( 1 ) THE petitioner is seeking a declaration that his employer, Indian Iron and Steel Company ltd. was not empowered and entitled to deduct the sum of Rs. 51,314 from his gratuity, He has prayed for a mandamus directing his employer to pay that amount with interest @ 10% per annum. He has also prayed for a mandamus directing his employer to pay allowance for travelling to his home after retirement.

( 2 ) AT the time of retirement on June 30, 2003 he was working as senior Manager (Mining ). A minor penalty disciplinary action was initiated against him by issuing charge-sheet dated June 23, 2003, He submitted his reply dated July 9, 2003. He denied the allegation that by showing favour to a party he had caused financial loss to his employer. By an order dated November 29, 2003, the disciplinary authority imposed the minor penalty "of reduction of pay by one stage in his last pay drawn for a period of one year without cumulative effect". He accepted it.

( 3 ) HE was occupying quarters allotted to him by his employer. Though according to rules and regulations of the company he was entitled to keep the quarters for two months after his retirement, he continued to occupy it till november 6, 2004, when he gave possession thereof to the company. In the circumstances, gratuity payable to him was paid on October 5, 2005 after deducting Rs. 3,600 by way of recovery of excess payment in terms of the minor penalty order, Rs. 16,320 on account of unpaid electricity consumption charges, and rs. 31,394 on account of house rent (normal and penal added together ). Feeling aggrieved he took out this writ petition.

( 4 ) HIS counsel argues that in view of provisions in Sections 1 (3), 4 (1), 5, 6, 7 (3), 13 and 14 of the Payment of Gratuity Act, 1972, the company was not empowered and entitled to deduct any amount from the gratuity. His, contention is that since no notification in terms of provisions in Section 1 (3) was issued exempting the company from the operation of the Act, it was bound to pay gratuity according to its provisions. In support of this he relies on calcutta Dock Labour Board and Another v. Smt. Sandhya Mitra and Others, AIR 1985 SC 996 : (1985) 2 SCC 1 : 1993-III-LLJ (Suppl)-412. On the strength of Travancore plywood Ind. Ltd. v. Regional Jt. Labour. Commr. and Others, 1996 LIC 1403 (Ker), mining and Allied Machinery Corporation v. Ram Ranjan Mukherjee and Others, 2004 (1)CHN 510 (DB), Rabindra Nath Banerjee v. Certificate Officer and Others, (2005) 1 Cal LT 525 (HC) and Jaswant Singh Gill v. Bharat coking Coal Ltd. and Others 2007-I-LLJ-795 (SC), he argues that since provisions of the payment of Gratuity, Act, 1972 were to prevail over the gratuity rules of the company, and since in terms of provisions of the Act nothing can be deducted from gratuity payable to an employee, by deducting the amount the company acted wrongfully and illegally, and hence it must pay it with interest, for which relies on H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd. AIR 2003 SC 1526 : (2003) 3 SCC 40 : 2003-I-LLJ-1119.

( 5 ) COUNSEL for the company argues that in view of the rules in terms whereof gratuity was to be paid to the petitioner, the company was empowered and entitled not only to withhold payment of the amount for non-vacation of its accommodation, but it also had the right to deduct therefrom any amount payable to it. He says that the amount was rightly deducted, because, admittedly, the, petitioner did not vacate the quarters after his retirement. His argument is that the question whether in terms of the rules the company was empowered and entitled to deduct the amount from the gratuity is no longer res integra, because in a previous case involving the same question a Division bench of this Court held that the company would be entitled to deduct penal rent from the gratuity payable to an employee. He relies on the decision dated May 5. 2005 given in MAT no. 427 of 2005 Bhola Misra v. Union of India and Others.

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