P. S.
E. B., Patiala & Anr Vs. Sudarshan Parshad & Ors [2006] Insc 327 (18 May 2006)
K.
G. Balakrishnan & R. V. Raveendran
WITH CA
Nos. 7588-89/2002, 7590-91/2002 and 7592-93/2002 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
-
7586-87/2002 CWP
12558/1995 14.5.1998
-
7588-89/2002 CWP
12557/1995 14.5.1998
-
7590-91/2002 CWP
12556/1995 14.5.1998
-
7592-93/2002 CWP
13158/1995 14.5.1998
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.
-
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, in these appeals, were posted in the towns of Doraha and
Payal situated near Ludhiana. Upto 31.8.1988, the respondents
were being paid HRA as applicable to Ludhiana city (class 'A' city) in view of
the proximity of those towns (Doraha and Payal) to Ludhiana, as per Board's
policy that employees posted in places which were within a radius of 8 km from
the periphery of a Municipal Corporation were to be paid the same HRA as
applicable to those employed in places within such Municipal Corporation
limits.
-
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 the 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 :-
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" 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 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.
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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.
-
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.
-
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.
-
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 :
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"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.
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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."
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Some of
employees of the Board filed a writ petition 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 pay the protected (higher) HRA as drawn by them as on 31.8.1988.
The said writ petition Electricity Board) was disposed of by order dated
23.7.1992.
We
extract below the relevant portion of the said order :
"The
language of the above provision is very clear. All these employees who are
working at places falling within 8 kms radium of the periphery of the
Municipality of the classified cities and towns are entitled to house rent
allowance.
The
grievance of the petitioners is that instead of calculating the distance from
the periphery or outer limits of the classified cities or towns, the distance
has been calculated from Octroi Post and consequently, though the employees
were eligible for the House Rent Allowance, they were denied of the benefit. In
support of his submission, the learned counsel relied upon annexure R-4
produced by the respondents which is a certificate issued by the Deputy
Commissioner, Ludhiana. It is seen from the said annexure
that the Deputy Commissioner has calculated the distance from the Octroi Post
and has specified the distance from the Octroi Post concerned.
The
learned counsel for the Board submitted that the octroi posts are generally
situated on the periphery of the town concerned, therefore, the distance
calculated from that point is correct. The learned counsel for the petitioners,
however, contended that the octroi posts in many cities are situated in the
middle of the town or cities, as the case may be, and therefore, in accordance
with the order dated 10th
May, 1989, the
distance is to be calculated only from the periphery of the classified cities
or the town.
The
question as to whether the octroi posts itself are located in periphery or not,
is a matter to be got verified physically.
However,
it should be stated if the periphery of the classified town or cities is beyond
the octroi posts then the distance has to be calculated from the periphery and
not from the octroi posts. In the result, we allow the petitions and make the
following order :- A direction shall issue to the respondent- board to
calculate the distance of each of the place where the employees working, from
the periphery of the classified cities or towns and then on that basis to
decide as to whether the concerned employees are entitled to the House Rent
Allowance.
After
ascertaining the distance, if all or any of the petitioners are entitled to the
payment of the House Rent Allowance, it shall be paid to each of the
petitioners and the arrears payable from the date of entitlement shall also be
paid. Amount already paid in pursuance of the interim order shall be adjusted.
The time for compliance is six months."
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In pursuance of
a query from the Board, it would appear that Deputy Commissioner-cum-Collector,
Ludhiana, issued a certificate dated 29.3.1993 to the Board certifying that the
distance of Doraha and Payal from the outer periphery of Ludhiana was 10 and 18
kms respectively. As they were beyond 8 km from Ludhiana, the Board was of the
view that the HRA applicable to Ludhiana (class 'A' city) could not be paid to
the employees working at Doraha and Payal, and that as the said two towns were
shown as class 'D' towns in the order dated 7.3.1989, the employees of Board
posted at Doraha and Payal will be entitled to lesser rate of HRA applicable to
class 'D' towns.
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Some employees
again approached the High Court in W.P. No. 14529 and 14920 of 1994 seeking
protection of higher HRA. The High Court disposed of the writ petitions,
permitting the respondents herein 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.
