The Supreme Court has observed that gratuity can be withheld for recovery of dues from an employee.
In this case, the Jharkhand High Court had rejected the contention raised by Steel Authority Of India Ltd., that the Company was entitled to withhold the gratuity of the employee from its retired employee for non-vacation of the company's accommodation and no interest was payable on the same. The High Court, to hold thus, had relied on a 2017 Supreme Court judgment in Ram Naresh Singh Vs. Bokaro Steel Ltd. & Ors.
We are of the view that if an employee occupies a quarter beyond the specied period, the penal rent would be the natural consequence and such penal rent can be adjusted against the dues payable including gratuity, said the Apex Court bench comprising Justices Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy while referring to ONGC Ltd. & Anr. Vs. V.U. Warrier (2005) 5 SCC 245.
The court added that the reliance placed by the High court on the case of Ram Naresh Singh is misplaced as it is not even a judgment but an order in the given facts of the case. In the said order, the Court had held that Bokaro Steel Limited could not have retained the amount due to its employee on account of gratuity.
The court however dismissed the writ petition observing that the amount in question is also quite small and thus it is not a t case for interference under Article 136 of the Constitution of India.
Source of article: Live law
Section: 4
Payment of gratuity
(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five
years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
(6) Notwithstanding anything contained in sub-section (1), -
(a) the gratuity of an employee, whose services have been terminated for any
act, wilful omission or negligence causing any damage or loss to, or
destruction of, property belonging to the employer, shall be forfeited to the
extent of the damage or loss so caused.
(b) the gratuity payable to an employee may be wholly or partially forfeited]
-
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which
constitutes an offence involving moral turpitude, provided that such offence
is committed by him in the course of his employment.
This is what Act in original reads
Apex court may have considered that wilful occupation of quarter by employee was an act causing loss to the company and accordingly passed the order.
This order clears the air about the oft reported habit of employees refusing to vacate quarter,even after leaving the job and still demanding Gratuity.
In this case, the Jharkhand High Court had rejected the contention raised by Steel Authority Of India Ltd., that the Company was entitled to withhold the gratuity of the employee from its retired employee for non-vacation of the company's accommodation and no interest was payable on the same. The High Court, to hold thus, had relied on a 2017 Supreme Court judgment in Ram Naresh Singh Vs. Bokaro Steel Ltd. & Ors.
We are of the view that if an employee occupies a quarter beyond the specied period, the penal rent would be the natural consequence and such penal rent can be adjusted against the dues payable including gratuity, said the Apex Court bench comprising Justices Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy while referring to ONGC Ltd. & Anr. Vs. V.U. Warrier (2005) 5 SCC 245.
The court added that the reliance placed by the High court on the case of Ram Naresh Singh is misplaced as it is not even a judgment but an order in the given facts of the case. In the said order, the Court had held that Bokaro Steel Limited could not have retained the amount due to its employee on account of gratuity.
The court however dismissed the writ petition observing that the amount in question is also quite small and thus it is not a t case for interference under Article 136 of the Constitution of India.
Source of article: Live law
Section: 4
Payment of gratuity
(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five
years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
(6) Notwithstanding anything contained in sub-section (1), -
(a) the gratuity of an employee, whose services have been terminated for any
act, wilful omission or negligence causing any damage or loss to, or
destruction of, property belonging to the employer, shall be forfeited to the
extent of the damage or loss so caused.
(b) the gratuity payable to an employee may be wholly or partially forfeited]
-
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which
constitutes an offence involving moral turpitude, provided that such offence
is committed by him in the course of his employment.
This is what Act in original reads
Apex court may have considered that wilful occupation of quarter by employee was an act causing loss to the company and accordingly passed the order.
This order clears the air about the oft reported habit of employees refusing to vacate quarter,even after leaving the job and still demanding Gratuity.