JUDGMENT - ASHOK AGARWAL, J.:--- Whether a Company is justified in withholding the retirement benefits of its ex-employee on the ground that the employee is withholding the possession of the Company's flat which was allotted to him as a per requisite of his service condition is the short question that arises for determination in the present Notice of Motion.

2. The plaintiff, who was in the employment of the defendants, retired with effect from 11th February, 1987. It is undisputed that the plaintiff is governed by the retirement benefits scheme for the management grade officers. During the tenure of his service, the plaintiff was allotted a flat which the Company under a lease agreement dated 26th July, 1968 had obtained from its landlord one U.T. Daswani. The defendant was permitted to reside in the said flat as condition of his service. The rent is respect of the said flat was paid by the Company to the said Daswani. After the plaintiff retired, correspondence ensued wherein the Company demanded back the possession of the flat and the plaintiff contended that it was he who had obtained the said flat on lease from the landlord. According to the plaintiff, it was only for obtaining certain tax benefits that the lease agreement was entered into between the Company and the landlord and it was specifically agreed that on his retirement the lease would be transferred in his favour. It is true that this contention was taken by the plaintiff for the first time in the correspondence that ensued after his retirement. The question, however, is whether the Company would be justified in withholding the retirement benefits of the plaintiff on the ground that the plaintiff is withholding the possession of the Company's flat. Reliance is placed by Mr. Tulzapurkar on Article 10 of the Retirement Benefits Scheme for Management Grade Officers of the defendant Company. It provides as under :--

"Withdrawal of benefits payable under the Retirement Benefits Scheme. Notwithstanding any other provisions of this scheme, the benefits paid under this scheme will be withdrawn if the beneficiary jeopardizes or interferes with the essential interests of the Company by committing any of the following acts:

(a) Conducts or engages in any business activities which are similar to those carried on by the Company or in which the Company is engaged, without obtaining prior approval of the Company.

(b) Is guilty of theft or fraud, in respect of properties or business of the Company.

(c) Commits any act which is punishable under the Indian Penal Code, in dealings with the Company.

(d) Commits any act in contravention of the provisions of Article 9 of this scheme.

Before taking action under this clause the Company shall call upon the beneficiary by notice in writing to show cause why the benefits should not be withdrawn. The decision of the company however will be final and binding."

It is pointed out by Mr. Tulzapurkar by making a reference to the correspondence which ensued after the retirement and before filing of the suit that the Company had given notice as required under the above article. The plaintiff was given adequate opportunity and the Company had thereafter proceeded to withdrawn the benefits due to the plaintiff under the scheme. According to Mr. Tulzapurkar, the plaintiff is guilty of theft or fraud in respect of the properties of the Company, and is therefore, liable under sub-clause (b) of Article 10.

The plaintiff has also committed an act which is punishable under section 408 of the Indian Penal Code. In fact, a prosecution has been duly launched by the Company against the plaintiff under section 408 of the Indian Penal Code and section 630 of the Companies Act and the same is pending. Hence the plaintiff is liable also under clause (c) of the said article. According to Mr. Tulzapurkar, the claim set up by the plaintiff in respect of the Company's flat is belated, dishonest and mala fide. He submitted that the plaintiff in the suit would at best be

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