The court ruled that administrative orders must provide reasons and notice to comply with natural justice principles, and failure to do so renders the order unsustainable.

JUDGMENT :

Ravi Krishan Kapur J.

1. The petitioner employer assails an order dated 11 January, 2017 directing payment of an amount of Rs.14,85,448/- as gratuity under section 4 of the Payment of Gratuity Act 1972 alongwith the notice dated 11 January 2017 in Form R and the consequential show cause notice dated 18 May 2017 passed in Case No pg/10/2015/ALCR (SAIL, ASP vs Smt Swasti Ghosh). The petitioner also prays for directions on the respondent no.2 to vacate and surrender the residential accommodation provided by the petitioner which continues to be unauthorisedly occupied by the respondent no.2.

2. Briefly, the husband of the respondent no.2, Mohan Kumar Ghosh was an employee of the Alloy Steel Plant a unit of Steel Authority of India Limited (SAIL) and retired on 31 December, 2014. During the course of his employment, he was allotted premises No.6, Sarat Chandra Avenue, Durgapur Steel Township for his residential accommodation which he was obliged to vacate within two months of his retirement.

3. Shortly after his retirement in January 2015, the said Mohan Kumar Ghosh was paid his outstanding dues on account of provident fund alongwith interest aggregating to Rs.23,46,147/- and Rs.21,557/-respectively. Subsequently, in March 2015 he claimed gratuity before the Controlling Authority without vacating the above quarters.

4. Significantly, sometime in April 2015, Mohan Kumar Ghosh had requested the Competent Authority for a lease or license in respect of the above residential quarters. The request was considered and rejected informing him that such retention could only be permitted for two months with an additional period of two months on special grounds and at an enhanced rent.

5. In January, 2017, the Controlling Authority disposed of an application filed by the respondent no.2 and passed the impugned order directing the petitioner to pay gratuity amounting to Rs.14,85,448/-. Thereafter, the Controlling Authority issued a notice for issuance of the impugned certificate for recovery of the gratuity amount alongwith compound interest. The principal grievance of the petitioner is that the impugned order was passed in violation of the principles of natural justice and without any notice to the petitioner. In any event, there are no reasons in the impugned order which makes the same unsustainable.

6. It is contended that the petitioner is an "integral company" under the Public Sector Iron and Steel Companies (Restructuring) and Miscellaneous Provisions Act, 1978 and has its own Gratuity Fund under section 20 of the Act which provides for higher benefits than what is payable under the Act in respect of non-executive employees. It is further alleged that in 2014, when Mohan Kumar Ghosh had retired, the ceiling limit under the SAIL Gratuity Rules was Rs. 10,00,000/-. However, the respondent no.2 has been awarded Rs.14,85,448/- which is more than the amount prescribed. It is urged that clause 3.2.1 (c) of SAIL Gratuity Rules also recognizes withholding of such gratuity for non-compliance of the Company Rules including failing to vacate the company accommodation, and that no interest is payable on such gratuity amount for the period of unauthorized occupation. The Rules have also been promulgated in order to safeguard the petitioner against the exploitation by an ex-employee or his family members post his death. Since the rent, electricity and water charges are being borne by the petitioner and the same continue to accumulate there is no way of securing such amount.

7. It is also contended that the normal monthly rent for the above accommodation at the relevant point of time was Rs. 3,697/-. As such, an amount of Rs. 4.13 lacs has accrued only on account of occupational charges from the respondent no.2. There are also outstanding additional dues on account of penal charges which continue to accumulate with little hope of recovery. Only electricity bills raised at a nominal flat rate till 2021 have been paid by the respondent no.2. However, re