Calcutta High Court
Chandan Kumar Ganguly And Ors vs The Official Liquidator on 25 June, 2025
IN THE HIGH COURT AT CALCUTTA
ORIGINAL JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice Krishna Rao
C. A. No. 93 of 2025
In
C. P. No. 4 of 1956
FIRE & GENERAL INSURANCE COMPANY OF INDIA LTD. (IN LIQN.)
-AND-
CHANDAN KUMAR GANGULY AND ORS.
-VS-
THE OFFICIAL LIQUIDATOR, HIGH COURT, CALCUTTA
Mr. Ranjan Bachawat, Sr. Adv.
Mr. Sarosij Dasgupta, Adv
Mr. Nilay Sengupta, Adv.
Mr. Sujit Banerjee, Adv.
... for the applicants.
Ms. Manju Bhuteria, Sr. Adv.
Ms. Arundhati Barman Roy,
Ms. Shreya Choudhary, Adv.
... for the Official Liquidator.
2
Hearing Concluded On : 11.06.2025
Judgment On : 25.06.2025
Krishna Rao, J.:
1. The present application has been filed under Rules 308 and 309 of the
Companies (Court) Rules, 1959, by the Company Paid Staff working in
the Office of the Official Liquidator, High Court at Calcutta (hereinafter
referred to as the “Applicants”), seeking the grant of terminal medical
benefits along with exemption from Income Tax under Section 10(10) of
the Income Tax Act.
2. The Office of the Official Liquidator has two types of employees – (a)
Central Government employees, and (b) Company Paid Staff. As per the
provisions of the Companies Act, 1956, read with Rules 308 and 309 of
the Companies (Court) Rules, 1959, the Official Liquidator is
empowered to appoint Company Paid Staff, with the sanction of the
Hon’ble Judge, to manage the workload of his office.
3. Till 1991, Company Paid Staff received only a nominal amount as an ad
hoc basic salary, despite performing duties equivalent to those of
Central Government employees. Upon retirement, they were given only
a nominal Ex-gratia amount. No appointments have been made under
the Company Paid Staff category since 2002.
4. In the year 1992, this Court considered the apathy of the Company
paid staff and tried to frame scheme for their service. In the year 1996
this Court modified the said scheme to the effect that the service
benefits of the Company Paid Staff shall be modified at par with the
3
service benefits of the Central Government Employees. In the year
1998, the Central Government took steps to regularise the services of
the Company Paid Staff, in the Office the Official Liquidator, in terms of
1978 Scheme. The Scheme was not at all beneficial for all the Company
Paid Staff, as because, only 23 nos. Company Paid Staff absorbed in
the service with the Central Government upto the year 2006, more so,
with the bottom of pay scale.
5. Challenging the said action of the Central Government, the petitioners
filed writ petitioners have filed writ petition. The said writ petition was
disposed of on 4th November, 2008 but no order for regularization was
passed but the Hon’ble Supreme Court directed all the concern Official
Liquidators attached with the respective High Court to place proper
report for Regular Company Paid Staff in the hike of market price.
6. Considering the order passed by the Hon’ble Supreme Court and this
Court from time to time, provided some sort of benefits, by making a
provision for One Time Ex-gratia, whereby, along with existing gratuity,
some ad hoc amount was also arranged, at the time of retirement from
the service. At present 57 Company Paid Staff exist in the Office of the
Official Liquidator of this Court. Out of the total regular Company Paid
Staff 38 numbers belongs to Group “C” and remaining 19 are in Group-
“D” category.
7. Mr. Ranjan Bachawat, Learned Senior Advocate representing the
applicants submits that the present retirement benefits for the regular
4
Company Paid Staff are not enough to maintain the rest life and since it
is not adequate to educate their children and to settle them. He
submits that in the way of high living cost including education, medical
and maintenance of the families of the applicants, the emoluments, as
received upon retirements, are actually hardship to maintain the rest of
their life.
