IN THE HIGH COURT OF JUDICATURE AT PATNA
C.W.J.C No.6609 OF 2006
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1. The General Manager, East Central Railway, Hajipur.
2. The Divisional Railway Manager, Sonepur.
3. The Divisional Accounts Manager, Sonepur.
4. The Financial Adviser-cum-Chief Accounts Officer, East Central
Railway, Hajipur.
5. The District Personal Manager, Sonepur.
……… Petitioners
Versus
1. The Central Administrative Tribunal, Patna Bench, through
Registrar.
2. Subhadra Jha, Son of Nageshwar Jha, resident of Mohalla-
Aamgola Maligab, P.S. Kazi Mohammadpur, District-
Muzaffarpur.
…. Respondents.
For the petitioners : Mr.Mahes Prasad, Advocate
For the respondent no.2 : Mr.Surya Kant Mishra, Advocate
——
PRESENT
Hon’ble the Chief Justice
&
Hon’ble Mr. Justice Kishore K. Mandal
——
Dated, the 22nd October, 2008.
The Railway authorities have filed this writ petition
aggrieved by the order dated 12th August, 2005 passed by the Central
Administrative Tribunal, Patna Bench, Patna to the extent it declared
that order of recovery of Rs.29613/- towards penal rent from retiral
benefits was bad in law.
2. The controversy arises from the facts which may be noticed
first. Subhadra Jha ( respondent no.2) retired from the post of
-2-
Commercial Superintendent, North Eastern Railway, Sonepur
Division on 31st January, 1995. Even after his retirement, he continued
to occupy the official quarter which was given to him during the
service. While settling his retiral dues, the amount of Rs. 29613/- was
deducted on account of damages for unauthorised occupation of the
Railway quarter after his retirement. We need not refer to the facts
with regard to the stoppage of increment, non-payment of pension at
the pay last drawn by him and the salary for unutilized leave etc. as
these aspects which were in issue before the Tribunal, are not for
consideration before us in the writ petition. The Tribunal relied upon
the decision of the Supreme Court in the case of Gorakhpur
University and others Vs. Dr. Shitla Prasad Nagendra and others,
(2001) 6 Supreme Court Cases 591, and held that penal rent could not
be recovered from the retiral dues and that recovery of Rs.29,613/-
towards penal rent was bad in law. As noticed above, it is only this
part of the order that is challenged in the present writ petition.
3. Rule 15 of the Railway Services (Pension) Rules, 1993 makes
a provision for recovery and adjustment of Government or railway
dues from pensionary benefits which read thus:
“15. Recovery and adjustment of Government or railway
dues from pensionary benefits.(1) It shall be the duty of the Head office to ascertain and
assess Government or railway dues payable by a railway
servant due for retirement.(2) The railway or Government dues as ascertained and
assessed, which remain outstanding till the date of retirement
or death of a railway servant, shall be adjusted against the
amount of the retirement gratuity or death gratuity or terminal
gratuity and recovery of the dues against the retiring railway
servant shall be regulated in accordance with the provisions
-3-of sub-rule (4).
(3) For the purposes of this rule, the expression “railway
or Government dues” includes-(a) dues pertaining to railway or Government
accommodation including arrears of licence fee, if any;(b) dues other than those pertaining to railway or
Government accommodation, namely balance of house-
building or conveyance or any other advance,
overpayment of pay and allowances, leave salary or other
dues such as post office or Life insurance premia losses
(including short collection in freight charges shortage in
stores (caused to the Government or the railway as a
result if negligence or fraud on the part of the railway
servant while he was in service.4. (i) A claim against the railway servant may be on account
of all or any of the following:-(a) loses (including short collection in freight charges,
short-age in stores caused to the Government or
the railway as a result of negligence or fraud in the
part of the railway servant while he was in serve;(b) other Government dues such as over-payment on
account of pay and allowances or other dues such
as house rent, post office or life Insurance premia,
or outstanding advance,(c) non-Government dues.
