C.K.THAKKER, J. - (1.) LEAVE granted.
(2.) 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. To understand the controversy raised in the appeals, relevant facts in brief may be stated. The respondent herein - petitioner before the High Court - was in service of Oil and Natural Gas Commission, ("Commission" for short) appellant herein. He was holding the post of Additional Director (Finance and Accounts) prior to his retirement. As an employee of the Commission, he was allotted quarter on December 10,1982. He retired from service on reaching the age of superannuation with effect from February 28, 1990. It is the case of the appellant that after the retirement, an employee has to vacate the residential accommodation given to him by the Commission. The respondent, therefore, was informed by the Commission that he had to vacate the quarter. It was the policy of the Commission to grant four months' time to retain a quarter by an employee after his retirement. Accordingly, the respondent was asked to handover vacant and peaceful possession of the quarter to the Commission latest by 30 June, 1990. It is an admitted fact that the respondent did not vacate the quarter. It has come on record that he made representations to permit him to continue to occupy the quarter but those representations were rejected. Since the respondent did not vacate the quarter, proceedings were also initiated by the Commission under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. In those proceedings, an undertaking was given by the respondent that he would vacate the quarter latest by May 30, 1991. Pursuant to the said undertaking, the respondent vacated the quarter on May 16", 1991. Eviction proceedings were then dropped. The respondent claimed an amount of gratuity payable to him. According to the respondent, he was entitled to Rs. one lac towards payment of gratuity. The Commission, however, deducted an amount of Rs.53,632/-towards unauthorized occupation charges of official accommodation from July 01, 1990 to May 15, 1991 at the rate of Rs.5,100/- being 75 per cent of the basic pay of Rs.6,800/- per month. According to the respondent, it was not open to the Commission to deduct any amount payable to him towards gratuity. He, therefore, approached the High Court of judicature at Bombay challenging the action. He prayed for quashing of an order of appropriation of Rs.53,632/- as unauthorized occupation charges of official accommodation from July, 1990 to May, 1991 at the rate of Rs.5,100/- by permanently restraining the Commission from recovering the said amount. A prayer was also made to direct the Commission to pay the amount of gratuity with interest. An affidavit in reply was filed by the Commission. In the counter, the Senior Deputy Director (Personnel and Administration), stated that the Commission was a statutory Corporation established in 1960 under the Oil and Natural Gas Commission Act, 1959. The said Act was repealed by the Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993. It was stated that the respondent (petitioner before the High Court), had concealed several material facts. He was working as Additional Director and retired at the age of 58 years on superannuation after office hours on February 28, 1990. As Additional Director, he belonged to "gold collar" class of employee as observed by this Court in O.P. Bhandari v. Indian Tourism Development Corporation Ltd. and others. In the capacity of an employee of the Commission and for efficiently discharging his duties, he was allotted accommodation in Building No. D/63, Vidya Vihar, ONGC Colony, Chittaranjan Nagar, Bombay vide allotment letter dated December 10, 1982. The said accommodation was on certain terms and conditions. Clauses 11 and 12 read as under "Clause 11 If the employee to whom a residence is allotted retires or resigns or is dismissed or removed from service, the allotment shall be cancelled with effect from two months after the date of his retirement, and one month after the date of his resignation, dismissal, or removal as the case may be, or with effect from any date after such dismissal or removal or retirement on which the residence is vacated, whichever is earlier." Clause 12 After cancellation of the allotment, if the premises are not vacated, the occupation thereof shall be considered unauthorized, and the ex-allottee shall be liable to pay liquidated damages for occupation of the premises either twice of the standard rent or at the rate of the rent as may be determined by the Commission from time to time." It was also stated by the deponent that the Commission had issued Allotment of Residences Instructions, 1970. Clause 14(1) of 1970 - Instructions reads as under "After cancellation of the allotment, if the premises are not vacated, the occupation thereof shall be considered unauthorized and the ex-allottee shall be liable to pay liquidated damages for occupation of the premises either at the