Case: Secretary, O.N.G.C. Ltd.  Vs. V.U. Warrier

but "disputed" by him. This Court noted that the employee was keeping a quarter allotted to him and continued to occupy after retirement. It was, inter alia, observed by this Court that after the employee retired, his request and application as per practice for allotment of quarters in the name of his son who was also an employee in the University remained pending and no orders were passed thereon. Moreover, there were resolutions of the University to waive penal rent and such benefits were granted to other employees, but different treatment was shown to him which constituted "hostile discrimination" and the act was thus `unreasonable. Though the employee retired in 1990 and continued to keep the quarter up to 1996, the University did not choose to take any action to evict him. On the contrary, it acquiesced in his occupation "by accepting regularly the normal rent". Thus, there was lack of bona fides on the part of the University. 28. In Wazir Chand vs. Union of India and others, (2001) 6 SCC 596 , a retired employee continuously kept the quarter occupied unauthorisedly. He was charged penal rent in accordance with rules and after adjustment of dues, balance amount of gratuity was paid to him. He contended that it was bounden duty of the Government not to withhold the gratuity amount. The Court, however, dismissed the appeal observing that it was "unable to accept" the prayer of the appellant. The Court observed that the appellant having authorisedly kept the government quarter was liable to pay penal rent in accordance with rules and there was no illegality in adjusting those dues against death-cum-retirement benefits. 29. Wazir Chand was considered in Gorakhpur University but the Court stated that it was not clear from the facts whether the person was allowed to retain the accommodation on receipt of normal rent as in the University case. 30. The matter can be considered from another angle also. It is well-settled that the jurisdiction of the High Court under Article 226 of the Constitution is equitable and discretionary. The power under that Article can be exercised by the High Court "to reach injustice wherever it is found". Before more than fifty years, in G.V. Veerappa Pillai, Proprietor, Sathi Vilas Bus Service, Porayar Tanjore Direct, Madras vs. Raman & Raman Ltd., Kumbakonam, Tanjore District & others, 1952 SCR 583 , the Constitution Bench of this Court speaking through Chandrasekhara Aiyer, J., observed that the writs referred to in Article 226 of the Constitution are obviously intended to enable the High Court to issue them "in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record, and such act, omission, error, or excess has resulted in manifest injustice." (emphasis supplied) 31. Similarly, in the leading case of Sangram Singh vs. Election Commissioner, Kotah & Another, (1955) 2 SCR 1 , dealing with the ambit and scope of powers of High Courts under Article 226 of the Constitution, Bose, J., stated "That, however, is not to say that the jurisdiction will be exercised whenever there is an error of law. The High Courts do not, and should not, act as Courts of appeal under Art 226. Their powers are purely discretionary and though no limits can be placed upon that discretion it must be exercised along recognized lines and not arbitrarily; and one of the limitations imposed by the Courts on themselves is that they will not exercise jurisdiction in this class of cases unless substantial injustice has ensued, or is likely to ensue. They will not allow themselves to be turned into Courts of appeal or revision to set right mere errors of law which do not occasion injustice in a broad and general sense, for, though no legislature can impose limitations on these constitutional powers it is a sound exercise of discretion to bear in mind the policy of the legislature to have disputes about these special rights decided as speedily as may be. Therefore, writ petitions should not be lightly entertained in this class of case." (emphasis supplied) 32. The above principle has been reiterated and followed by this Court in several subsequent cases. 33. As already adverted to by us hereinabove, the facts of the present case did not deserve interference by the High Court in exercise of equitable jurisdiction under Article 226 of the Constitution. The respondent-petitioner before the High Court, was a responsible officer holding the post of Additional Director (Finance & Accounts). He was, thus, "gold collar" employee of the Commission. In the capacity of employee of the Commission, he was allotted a residential quarter. He reached the age of superannuation and retired after office hours of February 28, 1990. He was, therefore, required to vacate the quarter allotted to him by the Commission. The Commission, as per its policy, granted four months time to vacate. He, however, failed to do so. His prayer for continuing to occupy the quarter was duly considered and rejected on relevant and germane grounds. The residential accommodation constructed by him by taking loan at the concessional rate from the Commission was leased to Commission, but the possession of that quarter was restored to him taking into account the fact that he had retired and now he will have to vacate the quarter allotted to him by the Commission. In spite of that, he continued to occupy the quarter ignoring the warning by the Commission that if he would not vacate latest by June 30, 1990, penal rent would be charged from him. In our judgment, considering all these facts, the High Court was wholly unjustified in exercising extraordinary and equitable jurisdiction in favour of the petitioner - respondent herein - and on that ground also, the order passed by the High Court deserves to be set aside.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]18. Having heard the learned counsel for the parties, in our opinion, the appeals deserve to be allowed. It is no doubt true that pensionary benefits, such as gratuity, cannot be said to be bounty. Ordinarily, therefore, payment of benefit of gratuity cannot be withheld by an employer. In the instant case, however, it is the specific case of the Commission that the Commission is having a statutory status. In exercise of statutory powers under Section 32(1) of the Act, regulations know as the Oil and Natural Gas Commission (Death, Retirement and Terminal Gratuity) Regulations, 1969 have been framed by the Commission. In Sukhdev Singh vs. Bhagatram Sardar Singh Raghuvanshi & Another, (1975), 1 SCC 421 the Constitution Bench of this Court held that regulations framed by the Commission under Section 32 of the Oil and Natural Gas Commission Act 1959 are statutory in nature and they are enforceable in a court of law. They provide for eligibility of grant of gratuity, extent of gratuity, etc.The above regulation leaves no