Full Judgment Text
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CASE NO.:
Appeal (civil) 7567 of 2002
PETITIONER:
P. S. E. B. & Anr.
RESPONDENT:
Som Nath & Ors.
DATE OF JUDGMENT: 18/05/2006
BENCH:
K. G. Balakrishnan & R. V. Raveendran
JUDGMENT:
J U D G M E N T
WITH
CA Nos. 7569/2002, 7600-01/2002, 7607/2002, 7606/2002,
2323/2004, and 2987/2004
RAVEENDRAN, J.
These appeals are filed against the judgments of the
Punjab & Haryana High Court in the following cases :
S.No.
Civil Appeal No.
Case No. before High
Court
Date of
Judgment of
High Court
i)
7567/2002
CWP 12606/1995
14.5.1998
ii)
7569/2002
RSA 2990/1996
22.1.1999
iii)
7600-01/2002
CWP 12810/1995
14.5.1998
iv)
7607/2002
RSA 3237/1996
22.1.1999
v)
7606/2002
CWP 12830/1995
14.5.1998
vi)
2323/2004
CWP 3752/2002
3.11.2003
vii)
2987/2004
CWP 4903/2002
3.11.2003
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These appeals involve a common question, as to protection of
higher House Rent Allowance drawn upto 31.8.1988 by the
employees of Punjab State Electricity Board, after the revision
of such allowance with effect from 1.9.1988.
2. The appellant is the Punjab State Electricity Board
(hereinafter referred to as ’the Board’). The respondents
are/were the employees of the Board. At the relevant point of
time, the Respondents were posted at Ajnala, Ramdas, Patti,
Khem Karan in the district of Amritsar and at Ferozepur, in
places within a radius of 16 kms from the international border.
As employees posted in the border areas within a radius of 16
km from the international border, they were paid HRA
applicable to I class or A class cities in Punjab, by taking note
of the special problems relating to border areas. Thus all the
Respondents were getting the higher rate of HRA applicable to
I Class/’A’ Class cities.
3. The State Government revised the rates of HRA vide
circular dated 30.8.1988, implementing the recommendations
of the Third Pay Commission. The Board adopted the revised
rates of HRA introduced by the State Government. By Order
No.142/FIN.PRC-1988 (Finance Circular No. 11/89) dated
7.3.1989, it classified cities and towns in Punjab into four
classes [Class A, Class B, Class C and Class D] and revised
the rates of house rent allowance for various pay ranges
admissible in different classes of cities/towns. We extract
below the relevant portion of the said order dated 7.3.1989 :-
"(ii) The rates of house rent allowances for various pay
ranges admissible in different classes of cities/towns
shall be as under :
Pay Range
Class ’A’
City
Class ’B’
City
Class ’C’
City
Class ’D’
Town
Rs.
Rs.
Rs.
Rs.
750-1249
200
150
100
75
1250-1749
300
225
150
100
1750-2249
400
300
200
150
2250-2749
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500
375
250
175
2750-3249
600
450
300
225
3250-3749
700
525
350
250
3750-4249
800
600
400
300
4250-4749
900
675
450
325
4750-5249
1000
750
500
375
5250
onwards
1000
750
500
375
The amount of house rent allowance being drawn under
the existing orders by the employees at higher rates than
those specified above shall be protected till their rate of
house rent allowance gets adjusted in their revised rates.
(iii) The house rent allowance shall no longer be admissible at
the places falling within 8 kms radius of the
municipal/outer limits of the classified cities/downs, save
in those cases where house rent allowance is admissible at
the place of posting itself.
(iv) The eligibility of house rent allowance of an employee
shall be determined with reference to the place of posting
of the employee.
The other existing terms and conditions regarding the grant of
house rent allowance shall continue to be in force.
4. By circular dated 10.5.1989, the Board ordered that its
employees who are entitled to rent free accommodation, when
not provided or allotted with such accommodation, shall be
allowed 5% of the basic pay in addition to the normal HRA
admissible at the place of posting. By another circular dated
10.5.1989, clause (iii) in the order dated 7.3.1989 was
substituted with effect from 1.9.1988 to the effect that house
rent allowance of the employees is also admissible to the
places falling within 8 km radius of the periphery
municipal/outer limits of the classified cities/downs.
