Justice Krishna Rao of the Calcutta High Court has declined an application seeking lump-sum terminal medical benefits for Company Paid Staff in the Office of the Official Liquidator, while directing an upward revision of their monthly medical allowance.
The case stemmed from the application, filed under Rules 308 and 309 of the Companies (Court) Rules, 1959, which was brought by 57 regular Company Paid Staff members engaged in the Office of the Official Liquidator, High Court at Calcutta. The applicants sought a terminal medical benefit of ₹20 lakhs for Group “C” and ₹18 lakhs for Group “D” employees, alongside exemption under Section 10(10) of the Income Tax Act, 1961. The staff, originally appointed with the sanction of the Court under the Companies Act, 1956, contended that their service conditions lacked parity with those of Central Government employees, particularly in post-retirement benefits. The applicants pointed to the absence of pension, contributory provident fund, and medical security post-retirement, arguing that their existing monthly medical allowance of ₹2000/- was grossly inadequate.
Senior Advocate Mr. Ranjan Bachawat, appearing for the applicants, highlighted the financial vulnerability faced by the retired staff, especially in light of escalating medical expenses. He submitted that “an additional amount is needed to mitigate their medical exigencies after retirement” and emphasised the absence of CGHS or CPF benefits for these employees.
Citing Rajkaran Singh & Ors. v. Union of India & Ors. (2024), Vinod Kumar & Ors. v. Union of India & Ors. (2024), and State of Punjab & Ors. v. Jagjit Singh & Ors. , he argued that the denial of terminal medical benefits perpetuated discrimination against employees with long service who performed duties identical to those of regular staff.
In response, Senior Advocate Mrs. Manju Bhuteria, appearing for the Official Liquidator, submitted that the applicants already enjoy emoluments either at par with or higher than those of their Central Government counterparts, including benefits such as Modified Assured Career Progression Scheme (MACP), Leave Travel Concession (LTC), Travelling Allowances (TA), House Rent Allowance (HRA), and a fixed medical allowance. She submitted that the medical allowance and other benefits were granted pursuant to a Committee recommendation accepted by the Court.
She further submitted that three Company Paid Staff who retired recently had received retirement benefits between ₹46.3 lakhs to ₹47.5 lakhs and contended that the prayer for terminal medical benefits lacked statutory backing.
Justice Krishna Rao observed, “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 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.”
It noted that the funds available in the Official Liquidator’s Establishment Charges Account, amounting to ₹50.98 crores, were designated for operational expenses and not for disbursing employee benefits. The Court held, “Using public exchequer funds for medical or terminal benefits from an Official Liquidator’s establishment charges account is generally not permissible.”
Further, the Court acknowledged the increased burden of medical costs in recent years, while noting that the applicants had been receiving ₹2000/- per month as medical allowance since 2011.
While rejecting the plea for terminal medical benefits, the Court nonetheless directed an increase in the monthly medical allowance: “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. 2000/- per month from the 1st July, 2025.”
Case Title: Fire & General Insurance Company Of India Ltd. (In Liqn.) -Andchandan Kumar Ganguly and Ors. Vs. The Official Liquidator, High Court, Calcutta
Case No.: C. A. No. 93 of 2025
Coram: Justice Krishna Rao
Advocate for Appellant: Sr. Adv. Ranjan Bachawat, Advocates Sarosij Dasgupta, Nilay Sengupta, and Sujit Banerjee
Advocate for Official Liquidator: Sr. Adv. Manju Bhuteria, Advocates Arundhati Barman Roy and Shreya Choudhary
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