IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21/04/2006
CORAM
THE HON'BLE MR.JUSTICE P.K.MISRA
AND
THE HON'BLE MR.JUSTICE R.SUDHAKAR
W.P. No.38937 of 2005
to
W.P. No.38941 of 2005
and
W.P. No.39594 of 2005
to
W.P. No.39599 of 2005
and
W.P. No.36183 of 2065
and
W.P. No.40021 of 2005
and
W.P. No.9280 of 2006
and
W.P. No.62 of 2006
and
W.P.M.P. No.41711 of 2005
to
W.P.M.P. No.41715 of 2005
and
W.P.M.P. No.42441 of 2005
to
W.P.M.P. No.42446 of 2005
and
W.P.M.P. No.39028 of 2005
and
W.P.M.P. No.42917 of 2005
and
W.P.M.P. No.10269 of 2006
and
W.P.M.P. No.56 of 2006
The Principal,
Kendriya Vidyala Sangathan,
Meenambakkam,
Chennai 600 027. .. Petitioner in
W.P.No.38937 of 2005
-Vs-
1. D.Sarala
2. The Registrar,
Central Administrative
Tribunal,
Chennai. .. Respondents in
W.P.No.38937 of 2005
Writ Petition No.38937 of 2005 filed under Article 226 of the
Constitution of India, praying for issuance of a writ of certiorari, calling
for the records of the Central Administrative Tribunal culminating with its
order dated 8.3.2005 passed in O.A.NO.962 of 2004 and quash the same.
!For petitioner in
W.P.No.38937 of 2005: Mr.M.Vaidyanathan
^For respondents in
W.P.No.38937 of 2005: Mr.V.Girish Kumar for R1
R2 Tribunal.
:COMMON ORDER
(The Order of the Court was made by R.Sudhakar,J.)
Even though the matters are listed for hearing miscellaneous
petitions, on consent of the learned counsel appearing for both sides, the
writ petitions themselves are heard on merits.
2. The present batch of writ petitions have been filed by Kendriya
Vidyalaya Sangathan (in short, ‘KVS’).
3. The petitioner-KVS is an autonomous body registered under the
Societies Registration Act and financed by the Government of India through
Ministry of Human Resource Development. The staff of Kendriya Vidyalaya are
governed by the Rules framed by the Board of Governors in terms of the
policies laid down by the Government of India. In 1986, sanction was accorded
for construction of staff quarters for teaching staff of Kendriya Vidyalaya,
Meenambakkam in Tamil Nadu within the premises of the Vidyalaya. The
construction of the building was completed in September 1992 at a cost of
Rs.33.65 lakhs. In all, 21 quarters were constructed and classified as Type-I
(A), Type-II (B), TypeIII (C) and Type-IV(D). In terms of Rule 8 of the KVS
(Allotment of Residence) Rules, 1998 (hereinafter referred to as ‘the Rules’),
the abovesaid quarters are allotted to the teachers as per the emoluments
received by them. It appears that in January, 1995, due to acute water
shortage, all the quarters were vacated by the occupants and thereby heavy
monetary loss was caused to the KVS and pursuant to audit objection, the KVS
(Allotment of Residence) Rules, 1998 came into force. All the staff were
briefed about the audit objection and the willingness of the staff was called
for to accept the allotment. Since none of the staff members, the contesting
respondents in all these writ petitions offered to take up the staff quarters,
several circulars were issued to the staff members, in particular, a circular
dated 19.1.2 004 was issued to the staff to apply for accommodation of Type-B
quarters. Subsequently, a priority list dated 1.1.2004 for allotment
categorywise for Type ‘B’ and Type ‘C’ quarters, was circulated on 20 .2.2004.
The above circulars were issued under the Rules. Inspite of such circular,
since no staff member came forward to occupy the premises, the petitioner-KVS
was left with no other option except to allot the quarters as per the priority
list. However, in view of the refusal of the staff to occupy the quarters
allotted to the contesting respondents, the House Rent Allowance (in short,
‘HRA’) for the period from the date of allotment to the date when the last
unit was occupied, was disallowed. This was done based on Rule 11 of the
Rules. The allotment of the quarters was done in terms of Rule 10 of the
Rules by the Allotment Committee. There was no compulsion by the KVS
authorities whatsoever. Since the staff members did not co-operate with the
KVS, the KVS had to invoke Rule 8 read with Rule 6 and Rule 3(9) of the Rules
for allotment of quarters. This was done by the Executive Committee which is
a sub-committee of the Vidyalaya Management Committee. The contesting
respondents, namely the staff members, aggrieved by the deduction of HRA,
filed Original Applications before the Central Administrative Tribunal.