room of doubt that the Commission has right to effect recovery of its dues from any officer without his consent from gratuity. In the present case admittedly the respondent retired after office hours of February 28, 1990. According to the Commission, he could be allowed four months time to occupy the quarter which was granted to him. His prayer for extension was considered and rejected stating that it would not be possible for the Commission to accept the prayer in view of several officers waiting for quarters. He was also informed that if he would not vacate the quarter, penal rent as per the policy of the Commission would be recovered from him. But the respondent did not vacate the quarter. It was only after eviction proceedings were initiated that he vacated the quarter on May 16, 1991. In the circumstances, in our opinion, it cannot be said that the action of the Commission was arbitrary, unlawful or unreasonable. It also cannot be said that the Commission had no right to withhold gratuity by deducting the amount which is found due to Commission and payable by the respondent towards penal charges for unauthorized occupation of the quarter for the period between July 1, 1990 and May 15, 1991.21. So far as the Payment of Gratuity Act is concerned, according to the appellant, the said Act was not applicable to the respondent. We are concerned with the position as in 1990. Clause (e) of Section 2 of the Act definedFrom the above definition, it is clear that a person can be said to be an "employee" if this wages did not exceed two thousand five hundred rupees per month. According to the Commission, the salary of the respondent was Rs.6800/approximately which was more than Rs.2500/and hence, he could not be held "employee" covered by the definition. The definition of "employee" was no doubt amended subsequently and the provision as to amount of wages had been deleted. But the amendment was made in 1994 and was not retrospective in nature and thus was not applicable in the case of the respondent who retired in 1990.23. As held by this Court in Union of India vs. All India Services Pensioners Association & another, (1988) 2 SCC 580 , an incumbent is entitled to those benefits as he could claim on the date of retirement. He could not claim any benefit prior to his appointment or subsequent to his retirement.24. It is well settled that gratuity is earned by an employee for long and meritorious service rendered by him. Gratuity is not paid to the employee gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer [vide Garment Cleaning Works vs. Its Workmen, (1962) 1 SCR 711 ]. In Calcutta Insurance Co. Ltd. vs. Their Workmen, (1967) 2 SCR 596 , after considering earlier decisions, this Court observed that "long and meritorious service" must mean long and unbroken period of service meritorious to the end. As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity. If a workman commits such misconduct as causes financial loss to his employer, the employer would under the general law have a right of action against the employee for the loss caused and making a provision for withholding payment of gratuity where such loss caused to the employer does not seem to aid to the harmonious employment of labourers or workmen. The Court proceeded to state that the misconduct may be such as to undermine the discipline in the workersa case in which it would be extremely difficult to assess the financial loss to the employer.The ratio in R. Kapoor, in our opinion, does not help the respondents as in that case, the claim for damages for unauthorized occupation against theemployee was "pending" and the proceedings were not finally disposed of. In the present case, the facts clearly reveal that the last day of lawful occupation of quarter by the respondent was June 30, 1990 and before that date, the appellant Commission had informed the respondent that his prayer for extension or retention of quarter had not been accepted and he should vacate by June 30, 1990. If he would not vacate the quarter, penal rent would be recovered from him. He did not challenge the action of not extending the period nor the recovery of penal rent. He, therefore, cannot make grievance against the action of the Commission.27. Similar is the case of Gorakhpur University. There retrial benefits were withheld to adjust amount due from the employee but "disputed" by him. This Court noted that the employee was keeping a quarter allotted to him and continued to occupy after retirement. It was, inter alia, observed by this Court that after the employee retired, his request and application as per practice for allotment of quarters in the name of his son who was also an employee in the University remained pending and no orders were passed thereon. Moreover, there were resolutions of the University to waive penal rent and such benefits were granted to other employees, but different treatment was shown to him which constituted "hostile discrimination" and the act was thus `unreasonable. Though the employee retired in 1990 and continued to keep the quarter up to 1996, the University did not choose to take any action to evict him. On the contrary, it acquiesced in his occupation "by accepting regularly the normal rent". Thus, there was lack of bona fides on the part of the University.As already adverted to by us hereinabove, the facts of the present case did not deserve interference by the High Court in exercise of equitable jurisdiction under Article 226 of the Constitution. Thebefore the Highwas a responsible officer holding the post of Additional Director (Finance & Accounts). He was, thus, "gold collar" employee of the Commission. In the capacity of employee of the Commission, he was allotted a residential quarter. He reached the age of superannuation and retired after office hours of February 28, 1990. He was, therefore, required to vacate the quarter allotted to him by the Commission. The Commission, as per its policy, granted four months time to vacate. He, however, failed to do so. His prayer for continuing to occupy the quarter was duly considered and rejected on relevant and germane grounds. The residential accommodation constructed by him by taking loan at the concessional rate from the Commission was leased to Commission, but the possession of that quarter was restored to him taking into account the fact that he had retired and now he will have to vacate the quarter allotted to him by the Commission. In spite of that, he continued to occupy the quarter ignoring the warning by the Commission that if he would not vacate latest by June 30, 1990, penal rent would be charged from him. In our judgment, considering all these facts, the High Court was wholly unjustified in exercising extraordinary and equitable jurisdiction in favour of the petitionerand on that ground also, the order passed by the High Court deserves to be set aside.