JUDGMENT - LODHA R.M., J.:---The petitioner was holding the post of Additional Director (F A) in Oil and Natural Gas Commission (O.N.G.C.) prior to his retirement. He retired from service on superannuation with effect from 28th February, 1990. While dealing with the aspect of payment of gratuity which was found payable to the petitioner under 1969 Regulations, the amount of Rs. 53,632/- was deducted towards unauthorised occupancy of official accommodation from 1st July, 1990 to 16th May, 1991 at the rate of Rs. 5100/- being 75% of basic pay of Rs. 6800/- per month. This action is impugned in the present writ petition.

2. Few facts are not in dispute. The petitioner retired in service of O.N.G.C. as Additional Director (F A). He retired on 28th February, 1990. Under the then existing Rules, petitioner was entitled to retain the official accommodation upto the period of four months from the date of retirement and accordingly he was in authorised occupation of the official accommodation upto 30th June, 1990. The petitioner vacated the official accommodation on 16th May, 1991. The petitioner's prayer for retention of official accommodation beyond 30th June, 1990 was rejected. An amount of Rs. 1,00,000/- was payable to the petitioner towards gratuity under relevant Regulations. The dispute is whether the respondents were competent and could in law set off the unauthorised occupancy charges of the official accommodation for the period from 1st July, 1990 to 16th May, 1991.

3. The learned Counsel for petitioner contended that retiral benefits, particularly pension and gratuity are earned by an employee and on his retirement is entitled to get the same from the employer and the said valuable right cannot be adjusted or set off even if employee has unauthorisedly remained in possession of official accommodation after retirement. In this connection in support of her contention, the learned Counsel for petitioner has strenuously placed reliance on (i) (R. Kapur v. Director of Inspector (Painting and Publication) Income Tax and another)1, 1994(6) S.C.C. 589 and (ii) (Gorakhpur University others v. Shitla Prasad Nagendra (Dr.) others)2, 2001(III) C.L.R. 262. The learned Counsel also contended that by depriving the petitioner his legitimate due amount of gratuity, the respondents are liable to pay interest. In this connection, she relied upon the judgment of the Apex Court in (State of Kerala v. M. Padmanabhan Nair)3, 1985(1) S.C.C. 429, and R. Kapur cited supra.

4. Though an affidavit in reply has been filed by respondents, nobody appears for respondents to argue the matter.

5. Legal position is no more res integra that pension and gratuity become valuable rights and property in the hands of employees on their retirement and payment of pension and gratuity cannot be withheld even if the employee has remained in unauthorised occupation of employer's accomodation and become liable to pay damages under the allottment Rules for overstay. To recover damages from such retired employee for unauthorised occupation the employer has to pursue appropriate remedy in law but the said amounts cannot be set off against pension and gratuity amount payable to retired employee. In M. Padmanabhan Nair case, the Apex Court held thus:

"10. Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment."

6. The aforesaid judgment was considered by the Apex Court in R. Kapur and relying upon the aforesaid observations, in paragraph 11 of the judgment holds thus:

"11. The Tribunal having come to the conclusion that D.C.R.G. cannot be withheld merely because the claim for damages for unauthorised occupation is pending, should in our considered opinion, hav