rate of twice of the standard rent or at the rate of the rent as may be determined by the Commission from time to time." On retirement from the service of the Commission, the respondent was entitled to the following benefits: JUDGEMENT_489_JT4_2005Html1.htm According to the Commission the gratuity payable on the retirement of respondent had been paid and appropriated as under: JUDGEMENT_489_JT4_2005Html2.htm The Commission was paying 30 per cent basic pay as HRA to those employees who could not be allotted accommodation by the Commission at selected centres like Delhi, Bombay, etc., but used to recover only 7 per cent basic pay as HRA from the employees on allotment of accommodation. In the event of unauthorized occupation of staff accommodation, liquidated damages are recoverable as double the rent i.e. 37- % x 2 = 75% of basic pay till the accommodation is vacated by the incumbent. A copy of the office order dated January 30, 1990 was also annexed to the affidavit in reply. It was submitted that though the respondent retired on February 28,1990 and was allowed four months' time to occupy the quarter as per the policy of the Commission, he failed to vacate the quarter. His prayer for retention of quarter was considered by the Commission but in view of non-availability of quarters to several other employees, the prayer was rejected and the respondent was asked to vacate it. He was also informed that in case, he would not vacate the quarter, penal rent at the rate of 75% of basic salary would be recovered from him. In spite of such communications and letters, the respondent failed to vacate the quarter. The Commission was required to initiate eviction proceedings and only thereafter an undertaking was filed and possession of quarter was given back to Commission. In the circumstances, the Commission was within its power to deduct the amount recoverable from the respondent towards unauthorized occupation of residential quarter from July 1, 1990 till May 15, 1991 and the employee had no reason to make grievance against it. It was also the case of the Commission that the respondent was not covered by Payment of Gratuity Act, 1972 as amended from time to time. Statutory regulations framed by the Commission are more liberal and beneficial than the provisions of the Payment of Gratuity Act. It was further stated that the respondent had constructed a flat bearing No. B-209, Dewan Mansion, Plot No. 29/36, Vasai, Bombay by taking concessional loan at the rate of 6% per annum from the Commission. The said quarter was leased by him to the Commission at the rate of Rs.880/- per month. In view of the retirement of the respondent on February 28, 1990 and in view of the fact that he had to vacate the residential quarter of the Commission, possession of the quarter that belonged to the respondent and let out to the Commission was given back to him on June 3, 1990. For four months from March 1, to June 30, 1990, the respondent was charged nominal rent of Rs.205/- per month. Since the respondent did not vacate the quarter, the impugned action of charging penal rent was taken and the amount was appropriated from gratuity benefits payable to the respondent. The said action was legal and valid. It was further stated that there was a list of senior officers waiting for years for allotment of staff accommodation in Bombay. The Commission was paying 30 per cent of basic pay as HRA to twelve officers for non-allotment of residential quarter. Particulars thereof had also been annexed to the affidavit in reply. At the time of hearing of the petition, an advocate appeared for the respondent (petitioner before the High Court). None, however, appeared for the Commission. 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. The Court also referred to State of Kerala v. M. Padmanabhan Nair, R. Kapurv. Director of Inspector (Painting and Publication) Income Tax and another, and Gorakhpur University and others v. Shilla Prasad Nagendra (Dr.) and others. The writ petition was accordingly allowed and the following directions were issued by the Court; "(a) It is declared that appropriation of a sum of Rs.53,637/- towards unauthorized occupancy of the official accommodation by the petitioner from 1st July 1990 to 16th May, 1991 at the rate of Rs.5100/- per month was illegal. However, this will not preclude the respondents from proceeding against the petitioner for recovery of due amount of unauthorized occupancy of the official quarter for the period from 1st July 1990 to 16th May, 1991 in accordance with law. (b) The petitioner is entitled to payment of Rs.49,924/- towards gratuity under the relevant Regulations along with interest at the rate of 6% per annum from 1st March 1990 until payment is made. We grant time of two months to respondent for making the aforesaid payment to the petitioner. (c) Since the respondent have not chosen to appear today at the time of hearing of Writ Petition, we direct the