Calcutta High Court (Appellete Side)
Eastern Coalfields Limited & Anr vs Union Of India & Ors on 1 April, 2026
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IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
APPELLATE SIDE
Present:
The Hon'ble Justice Shampa Dutt (Paul)
WPA 6050 of 2026
Eastern Coalfields Limited & Anr.
Vs.
Union of India & Ors.
For the Petitioners : Ms. Priti Banerjee,
Ms. Swapna Sikder.
For the Respondent No. 1 : Mr. Pinaki Ranjan Chakraborty,
Mr. Anjan Chakraborty.
For the Respondent No. 4 : Mr. Abdul Masood,
Mr. Md. Sajid Hussain.
Judgment reserved on : 19.03.2026
Judgment delivered on : 01.04.2026
Shampa Dutt (Paul), J.:
1. Affidavit of service filed be kept with the record.
2. The writ application has been preferred praying for direction upon the
the respondent No. 2, being the Deputy Chief Labour Commissioner
(Central), Asansol and the Appellate Authority under Payment of
Gratuity Act, 1972, to cancel, rescind, withdraw the impugned order
dated 25th November, 2025, passed by the respondent No. 2 in Appeal
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No. PG. 22 of 2025-E, thereby setting aside the order dated 5th
August, 2024 passed by the respondent No. 3, being the Assistant
Labour Commissioner (Central), Asansol and the Controlling Authority
under the Payment of Gratuity Act, 1972, in File/Application No.
48(23)/2023/E-2.
3. The petitioner states that:-
i. The respondent No. 4 was employed with the petitioner No. 1
Company and got superannuated with effect from 30th June,
2022, her date of appointment being 15th January, 1987. The
respondent No. 4, at the time of his superannuation, was
serving as ‘Compounder’, in the medical department, UM No.
258599, at the Ningah Colliery under the Satgram-Sripur area
of the petitioner no. 1 company in the District of Paschim
Bardhaman.
ii. The respondent No. 4 was allotted a residential quarter being
Quarter No. NHA-A/10, at Sarkar Para, under Ningah Colliery in
the district of Paschim Bardhaman (hereinafter referred to as
the “said Quarter”) during her service tenure by the Company
and the said quarter is still in possession of the respondent No.
4, who has not yet vacated the quarter till date.
iii. That as per the prevailing practice, the respondent No. 4 was
intimated as to the date of her superannuation by a Retirement
Notice bearing Ref. No. GM/SA/C-6D/18/21/1051 dated 8th
December, 2021. Under the said office order, it was clearly
specified to the respondent No. 4, inter alia, to handover the
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petitioner No. 1 Company’s quarter under her occupation to theCompany on the date of her superannuation, failing which she
would be liable to pay penal rent and such penal rent would be
deducted from her retirement benefits and further payment of
her gratuity shall be subject to the office order dated
08.12.2021, thereby indicating that the gratuity would be paid
only after the said quarter was vacated by the respondent No. 4.
iv. By a Circular bearing Reference No.
CIL:D(P&IR):SECH:005:144:133 dated 11th November, 2021
(hereinafter referred to as the “said circular”), Coal India Limited
(hereinafter referred to as the “CIL”) directed all its subsidiaries
including the petitioner No. 1 Company to take measures as
stated therein for vacation of quarters after retirement of the
employees including charging of penal rent from the concerned
retired employee for unauthorized occupation of the quarter
after retirement and withholding of the retiral benefits until
quarter is vacated by the concerned employee.
v. The aforesaid Circular dated 11th November, 2021 of the CIL
was circulated by the management of the Company to all its
areas and collieries vide Office Order bearing Ref. No.
ECL/CMD/C-6/WBE-33/1197 dated 02-12-2021 for needful
action in the matter to get the quarters vacated by the
unauthorized occupants that is the retired employees.
vi. Amongst the retiral benefits as are available to an employee,
provident fund, which is called Coal Mines Provident Fund (in
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short “CMPF”) and pension are not within the domain of the
petitioner as in coal sectors, the CMPF and pension are
maintained and disbursed by the Coal Mines Provident Fund
Organisation, which is a separate and independent organization
and as such no adjustment or deduction for penal rent or
otherwise for withholding quarter can be made by a coal
company against CMPF or pension.
vii. The respondent No. 4, though got superannuated with effect
from 30th June, 2022, yet, till date, has not vacated and handed
over the quarter to the petitioner Company and is still illegally
occupying the same and is using water and electricity thereat at
the cost and expenses of the petitioner Company.
4. In the present case, as the petitioner refused to release the gratuity,
the dispute as to the gratuity amount payable to the respondent no.4
has been adjudicated by the Controlling Authority under the Payment
of Gratuity Act, 1972 (hereinafter referred to as, “1972 Act”).
5. The Controlling Authority has held vide order dated 5th August, 2024
that a sum of Rs.18,99,752/- is receivable by the respondent no.4 on
account of gratuity for ECL.
6. Challenging the said order, ECL had preferred an appeal before the
Appellate Authority under the 1972 Act. The Appellate Authority by an
order dated 25th November, 2025 had upheld the order of the
Controlling Authority. At the time of preferring the appeal, ECL had
deposited the amount allowed, by way of Demand Draft No. 101038
dated 30.10.2024, drawn on the State Bank of India, Sanctoria
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Branch, with the Controlling Authority as a pre-condition for
preferring the appeal. Against the appellate authority’s order dated
25th November, 2025, this writ petition has been preferred.
7. The respondent no. 4 inducted as a licencee, has admittedly over
stayed after his licence expired on superannuation.
