In a partial relief to company-paid staff in the Office of the Official Liquidator, the Calcutta High Court on Friday declined their plea for lump-sum terminal medical benefits but directed an increase in their monthly medical allowance from ₹2,000 to ₹3,000, effective July 1, 2025.

Justice Krishna Rao was hearing an application filed by 57 regular Company Paid Staff members seeking ₹20 lakhs and ₹18 lakhs as terminal medical benefits for Group “C” and Group “D” employees respectively, along with tax exemptions under Section 10(10) of the Income Tax Act, 1961.

The petitioners, represented by Senior Advocate Ranjan Bachawat, argued that they faced acute financial vulnerability after retirement, with no access to pensions, CGHS, or CPF. Highlighting rising medical expenses and the inadequacy of the existing allowance, they contended that their service conditions were not at par with Central Government employees despite discharging similar duties.

Opposing the plea, Senior Advocate Manju Bhuteria, appearing for the Official Liquidator, asserted that the staff already enjoy benefits such as MACP, LTC, TA, HRA, and a fixed medical allowance, based on Court-accepted recommendations. She also pointed out that retiring employees had received retirement benefits up to ₹47.5 lakhs, and that the demand for terminal medical benefits had no statutory basis.

The Court noted that while the prayer for terminal medical benefits could not be allowed, the burden of rising healthcare costs must be acknowledged. “The applicants have been receiving ₹2,000 per month since January 2011. Fourteen years have passed, and despite the steep rise in medical expenses, there has been no revision in this allowance,” the Court observed.

It clarified that the ₹50.98 crore in the Official Liquidator’s Establishment Charges Account was earmarked for operational expenses, not employee welfare payouts, and using public funds for terminal medical benefits was generally impermissible.

Accordingly, the Court dismissed the plea for terminal benefits but enhanced the monthly medical allowance to ₹3,000.

Case Title: Fire & General Insurance Company Of India Ltd. (In Liqn.) and Chandan Kumar Ganguly & Ors. v. The Official Liquidator, High Court, Calcutta
Case No.: C.A. No. 93 of 2025