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5. In view of different interpretations of the HRA orders by
different offices, the State Government issued a clarificatory
Circular dated 19.9.1990 (adopted by the Board by Finance
Circular No. 25/1992 dated 29.5.1992), relevant portions of
which are extracted below :
"a) Government employees entitled to rent free
accommodation when not provided/allotted such
accommodation shall be allowed payment equal to the
house rent charged by the Government from the employees
for Government accommodation i.e. 5% of the basic pay in
addition to the normal house rent allowance, if admissible
at the place of posting. This implies that the employees
posted at the place in the belt of 16 kms. from the
International Border who are entitled to rent free
accommodation as also other employees who are otherwise
entitled to rent free accommodation will get 5% of the basic
pay in addition to the house rent allowance if the place of
posting of the employees falls, in Class A, Class B, Class C,
and Class D Cities, as the case may be in accordance with
the instructions contained in the Department of Finance
letter No. 10/77/88/FPI/8014 dated 30th Aug. 1988. It is
made clear that the amount of house rent allowance of First
class cities admissible before 1.9.1988, to the employees
posted in the belt of 16 kms. from the International Border
is not covered within the protection of the House Rent
Allowance, as this amount of House Rent Allowance was
admissible in lieu of rent free accommodation only.
b) In the rural area, house rent is not admissible to the
Government employees who, prior to 1.9.1988, were
entitled to house rent allowance of first class cities or
second class cities, as the case may be. The Govt.
employees posted in the rural areas who are entitled to rent
free accommodation when not provided such
accommodation are entitled to 5% of the basic pay, in
addition to rural area allowance and nothing more. In view
of this position, the employee posted in rural area, who,
prior to 1.9.1988, were drawing house rent allowance in
accordance with the earlier instructions in lieu of rent free
accommodation are not entitled to be given any protection
of amount of house rent allowance which they were
claiming previously."
6. Some of the respondents filed writ petitions before the
Punjab and Haryana High Court alleging that they were not
being extended the benefit of protection of higher HRA drawn
upto 31.8.1988, granted under the Circular dated 7.3.1989 and
seeking a direction to the Board to pay them the protected
(higher) HRA as drawn by them as on 31.8.1988. The High
Court disposed of the writ petition, permitting the petitioners
therein to file representation/s, and to treat the writ petition
itself as the representation, if no separate representation was
filed, and to dispose of the claims by a speaking order. The
High Court also directed that till such orders were made,
deduction of HRA shall remain stayed and no recovery shall
be made from the employees. It further directed that if the
representations were decided against the affected employees,
the amount drawn on the basis of the said orders shall be
recoverable in future.
7. The Board, accordingly, considered the representations
of the Respondents and rejected the same by order dated
13.7.1995 holding that they were not entitled to the benefit of
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protection as per the Circulars dated 7.3.1989 in view of the
clarificatory instructions contained in the Government Circular
dated 19.9.1990 adopted by the Board on 29.5.1992. The
respondents herein challenged the said order dated 13.7.1995
in several writ petitions with a further prayer that the HRA that
was being paid to them up to 31.8.1988, should be protected.
The said writ petition was allowed by the impugned orders
dated 14.5.1998 and 3.11.2003 with a direction that the HRA
that was admissible to respondents prior to 31.8.1988 shall be
protected. The High Court followed the decision of this Court
in Mohinder Singh v. State of Punjab [SLP (c) No.9149 of
1992 decided on 21.4.1995], while allowing the writ petitions.
Some employees of the Board had also filed civil suits for a
declaration that they are entitled to protection of higher HRA
which they receiving till 31.8.1988 and those suits were
decreed and those decreed were affirmed by the first Appellate
Court as also by the High Court on 22.1.1999. The said orders
dated 14.5.1998 and 3.11.2003 in the writ petitions and the
judgment and decrees dated 22.1.1999 in the second appeals
are challenged by the State in these appeals by special leave.
