Calcutta High Court (Appellete Side)
Swasti Ghosh vs The Ld. Controlling Authority & Anr on 13 February, 2026
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
The Hon'ble Justice Lanusungkum Jamir
And
The Hon'ble Justice Rai Chattopadhyay
MAT 484 of 2025
With
I.A. No.: CAN 2 of 2025
Swasti Ghosh
Vs.
The Ld. Controlling Authority & Anr.
For the appellant : Mr. Uday Sankar Chattopadhyay
: Mr. Suman Sankar Chatterjee
: Mr. Pronay Basak
: Ms. Rajashree Tah
: Ms. Trisha Rakshit
: Ms. Aishwarya Datta
: Ms. Bidisha Chakraborty
For the respondent No. 2 : Mr. Kishore Kr. Datta, Ld. A.G.
: Mr. Narayan Chandra Bhattacharya
: Mr. Lakshmi Kanta Pal
Heard on : 04/02/2026
Judgment on : 13/02/2026
Page 2 of 14
Rai Chattopadhyay, J. :-
1. A judgment of the Hon'ble Single Judge dated January 14, 2025, in
WPA No. 26418 of 2017 is under challenge in this appeal, and the
subject matter of the lis is whether after the death of the erstwhile and
retired employee of the respondent company, who happens to be the
husband of the appellant, the respondent has acted lawfully and
justifiably in withholding his gratuity, considering that the present
appellant has not yet delivered the vacant possession of the government
accommodation occupied by her, allegedly unauthorisedly.
2. The husband of the appellant retired on 31.12.2014. During the course
of his employment, he was allotted premises No. 6, Sarat Chandra
Avenue, Durgapur Steel Township for his residential purpose, which the
employee was required to vacate within two months of his date of
retirement.
3. After retirement, the said employee did not vacate the government
quarter which he occupied during service. He has claimed gratuity
before the Controlling Authority in March 2015. The Controlling
Authority in the month of January 2017 has directed for the payment of
gratuity to the said employee/his legal heir [present appellant],
amounting to Rs.14,85,448/-.
Page 3 of 14
4. The writ petition No. WPA 26418 of 2017 has been filed by the present
respondent company challenging the order of payment of gratuity to the
said employee/his legal heir on the grounds, inter alia, that the order of
the competent Authority suffers from non-consideration of the specific
provision of SAIL Gratuity Rules, which squarely apply in the case of
the said employee, since retired; that the direction of the Authority was
without jurisdiction as the same is not empowered to adjudicate with
reference to the company's own Rules, that is, the SAIL Gratuity Rules;
that according to the said Rules as applicable to the concerned
employee, the company is duly empowered and competent to withhold
the gratuity payable to the said employee, which the statutory Authority
has failed to consider.
5. The said writ petition has been disposed of by the Hon'ble Single Judge
vide the impugned judgment as mentioned above, in which the court
has recorded that the impugned order in the writ petition was
unsustainable and the same was set aside by the court. All
consequential steps taken pursuant to the order impugned in the writ
petition were also set aside by the court. The court has further directed
that the Controlling Authority should reconsider the matter afresh after
giving a right of hearing to both the company and the employee and
pass a reasoned order within a stipulated period of time. Hence, being
aggrieved, the appellant has filed the instant appeal.
Page 4 of 14
6. Mr. Uday Sankar Chattopadhyay, learned advocate for the appellant
has founded his argument on a well-settled legal principle that gratuity
is being paid to an employee in recognition of meritorious conduct
during the tenure of his service and as such no development of events,
subsequent to cessation of employer-employee relationship by way of
supervision or retirement or resignation should be considered as
relevant for having any negative bearing upon the admissibility of
gratuity. He submits that as per provision under section 4(6) of the
Payment of Gratuity Act 1972, forfeiture of gratuity amount is only
permitted in case of termination of the concerned employee from service
for his unacceptable conduct in the course of his employment. He has
further submitted that in case the SAIL Gratuity Rules contain anything
inconsistent with the same as above, in terms of section 14 of the said
Act of 1972, the provision of the statute overrides the same. Mr.