4. The claim of the staff members is that they individually own
houses and reside within 20 kms. from the school. They are not eligible to
get accommodation by allotment of quarters as they have their own house. The
KVS without following the Rules, had allotted the quarters to the staff
members and they have objected to the allotment on the ground that they are
not entitled to such allotment under the Rules and therefore, requested for
cancellation of the allotment of quarters. It was contended by them that the
disallowance of HRA from the date of allotment of quarters was contrary to the
Rules and the deduction of HRA from their pay based on the priority list by
common circular dated 28.6.2004, was erroneous. It is contended by the staff
members that the allotment should be made strictly in accordance with the
Rules and the KVS authorities cannot suo motu allot the quarters and compel
the staff members to occupy the same. It is also contended by the staff
members that in terms of Rule 10 of the Rules, the Committee should have
short-listed the staff members who are ineligible to get accommodation as per
Rule 4(1) of the Rules. It was also contended by the staff members that in
the case of one V.K.Manoharan, who was occupying the quarters from 1993 to
1996, was forcibly evicted by the KVS authorities under Rule 4(3) of the Rules
on the ground that he purchased his own house. On the same analogy, the
subsequent allotment made is contrary to the rules and therefore
unsustainable.
5. Relying upon the various provisions of the Rules, the Tribunal
observed as follows:
“26. Here I have to see whether the action of the respondents for
denying HRA is proper. Admittedly, as per rules, the applicants are not
eligible for allotment of quarters. When the applicants are not fulfilling
the benefit of residing in quarters they are eligible for HRA. When the
respondent has forcibly allotted the quarters the applicants have refused the
allotment. Immediately without hearing the applicants, the respondent has
issued a circular for recovery of the HRA paid to the applicants from the pay
bill June, 2004 which is capricious and against law.
31. The said rules is applicable to the allottees made by the
Allotment Committee after calling applications for allotment of quarters. The
said rule is not applicable to the present case since there was no procedure
followed by the respondents for calling of applications. The applicants did
not submit their applications for allotment. Refusal of occupying the
quarters only on the basis of the allotment made by the respondents suo motu,
hence the said rule 11 is not applicable to the facts of this case.
32. I carefully considered the contentions from the either side and
the respondent has not justified in denying HRA. The impugned order is not
sustainable in the eye of law since there was no notice prior to passing the
orders. Since the rules for allotment are not followed while allotting the
quarters the denial of HRA is also not proper. I consider the orders passed
by this Tribunal in OA.981 of 2000 and batch is applicable to the facts of
this case. Hence the impugned order is not sustainable in the eye of law.
33. For the foregoing reasons and the judgment referred above and as
per provisions of allotment rules, KVS (Allotment of Residence) Rules, 1998,
the impugned action of the respondents is illegal. I accepted the contention
taken by the applicants and the respondents have not justified in taking
action for denial of HRA. While admitting the case the interim order of
recovery was granted. The interim order is made absolute.
34. The OAs. are allowed. No order as to costs.”
It is against this order of the Tribunal that the KVS has filed the present
writ petitions.
6. Before we go into the merits of the claims made by either parties,
it will be useful to refer to the following Rules of the KVS ( Allotment of
Residence) Rules:
“Rule 3. Definitions:
In these rules, unless the context otherwise requires-
(9) ‘Priority Date’ of an officer in relation to a type of residence
to which he is eligible under Rule 6 of these Rules, means the earliest date
from which he has been continuously drawing emoluments relevant to a
particular type or a higher type in a post under the Kendriya Vidyalaya
Sangathan or the Central Govt. or State Govt. or on foreign service except
for periods of leave.
Provided that where the priority date of two or more officers is the
same, seniority among them shall be determined by the emoluments, the officer
in receipt of higher emoluments taking precedence over the officer in receipt
of lower emoluments; where the emoluments are equal, by the length of service;
and where both the emoluments and length of service are equal, on the basis of
the scale of pay of the officer, the officer working in a post having higher
scale of pay taking precedence over the officer in receipt of lower scale of
pay.
Rule 4: Ineligibility of Employees owning House(s).
(1) No employee of the Sangathan shall be eligible for allotment of
residence if either he or any member of his family owns a house within 15 Kms.
(20 Kms. for Delhi, Calcutta, Bombay and Chennai) from place of his posting.
