1 2026:CGHC:24436 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPL No. 2 of 2022  South Eastern Coalfield Limited Through Deputy General Manager, Central Store, Korba Area, P.O. Korba, District Korba Chhattisgarh, District : Korba, Chhattisgarh ... Petitioner(s) versus 1. Shri Chaitu S/o Shri Bhawram, Ex- Head Peon- Central Store R/o Mudapara, Near Bazarpara, Post Korba, District Korba Chhattisgarh, District : Korba, Chhattisgarh 2. Regional Labour Commissioner, Under The Payment Of Gratuity Act, 1972 And The Assistant Labour Commissioner (Central) Torwa, Bilaspur, District Bilaspur Chhattisgarh, District : Bilaspur, Chhattisgarh ... Respondent(s) For Petitioner : Mr. Vivek Verma, Advocate For Respondent No. 1 : Mr. F.S. Khare, Advocate Hon’ble Shri Justice Rakesh Mohan Pandey Order On Board 17.6.2026 1) By way of this petition, the petitioner has sought following reliefs:- i) This Hon'ble Court may kindly be pleased to call for the entire record relating to the case of the petitioner from the possession of the respondent authorities for its kind perusal. ii) This Hon'ble Court may kindly be pleased to quash the order dated 21.12.2021 (Annexure P/1) 2 and order dated 21.02.2019 (Annexure P/2). This Hon'ble Court may kindly be pleased to direct the respondent No. 1 and 2 not take any action against the petitioner. iv) Any other relief as deemed fit and proper by this Hon'ble Court. 2) Facts of the present case are that respondent No. 1 was working on the post of Peon under the petitioner company and he retired from services on 30.11.2014. He was residing in the company quarter and was directed to vacate the same before 30.6.2015. Respondent No. 1 did not vacate the company quarter and moved application before the Controlling Authority under Payment of Gratuity Act seeking payment of gratuity. The authority concerned vide its order dated 11.7.2018 allowed the application and directed the petitioner to make payment of Rs. 6,52,728/- to the respondent No. 1. Petitioner herein preferred appeal against the order dated 11.7.2018 before the Appellate Authority under Payment of Gratuity Act. The Appellate Authority vide its order dated 21.2.2019 directed the petitioner to make payment of gratuity to the respondent No. 1 with interest @ 10% per annum from the date of retirement till its realization. Petitioner deposited the amount of gratuity with interest and at the same time imposed penal rent as respondent No.1 failed to vacate the company quarter till 31.1.2021. 3) Learned counsel for the petitioner submits that employer reserves the right to adjust the amount of penal rent against the amount of 3 gratuity admissible to an employee. In support, he has placed reliance on the judgment rendered by the Hon’ble Supreme Court in the matter of M/s Steel Authority of India Ltd. Versus Raghbendra Singh and Others passed in Special Leave to Appeal (C) No(s). 11025/2020. He prays to quash the orders dated 21.2.2019 and 21.12.2021. 4) On the other hand, learned counsel for the respondent No. 1 submits that petitioner has already adjusted the interest part of amount of gratuity admissible to the petitioner against the penal rent. He further submits that respondent No. 1 did not vacate the company quarter as petitioner failed to make payment of gratuity immediately after retirement. He also submits that as there was no fault on the part of respondent No. 1, the appellate authority vide its order dated 21.2.2019 rightly awarded interest on the amount of gratuity and this petition deserves to be dismissed. 5) I have heard learned counsel for the parties and perused the material available on record. 6) Hon’ble Supreme Court in Raghbendra Singh (supra) held that if an employee occupies a quarter beyond the specified period, the penal rent would be the natural consequence and the same can be adjusted against the dues payable including gratuity. Relevant paragraph reads as under :- “We, however, set aside the observations made in paras 19 and 21 qua the principles of penal 4 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 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.” Thus, the decision taken by the petitioner with regard to adjustment of interest component of gratuity with the penal rent appears to be valid. 7) Taking into consideration the above-discussed facts, the decision taken by the petitioner to adjust the interest component granted on amount of gratuity against the penal rent appears to be just and proper. 8) Accordingly, this writ petition stands disposed. Sd/- (Rakesh Mohan Pandey) JUDGE A j i n k y a Digitally signed by AJINKYA PANSARE Date: 2026.06.19 10:27:07 +0530