Employer cannot withhold gratuity for unauthorized retention of quarters post-retirement; statutory interest of 10% applies for delayed payment.

JUDGMENT :

S.K. MISHRA, J.

1. This writ petition has been preferred by the Mahanadi Coalfields Ltd. (Employer) challenging the order dated 26.05.2015 passed by the Controlling Authority-cum- Regional Labour Commissioner (Central), Rourkela under the Payment of Gratuity Act, 1972, shortly hereinafter, “P.G. Act” in application no.36(12)2014/RKL/R, so also the confirming order dated25.10.2016 passed by the Appellate Authority-cum-Deputy Chief Labour Commissioner (Central), Bhubaneswar.

2. Such orders are challenged basically on the ground that the Petitioner was justified to withhold the gratuity. The Opposite Party No.1-employee, though was superannuated from service w.e.f. 31.01.2010, illegally and unauthorisedly retained the quarter allotted to him for about 3 years and 9 months i.e. from 01.04.2010 till 2014.

3. Learned Counsel for the Petitioner, reiterating the grounds urged in the writ petition so also relying on the judgment of this Court in Debakar Vs. Steel Authority of India & Ors., 2001 (I) OLR 41 submits, because of the reason of not vacating the Company’s quarter after retirement, the Petitioner- Employer was justified to withhold the gratuity. That apart, while preferring Appeal Case No.01 of 2016, as required under the second Proviso under sub-section 7 of Section 7 of P.G. Act, 1972, the entire awarded amount of gratuity with accrued interest as on the said date, to the tune of Rs.13,36,168.20/- has already been deposited with the Controlling Authority vide demand draft dated 28.12.2015, drawn in the name of Assistant Labour Commissioner (Central), Bhubaneswar.

4. Mr. Pattanayak further submits, the Controlling Authority was not justified to direct to release the gratuity amount along with 10% interest, which has been incorrectly confirmed by the Appellate Authority vide the second impugned order dated 25.10.2016 passed in Appeal Case No.01 of 2016 .

5. Per contra, learned Counsel for the Opposite Party No.1, drawing attention of this Court to the observations so also findings in the impugned orders as well as legal provisions, enshrined under sub-section (3-A) of Section 7 of the P.G. Act, 1972, submits that the Controlling Authority was justified to award 10% interest over and above the gratuity amount payable to the Opposite Party No.1, in view of the legal provisions in the said regard, as contemplated under sub-section 3 & (3-A) of Section 7 of the P.G. Act, 1972, which was rightly confirmed by the Appellate Authority.

6. Relying on a recent judgment of this Court reported in Md. Odisha State Cooperative Bank Ltd. Bhubaneswar Vs. Prafulla Kumar Pattnaik & Ors. 2025 (I) ILR CUT 1314, so also the judgment reported in Managing Director, Odisha State Cooperative Bank Ltd. Vs. Managovinda Barik & Ors. MANU/OR/1312, she further submits, law with regard to withholding and payment of gratuity, so also awarding interest on delayed payment is well settled, as has been detailed in the said judgments of this Court. Hence, there is no infirmity in the impugned order passed by the Controlling Authority so also the confirming order passed by the Appellate Authority and the writ petition deserves to be dismissed with exemplary costs to compensate the hardship caused to the Opposite Party, who died during pendency of the writ petition, so also his legal heirs.

7. That apart, to substantiate the stand regarding allowing the Opposite Party No.1 to retain the official quarter on the basis of making payment of penal rent, learned Counsel for the Opposite Party No.1, drawing attention of this Court to documents at Annexure A/1 series to th