8. The appellant contends that the benefit of the protection
clause in the order dated 7.3.1989 is not available to the
respondents, in view of the clarification contained in the
Circular dated 19.9.1990 issued by the State Government
which was adopted by the Board on 29.5.1992. It is submitted
that the HRA admissible before 31.8.1988 to employees posted
in areas falling within 16 km international border are not
covered by the protection clause as what was being paid was
not HRA but an allowance in lieu of rent free accommodation.
It is contended that the decision of this Court in Mohinder
Singh (supra) is inapplicable as it did not consider the circular
dated 19.9.1990 of the State Government and adoption
Circular dated 29.5.1992 of the Board.
9. The contention of the appellant that the decision of this
Court in Mohinder Singh (supra) was inapplicable, as the
Circular dated 19.9.1990 adopted by the Board on 29.5.1992
was not considered, is incorrect and untenable. We have
secured and examined the records of C.A. No.5124/1995
[Mohinder Singh v. State of Punjab]. That petition related to
the employees of the State Government working in Patti,
Amritsar District, situated within the 16 km from the
international border. Relying on the Circular dated 19.9.1990,
on identical contentions, the State Government refused to
extend the benefit of the HRA protection. That decision was
challenged by the government servants in W.P. No.7734/1992
and the said writ petition was dismissed by the Punjab High
Court vide order dated 12.2.1992 following the decision dated
4.2.1992 in LPA No.895/1991. The said decision in LPA
No.895/1991 considered the very same contentions with
reference to the Government Circular dated 19.9.1990 and
upheld the stand the State Government. It was the said decision
in favour of the State Government, that was challenged before
this Court in C.A. No.5124/1995 which was allowed by the
following order dated 21.4.1995 :
"Leave granted.
These appeals impugn a common judgment and order of the
High Court of Punjab and Haryana. The only question
urged in these appeals is in relation to the house rent
allowance (H.R.A.) payable by the State of Punjab to its
employees classified in the A, B, C, D categories of a
circular dated 30th August, 1998.The rates of H.R.A. were
thereby revised. A proviso stated that the HRA.being drawn
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by employees at rates higher than those specified in the
circular "shall be protected, till their rate of HRA. gets
adjusted in these revised rates". It is not in dispute that this
proviso protects the HRA. that is being drawn if it is at a
rate higher than that prescribed by the circular. The
protection enures until the rate specified in the circular is
enhanced to a rate higher than that presently drawn.
In view of this undisputed position, the appeals are allowed
and the judgment and order of the High Court is set aside to
the extent aforesaid. The State Government shall give such
protection to its appellant employees."
Thus the decision in Mohinder Singh (supra) squarely and
directly applies to the facts of these cases. Therefore, the High
Court was justified in allowing the writ petitions filed by the
Board employees in terms of the decision in Mohinder Singh.
10. The Order dated 7.3.1989, clearly protects the higher
House Rent Allowance drawn by the employees of the Board
under the existing orders, upto 31.8.1988. The clarificatory
Circular dated 19.9.1990 of the State Government, adopted by
the Board by Circular dated 29.5.1992, does not cancel or
delete the protection clause in regard to the higher HRA
extended under the order dated 7.3.1989. The fact that those
posted in places falling within 16 km radius of international
border were paid a higher HRA as in the case of Class I or
Class ’A’ cities on account of special circumstances, is not a
ground to exclude them from the protection of higher HRA,
available under the order dated 7.3.1989. It is unfortunate that
the Board having given protection of higher HRA drawn by its
order dated 7.3.1989, has tried to avoid the obligation on
untenable grounds. The alleged clarification contained in the
letter dated 19.9.1990 in no way assists the Board to avoid
liability to protect the higher HRA of Respondents in terms of
the order dated 17.3.1989. At all events, the matter being
squarely covered by the decision in Mohinder Singh, it is not
open to the Board to contend otherwise.
13. We, therefore, find no reason to interfere with the
impugned orders/judgments. The appeals are, therefore,
dismissed.