest at the rate of 6% per annum from the date of retention of the amount till the date of actual payment, and in such circumstances, for retention of the quarter by the retired employee, only the normal rent (and not the penal rent) of the quarter was found to be leviable from the retired employee. This Court, while deciding the aforesaid L.P.A., recorded the submissions of the Steel Authority of India Limited, who relied upon the specific rule of SAIL enabling adjustment of gratuity and also the judgment passed by the Hon’ble Supreme Court in the case of Secretary, ONGC Limited (supra). It was also submitted by the SAIL that the judgment passed in the case of Ram Naresh Singh (supra) was not laying down any principle of law and could not be treated as a precedent. However, this Court while deciding the L.P.A. recorded its finding in paragraph 19 that the original writ petitioner had a reasonable ground for retaining the quarter after his retirement as his retiral dues were not cleared by the Company, and subsequently, the quarter was also allotted in his favour for long term lease and held that he was not liable to pay the penal rent on the Company's accommodation retained by him. This Court in the aforesaid L.P.A. at paragraph 21 has also held that the penal rent on the quarter in question cannot be charged by the SAIL, rather only the normal rent could be charged. Paragraph 19 and 21 of the L.P.A. No. 19/2016 are quoted as under: - “19. Though relying upon ONGC Ltd.'s case (supra), it is the case of the respondent SAIL, that the Company was entitled to withhold the gratuity of the employee for non-vacation of the company’s accommodation and no interest was payable on the same, but the facts of this case is fully covered by the later order of the Hon'ble Apex Court in Ram Naresh Singh's case (supra). The original writ petitioner had a reasonable ground for retaining the quarter after his retirement as his retiral dues were not cleared by the Company, and subsequently, the quarter was also allotted in his favour for long term lease. As such, the original writ petitioner could not have been denied due interest on his retiral dues, which remained unpaid for a long time, and he even died without getting 8 them. At the same time, he was also not liable to pay the penal rent on the Company's accommodation retained by him. Hence the finding of the Writ Court that no fault could be found in the respondents' calculating the penal rent, as the status of the employee was of an unauthorised occupant of the quarter after his retirement, cannot be sustained in the eyes of law. 21. The annexure brought on record to this counter-affidavit gives the details of the aforesaid calculation in the tabulated charts. These charts show that as on 29.2.2016, the total dues of house rent against the appellants on the basis of the penal rent comes to Rs.5,18,086/-. The dues of the electricity charges and water charges have also been given, but since we are no more concerned with these dues as the appellants have paid these dues, the same are not being taken into consideration. The charts further show that the dues payable by the Company to the ex- employee, included the gratuity amount of Rs.1,30,491/-, the earnest money Rs.16,000/- and cash deposit Rs.1,30,000/-, apart from the other dues which are not in dispute. Admittedly, the earnest money has been taken only as Rs.16,000/-, whereas the earnest money paid in all by the writ petitioner was Rs.32,000/-. Learned counsel for the respondent during arguments, conceded that this is a mistake, and total earnest money was Rs.32,000/-. These charts clearly show that at one hand the Company is claiming the dues from the appellants charging the penal rents, whereas the gratuity amount payable by the Company to the appellants has been shown without any interest. This cannot be the case, rather, it has to be other way round. No penal rent could be levied from the appellants for the simple reason that the original writ petitioner was occupying the quarter in question after his retirement, for the fact that his retiral dues were not cleared by the Company. Thereafter the offer was given to him for the long term lease of the quarter in question which also he accepted and deposited the earnest money and cash of Rs.1,30,000/- for the same, and the quarter was allotted in his favour for long term lease. In that view of the matter, there was no question for charging any penal rent from the appellants. Similarly, the gratuity amount of the ex-employee payable to the appellants as on 29.02.2016, cannot be only the principal amount of Rs.1,30,491/-, as said amount remained unpaid since the year 1997 itself, and it must incur interest also, which has not been calculated. Taking a cue from the order of the Hon'ble Apex Court in Ram Naresh Singh's case (supra), we see no reason as to why the same interest @ 6% per annum be not made chargeable on the unpaid gratuity to the appellants, as well. We accordingly, find and hold that the penal rent on the quarter in question cannot be charged by the respondent SAIL, rather only the normal rent is to be charged, and the amount of gratuity shall carry the interest @ 6% per annum, as given to a similarly situated employee of SAIL itself, by the Hon’ble Apex Court in Ram Naresh Singh's case (supra), as there appears to be no reason to deprive the appellants from the same relief.”

12. This Court further finds that the said judgment passed in L.P.A. No. 19/2016 was subject matter of consideration before the Hon’ble Supreme Court in the judgment reported in 2020 SCC Online SC 1063 and paragraph 19 and 21 qua principle of penal rent being charged if an employee occupies the quarter beyond the satisfied period was held to be a natural consequence and the judgment passed by the Hon’ble Supreme Court in the case of Secretary, ONGC 9 Limited (supra) was also considered and it was also held that the judgment passed in the case of Ram Naresh Singh vs. Bokaro Steel Limited & Others dated 31.03.2017 was not even a judgment, but an order in the given facts of the case. 13. This Court finds that in the judgment passed in L.P.A. No. 19/2016 and also in the judgment passed by the Hon’ble Supreme Court in the case of Secretary, ONGC Limited (supra), there was specific provision regarding adjustment of certain dues including rent against gratuity payable, but there is no such corresponding rule or provision produced by the petitioner enabling them to make any such adjustment. This aspect of the matter when taken into consideration in view of Sections 13 and 14 of the Payment of Gratuity Act, the plea of the petitioner as raised in the writ petition seeking adjustment of penal rent against gratuity payable is not sustainable in the eyes of law. 14. This Court is of the considered view that the impugned order passed by the appellate authority refusing to allow adjustment of penal rent against gratuity payable by referring to the provision of Payment of Gratuity Act has been passed in accordance with law and no illegality or perversity has been pointed out by the learned counsel for the petitioner calling for any interference in the impugned order in this writ proceeding. Accordingly, the present writ petition is hereby dismissed. 15. Pending interlocutory application, if any, is closed. Mukul (Anubha Rawat Choudhary, J.)