Chattopadhyay has further submitted that the provision heavily relied
upon by the respondent company in the SAIL Gratuity Rules, claiming
to be an enabling provision, allowing the company to withhold the
gratuity in case of extended occupation of the company premises by the
employee beyond the stipulated period of time, has ultimately been
omitted in the revised SAIL Gratuity Rules. Hence, according to the
appellant, there is no scope for the appellant to rely upon the same.
Next, Mr. Chattopadhyay submits that extensive opportunity of hearing
has been granted to both the parties by the Authority, before coming to
the decision, which was challenged and set aside by the Hon'ble Single
Bench. Allegation of violation of principles of natural justice is therefore
Page 5 of 14
unfounded and the Court has committed a wrong in this regard, he
says. It has further been argued that the employee has the right to
receive better terms of gratuity in terms of the statute itself and the
order of the Controlling Authority was flawless and unjustifiably
interfered into and set aside by the Hon'ble Single Bench. Hence, the
appellant seeks immediate payment of gratuity to her, by the
respondent company.
7. The following judgments are relied upon by the appellant: -
i) Jorsingh Govind Vanjari Vs. Divisional Controller,
Maharashtra State Road Transort Corporation, Jalgaon
Division, Jalgaon, reported in (2017) 2 SCC 12 - Relevant
Paragraph Nos. 15, 16
ii) Union Bank of India and Ors. Vs. C.G. Ajay Babu & Anr.,
reported in (2018) SCC 529 - Relevant Paragraph Nos. 15, 16, 17,
18, 19, 20.
iii) Steel Authority of India Limited & Anr. Vs. Taraknath
Sengupta & Ors. reported in (2010) 2 Cal LT 473 - Relevant
Paragraph Nos. 27, 46.
iv) Tapan Chandra Vs. Union of India & Ors., reported in (2019)
SCC OnLine Cal 5117 - Relevant Paragraph Nos. 22.
8. Mr. Kishore Kr. Datta, learned senior counsel has appeared on behalf of
the respondent/ SAIL.
Page 6 of 14
9. Mr. Datta, learned senior counsel has appeared on behalf of the
respondent/SAIL. According to the respondent, not the amended Rules
but the SAIL Gratuity Rules, 1966 and Rule 3.2.1 (c) thereof is
applicable in case of the said employee in so far as on the date of his
superannuation in 2014 the amended Rules did not come into effect. It
is submitted that the amended Rules of the company which came into
effect from November 01, 2020 has no retrospective effect and it has to
be applied only prospectively. In that event, the said employee is
squarely covered under the provisions of the SAIL Gratuity Rules. Mr.
Datta, learned senior counsel has further submitted that the controlling
authority in his order dated January 11, 2017 has calculated gratuity
payable to the employee as above in terms of the SAIL Gratuity Rules
and has also held that the provision of withholding of gratuity for
occupying unauthorizedly the official quarter as enshrined in the aid
Rules shall not be applicable in case of the said person. He submits
that the finding of the controlling authority is, therefore, self-
contradictory. According to the respondent, the authority could not
have applied one portion of the Rules and declined to apply the other
portion thereof in case of a particular employee.
10. It is further submitted that, the company has initiated and succeeded in
a proceeding against the present appellant under The Public Premises
(Eviction of Unauthorized Occupants) Act, 1971 in which the appellant
having been found as an unauthorized occupant of the company
quarter, has been directed to vacate the same allegedly the appellant
Page 7 of 14
has deliberately and consciously violated the said order of vacating the
company quarter and has been forcefully and unauthorizedly occupying
therein. A writ petition is filed in this Court against the said order of
eviction whereas the statute as provided for filing of an appeal under
Section 9 of the Act of 1971, to challenge any order of the competent
authority under the Act. It has further been mentioned that, in terms of
the Court's direction, the amount of gratuity was deposited by the
company with the learned Registrar General of this Court at one point
of time, though never withdrawn by the appellant. Since, the appellant
never withdrew the amount of gratuity so deposited by the company
with the learned Registrar General of this Court, as per Court's order,
the said amount of money has been withdrawn by the company itself at
a subsequent stage.
11. Mr. Datta, learned senior counsel has submitted that the concerned
employee and the present appellant being his legal heir is responsible
for gross violation of the conditions of service due to which the
accommodation for residence has been provided to a company
employee. By misusing the concession granted under the Rules, the
concerned persons overstayed without any authority in the
accommodation provided by the company, thereby depriving some in-
service incumbents who are in genuine need of accommodation. Mr.