8. The following government office memorandum dated 20th October,
2023, provides for recovery of Govt. dues from gratuity payable and
these dues include “3(a) dues pertaining to Government
accommodation including arrears of licence fee as well as
damages (for the occupation of the Government accommodation
beyond the permissible period after the date of retirement of the
allottee, subletting, unauthorised occupation, transfer to an
ineligible office, etc.) and dues or arrears in respect of electricity,
water and PNG charge, if any;”
9. In M/s. Steel Authority of India Ltd. vs Raghbendra Singh & Ors.,
in SLP to Appeal (c) No(s). 11025/2020, decided on 15,12,2020,
the Supreme Court held:-
“………….We, however, set aside the observations made
in paras 19 and 21 qua the principles of penal rent
being charged as we are of the view that if an
employee occupies a quarter beyond the specified
period, the penal rent would be the natural
consequence and such penal rent can be adjusted
against the dues payable including gratuity. This is
so in view of the judgment in Secretary, ONGC Ltd. v.
V.U. Warrier (2005) 5 SCC 245 and the reliance placed in
the impugned judgment on the case of Ram Naresh Singh
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v. Bokaro Steel Plant [Civil Appeal No.4740/2007] dated
31.03.2017 is misplaced as is not even a judgment but
an order in the given facts of the case……”
10. In Secretary ONGC Ltd. & Anr. vs V.U. Warrier, AIR 2005 SC
3039, decided on 20 April, 2005, the Supreme Court held:-
“……………….The present appeals are directed against
the judgment and order passed by the High Court of
Judicature at Bombay dated February 15, 2003 in Writ
Petition No. 3947 of 1994 and also against an order
dated January 14, 2004 passed in Civil Application No.
63 of 2003.
According to the High Court, the legal
position was no more res integra that pension and
gratuity were rights accrued in favour of employees
on their retirement. Those benefits, therefore, could
not be withheld even if an employee unauthorisedly
occupied accommodation and was, therefore, liable
to pay damages or penal rent under the relevant
rules. The only remedy available to the employer
was to take appropriate action but the amount of
pensionary benefit could not be set off against the
so- called dues for unauthorized occupation.
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 v. Its Workmen, [1962] 1 SCR
711]. In Calcutta Insurance Co. Ltd. v. 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
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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 workers – a case in which it
would be extremely difficult to assess the financial
loss to the employer.
In Jarnail Singh v. Secretary, Ministry of Home
Affairs and Ors, [1993] 1 SCC 47, this Court had an
occasion to consider the provisions of the Central Civil
Services (Pension) Rules, 1972. The definition of “pension”
included gratuity under Rule 3. Rule 9 conferred on the
President right to withhold or withdraw pension in certain
circumstances. The order was passed against the
appellant withholding pension and the entire amount of
death- cum- retirement gratuity otherwise admissible to
him. The direction was given on serious irregularities
found to have been committed by the appellant. The
appellant challenged that order unsuccessfully before the
Central Administrative Tribunal. He, therefore,
approached this Court. His contention was that an
amount of gratuity could not have been withheld.
Negativing the contention, the Court held that the power
to withhold gratuity was conferred on the President under
the relevant rules and hence, such action could not be
said to be illegal. According to the Court, there could be
adjustment of Government dues against the amount of
death-cum- retirement gratuity payable to Government
servant.
In Wazir Chand v. Union of India and Ors., [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 unauthorisedly kept the
government quarter was liable to pay penal rent in
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accordance with rules and there was no illegality
in adjusting those dues against death-cum-
retirement benefits.
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. Veerappa
Pillai, Proprietor, Sathi Vilas Bus Service, Porayar,
Tanjore District, Madras v. Raman & Raman Ltd.,
Kumbakonam, Tanjore District and Ors., [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) Similarly, in the leading case
of Sangram Singh v. Election Commissioner, Kotah &
Anr., [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
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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) The above principle has been
reiterated and followed by this Court in several
subsequent cases.
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…………….”
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11. In the present case, the private respondent superannuated on 31st
January, 2025, and was served with a notice to vacate the official
quarter occupied by her, which has not been done till date.
12. Considering that the rent due from the said respondent and the
penal rent are all govt. dues, the petitioner is entitled to deduct
the same from the retiral dues, of the respondent including
gratuity.
13. If such conduct is tolerated/indulged, it will only encourage others to
act in such manner, leading to a situation, where quarters cannot be
provided to employees who are in service and entitled to such facility.
14. Accordingly, in view of the judgment in Raghabendra Singh (Supra)
and V.U. Warrier (Supra), the impugned order dated 25th November,
2025, passed by the respondent No. 2, Deputy Chief Labour
Commissioner (Central), Asansol and the Appellate Authority under
Payment of Gratuity Act, 1972, in Appeal No. PG. 22 of 2025-E, and
the order dated 5th August, 2024 passed by the respondent No. 3,
being the Assistant Labour Commissioner (Central), Asansol and the
Controlling Authority under the Payment of Gratuity Act, 1972, in
File/Application No. 48(23)/2023/E-2, are set aside.
15. The deposit of Rs. 18,99,752/- be returned to the petitioner herein,
who is at liberty to deduct the rent due along with penal rent from the
total gratuity due till the respondent no. 4 vacates the Govt.
accommodation, which is forcibly occupied by her.
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16. On the respondent no. 4 vacating the Govt. accommodation, the total
Govt. dues be deducted from the gratuity and the balance (if any) be
paid to the respondent no. 4 within 15 days thereafter.
17. WPA 6050 of 2026 is disposed of as allowed.
18. All connected application, if any, stands disposed of.
19. Interim order, if any, stands vacated.
20. Urgent photostat certified copy of this Judgment, if applied for, be
given to the parties upon compliance of all necessary formalities.
(Shampa Dutt (Paul), J.)
