Dismissed

Chief Secretary,Govt.of Kerala v. Amarnatha Shetty

Kerala HC13 Jul 2016WP(C)/5029/2007

Case brief

AI extract

What is this about?

The High Court dismissed the State's writ petition challenging the Central Administrative Tribunal's decision to limit a government circular mandating higher rent recovery to prospective effect only, relying on Supreme Court principles against retrospective recovery without employee fault.

What did the court decide?

The Writ Petition was dismissed, upholding the Tribunal's order limiting the retrospective rent recovery circular to prospective effect only.

Chief Secretary,Govt.of Kerala Vs… — Constitutional and Fundamental Rights | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON &

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THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

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WEDNESDAY, THE 13TH DAY OF JULY 2016/22ND ASHADHA, 1938

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WP(C).No. 5029 of 2007 (S)

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AGAINST THE ORDER/JUDGMENT IN OA 466/2006 of CENTRAL ADMINISTRATIVE TRIBUNAL, ERNAKULAM BENCH DATED 20-12-2006

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PETITIONERS :

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THE CHIEF SECRETARY, GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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THE PRINCIPAL SECRETARY, FINANCE DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM.

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THE PRINCIPAL SECRETARY, PUBLIC WORKS AND TRANSPORT DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM.

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THE PRINCIPAL CHIEF CONSERVATOR OF FORESTS, FOREST HEADQUARTERS, THIRUVANANTHAPURAM.

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BY SPL.GOVT.PLEADER SRI.M.P.PRAKASH

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RESPONDENTS :

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AMARNATHA SHETTY, CHIEF CONSERVATOR OF FORESTS, WORKING PLAN AND RESEARCH, FOREST HEADQUARTERS, THIRUVANANTHAPURAM.

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LAKHWINDER SINGH, CHIEF CONSERVATOR OF FORESTS, NORTHERN REGION, MATHOTTAM, KOZHIKODE.

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MR.N.NAGESH PRABHU, CONSERVATOR OF FORESTS, EASTERN CIRLE, ARANYA BHAVAN, PALAKKAD.

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DR.B.SIVARAJU, CHIEF CONSERVATOR OF FORSTS (HIRD), PTP NAGAR, THIRUVANANTHAPURAM.

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WP(C).No. 5029 of 2007 (S)

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MR.TRIVEDI BABU, CHIEF CONSERVATOR OF FORSTS(PROTECTION), FORESTS HEADQUARTERS, THIRUVANANTHAPURAM.

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UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF ENVIRONMENT & FORESTS, GOVERNMENT OF INDIA, PARIYAVARAN BHAVAN, NEW DELHI.

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R6 BY ADV. SRI.N.NAGARESH, ASSISTANT SOLICITOR GENERAL

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 5029 of 2007 (S)

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APPENDIX

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PETITIONERS' EXHIBITS:-

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EXT.P1	:	COPY OF OA.466/2006.
EXT.P2	:	COPY OF THE REPLY STATEMENT IN O.A.466/2006.
EXT.P3	:	COPY OF THE REJOINDER STATEMENT IN O.A.466/2006.
EXT.P4	:	COPY OF THE ADDL.REPLY STATEMENT IN O.A.466/2006.
EXT.P5	:	COPY OF THE RESIDUARY MATTERS RULES, 1960.
EXT.P6	:	COPY OF THE ORDER DTD.20.12.2006.

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RESPONDENTS' EXHIBITS:- NIL.

True copy

P.A to Judge

[CR]

P.R.RAMACHANDRA MENON & ANIL K.NARENDRAN, JJ.

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W.P.(C)No.5029 of 2007

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-----------------------------------------------------------------Dated this the 13^th day of July, 2016

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JUDGMENT

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Ramachandra Menon, J.

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This Writ Petition has been filed by the State mainly being aggrieved by the direction passed by the Tribunal taking away the retrospective application of Annexure.A4 Circular dated 13.4.2005, with regard to the power and authority of the petitioners to realise the rent arrears from 1.11.1998, based on the changed rules/norms; at the same time sustaining the validity of Annexure.A4 Circular which was sought to be challenged by the applicants in the O.A.