8. Mr. Bachawat submits that there is no provision for pension or any
medical benefits for the Company Paid Staffs after superannuation. Any
treatment, if runs for 10 to 15 days in any hospital, the hospital bills
would be not less than 15 lacs due to which the Company Paid Staff
after retirement will be in trouble and social security may be
jeopardised. He submits that the regular Company Paid Staff does not
have any entitlement of Contributory Provident Fund (CPF) or Central
Government Health Scheme (CGHS) facilities. He submits that to
maintain the social security of the Company Paid Staff, an additional
amount is needed to mitigate their medical exigencies after retirement.
He submits that at present the regular Company Paid Staffs are getting
only 2000/- per month as medical allowances.
9. Mr. Bachawat submits that currently, the Official Liquidator’s
Establishment Charges Account holds a corpus of approximately Rs.
50,98,62,300.80 crores. He submits that an amount of Rs.
11,02,00,000/- shall be required to pay as Terminal Medical Benefit to
57 numbers of regular Company Paid Staffs by bifurcating Rs.
7,60,00,000/- for 38 nos. of Group “C” i.e. Rs. 20,00,000/- each and
5
Rs. 3,42,00,000/- for 19 nos. Group “D” i.e. Rs. 18,00,000/- staff
respectively.
10. It is submitted that the applicants are not claiming medical benefits as
a matter of right, but only request, the Hon’ble Court to consider their
plight empathetically. They contended that in case of a medical
emergency affecting either the retired employee or a family member, a
significant portion of the Ex-gratia amount would be consumed. Once
the Ex-gratia is exhausted on medical expenses, the employee would be
left without sufficient means to support themselves.
11. Mr. Bachawat relied upon the judgment in the case of Rajkaran Singh
& Others vs. Union of India & Ors. reported in (2024) SCC OnLine
SC 2138 and submitted that creating of a class of employees who,
despite serving the government for decades in a manner
indistinguishable from regular employees, are deprived of the benefits
and protections typically accorded to government servants.
12. Mr. Bachawat further relied upon the judgment in the case of Vinod
Kumar & Ors. v. Union of India & Ors. reported in (2024) SCC
OnLine SC 1533 and submitted that in the specific circumstances
under which the petitioners were employed and have continued their
service, the procedural formalities at the outset cannot be used to
perpetually deny substantive rights that have accrued over the
considerable period through continuous service. Mr. Bachawat relying
upon the judgment in the case of State of Punjab and Others Vs.
6
Jagjit Singh and Others reported in (2017) 1 SCC 148 and
submitted that the Hon’ble Court has the temporary workers have every
right to get equal pay for equal work.
13. Mrs. Manju Bhuteria, Learned Senior Advocate representing the Official
Liquidator submits that the Company Paid Staffs are receiving salary
and other benefits not only at par with the Central Government
employee but in fact, more than the salary and other benefits received
by the Central Government Employees (Group – “C” (UDC) and MTS)
having more than 30 years of service. She submits that the Company
Paid Staffs also receive medical allowances and public provident fund of
Rs. 2000/- per month and Rs. 1000/- per month respectively, whereas
in the case of Central Government Employees, sums are deducted from
their salaries towards Government Provident Fund, Central
Government Employees Group Insurance Scheme and Central
Government Health Scheme.
14. Mrs. Bhuteria submits that the employees working as Company Paid
Staffs receive salary and allowances and other benefits like Leave Travel
Concession (LTC), Travelling Allowances (TA), Modified Assured Career
Progression Scheme (MACPs) and others akin to the Central
Government Employees. She submits that a sum of Rs. 250/- is
deducted from the salaries of Group “C” employees, a sum of Rs. 450/-
and Rs. 650/- is deducted from the salaries of Group “B” employees of
the Central Government for taking benefit of Central Government
Health Scheme during the service period and after retirement, Central
7
Government employee are required to deposit a sum of Rs. 78,000/- i.e.