(2) Notwithstanding anything contained in clause (1) of this rule, the
Allotting Authority may allot or reallot a residence to any employee if –
(a) The house owned by him, his wife, any dependent child or by his
father/mother or any other dependent relation has been requisitioned by the
Government/Local authority; or
(b) It is proved to the satisfaction of the Allotting Authority that
such house has been given out on lease:
(i) Before the posting of the employee to the Vidyalaya, Regional
Office(s) and Headquarters office of the Sangathan; and
(ii) The Allotting Authority is satisfied that it is not possible for
the lessor, for reasons beyond his control, to obtain vacant possession of the
house;
Provided that if at any time it appears to the Allotting Authority
that no effort has been made to obtain vacant possession of the house, it
shall be open to the Allotting Authority to cancel the allotment and require
the allottee to vacate the residence forthwith and to recover the damages at
the rates prescribed by Government of India or the Sangathan as damages from
the date of such cancellation till the residence is vacated.
(3) When after a residence has been allotted to an employee, he or any
member of his family becomes owner of a house within the limits mentioned in
clause (1) of this rule, such employee shall notify the fact to the allotting
authority and shall vacate the residence allotted to him by the Sangathan
under these rules within a period of one month from the date the house is
provided with electricity connection.
(4) The provisions of this rule will not apply where sufficient number
of residences are available for allotment to all the applicant.
Rule 7: Application for allotment:
(1) Applications for allotment shall be invited by the Allotting
Authority in such form and manner and before such date as may be specified by
him.
(2) An employee joining duty on transfer or on first appointment may
submit his application to the allotting authority within a month of his
joining duty.
(3) Application received under clause (2) above on or before the 20 th
day of a calendar month shall alone be considered for allotment in the
succeeding month.
Rule 8: Basis of allotment:
(1) Save as otherwise provided in these Rules, a residence falling
vacant will be allotted preferably to an applicant desiring a change of
accommodation in that type, and if not required for that purpose, to an
applicant without accommodation in that type having the earliest priority date
for that type of residence.
(2) Allotment of the residences earmarked for a specific employee or
classes of employees shall be made only to that specific employee of those
classes of employees in whose favour the residence has been earmarked.
(3) Employees joining the Sangathan on deputation may be allotted
residence of the eligible category or one category below on priority.
(4) Separate seniority list will be prepared showing the order in
which the allotment is to be made, for each type of residence.
Rule 9: Earmarking of residence:
Notwithstanding anything contained in these rules, any accommodation
may be earmarked for allotment to such officer or officers of the Sangathan as
may be specified by the Commissioner.
Rule 10: Allotment Committee:
(1) All applications for allotment shall be considered by the
Allotment Committee constituted separately for each Kendriya Vidyalaya,
Regional Office, the Headquarters office or any other establishment of the
Sangathan consisting of such members as may be prescribed by the KVS Hqrs.
(2) The Committee shall draw up a list of applicants eligible for
allotment in the order in which residence may be allotted during the allotment
year. The list shall remain valid for one year. A fresh list will be
prepared and approved by the Allotment Committee at the beginning of each
allotment year.
Note:- The Allotment Committee may allot an appropriate place in the
list of the employees joining during the middle of the year and apply for
residence as mentioned in Rule 7.
(3) A residence falling vacant will be allotted by the allotting
authority strictly in accordance with these rules after taking into account
the list prepared by the allotment committee under clause (2) of this rule.
In the event of difference of opinion between the allotting authority and
allotment committee, the matter will be referred to the authority immediately
higher than the allotting authority whose decision in the matter shall be
final.
(4) A letter of allotment shall be issued in duplicate to every
employee to whom a residence is allotted and he shall be required to convey
his acceptance or otherwise in writing (on one copy of the letter) of the
terms of the allotment stipulated therein before actual possession of the
residence is made over to him.
(5) If an employee to whom a residence is allotted does not accept the
allotment or take possession of the residence within a period not exceeding 8
continuous days, from the date of receipt of the letter of allotment, the
allotment will be treated as cancelled and he/she shall not be eligible for
another allotment for a period of one year from the date of the allotment
letter.
Rule 11: Non-acceptance of Allotment or offer or failure to occupy the
allotted residence after acceptance:
If any employee fails to accept the allotment of a residence within
five days or fails to take possession of that residence after acceptance
within eight days from the date of the receipt of the letter of the allotment,
he/she shall not be eligible for another allotment letter. Such an employee
will also not be eligible to the drawal of HRA for the period during which the
allotted residence remains vacant or surplus.”
