Facts
The applicants, employees of the Employees' Provident Fund Organisation (EPFO) at Rourkela, applied for residential quarters at the Steel Town Ship managed by the Steel Authority of India Limited (SAIL), Rourkela Steel Plant (RSP)
Source reference: p. 2-3, para 1Their applications were forwarded by the Regional Provident Fund Commissioner (RPFC) to SAIL, and quarters were subsequently allotted in the name of the RPFC for the applicants' use
Source reference: p. 3, para 1License fees were recovered from the applicants' salaries and remitted to SAIL
Source reference: p. 3-4, para 1In 2011, based on an audit objection by the Principal Accountant General (Civil Audit), the respondents determined that the applicants were ineligible for House Rent Allowance (HRA) under Rule 5(c)(ii) of the HRA/CCA rules because they were occupying quarters provided by a Public Sector Undertaking (PSU)
Source reference: p. 4, para 1Consequently, HRA was stopped effective December 2009
Source reference: p. 6, para 3The applicants challenged the orders stopping HRA and the subsequent decisions directing recovery of dues
Source reference: p. 5, para 2Issues
1. Whether the residential quarters allotted by SAIL (RSP) to the applicants via the RPFC constitute "government accommodation" that disqualifies the employees from receiving HRA?
Source reference: p. 9, para 6Law Applied
Rule 5(c)(ii) of the HRA/CCA General Rules and Orders of FR & SR, which prohibits HRA for government employees provided with accommodation by the Central/State Government, Autonomous Bodies, or PSUs
Source reference: p. 4, para 1Precedent from the Hon’ble High Court of Karnataka in B.H. Amar Venkatesh and others v. Senior Superintendent of Post Offices (ILR 2004 KAR 1600), which held that an employee remains entitled to HRA if the quarters are not allotted under the Allotment of Govt. Residences (General Pool) Rules
Source reference: p. 9, para 4; p. 11, para 7Rulings from CAT Jabalpur (OA 268 of 1998) and the Patna High Court (CWJ Case No. 87 of 1994), which established that HRA is payable when the employer acts merely as a conduit for rent payment to a third-party landlord and has no direct control over the allotment
Source reference: p. 3-4, para 1; p. 10, para 6Reasoning
The Tribunal found that the RPFC did not "provide" the accommodation in a legal sense; rather, it merely forwarded the applicants' requests and acted as a model employer by facilitating the transfer of rent from salary to SAIL
Source reference: p. 10, para 6The records indicated no formal agreement between SAIL and RPFC where the RPFC took possession of the quarters for re-allotment
Source reference: p. 10, para 6Possession was delivered directly by SAIL to the applicants, and maintenance was handled through a direct link between the employees and SAIL
Source reference: p. 8, para 4The applicants paid license fees at SAIL's rates, which were higher than standard government rates
Source reference: p. 8-9, para 4The Tribunal reasoned that since the accommodation was not part of the "General Pool" under specific government allotment rules and was obtained from an outside agency (SAIL) via individual requests, it could not be classified as government-provided accommodation under Rule 5(c)(ii)
Source reference: p. 12, para 8Holding
The Tribunal allowed the O.A., holding that the stoppage of HRA was improper
It quashed the impugned audit notes and rejection letters (Annexures A/15, A/15(a), A/20, A/21, and A/22)
Source reference: p. 12-13, para 8The Tribunal directed Respondent No. 3 to pay the applicants HRA arrears from December 2009 onwards within 90 days of the order
Source reference: p. 13, para 8However, it ruled that the applicants were not entitled to interest on the arrears given the peculiar circumstances of the case
Source reference: p. 13, para 8Original Court PDF
S B BARIKvsEmployees Provident Fund Organisation
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