(10 years contribution at a time as per their entitlement) to the
Government for taking benefit of Central Government Health Scheme
for a period of 10 years.
15. Mrs. Bhuteria Submits that three Company Paid Staffs (Group) staffs
had retired in the month of December, 2024 and January, 2025 and
they have received the retirement benefits of Rs. 46,90,581/-, Rs.
46,39,353/- and Rs.47,52, 638/- respectively.
16. Pursuant to an order passed by this Court in Company Application No.
246 of 2011, a Committee comprising the Registrar, Original Side, and
the Official Liquidator made certain recommendations to this Court
regarding benefits for Company Paid Staff. One such recommendation
reads as follows:
“III. Restructuring of the Company Paid Staff
strength may be adopted with enhancement of
Grade Pay, Medical Allowance from ₹500/- to
₹2,000/-, and grant Provident Fund allowance of
₹1,000/- each (only for those who have Public
Provident Fund accounts), with effect from January
1, 2011.”
This Court has accepted the recommendation and the Official
Liquidator started paying the Medical Allowance of Rs. 2000/- per
month.
17. As per claim of the applicants presently there is an accumulated fund
as fixed deposit of Rs. 50,98,62,300.80/- which is lying in the credit of
the Official Liquidator’s Establishment Charges Account, wherefrom a
8
sum of Rs. 11,02,00,000/- shall be required to pay the Terminal
Medical Benefit to the applicants being 57 numbers of regular
Company Paid Staff bifurcating Rs. 7,60,00,000/- for 38 numbers of
Group- “C” i.e. Rs. 20,00,000/- each and Rs. 3,42,00,000/-for 19
numbers of Group-“D” i.e. Rs.18,00,000/- each to the employees
respectively. It is also the case of the applicants that the amount of Rs.
11,02,00,000/- shall be further generated from the 30% interest of the
deposit sales proceeds, in the hand of the Official Liquidator, within 6
to 7 years.
18. The applicants being the Company Paid Staffs are getting basic pay,
Dearness Allowance @ 53%, House Rent Allowance @ 30%, Travelling
Allowance of Rs. 5508/- per month, Medical Allowance of Rs. 2000/-
and PPF of Rs. 1000/- per month. The applicants are also getting the
benefits of Modified Assured Carrier Progression Scheme (MACPs) as
per their eligibility.
19. In terms of order passed by this Court in C.A. No. 926 of 2010 dated
21st December, 2010, the Committee has made recommendation with
regard to Medical Allowance which reads as follows:
“Committee has also noticed that the
Company Paid Staff are not eligible for coverage
neither Central Government Health Scheme nor any
other Group Health Scheme to cover their medical
needs. As such they are getting monthly allowance
of just ₹ 500/- as medical allowance. In view of
escalation of prices the Committee recommends
enhancement of medical allowance to ₹ 2,000/-
with a view to encourage them to avail mediclaim
policy in accordance with IRDA regulations and
guidelines. Further in order to encourage savings
9Committee suggests grant of Provident Fund
allowance of ₹ 1000/- to each staff who have or
will open a Public Provident Fund Account and that
sum will be directly deposited by the Office with
the designated Bank as per particulars furnished
by such staff. At the same time in order to maintain
regularity in attendance and duty the gross
emoluments need to be restricted to number of
hours put by each staff according to the electric
attendance register.
It is further recommended that proposed
revision in Grade Pay and medical allowance may
be made applicable with effect from 1st January,
2011.”
The recommendation of Committee was duly accepted by this
Court and the same has been implemented and the applicants are
getting the said benefits since January, 2011.
20. In the case of Official Liquidator Vs. Dayanand and Others reported
in (2008) 10 SCC 1, the Hon’ble Supreme Court held that:
“100. As mentioned earlier, the respondents
were employed/engaged by the Official Liquidators
pursuant to the sanction accorded by the Court
under Rule 308 of the 1959 Rules and they are
paid salaries and allowances from the company
fund. They were neither appointed against
sanctioned posts nor were they paid out from the
Consolidated Fund of India. Therefore, the mere
fact that they were doing work similar to the
regular employees of the Offices of the Official
Liquidators cannot be treated as sufficient for
applying the principle of equal pay for equal work.
