Calcutta High Court news: The Calcutta High Court recently delivered a firm ruling against the unauthorised occupation of official quarters by retired employees and held that Eastern Coalfields Limited (ECL) is entitled to deduct penal rent from an employee’s gratuity if they refuse to vacate company accommodation after superannuation

Justice Shampa Dutt observed that tolerating such conduct would encourage misuse and deprive serving employees of the accommodation they are entitled to.

The high court was hearing a plea filed by Eastern Coalfields Limited challenging orders passed by the controlling authority and appellate authority under the Payment of Gratuity Act, 1972, which had directed the release of gratuity to the employee.

“If such conduct is tolerated/indulged, it will only encourage others to act in such manner, leading to a situation where quarters cannot be provided to employees who are in service and entitled to such facility,” the Calcutta High Court said in its April 1 order. 

The employee was employed with the said company on January 15, 1987, and got superannuated with effect from June 30, 2022. The employee was serving as a compounder at the time of their superannuation in the medical department in the district of Paschim Bardhaman. 

The government employee was allotted a residential quarter, Sarkar Para, in the district of Paschim Bardhaman by the company during their service tenure, and it was claimed that the said quarter is still in their possession, who has not yet vacated the quarter till date.

It was also claimed that the employee was informed of the date of their superannuation by a retirement notice to hand over the company’s quarter under their occupation to the company on the date of their superannuation.

The employee was also informed that if they fail to do so, they would be liable to pay penal rent and such penal rent would be deducted from the retirement benefits, and further payment of their gratuity, thereby indicating that the gratuity would be paid only after the said quarter was vacated by them.

By a circular issued by Coal India Limited on November 11, 2021, it was directed that all its subsidiaries, including the said company, take measures for vacation of quarters after retirement of the employees, including charging of penal rent from the concerned retired employee for unauthorised occupation of the quarter after retirement and withholding of the retiral benefits until quarter is vacated by the concerned employee. 

However, the employee has not allegedly vacated and handed over the quarter to the said company and is still illegally occupying the same and is using water and electricity thereat at the cost and expenses of the said company.

As the company withheld gratuity on this ground, the employee approached the controlling authority under the Payment of Gratuity Act, 1972, which directed payment of gratuity amounting to Rs 18.99 lakh.

The company challenged this before the appellate authority, which upheld the direction to release gratuity and aggrieved by these orders, the company approached the Calcutta High Court.