(ii) Recovery of losses specified in sub-clause (a) of
clause (i) of this sub-rule shall be made subject to the
conditions laid down in rule 8 being satisfied from
recurring pensions and also commuted value thereof,
which are governed by the Pensions Act, 1871 (23 of
1871). A recovery on account of item (a) of sub-para(i) which cannot be made in terms of rule 8, and any
recovery on account of sub-clauses items (b) and (c)
of clause (i) that cannot be made from these even with
the consent of the railway servant, the same shall be
recovered from retirement, death, terminal or service
gratuity which are not subject to the Pensions Act,
1871 (23 of 1871). It is permissible to make recovery
of Government dues from the retirement, death,
terminal or service gratuity even without obtaining his
consent, or without obtaining the consent of the
members of his family in case of a deceased railway
servant.(iii) Sanction to pensionary benefits shall not be delayed
pending recovery of any outstanding Government
-4-dues. If at the time of sanction, any dues remain
unassessed or unrealized the following courses should
be adopted:-(a) In respect of the dues as mentioned in sub-
clause (a) of clause (i) of this sub-rule. A
suitable cash deposit may be taken from the
railway servant or only such portion of the
gratuity as may be considered sufficient, may
be held over till the outstanding dues are
assessed and adjusted.(b) In respect of the dues as mentioned in sub-
clause (b) of clause (i) of this sub-rule (1) The
retiring railway servant may be asked to
furnish a surety of a suitable permanent
railway servant. If the surety furnished by him
is found acceptable, the payment of his
pension or gratuity or his last claim for pay,
etc. should not be withheld and the surety shall
sign a bound in Form 2.(2) If the retiring railway servant is unable or not
willing to furnish a surety, then action shall be
taken as specified in sub-clause (a) of sub-clause(iii).
(3) The authority sanctioning pension in each case
shall be competent to accept the surety bound in
Form 2 on behalf of the President.(c) In respect of the dues as mentioned in sub-
clause (c) of clause (i) the quasi-Government
and non-Government dues, such as amounts
payable by a railway servant to Consumer
Cooperative Societies, consumer Credit
Societies or the dues payable to an autonomous
organization by a railway servant while on
deputation may be recovered from the
retirement gratuity which has become payable
to the retiring railway servant provided he
gives his consent for doing so in writing to the
administration.(iv) In all cases referred to in sub-clauses (a) and (b) of
clause (i) of this sub-rule, the amounts which the
retiring railway servants are required to deposit or
those which are withheld from the gratuity payable to
them shall not be disproportionately large and that
such amounts are not withheld or the sureties
furnished are not bound over for unduly long periods.-5-
To achieve this the following principles should be
observed by all the concerned authorities:-(a) The cash deposit to be taken or the amount of
gratuity to be withheld should not exceed the
estimated amount of the outstanding dues plus
twenty-five per centum thereof.(b) Dues mentioned in clause (i) of this sub-rule
should be assessed and adjusted within a period
of three months from the date of retirement of
the railway servant concerned.(c) Steps should be taken to see that there is no loss
to Government on account of negligence on the
part of the officials concerned while intimating
and processing of a demand. The officials
concerned shall be liable to disciplinary action in
not assessing the Government dues in time and
the question whether the recovery of the
irrecoverable amount shall be waived or the
recovery made from the officials held
responsible for not assessing the Government
dues in time should be considered on merits.(d) As soon as proceedings of the nature referred to
in rule 8 are instituted, the authority which
instituted the proceedings should without delay
intimate the fact to the Accounts Officer.”4. Rule 16 the Railway Services (Pension) Rules, 1993 provides
for adjustment and recovery of dues pertaining to Government or
railway accommodation. It reads thus:
“16. Adjustment and recovery of dues pertaining to
Government or railway accommodation(1) The Directorate of Estates on receipt of intimation from
the Head of Office under sub-rule(1) or rule 98 regarding the
issue of No Demand Certificate shall scrutinize its records
and inform the Head of Office eight months before the date of
retirement of the allottee, if any licence fee was recoverable
from him in respect of the period prior to eight months of his
retirement. If no intimation in regard to recovery of
outstanding licence fee is received by the Head of Office by
the stipulated date, it shall be presumed that no licence fee
was recoverable from the allottee in respect of the period
preceding eight months of his retirement.(2) The Head of Office shall ensure that licence fee for the
next eight months, this is up to the date of retirement of the
-6-allottee is recovered every month from the pay and
allowances of the allottee.(3) Where the Directorate of Estates intimates the amount of
licence fee recoverable in respect of the period mentioned in
sub-rule (1), the Head of Office shall ensure that outstanding
licnece fee is recovered in instalments from the current pay
and allowances of the allottee and where the entire amount is
not recovered from the pay and allowances, the balance shall
be recovered out of the gratuity before its payment is
authorized.(4) The Directorate of Estate shall also inform the Head of
Office the amount of licence fee for the retention of
Government accommodation for the permissible period of
four months beyond the date of retirement of the allottee. The
Head of Office shall adjust the amount of that licence fee
from the amount of the gratuity together with the unrecovered
licence fee, if any, mentioned in sub-rule (3).
