Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CAT) 5322

CENTRAL ADMINISTRATIVE TRIBUNAL
Om Prakash-VII, J
Farida Begum – Appellant
Versus
Union Of India – Respondent
Original Application No. 220 of 2021|Original Application No. 02 of 2023

Advocates:
For the Appellants/Petitioners: R.K. Dixit
For the Respondents: Krishna Kumar Ojha, Manoj Kumar Sharma, Amitabh Kumar Sinha

Retiral benefits and gratuity cannot be withheld or subject to recovery of penal/damage rent when the employee was authorized to retain accommodation at normal rent under valid departmental circulars, as retiring employees have a vested right to receive their earned terminal benefits.

Headnote:(A) Administrative Tribunals Act, 1985 - Section 19 - Retiral benefits - Recovery of penal/damage rent - Employee retained railway accommodation after transfer - Tribunal in earlier proceeding had directed formulation of uniform policy and allowed retention - Subsequent departmental circular specifically directed deduction of normal rent instead of penal rent - No evidence that subsequent circular was withdrawn - Recovery of damage rent from DCRG post-retirement and post-death held arbitrary and unsustainable.

Facts of the case:
The applicant’s husband was a railway employee who continued to occupy his previous accommodation after being transferred to another station. Despite retirement and death, the Railway authorities withheld DCRG and recovered damage rent, citing unauthorized occupation. The applicant challenged the withholding of gratuity and the recovery of penal rent, contending that her husband had paid the normal rent as directed by departmental authorities and that the unauthorized occupation charge was unjustified.

Findings of Court:
The Court held that in the absence of evidence showing the withdrawal of the specific departmental letter authorizing the deduction of normal rent, the initiation of recovery of penal/damage rent was illegal. The Court allowed both applications, quashed the impugned order, and directed the refund of recovered amounts with interest.

Issues: Whether the recovery of damage rent from the deceased employee's retiral dues was legally sustainable in light of earlier departmental directives allowing retention of accommodation at normal rent.

Ratio Decidendi: Retiral dues represent earned benefits and cannot be withheld arbitrarily. When a specific departmental instruction permits the payment of normal rent for accommodation retained by transferred employees, the subsequent recovery of 'damage' or 'penal' rent without withdrawing said instruction is legally impermissible.

Result: Applications allowed.

Table of Content
1. introduction and primary reliefs sought in original applications. (Para 1 , 2)
2. summary of facts regarding non-payment of dcrg and unauthorized rent recovery. (Para 3 , 4 , 5 , 6 , 7)
3. arguments presented by respective counsels regarding policy and rent deductions. (Para 8 , 9 , 10 , 11)
4. court deliberation on prior rulings and departmental circulars governing rent. (Para 12 , 13 , 14 , 15 , 16 , 17)
5. final direction for refund of recovered amounts and disposal of applications. (Para 19)

(O R D E R)

BY JUSTICE OM PRAKASH-VII, MEMBER (J)

Both the Original Applications have been heard together and are being decided with the consent of learned counsels for the parties by a common order as the controversy involved in both the cases are similar and identical.

2. The present Original Applications have been filed by the applicants under section 19 of the Administrative Tribunal Act, 1985 seeking following reliefs:-

Reliefs in OA No. 220/2021

(i) The Hon’ble Tribunal may graciously be pleased to quash the impugned order dated 3.2.2021 (Annexure A-1 to the OA) and direct the respondents to release the DCRG (Death Cum Retiral Gratuity) with 18% interest.

(ii) To issue any other suitable order or direction which this Hon’ble Court may deem fit and proper under the facts and circumstances of the case.

(iii) To award the cost of Rs. 50000/- payable in favour of applicant and recover the amount from the responsible authority”.

Reliefs in OA No. 02/20

(i) The respondents may be directed not to recover any amount from pension or other benefits, in lieu of so called undeclared amount and the amount already recovered may be refunded with 12% interest.

(ii) To issue any other suitable order or direction which this Hon’ble Court may deem fit and proper under the facts and circumstances of the case.

(iii) To award the costs of the application in favour of the applicant”.

3. The brief facts of O.A. No. 220/2021 are that the applicant’s husband was appointed in the Railway Department on 11.06.1985 and retired from service on 31.07.2012. After his retirement, he informed the department about the vacation of the allotted quarter and subsequently handed over possession of the same to the Railways. The respondents sent a surrender letter to the competent authority for granting clearance to the applicant’s husband. However, the DCRG (Death-cum-Retirement Gratuity) was not released to the applicant’s husband after his retirement. Consequently, he submitted a representation to the respondents. As the surrender certificate had not been issued to him till 02.08.2012, he again submitted a representation seeking clearance of the quarter. Due to non-payment of the DCRG amount and financial constraints, the applicant’s husband fell seriously ill, suffered paralysis and his condition became critical. He again submitted a representation dated 16.05.2017 requesting payment of the DCRG amount, however, no response was received from the respondents. Due to continued non-payment of DCRG resulted financial hardship, the applicant’s husband passed away on 18.11.2019. After the death of her husband, the applicant submitted a representation dated 14.08.2020 to the respondents stating therein that her husband had already vacated Railway Quarter No. T-5B/A and had informed the Foreman, Moradabad on 30.07.2012, prior to his retirement, but the DCRG had still not been released. She again submitted a representation dated 09.11.2020 reiterating the said request. Ultimately, the respondents, vide impugned order dated 3/02/2021, informed the applicant that since the quarter had been allotted to her husband and had not been vacated and in the absence of a ‘No Dues/No Claim Certificate’ from the concerned Railway authority, the gratuity could not be released. Aggrieved by the aforesaid impugned order, the applicant has filed the present Original Application.

4. The brief facts of O.A. No. 02/2023 are that the applicant’s husband was appointed in the Railway De

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2026 Supreme(Online)(CAT) 5322

CENTRAL ADMINISTRATIVE TRIBUNALOm Prakash-VII, JFarida Begum – AppellantVersusUnion Of India – RespondentOriginal Application No. 220 of 2021|Original Application No. 02 of 2023

Retiral benefits and gratuity cannot be withheld or subject to recovery of penal/damage rent when the employee was authorized to retain accommodation at normal rent under valid departmental circulars, as retiring employees have a vested right to receive their earned terminal benefits.

Cases Referred (1)

CENTRAL ADMINISTRATIVE TRIBUNAL
Om Prakash-VII, J
Farida Begum – Appellant
Versus
Union Of India – Respondent
Original Application No. 220 of 2021|Original Application No. 02 of 2023