Datta, learned senior counsel has submitted that the appellant who
herself has violated the law, cannot come before this Court to seek
equitable relief with unclean hands. That, considering her prayer would
Page 8 of 14
amount to violation of the well-celebrated legal principles that a person
should come with clean hands before the Court of equity. He further
mentions that, time and again, the appellant has shown adamancy and
obstinacy as she deliberately violated Court's order on repeated
occasions. According to the respondent, in exercise of Rules 3.2.1 (c) of
the SAIL Gratuity Rules, 1966, which is applicable in case of the
appellant and her husband (now deceased), the company is duly eligible
and empowered to withhold the entire gratuity amount of the person
unless and until the conditions of service as vacating residential quarter
within two months of superannuation is fulfilled by the concerned
persons. Mr. Datta, learned senior counsel has insisted that, there is no
cogent ground to interfere with the order of the Hon'ble Single Judge as
impugned in this appeal and the appeal may be dismissed.
12. It has been submitted by the respondent that statutory alternative
remedy is not the only remedy available in accordance with law to the
respondent and of remedy gross illegality and arbitrariness a litigant is
free to move this Court seeking exercise of its jurisdiction under Article
226 of the Constitution.
13. To buttress his submissions, Mr. Datta, learned senior counsel has
relied on the following judgments: -
i) Secretary, ONGC Ltd. and Another Vs. V.U. Warrier reported
in (2005) 5 SCC 245
Page 9 of 14
ii) Steel Authority of India Ltd. Vs. Raghabendra Singh &
Others reported in (2021) 18 SCC 272
iii) Raghbendra Singh & Others Vs. Steel Authority of India
Ltd. & Ors. reported in 2020 SCC OnLine Jhar 1084
iv) State of Madhya Pradesh & Ors. Vs. Sanjay Nagayach &
Ors. reported in (2013) 7 SCC 25
v) Wazir Chand Vs. Union of India & Ors. reported in (2001) 6
SCC 596
14. The appellant on one hand seeks to be paid with gratuity amount which
she claims to be still standing due and on the other hand she declines
to accept the said amount when secured with the learned Registrar
General of this Court. Upon being asked by the Court, no plausible
reason for the same could be cited by the appellant.
15. Some facts are evidently existing in this case, like that the appellant
and previously her husband also [now deceased], have been in
occupation of the company premises, after superannuation of the said
employee and even after the order of eviction being passed in a
proceeding under The Public Premises (Eviction of Unauthorized
Occupants) Act, 1971. Also that the appellant has been fighting in
Courts as if to recover the unpaid gratuity, whereas, she does not
accept the entire gratuity amount made secured by dint of the Court's
order.
Page 10 of 14
16. Keeping in mind all as mentioned above, now this Court is inclined to
consider the points of law which arose in this appeal. According to the
appellant, payment of gratuity to an employee on his superannuation
and vacating a residential accommodation earlier allotted for occupation
of an employee are two different incidents of service which cannot be
made intertwined. In other words, gratuity of an employee who has
retired due to attaining the age of superannuation can never be
withheld under the law, excepting any proven misconduct of him
resulting into loss of the company. The appellant has largely relied on
the provision of section 4(6) of the Payment of Gratuity Act, 1972 and
says that the same would override if there is anything in contrary
contained in the SAIL Gratuity Rules.
17. By saying so, the appellant approbates and reprobates at the same
time, which cannot be sustained in the eye of law. The appellant is
precluded to concede to the benefitting portion of the Rules, by virtue of
which the Controlling Authority determines the higher amount of
gratuity than the statutory limit as per the Act of 1972 whereas to resist
simultaneously the other provision thereof to be applied against her,
which may adversely affect her. Similar error has been done by the
Controlling Authority, in his order dated January 11, 2017, who
determines the amount of gratuity in terms of the SAIL Gratuity Rules,
though declines to apply the provisions made there under to redress the
menace of unauthorised occupation of the company premises.
Page 11 of 14
18. The question still remains if the provisions under Clause 3.2.1 (c) of the
SAIL Gratuity Rules, 1966 is applicable in case of the appellant or not.
Let the same be quoted as hereinbelow: -
"3.0 PAYMENT OF GRATUITY
......................