(5) If on any particular case, it is not possible for the
Directorate of Estates to determine the outstanding licence
fee, that Directorate shall inform the Head of Office that ten
per cent of the gratuity or one thousand rupees, whichever is
less, may be withheld pending receipt of further information.
(6) The recovery of licence fee for the occupation of the
Government accommodation beyond the permissible period
of four months after the date of retirement if allottee shall be
the responsibility of the Directorate of Estates. Any amount
becoming due on account of licence fee for retention of
Government accommodation beyond four months after
retirement and remaining unpaid licence fee may be
recovered by the Directorate of Estates through the concerned
Accounts Officer from the dearness relief without the consent
of the pensioner. In such cases no dearness relief should
disbursed until full recovery of such dues have been made.NOTE : For the purpose of this rule, the licence fee shall also
include any other charges payable by the allottee for
any damage or loss caused by him to the
accommodation or its fittings.[8. (a) In case where a railway accommodation is not vacated
after superannuation of the railway servant or after
cessation of his services such as on voluntary
retirement, compulsory retirement, medical
invalidation, or death, then the full amount of
retirement gratuity, death gratuity or special
contribution to provident fund, as the case may be,
shall be withheld.(b) the amount withheld under clause (a) shall remain
with the railway administration in the form of cash.-7-
(c) In case the railway accommodation is not vacated even
after the permissible period of retention after the
superannuation, retirement, cessation of service or
death, as the case may be, the railway administration
shall have the right to withhold recover, or adjust
from the Death-cum-retirement Gratuity, the normal
rent, special licence fee or damage rent, as may be due
from the ex-railway employee and return only the
balance, if any, on vacation of the railway
accommodation.(d) Any amount remaining unpaid the adjustment made
under clause (c), may also be recovered without the
consent of the pensioner by the concerned Accounts
Officer from the dearness relief of the pensioner until
full recovery of such dues has been made.(e) Dispute, if any, regarding of damages or rent from the
ex-railway employee shall be subject to adjudication
by the concerned Estate Officer appointed under the
Public Premises (Eviction of Unauthorised occupants)
Act, 1971 (40 of 1971).](9) In case where a railway accommodation is not vacated by
a railway servant after superannuation or after cessation of his
services such as voluntary retirement or death, the full amount
of the retirement gratuity, death gratuity or special
contribution of provident fund, as the case may be, shall be
withheld. The amount so withheld shall remain with the
administration in the form of cash which shall be released
immediately on the vacation of such railway accommodation.”5. Incidentally, we may notice here that the controversy is not
with regard to non-payment of rent of the official accommodation
during the service, nor the recovery of rent is for the unauthorised
occupation at the rate being paid by the employee during the service.
The controversy is with regard to damages (penal rent) for
unauthorised occupation of the Railway quarter by the respondent
no.2 after his retirement. Neither Rule 15, nor Rule 16 of the Rules
provide for determination of penal rent. Obviously, until that exercise
-8-is done, the question of adjustment or recovery of that amount from
retiral benefits cannot arise.
