Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(SC) 284

SUPREME COURT OF INDIA
Pankaj Mithal, S.V.N. Bhatti, JJ.
The Management of Steel Authority of India And Others – Appellants
Versus
Shambhu Prasad Singh And Others – Respondents
Civil Appeal Nos. 3499-3500 of 2026 @ Special Leave Petition (Civil) Nos. 025516 – 025517 OF 2024 WITH Civil Appeal Nos. 3489-3490 OF 2026 @ Special Leave Petition (Civil) Nos. 010175 – 010176 OF 2026 Civil Appeal Nos. 3491-3492 OF 2026 @ Special Leave Petition (Civil) Nos. 021316 – 021317 OF 2024 Civil Appeal Nos. 3493-3494 OF 2026 @ Special Leave Petition (Civil) Nos. 021318 – 021319 OF 2024 Civil Appeal Nos. 3495-3496 OF 2026 @ Special Leave Petition (Civil) Nos. 021320 – 021321 OF 2024 Civil Appeal Nos. 3501-3504 OF 2026 @ Special Leave Petition (Civil) Nos. 025518 – 025521 OF 2024 Civil Appeal Nos. 3505-3506 OF 2026 @ Special Leave Petition (Civil) Nos. 026140 – 026141 OF 2024 Civil Appeal Nos. 3407-3508 OF 2026 @ Special Leave Petition (Civil) Nos. 026350 – 026351 OF 2024 Civil Appeal Nos. 3509-3510 OF 2026 @ Special Leave Petition (Civil) Nos. 026352 – 026353 OF 2024 Civil Appeal Nos. 3497-3498 OF 2026 @ Special Leave Petition (Civil) Nos. 026861 – 026862 OF 2024 With Civil Appeal Nos. 3511-3512 OF 2026 @ Special Leave Petition (Civil) Nos. 026863 – 026864 OF 2024 With Civil Appeal Nos. 3513-3514 OF 2026 @ Special Leave Petition (Civil) Nos. 026865 – 026866 OF 2024
Decided On : 18-03-2026

Advocates appeared:
For the Appellant(s) : Mr. Ashok Anand, AOR Mr. Moni Cinmoy, Adv. Mr. Rakesh Kumar Singh, Adv. Mr. Anshul Rai, AOR Mr. Mallika Ranjan, Adv. Mr. Raunaq Singh, Adv.
For the Respondent(s): Mr. Chandan Kumar, AOR Mr. Anshuman Siddharth Nayak, AOR Mr. N. S. Dalal, Adv. Mr. Devesh Pratap Singh, Adv. Mr. Rahul Kulhare, Adv. Mr. Baibhaw Gahlaut, Adv. Mr. Krishan Mourya, Adv. Mr. Divya Prakash Arya, Adv. Mr. Ratnadeep Raha, Adv. Mrs. Garima Yadav, Adv. Mr. Seemab Qayyum, Adv. Mr. Kumar Shivam, AOR Mr. Ashok Anand, AOR Mr. Moni Cinmoy, Adv. Mr. Rakesh Kumar Singh, Adv. Mr. Somanatha Padhan, Adv. Mr. Akash Kakade, Adv. Mr. Kameshwar Gumber, Adv. Mr. Ajay Gupta, Adv. Mr. Mukul Dev Mishra, Adv.

The court determined that gratuity can be withheld if an ex-employee fails to vacate company accommodation, constituting a breach of internal policies.

Headnote:(A) SAIL Gratuity Rules, 1978 - The management's right to withhold gratuity - Corporate policy on staff quarter retention - The obligation to vacate accommodation affects gratuity release.

(B) The court discussed the binding precedent set by orders of previous cases.

(C) The management contended that non-vacation of official quarters justified withholding gratuity as per internal policies.

Facts of the case:
Shambhu Prasad Singh and other Ex-Employees retired from service and retained allotted staff quarters longer than permissible. Management sought to withhold gratuity based on retention policies, leading to legal challenges.

Findings of Court:
The court held that gratuity payment is contingent upon vacation of allotted accommodation, guided by SAIL Gratuity Rules. The management's decision to charge penal rent was deemed legitimate under their policies.

Issues: Whether reliance on a previous order as a binding precedent is legally sustainable, and the entitlement of SAIL to adjust penal rent against gratuity of Ex-Employees for prolonged retention of staff quarters.

Ratio Decidendi: It was established that withholding gratuity for non-compliance with retention policies is permissible, and distinguishing past rulings underpins the rationale for penal rent adjustment prior to gratuity payment.

Result: Civil Appeals allowed, with modifications to prior decisions on gratuity payment.

Table of Content
1. overview of the cases and relevant timelines. (Para 2 , 3 , 4 , 5 , 6 , 7)
2. clarification of applicable gratuity and retention rules. (Para 8 , 12 , 18)
3. arguments on gratuity and penal rent adjustments. (Para 10 , 14 , 15)
4. assessment of obligations regarding gratuity and rental terms. (Para 16 , 17 , 19)
5. conclusion on reasonable penal rent and its implications. (Para 20 , 21)
6. final decision and outcome of the civil appeals. (Para 23)

JUDGMENT

S.V.N. BHATTI, J.

