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Steel Authority of India Ltd. v. Choudhary Tilotama Das & Ors. and connected matters

Civil Appeal · 2018 INSC 130Decided 12 Feb 2018
Civil Appeal No. 1834 of 2018, Civil Appeal No. 1835 of 2018
Justice Ranjan Gogoi · Justice R. Banumathi

Background

Rourkela Steel Plant (a SAIL unit) ran a 1999 Voluntary Retirement Scheme under which retiring employees could keep their official quarters on licence for 22 months. A later 2002 scheme allowed serving employees (but not these ex-employees) to get long-term 33-year leases on their quarters. The ex-employees who had taken voluntary retirement challenged their exclusion from the 2002 leasing scheme before the Orissa High Court, which directed SAIL to consider giving them long-term sub-leases too. SAIL appealed to the Supreme Court against that direction.

Decision Breakdown

The Supreme Court held that the 2002 leasing scheme was time-bound, applied only to serving employees, and never created any legal right for ex-employees to be considered for a long-term lease. By 2018, SAIL's own updated facts showed it was expanding production capacity and would itself need more quarters for incoming staff, making further long-term leases to ex-employees infeasible. Since no vested right existed and circumstances had changed, the Court set aside the High Court's direction but, balancing fairness, allowed the 53 ex-employees (or their heirs) to continue occupying their quarters for a further 33 months before having to hand them back.

Lesson Learnt

A time-limited welfare scheme does not automatically create a permanent entitlement once its stated period or applicability has lapsed, especially where the scheme never covered the claimant's category in the first place; courts will balance such claims against the current operational needs of the employer rather than freeze rights indefinitely.

Official source (sci.gov.in)View Judgment (PDF)

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