6. The Public Premises (Eviction of Unauthorised Occupants) Act,
1971 ( For short, „Act of 1971‟) defines “public premises” thus:
“2(e) “public premises” means-
(1) any premises belonging to, or taken on lease or
requisitioned by, or on behalf of the Central
Government, and includes any such premises which
have been placed by that Government, whether
before or after the commencement of the Public
Premises (Eviction of Unauthorised
Occupants)Amendment Act, 1980(61 of 1980),
under the control of the Secretariat of either House
of Parliament for providing residential
accommodation to any member of the staff of that
Secretariat;(2) any premises belonging to, or taken on lease by, or on
behalf of,-(i) any company as defined in section 3 of the
Companies Act, 1956 (1 of 1956), in which not
less than fifty-one per cent of the paid up share
capital is held by the Central Government or any
company which is a subsidiary (within the
meaning of that Act) of the first-mentioned
company;(ii) any corporation (not being a company as defined
in section 3 of the Companies Act, 1956 (1 of
1956) or a local authority) established by or under
a Central Act and owned or controlled by the
Central Government;(iii) any University established or incorporated by any
Central Act.(iv) any Institute incorporated by the Institutes of
Technology Act, 1961 (59 of 1961);(v) any Board of Trustees constituted under the Major
Port Trusts Act, 1963 (38 of 1963);(vi) The Bhakra Management Board constituted under
section 79 of the Punjab Reorganisation Act,
1966(31 of 1966), and that Board as and when re-
named as the Bhakra-Beas Management Board
under sub-section (6) of section 80 of that Act;(vii)any State Government or the Government of any
Union Territory situated in the National Capital
Territory of Delhi or in any other Union Territory;(viii) any Cantonment Board constituted under the
Cantonments Act, 1924 (2 of 1924); and
-9-(3) in relation to the National Capital Territory of Delhi-
(i) any premises belonging to the Municipal
Corporation of Delhi, or any Municipal
Committee or notified area committee;(ii) any premises belonging to the Delhi Development
Authority, whether such premises are in the
possession of, or leased out by, the said
Authority; and(iii) any premises belonging to, or taken on lease or
requisitioned by, or on behalf of any State
Government or the Government of any Union
Territory;”
7. That the railway quarter is covered by definition of “public
premises” under the Act of 1971 is not in dispute.
8. The Act of 1971 defines “unauthorised occupation” thus:
“2(g) “unauthorised occupation”, in relation to any public
premises, means the occupation by any person of the
public premises without authority for such occupation, and
includes the continuance in occupation by any person of
the public premises after the authority (whether by way of
grant or any other mode of transfer) under which he was
allowed to occupy the premises has expired or has been
determined for any reason whatsoever.”
9. That after his superannuation, the respondent no.2 remained
in unauthorised occupation of railway quarter at Muzaffarpur also
does not appear to be in dispute.
10. Section 7 of the Act of 1971 empowers the estate officer to
determine damages in respect of public premises. Sub-Section 2 of
Section 7 which is relevant for us reads thus:
“(2) Where any person is, or has at any time been, in
unauthorized occupation of any public premises, the estate
officer may, having regard to such principles of assessment of
damages as may be prescribed, assess the damages on
account of the use and occupation of such premises and may,
by order, require that person to pay the damages within such
time and in such instalments as may be specified in the
order.”
– 10 –
11. For want of any provision in Railway Services (Pension)
Rules, for determination of damages/penal rent in respect of a railway
accommodation in unauthorised occupation of the railway employee,
obviously recourse has to be taken by the railway authorities under the
Act of 1971 for determination of damages/ penal rent in respect of
public premises. The said recourse having not been taken, unilaterally
determination of damages/ penal rent of Rs.29613/- and then
deducting the said amount from the retiral benefits of the respondent
no.2 cannot be justifiably sustainable.