3.2 Amount of Gratuity .............
3.2.1 The amount of gratuity shall be equal to 15 days' emoluments for each completed year of service or part thereof in excess of six months subject to a maximum limit of Rs. 3,50,000/- provided that-
..............
(c) The company will have the right to withhold the gratuity amount payable to an ex-employee or his nominee/legal heir(s), in case of his death, for non- compliance of Company's rules including non-vacation of Company's accommodation. No interest shall be payable on the gratuity amount so withheld for the period of unauthorized occupation of Company's accommodation and up to one month after the vacation of the Company's accommodation."
19. Considering the date of retirement of the deceased husband of the present appellant, the Court finds this rule to be applicable in his case. The subsequent amended Rules which came into force in 2020 is not the relevant Rules in case of the said person. Argument on behalf of the appellant in this regard, is thus discarded.
20. According to the Rule 3.2.1 (c) of the SAIL Gratuity Rules, the respondent company is empowered to withhold the gratuity amount payable, for non-compliance of the company's Rules, including the Rule of non-vacation of company's accommodation. Non-vacation of company's accommodation is an important, impactful incident having Page 12 of 14 far-reaching consequences. The accommodation a person is allotted, is a public premises and according to the company's Rules the same is to be allocated to an employee in need of accommodation. Unauthorized occupying thereof beyond the period stipulated in the service conditions shall have adverse effect on the conditions of service of the employees who would succeed such an unauthorized occupant after his superannuation. This is bound to affect the smooth functioning of the organization itself and prejudicial to the larger interests of the society.
21. The Court, further notices that, Rule 3.2.1 (c) of the said Rules has no bearing with the relevant condition as incorporated under the Payment of Gratuity Act, under Section 4(6) thereof. The provision of the Act of 1972 whereas provides for withholding of gratuity being directly related with misconduct of the employee and loss suffered by the company due to the same, which is not so in case of the Rules of the company as above. The appellant being bound by the SAIL Gratuity Rules and having accepted the order of the Controlling Authority dated January 11, 2017 in terms of the said Rules cannot at a later stage deny application thereof in her case. According to the said Rules, no misconduct or loss of the company would be imperative for withholding of the gratuity amount payable to an ex-employee in case he himself or his legal heirs occupy the company premises in contravention of the company Rules, beyond the stipulated period, which is an evident fact in the instant case.
Page 13 of 14
22. As submitted on behalf of the respondent, the Court finds that, unauthorized occupation of the company premises beyond the specified period has always been deprecated by the Courts. The judgment of Raghbendra Singh (Supra) is very apt in this regard to mention. The Supreme Court has even directed adjustment of penal rent due to unauthorized occupation of Government quarters with the death-cum- retirement benefits payable to the appellants in Wazir Chand's Case (Supra).
23. The Hon'ble Single Judge has meticulously considered all the relevant issues involved in the writ petition. An intra-Court appeal, the Appeal Court is not supposed to unsettle a judgment of the Hon'ble Single Judge unless the same suffers from manifest gross and palpable error in law or irrationality. The conduct of the appellant is worth noticing, as stated above. According to this case, the prayer of the appellant of being granted with the gratuity amount is only a frivolous and eye-wash in so far as she herself as once refused the amount of gratuity as adjudicated by the statutory authority. In such view of the fact, this Court is unable to find any impropriety or illegality in the judgment of the Hon'ble Single Judge dated January 14, 2025 as impugned in this appeal warranting interference of this Court. Hence, the appeal is devoid of any merit and is liable to be dismissed.
Page 14 of 14
24. Accordingly, the appeal is dismissed and the judgment dated January 14, 2025, of the Hon'ble Single Judge in writ petition No. WPA 26418 of 2017 is upheld.
25. Having said all as above and before parting, this Court wants to indicate that for the ends of justice, the appellant is still granted opportunity to accept the amount of gratuity determined by the controlling authority in his order dated January 11, 2017, however, without any interest and immediately vacate the premises she is occupying at present, in case she applies in writing before the respondent company for disbursement of the said gratuity amount, within a maximum period of 15 days from the date of this judgment.
26. The appeal along with connected applications are disposed of.
27. Urgent certified copy of this judgment, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(Lanusungkum Jamir, J.) (Rai Chattopadhyay, J.)