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The sequence of events as revealed from the proceedings is that the respondents 1 to 5, who were holding the office of Chief Conservator of Forest/Conservator of Forest under the State, were provided with residential accommodation and they were satisfying the rent fixed as per the norms/instructions being issued; particularly in conformity with the terms of Annexure.A1 G.O.(MS)No.127/89/PW&T. As per Annexure.A1

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Government Order, the rent has to be calculated @8.5% of the basic pay and the occupant had to surrender the HRA as well; the total of which was never to exceed ₹1,300/-. In other words, the maximum liability, that has to be satisfied in respect of the officers of the cadre to which respondents 1 to 5 belonged was to an extent of ₹1,300/- and nothing more. By virtue of the next pay revision, pursuant to Annexure.A10 dated 25.11.1998, the rate was brought down to 4% in respect of the concerned category, but the maximum limit/ceiling fixed as ₹1,300/- per month was taken away. However, it was noted that recovery was not being effected in tune with the stipulation under Annexure.A10 dated 25.11.1998, which had come into effect from 1.11.1998, thus inviting audit objections. This led to various correspondences and the position was sought to be clarified by the Government as per Annexure.A4 Circular dated 13.4.2005, whereby it was observed that the rent had to be satisfied strictly in terms of Annexure.A10 Government Order; as modified pursuant to the Office Memorandum F.No.105/1/2004-IC GOI, Ministry of Finance (Central Government) dated 1.3.2004

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whereby 50% of the DA was merged with the basic pay with effect from 1.4.2004 which was to be counted for the purpose of fixation of 'license fee' (which is the term used for rent recovered from the Government employees residing in the Central Government Quarters). It was accordingly clarified by the State Government vide Annexure.A4 Circular, that by virtue of the above proceedings issued by the Ministry/Central Government, the rent for accommodation provided by the Government to All India Service officers with effect from 1.4.2004 shall be @4% of the basic pay; plus Dearness Allowance without any limit. Taking note of the fact that, besides the HRA surrendered by the concerned officers a sum of ₹300/- alone was being collected every month as rent, which was cited as quite irregular by the Accountant General who had suggested recovery of arrears, Annexure.A4 clarification came to be issued on 13.4.2005 as to actual extent of liability, as given in paragraphs 6 and 7. This was to the chagrin of the respondents 1 to 5 herein who approached the Tribunal by filing O.A.No.466/2006 with the following prayers:-

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W.P.(C)No.5029 of 2007

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(i) issue an order setting aside Annexures A4, A7 and A8.

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(ii) issue a declaration that the applicants are liable to pay the rent for the quarters/flats occupied by them only at the rate fixed vide Annexure.A1.

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(iii) issue a declaration that Annexure.A4 Circular is void and nonest in the eye of law.

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In the O.A. specific contentions were taken by the applicants to the effect that Annexure.A4 Circular could not have superceded Annexure.A1 Government Order; more so in the light of the ruling rendered by the Supreme Court in Prabhash Chand

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Jain Vs. State of Haryana and others (AIR 1996 (8) SCC

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105) . In 'Ground D', it was contended that Annexure.A10 Government Order dated 25.11.1998 which was adverted to in Annexure.A4 Circular by the State Government was not applicable to the applicants, as it was only to govern the service conditions of the State Government employees; whereas the applicants were belonging to the Central Government service,

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W.P.(C)No.5029 of 2007

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of course borne on the All India Service cadre. It was further contended in 'Ground G' of the O.A., that the applicants were told that they were required to satisfy the rent only in terms of Annexure.A1, which was being satisfied and had it not been the position, they would not have opted to go for Government quarters or would have sought to avail the quarters without claiming the benefit of HRA. Annexure.A4 Circular has been issued directing to pay a higher rate of rent by the applicants with retrospective effect from 1.11.1998.

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The claim was resisted from the part of the State/Department seeking to sustain the proceedings. After an indepth analysis with reference to the relevant provisions of law and binding precedents, the Tribunal upheld the stand of the State Government and the challenge raised against Annexure.A4 Circular was repelled. However, with regard to the applicability, the Tribunal held that it could only be 'prospective' and not retrospective from 1.11.1998 which made the State to feel aggrieved and hence the challenge in this Writ Petition.

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W.P.(C)No.5029 of 2007

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Despite the completion of service of notice,

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respondents 1 to 5 have not chosen to appear before this Court.

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Heard Sri.Manoj Kumar, the learned Special Government Pleader appearing for the State at length.

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The learned Senior Government Pleader submits that the contentions of the applicants raised before the Tribunal challenging the authority in having issued Annexure.A4 circular and that Annexure.A10 Government Order dated 25.11.1998 was not applicable to them in so far as they were belonging to All India Service Cadre, are quite wrong and misconceived. With reference to the All India Services (House Rent Allowance) Rules, 1977 (copy of which has been produced as Annexure.R3(a)) the learned Special Government Pleader submits that Rule 3(2) clearly stipulates that a member of the Service, serving in connection with the affairs of a State, shall be entitled to draw House Rent Allowance at such rates and subject to such conditions as may be specified by the State Government concerned, from time to time, in respect of the officers of the State Services Class-I. It was in accordance with the said