1. Leave Granted.

2. The batch of Civil Appeals arises from Civil Review Order dated 16.05.2024 in Civil Review No. 45 of 2021, etc., and the Order dated 20.01.2020 in LPA No. 561 of 2017 and batch. The questions of fact and law are the same in the Civil Appeals. The Civil Appeals were heard on 09.03.2026 and 11.03.2026, respectively, and reserved for judgment. Through the instant Judgment, the Civil Appeals are considered and disposed of.

3. There are two types of cases before this Court. One type where the Writ Petition was decided after the Order dated 31.03.2017 of this Court in Civil Appeal No. 4740 of 2017, and the other is where the Writ Petition was decided before the Order dated 31.03.2017 of this Court in Civil Appeal No. 4740 of 2017. To illustrate the two types of cases before this Court in the present batch of Civil Appeals, a table is presented below:

Case name

Writ Petition

LPA on

Civil Review decided on

WPs Dismissed

Bokaro Steel Plant & Ors. v. Shambhu Prasad Singh & Ors. (S.L.P. (C) No. 25516-25517 of 2024)

Filed on 27.03.2012

Decided on 28.07.2016

LPA No. 561 of 2017.

20.01.2020

Civil Review No. 45 of 2021.

16.05.2024

Bokaro Steel Plant & Ors. v. Shiv Shankar Jha & Ors. (S.L.P. (C) No. 21320-21321/2024)

Filed in April 2011

Decided on 28.07.2016

LPA No. 428 of 2016.

20.01.2020

Civil Review 23 of 2021

16.05.2024

WPs Allowed

Bokaro Steel Plant & Ors. v. Hira Devi & Ors. (S.L.P. (C) No. 21316- 21317 of 2024)

Filed in April 2011

Decided on 12.07.2017

LPA No. 490 of 2017.

20.01.2020

Civil Review No. 12 of 2021.

16.05.2024

Bokaro Steel Plant & Ors. v. Ganga Sagar Yadav & Ors. (S.L.P. (C) No. 21318-21319 of 2024)

Filed on 23.11.2017

Decided on 11.09.2018

LPA No. 708 of 2018.

20.01.2020

Civil Review No. 13 of 2021.

16.05.2024

Steel Authority of India v. Arvind Kumar & Ors. (S.L.P. (C) No. 25518-25521/2024)

Filed on 31.07.2008 and decided on 11.04.2018

LPA No. 423 of 2018.

30.06.2020

Civil Review No. 44 of 2021

25.04.2024

Steel Authority of India v. Virendra Pratap Singh (S.L.P. (C) No. 26861- 26862/2024)

Filed on 22.07.2004

Decided on 22.06.2018

LPA No. 431 of 2018.

18.12.2019

25.04.2024

Steel Authority of India Ltd. v. Sada Nand Singh (S.L.P. (C) Diary No. 33516 of 2024)

Decided on 02.08.2017

LPA No. 733 of 2018.

20.01.2020

Civil Review No. 11 of 2021.

25.04.2024

4. The management of Steel Authority of India is the Appellant, and the Respondents are retired employees of the Steel Authority of India/Bokaro Steel Plant. For convenience, the parties are referred to as SAIL and Ex-Employee(s), respectively. The circumstances, dates, and events in the Civil Appeal filed against Shambu Prasad Singh/Ex-Employee against the Order in Civil Review Petition No. 45 of 2021 in LPA No. 561 of 2017, against Writ Petition No. 1681 of 2012, are referred to and would be sufficient for disposing of the batch of Civil Appeals.

5. The Civil Appeals examine the workability of the right of SAIL to withhold the gratuity of Ex-Employees because the Ex-Employees did not surrender vacant possession of the quarter allotted to them while in service. The consideration of circumstances and mu

Click Here to Read the rest of this document

2026 Supreme(SC) 284

The court determined that gratuity can be withheld if an ex-employee fails to vacate company accommodation, constituting a breach of internal policies.

Cases Referred (1)

Related Judgments

Management of Steel Authority of India VS Shambhu Prasad Singh - 2026 Supreme(SC) 284

Management Of Steel Authority Of India vs Shambu Prasad Singh - 2026 Supreme(Online)(SC) 518

SWASTI GHOSH vs THE LD CONTROLLINNG AUTHORITY AND ANR - 2026 Supreme(Online)(Cal) 1111

Project Officer, Bachra Project, Central Coalfields Limited VS Union of India - 2023 Supreme(Jhk) 7

Steel Authority of India Ltd. VS Ld. Controlling Authority - 2025 Supreme(Cal) 73

Mahanadi Coalfields Ltd. vs G. Shyamal Rao (Dead), G. Kamala Rao - 2025 Supreme(Ori) 295

Ramakrishnan. P. K. VS Kerala State Beverages (M&M) Corporation Ltd. - 2022 Supreme(Ker) 106

Union of India VS Gurtiboina Appaia V. G. Shankar - 2021 Supreme(Cal) 375

A. B. Viswanathan, (Retired Senior Regional Manager), Fertilizers And Chemicals Travancore Ltd. (FACT) VS Fertilizers And Chemicals Travancore Ltd. (FACT) - 2021 Supreme(Ker) 141

Bokaro Steel Plant, a Unit of Steel Authority of India Limited, through its DGM (Law), Shri A. K. Upadhyay, son of Sri S. N. Upadhyay VS Hira Devi, wife of Biranchi Prasad Singh - 2024 Supreme(Jhk) 313