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The Board,
accordingly, considered the representations of the Respondents and rejected the
same by order dated 23.6.1995 holding as follows : "It has been found that
the case of the petitioners for allowing protection of the House Rent Allowance
drawn by them prior to 1.9.1988 is not covered under the above instructions, as
their station postings do not fall within 8 kms radius of the periphery of
Municipal Corporation, Ludhiana. So, the claim of the petitioners for allowing
protection of the same allowance is not tenable, and the representation is
disposed of accordingly."
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The respondents
herein challenged the said order dated 23.6.1995 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 petitions were allowed by the impugned
orders dated 14.5.1998 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], in allowing the writ petitions. The said orders are
challenged by the Board in these appeals by special leave.
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The appellant
contends that though earlier Doraha and Payal had been classified as category
'A' for the purpose of admissibility of HRA, having regard to their proximity
to Ludhiana, after the revision by circular dated 7.3.1989, payment of HRA at
the higher rates applicable to Ludhiana could not be continued, as both Doraha
and Payal fell under category 'D' towns, with effect from 1.9.1988. According
to appellants, the respondents are not entitled for the higher HRA which was
being paid till 31.8.1988, for the following three reasons :
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Doraha and Payal
were situated at a distance of 10 kms and 18 kms from the periphery of Ludhiana and therefore, the benefit which
was earlier being given on the assumption that they fell within a radius of 8 kms
of periphery of Ludhiana, could not be continued.
-
Even assuming
that the two towns (Doraha and Payal) were situated within a distance of 8 kms
from the periphery of Ludhiana, as Doraha and Payal were separately classified
as category 'D' towns under the order dated 7.3.1989, their proximity to Ludhiana
became irrelevant.
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The protection
of HRA was granted only with reference to the cities/towns which were already
specified for purposes of HRA prior to the circular dated 7.3.1989; and as only
the cities mentioned in classes 'A' and 'B' under the circular dated 7.3.1989
were earlier recognized as cities to which HRA was applicable, the protection
was available only in regard to those cities which fell under classes 'A' and
'B' under the order dated 7.3.1989 and not to other cities/towns which were
newly included in classes 'C' and 'D' under the order dated 7.3.1989.
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The question whether Doraha and Payal
are situated within a distance of 8 kms within the periphery of Ludhiana (as contended by Respondents) or
beyond 8 kms from Ludhiana (as contended by Appellants) is a
disputed question of fact. If they are situated within 8 kms of periphery of Ludhiana, then there is no doubt that HRA
applicable to Ludhiana city would apply to Doraha and Payal
in view of the substitution of clause (iii) of the circular dated 7.3.1989 by
circular dated 10.5.1989. But it may not be necessary to examine this disputed
question of fact. For the purposes of these appeals, we may assume that the
towns of Doraha and Payal are situated beyond 8 kms from Ludhiana city as
contended by the appellant and therefore, the HRA is admissible only at the
rates applicable to class 'D' towns and not any higher HRA. But even then, in
view of clause (ii) of the order dated 7.3.1989 which protects the HRA at
higher rates already being drawn upto 31.8.1988, under the existing orders,
such higher HRA stands protected, till the rate of HRA gets adjusted in their
revised rates. Therefore, even if the rate of HRA payable to employees at Dohara
and Payal, is lowest as the said towns fall under class 'D' under the order
dated 7.3.1989, having regard to the fact the respondents working in those
towns were being paid a higher HRA prior to 1.9.1988, they would be entitled to
the protection of such higher rate of HRA. Protection of higher HRA under
clause (ii) of the order dated 7.3.1989 was recognized and accepted by this
Court in Mohinder Singh vs. State of Punjab [CA No. 5124/1995] decided on
21.4.1995. We extract below the short order passed in the said case :
"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 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."
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The decision in Mohinder Singh would
squarely apply to the facts of this case. Clause (ii) of the Order dated
7.3.1989 clearly protects the higher HRA drawn by the employees of the Board upto
31.8.1988. Neither the clarificatory circular dated 19.9.1990 of the State
Government (adopted by the Board by circular dated 29.5.1992), nor clause (iii)
of the circular dated 7.3.1989 as substituted by circular dated 10.5.1989, nor
the fact that Doraha and Payal were recognized as class 'D' towns under the
circular dated 7.3.1989, will affect the applicability of the protection
clause.
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We, therefore, find no reason to
interfere with the impugned orders. The appeals are, therefore, dismissed.
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