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W.P.(C)No.5029 of 2007 7

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provision, that the rent payable was stipulated as per Annexure.A1 G.O. dated 22.12.1989, which came into effect from 1.1.1990. As borne by the 3^rd paragraph of the said G.O., the rate was stipulated as 8.5%, and considering the limit of HRA, the maximum amount reckonable was specified as ₹1,300/-. By virtue of the next pay revision implemented as per Annexure.A10 dated 25.11.1998 with effect from 1.11.1998, the rate of rent was reduced from 8.5% to 4% in the case of the officers of the cadre concerned herein. However, there was a lapse/omission on the part of the authorities concerned in giving effect to the same, in so far as the recovery aspect was concerned, which was objected from the part of the Audit Department, in turn leading to Annexure.A4. The learned Government Pleader also points out

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that Annexure.A4 is only 'clarificatory' in nature and this being the position, the clarification being only in respect of a provision which was already in existence, nothing new has been introduced as per Annexure.A4. As it stands so, it was not at all correct or proper for the Tribunal to have intercepted Annexure.A4 restricting the operation only to be prospective from the date of

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W.P.(C)No.5029 of 2007

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issuance of Annexure.A4. By virtue of the interception made by the Tribunal, undue benefits have been caused to be extended to the undeserving slot, i.e., the applicant and others concerned, which hence is sought to be intercepted in the Writ Petition.

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We find that the contention raised as to the inapplicability of Annexure.A10 and validity of Annexure.A4 Circular of course was upheld by the Tribunal. We also find that authority is vested with the State Government to stipulate the rent payable by the officers concerned, who belonged to the All India Cadre; in so far as they are serving the State; by virtue of Rule 3(2) of the All India Services (House Rent Allowance) Rules, 1977. By virtue of the authority conferred upon the State, it could be fixed by the State from time to time, which was liable to be satisfied by the occupants concerned. When the applicants contend that they were being governed by Annexure.A1 Government Order dated 22.12.1989, the ceiling stipulated therein came to be taken away while reducing the rate of rent bringing down from 8.5% to 4%, as per Annexure.A10. No doubt, Annexure.A10 came into existence from 1.11.1998 and it was not

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open for the applicants to have contended that they were liable to be governed by A1 alone. Subsequently, by virtue of the orders/instructions issued by the Ministry (Central Government) referred to at Serial No.6 of Annexure.A4, 50% of the DA was merged with the basic salary and as such, the requisite extent of rent payable at the rate of 4% had to be worked out with reference to such modified basic pay, i.e., reckoning the element of 50% DA as well which got merged with the basic pay. As such, the liability of the occupant was to satisfy the rent in accordance with Annexure.A10, modified to the said extent and subsequently clarified as per Annexure.A4 Circular. We accept the submission made by the learned Special Government Pleader in this regard to the said extent.

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But coming to the question of recovery, it is to be noted that the applicants were never told as to the extent of liability as now stands or sought to be mulcted upon their shoulders. It is true that ignorance of law is not an excuse; but it is equally applicable to both the applicants as well as to the Government. The Government/Department had informed the

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applicants concerned that the extent of liability was only to a 'lesser extent', which in turn was being realised from time to time. In other words, there was no contribution from the part of the applicants in paying the lesser rent, if the actual extent was something more. If the applicants were told then and there, as to the actual extent of liability, it was quite open for them to have taken a decision whether to occupy the quarter, whether to surrender the HRA or should they go elsewhere availing private accommodation. Having denied such chance, would it be fair and proper on the part of the Government to have it recovered from a retrospective date; is the only point to be considered.

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With regard to the pay fixation benefits and the instances of recovery, the matter had attracted the attention of Supreme Court on many an occasion. As per the law declared by the Apex Court earlier, vide judgment reported in Chandi Prasad Uniyal and others Vs. State of Uttarakhand and others (2012 (8) SCC 417) , it was quite possible to have the amount recovered. But the scope of the said decision was considered in a subsequent ruling rendered by the Supreme Court

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W.P.(C)No.5029 of 2007

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in State of Punjab V. Rafiq Masih (2015 (4) SCC 334) ; where, it has been held that, in so far as there was no fault/contribution on the part of the employees concerned in drawing any excess payment, such recovery proceedings shall not be pursued against them after lapse of several years. We find that the same principle could be applied in the instant case as well. In the said circumstance, we do not propose to interfere with the verdict passed by the Tribunal limiting the scope of Annexure.A4 Circular from the date of issuance of the said Circular; thus making it 'prospective'.

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The Writ Petition stands dismissed in the said circumstance.

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Sd/- P.R.RAMACHANDRA MENON, JUDGE

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Sd/- ANIL K.NARENDRAN, JUDGE

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skj

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True copy

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P.A to Judge