7. The main contention of the petitioners/KVS in their challenge
against the order of the Tribunal is that Rule 4(1) of the Rules will not be
applicable in the present case. On the contrary, allotment of quarters was as
per Rule 4(4) of the Rules. Further, the petitioners had prepared a priority
list for allotment of quarters and the staff members were allotted only as per
the priority list. Since the staff members refused to accept the quarters,
they were rightly disentitled to HRA, which is not part of the pay and it
cannot be claimed as a matter of right. When the quarters are allotted to the
staff members by the petitioners, they cannot refuse to take such allotment
and also claim the HRA. The conduct of the staff members in refusing to
occupy the quarters and claim HRA, will amount to imposing unwanted liability
on the petitioners. Further, the Tribunal has failed to take into
consideration the ratio of the judgment reported in AIR 1994 SC 254 1
(Director, C.P.Crops Reserach Institute vs. M.Purushothaman), which would
apply squarely to the present case and the reliance of the earlier order of
the Tribunal in O.A.No.981 of 2000 and batch, dated 20.7.2001, was totally
misconceived and it will not apply to the facts of the present case.
8. Learned counsel for the KVS would earnestly submit that the
Tribunal has overlooked the decision of the Supreme Court reported in AIR 1994
SC 2541 cited above. It was submitted that the contentions made by the
present contesting respondents, namely the staff members, were considered by
the Apex Court and negatived in similar circumstances. In such view of the
matter, it was submitted that there is no scope for any further adjudication
on the claim of the contesting respondents with regard to their claim for HRA.
9. In the above circumstances, it will be useful to refer to the
observations of the judgment of the Apex Court in the said decision reported
in AIR 1994 SC 2541. The Tribunal in that case held that the employees cannot
be compelled to occupy official quarters and hence on their refusal to occupy
the same, they cannot be denied the benefit of HRA. The Tribunal gave two
reasons and the first reason was that under the relevant provisions, it is
only those employees who had applied for official accommodation and who
refused to occupy the same, are liable to forfeit the benefit of HRA and not
others. The second reason given by the Tribunal in that case was that the HRA
is a part of wages and no deduction from the wages can be made merely on
account of the refusal to accept the accommodation. Paragraphs 5 to 10 of the
judgment of the Supreme Court in that case (AIR 1994 SC 2541) read as follows:
“5. It is clear from the aforesaid provisions that paragraphs 4
(a)(i) and (ii) lay down the procedure for making application for
accommodation. Paragraph 4(b)(i) lays down the consequences on refusal to
accept the accommodation when offered. There is no doubt that paragraphs
4(a)(i) and (ii) state that an application has to be made to secure
accommodation. However, that does not mean that Government or the
organisation such as the appellant-organisation to which the said provisions
apply cannot on their own offer accommodation to the employees. Hence the
reason given by the Tribunal that it is only if the employee applies for such
accommodation and he refuses to accept the same when offered that he would be
disentitled to the HRA, is not correct. It must be remembered in this
connection that the Government or the organisation of the kind of the
appellant spends huge public funds for constructing quarters for their
employees both for the convenience of the management as well as of the
employees. The investment thus made in constructing and maintaining the
quarters will be a waste if they are to lie unoccupied. The HRA is not a
matter of right. It is in lieu of the accommodation not made available to the
employees. This being the case, it follows that whenever the accommodation is
offered the employees have either to accept it or forfeit the HRA. The
management cannot be saddled with double liability, viz. to construct and
maintain the quarters as well as to pay the HRA. This is the rationale of the
provisions of paragraph 4 of the said Government Office Memorandum.
6. It is for this reason again that paragraph 4(b)(i) provides that
the HRA shall not be admissible to those who occupy accommodation provided for
them as well as to those to whom accommodation has been offered but who have
refused to accept it. The provisions of paragraph 4(b)(i) are independent of
the provisions of paragraph 4(a)(i) and (ii). Whereas paragraph 4(a)(i) and
(ii) speak of procedure to be followed by the employees who are in need of
accommodation, paragraph 4(v)(i) provides for the forfeiture of the HRA even
when the accommodation has been offered on its own by the management whether
the application for the same has been made or not. There is no distinction
made in this provision between those who have applied and those who have not
applied for accommodation. Even otherwise, we are of the view that the
distinction sought to be made by the Tribunal is on the face of it,
irrational, particularly taking into consideration the resources spent on
constructing the quarters.
7. We are also afraid that the Tribunal is not right in including the
HRA in the definition of wages. The Fundamental Rule 9(21)(a) which is
applicable to the respondents-employees defines “pay” as follows:-
“9(21)(a) Pay means the amount drawn monthly by a Government servant
as–
(i) the pay, other than special pay granted in view of his personal
qualifications, which has been sanctioned for a post held by him substantively
or in an officiating capacity, or to which he is entitled by reason of his
position in a cadre; and
(ii) overseas pay, special pay and personal pay; and
(iii) any other emoluments which may be specially classed as pay by
the President.”