Any such direction will compel the Government to
sanction additional posts in the Offices of the
Official Liquidators so as to facilitate payment of
salaries and allowances to the company-paid staff
in the regular pay scale from the Consolidated
Fund of India and in view of our finding that the
policy decision taken by the Government of India to
reduce the number of posts meant for direct
recruitment does not suffer from any legal or
constitutional infirmity, it is not possible to
10entertain the plea of the respondents for payment
of salaries and allowances in the regular pay
scales and other monetary benefits on a par with
regular employees by applying the principle of
equal pay for equal work.
121. We also feel that the salaries and
allowances payable to the company-paid staff
should be suitably increased in the wake of huge
escalation of living cost. In Jawaharlal Nehru
Technological University v. T. Sumalatha a two-
Judge Bench, after taking note of the fact that
emoluments payable to the investigators appointed
in the Nodal Centre at Hyderabad had not been
revised for six years, directed the Union of India to
take expeditious steps in that direction. Keeping
that judgment in mind, we direct the Official
Liquidators attached to various High Courts to
move the Courts concerned for increasing the
emoluments of the company-paid staff. Such a
request should be sympathetically considered by
the Courts concerned and the emoluments of the
company-paid staff be suitably enhanced and paid
subject to availability of funds.
21. It is not denied that at present there is an accumulated fund of fixed
deposit of Rs. 50,98,62,300.80/- which is lying in the Credit of Official
Liquidator’s Establishment Charges Account. Funds available in the
Credit of Official Liquidator Establishment Charges Account refers to
the money held by the Official Liquidator specifically for covering the
expenses of their office, including staff’s salaries, operational cost and
other related charges. This account is distinct from other accounts
related to the liquidation of specific companies and is used to ensure
the smooth functioning of the Official Liquidator’s Office.
22. Using public exchequer funds for medical or terminal benefits from an
Official Liquidator’s establishment charges account is generally not
11
permissible. These funds are typically allocated for specific
administrative and operational expenses related to the liquidation
process, not for employee benefits. This account is used to cover
expenses incurred by the Official Liquidator’s Office in carrying out the
liquidation process, such as legal fees, publication costs and
administrative overhead.
23. The applicants pray for Terminal Medical Benefits only on the grounds
that the applicants are getting only 24,000/- per year as Medical
Allowance which is inadequate in this present medical perspective. The
applicants are getting the Medical Allowance in terms of the report of
the Committee which was duly affirmed by this Court. The said benefit
is getting from 1st January, 2011. The Hon’ble Supreme Court in the
case Official Liquidator vs. Dayanand & Ors. held that the salaries
and allowances payable to the Company Paid Staffs should be suitably
increased in the wake of huge escalation of living of cost. The Hon’ble
Court further directed the Official for increasing the emoluments of the
company paid staffs.
24. This Court did not find any reasons for allowing the terminal benefit as
prayed for by the petitioner but it cannot be ignored that medical cost
in India are rising. This increase is driven by factors such as increased
demand for quality health, rising prevalence of chronic illness and the
high cost of medical technology. Growing population and a rise in
chorionic diseases are driving up demand for health care services which
leading to increase cost. The applicants are getting medical allowance of
12
Rs. 2000/- per month since January, 2011 and fourteen years have
been passed the medical allowance is not increased though the medical
expenses has been sufficiently increased. In view of the above, the
Official Liquidator is directed to pay Rs. 3000/- per month as Medical
Allowance to the Company Paid Staffs instead of Rs. 3000/- per month
from the 1st July, 2025 .
25. C.A. No. 93 of 2025 is disposed of.
(Krishna Rao, J.)