12. In the case of Gorakhpur University and others Vs. Dr.
Shitla Prasad Nagendra and others, (2001) 6 Supreme Court Cases
591, although in relation to different provision governing employees
of Gorakhpur University, the Supreme Court made the following
observations:
“5. We have carefully considered the submission on behalf
of the respective parties before us. The earlier decision
pertaining to this very University, reported in S.N. Mathur
(1996) 2 ESC 211 (All) is that of a Division Bench, rendered
after considering the principles laid down and also placing
reliance upon the decisions of this Court reported in R. Kapur
(1994) 6 SCC 589, which, in turn, relied upon earlier
decisions in State of Kerala v. M. Padmanabhan Nair (1985)
1 SCC 429 : 1985 SCC (L & S) 278, and Som Prakash (1981)
1 SCC 449. This Court has been repeatedly emphasizing the
position that pension and gratuity are no longer matters of
any bounty to be distributed by the Government but are
valuable rights acquired and property in their hands and any
delay in settlement and disbursement whereof should be
viewed seriously and dealt with severely by imposing penalty
in the form of payment of interest. Withholding of quarters
allotted, while in service, even after retirement without
vacating the same has been viewed to be not a valid ground to
withhold the disbursement of the terminal benefits. Such is
the position with reference to amounts due towards provident
fund, which is rendered immune from attachment and
deduction or adjustment as against any other dues from the
– 11 –
employee. In the context of this, mere reliance on behalf of
the appellant upon yet another decision of a different Division
Bench of the very High Court rendered without taking note of
any of earlier decisions of this court but merely proceeding to
decide the issue upon equitable considerations of balancing
conflicting claims of respective parties before it does not
improve the case of the appellant any further. Reliance placed
for the appellant University on the decision reported in Wazir
Chand, (2001) 6 SCC 596 does not also sound well on the
facts and circumstances of this case. It is not clear from the
facts relating to the said decision as to whether the person
concerned was allowed to remain in occupation on receipt of
the normal rent as in the present case. As noticed earlier, the
case of the contesting respondent in this case is that the
university authorities regularly accepted the rent at normal
rates every month from the petitioner till the quarters were
vacated and that in spite of request made for the allotment of
the said quarters in favour of the son of the respondents, who
is in the service of the University, no decision seems to have
been taken and communicated though it is now claimed in the
court proceedings that he is not entitled to this type of
accommodation. Further, the facts disclosed such as the
resolutions of the University resolving to waive penal rent
from all Teachers as well as that of the Executive Council
dated 18.7.1994 and the actual such waiver made in the case
of several others cannot be easily ignored. The lethargy
shown by the authorities in not taking any action according to
law to enforce their right to recover possession of the quarters
from the respondent or fix liability or determine the so called
penal rent after giving prior show cause notice or any
opportunity to him before ever even proceeding to recover the
same from the respondent renders the claim for penal rent not
only a seriously disputed or contested claim but the
University cannot be allowed to recover summarily the
alleged dues according to its whims in a vindictive manner by
adopting different and discriminatory standards. The facts
disclosed also show that it is almost one year after the
vacation of the quarters and that too on the basis of certain
subsequent orders increasing the rates of penal rent, the
applicability of which to the respondent itself was again
seriously disputed and to some extent justifiably too, the
appellant cannot be held to be entitled to recover by way of
adjustment such disputed sums or claims against the pension,
gratuity and provident fund amounts indisputably due and
unquestionably payable to the respondent before us. The
claims of the University cannot be said to be in respect of an
admitted or conceded claim or sum due. Therefore, we are of
the view that no infirmity or illegality could be said to have
vitiated the order, under challenge in this appeal, to call for
our interference, apart from the further reason that the
– 12 –
disbursements have already been said to have been made in
this case as per the decision of the High Court.”
13. The observations made by the Supreme Court that not taking
any action according to law to determine the so-called penal rent after
giving prior show cause notice or any opportunity before even
proceeding to recover the same renders the claim for penal rent not
only seriously disputed or contested claim, but the University cannot
be allowed to recover summarily the alleged dues according to its
whims equally applies to the fact-situation of the present case.
14. Moreover, we are informed by the counsel for the respondent
no.2 that subsequent to the decision given by the Tribunal, an amount
of Rs. 21,938/- has already been paid out of Rs.29613/- which was
deducted as penal rent from the retiral benefits.
15. In this view of the matter, even otherwise the order passed by
the Tribunal does not call for any interference. Writ petition is,
accordingly, dismissed with no order as to cost.
R.M. Lodha, CJ
Kishore K. Mandal, J.
Sunil