For recovery of dues, gratuity can be withheld rules Supreme Court

New Delhi, Dec 27: The Supreme Court has ruled that the gratuity of an employee can be withheld for recovery of dues such as overstaying in official accommodation.

A Bench headed by Justice Sanjay Kaul said that there is no prohibition against recovering dues including penal rent.

"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," the Bench also said.

A Division Bench had in 2017 ruled unfavourably against confiscating the gratuity of an employee on account of overstaying in official quarters after his retirement. The Bench had ordered immediate release of his gratuity and held only normal and not penal rent should be charged for the period overstayed.

The Bench headed by Justice Kaul however held that any reliance on the 2017 order is misplaced since it is not even a judgment, but just an order on the given facts of that case. The 2017 order cannot be treated as a precedent, the Supreme Court also held.