8. It is obvious from this definition that HRA is not part of “pay”.
Further, Fundamental Rule 44 defines “Compensatory Allowance” as follows:-
“F.R. 44. Compensatory allowance Subject to the general rule that
the amount of compensatory allowance should be so regulated that the allowance
is not on the whole a source of profit to the recipient, the Central
Government may grant such allowances to any Government servant under its
control and may make rules prescribing their amounts and the conditions under
which they may be drawn.”
9. The HRA would be covered by the definition of Compensatory
Allowance. It is compensation in lieu of accommodations. This definition
itself further makes it clear that compensatory allowance is not to be used as
a source of profit. It is given only to compensate for the amenities which
are not available or provided to the employee. The moment, therefore, the
amenities are provided or offered, the employee should cease to be in receipt
of the compensation which is given for want of it. We wish the Tribunal had
perused the definition of “pay” and “compensatory allowance” given in the
Fundamental Rules before pronouncing that the HRA is a part of the wages or
pay and, therefore, cannot be disturbed.
10. For both these reasons, therefore, we are unable to accept the
conclusion of the Tribunal.
11. Shri Ranjit Kumar, learned counsel appearing for the
appellantorganisation pointed out a letter dated 13-8-1986 addressed by the
Under Secretary of the Indian Council of Agricultural Research to the
appellant wherein it is stated that the matter was examined and it was held
that the HRA should be denied to the employee who refuses to take the
allotment made or when offered to him till such time the quarter in question
lies vacant for want of any other taker. This would mean that the HRA would
be denied to the employee only for the period the quarter lies vacant
consequent upon his refusal. While, therefore, setting aside the impugned
order and allowing the appeal, we direct the appellant-organisation to deduct
the HRA from the salary of the respondent-employees only for the period the
quarters which were offered to the employees remained vacant. The appeal is
allowed accordingly with no order as to costs.”
10. In the present case also, it is not the case of the staff members
opting for allotment. On the contrary, sufficient quarters are available for
allotment and the petitioners-KVS allotted the quarters as per the priority
list. For reasons best known to each one of the staff members, they refused
to take the accommodation and therefore, it has to be accepted that they have
refused to take the offer and consequently, they will be disentitled to the
HRA. The Apex Court in no uncertain terms has held that whenever the
accommodation is offered to employees, they have to accept or forfeit the HRA.
Therefore, in the light of the very clear pronouncement of the Apex Court, we
have no hesitation to accept the stand of the petitioners-KVS.
11. The Tribunal in the present case, while extracting the relevant
portion of the judgment of the Apex Court, has steered clear of the
observations of the Apex Court on a specious plea of discrimination. The
Tribunal has proceeded to grant the relief to the staff members on the ground
that in O.A.No.981 of 2000, dated 20.7.2000, the Tribunal has granted the
relief in spite of the judgment of the Apex Court, which squarely covers the
issue in the present case. We are not concerned with the decision of the
Tribunal in O.A.No.981 of 2000 and it cannot be the basis for rendering a
decision contrary to the law laid down by the Apex Court which is binding on
all concerned under Articles 141 of the Constitution of India.
12. The Tribunal in the present case has also come to the conclusion
that since the allottees have not requested for any allotment, Rule 11 of the
Rules will not be applicable and HRA cannot be denied. Since the allotment
was made suo motu, Rule 11 of the Rules was held to be not applicable to the
present case. As has been very clearly held by the Apex Court, the power to
allot quarters is very much available with the authorities and that is so even
under the Rules. Hence, the allotment made as per priority list is in order
and consequently on refusal to accept the allotment, the respondents teachers
will be disentitled to the HRA. The judgment of the Apex Court clearly
fortifies such a view.
13. The contesting respondents cannot as a matter of right claim that
the HRA should be paid and the HRA recovered should be refunded. The order of
the Tribunal suffers from error apparent on the face of the record and
misreading of Rule 4(4) of the Rules and contrary to the judgment of the Apex
Court cited above.
14. In such view of the matter, we have no hesitation to set aside
the order of the Tribunal. Accordingly, the order of the Tribunal is set
aside. The writ petitions are allowed. The petitioners-KVS will be entitled
to make allotment in accordance with the Rules and as per the priority list.
No costs. W.P.M.Ps. are closed.
cs/ts