parties to bear costs." According to the Commission, it was not aware of the decision of the High Court dated 15 February, 2003, since none appeared on behalf of the Commission in the High Court at the time of hearing of the petition and the decision was ex parte. It, therefore, made necessary enquiry. As soon as it came to know about the decision of the High Court, it addressed a letter dated May 22, 2003, to the advocate appearing for the Commission and asked him under what circumstances he could not attend the matter which came to be decided ex parte against the Commission. The advocate vide his letter dated May 24, 2003 informed the appellant that he had been advised to take rest as he was suffering from Filariasis. According to the appellant, thus, absence of the advocate appearing for the Commission was neither intentional nor deliberate but due to his ill health. The appellant thereafter applied for certified copy of the judgment which was sent to Head Office, Dehradun. Relevant papers were then collected from the office of the advocate. After getting approval from the Head Office, new advocate was appointed on August 11, 2003, who was asked to file review petition which was filed on December 12,2003. There was thus delay of 116 days in filing the review petition. The Division Bench rejected the review petition observing that there was no explanation for the period from May 24, 2003 to September 6, 2003. In the opinion of the Court, there was no cause much less sufficient cause for condonation of delay. The review application was, therefore, rejected.
(3.) ON March 29, 2004, this Court issued notice on the Special Leave Petition as well as on the prayer of interim relief. ON October 25, 2004, an order was passed to place the matter for final disposal on any miscellaneous day. The matter was accordingly placed for hearing on January 31,2005 and remained part heard. ON February 4,2005, the matter was heard and the learned counsel for the parties completed their arguments. The learned counsel for the appellant contended that the High Court was clearly wrong in allowing the petition and in directing the Commission to pay the amount of gratuity to the respondent with interest at the rate of 6% per annum. According to the counsel, it was perfectly within the powers of the Commission to deduct the amount of liquidated damages towards unauthorized occupation of quarter by the respondent. Such action cannot be said illegal, unlawful or otherwise improper. The Commission is a statutory Corporation established by an Act of Parliament and in exercise of statutory powers it has framed regulations. Those regulations, therefore, are statutory in character, they are having force of law and are enforceable. It was also submitted that the provisions of Payment of Gratuity Act would not apply to the respondent. The counsel urged that sufficient quarters are not available to the Commission in cities like Delhi and Bombay. If the employees who had been allotted quarters do not vacate even after their retirement, it would create serious problems to the Commission as well as its employees. In the instant case, admittedly the respondent retired on February 28, 1990. He was allowed four months' time up to June 30, 1990 to vacate the quarter. His prayer for retention of quarter was duly considered and rejected expressly informing him that in view of several officers waiting for quarters it would not be possible to accede to the request and he must vacate the quarter by June 30,1990. He was specifically intimated that in case he did not vacate the accommodation within the stipulated time, penal rent would be charged from him. He ignored all those letters and continued to occupy the quarter So much so that eviction proceedings had to be initiated against him. It was only thereafter that the respondent gave an undertaking and vacated the quarter. The counsel also submitted that the respondent applied for loan for residential accommodation at concessional rate which was given to him. He had constructed a house. He let that house to the Commission at the rate of Rs.880/- per month as against Rs.205/- per month which he was paying towards rent. Considering the fact that the respondent had retired on February 28,1990 and was to vacate the quarter allotted to him by the Commission by June 30, 1990, the possession of the quarter belonged to the respondent and let out to the Commission was given back to him on June 3,1990. In spite of that, the respondent did not vacate the quarter. In the circumstances, the High Court was wholly wrong in granting relief to the respondent. The High Court was also wrong in not reviewing the order passed ex parte observing that no 'sufficient cause' had been made out for condonation of delay. It was, therefore, submitted that the appeal deserves to be allowed by quashing and setting aside the order of the High Court and by upholding the order passed by the Commission.;