Koyala Udyog Kamgar Sanghatan ... vs Central Mine Planning And Design ...
2007 Latest Caselaw 695 Bom

JUDGMENT

B.P. Dharmadhikari, J.

1. The challenge in both these Writ Petitions filed under Article 226 of Constitution of India is to the action of Respondents/Employer of effecting the recovery of amount of H.R.A. i.e. house rent allowance allegedly paid in excess to Petitioners/Employees. Said recovery is on the ground that revised provision and formula for payment of H.R.A. evolved as per National Coal Wage Agreement VI, hereinafter referred to as NCWA-VI has been implemented with effect from 1/6/2001 and therefore payment of H.R.A. in accordance with NCWA-V from 1/7/1996 till 31/5/2001 on revised basic salary i.e. as revised by NCWA-VI was illegal and unwarranted. Petitioners have prayed for quashing & setting aside of the order as contained in fax message dated 5/3/2003 ordering its recovery. W. P. 2103/2003 is filed by ten individuals. There is also prayer to refund the amount if recovered with interest @ 18% per annum in W. P. 2190/2003. Petitioner therein is a trade union registered under the provisions of Trade Unions Act, 1926. In both these matters while issuing "Rule", interim relief has been refused. It is admitted position that thereafter Respondents have completed recovery of alleged excess amount of H.R.A. received by Petitioners. It is also admitted position that payment of H.R.A. as revised by NCWAVI was sanctioned to Petitioners on 14/06/2001 with effect from 1/6/2001. New facts were disclosed by Respondents during final hearing & hence, Petitioners filed Civil Application 4090/2007 and 4140/2007 in respective Writ Petitions for amendment and in reply thereto, Respondents have pointed out another decision dated 17/5/2004 by which said date "1/6/2001" is replaced by date "1/7/1999". Thus the period for which recovery is in dispute now stands curtailed and the same is from 1/7/1996 to 30/6/1999.

2. Service conditions of Petitioners are decided through various agreements which are popularly known as "National Coal Wage Agreements". Each agreement remains in force for 3 to 5 years as agreed therein. The chronological serial number of such agreement is added at its end to identify it and in present matter we are concerned with NCWA-V & VI. The agreements are entered into between the management and a joint body of management and Unions by formation of a body called as Joint Bipartite Committee for the Coal Industry (popularly known as JBCCI). NCWA-V was in force from 1/7/1991 to 30/6/1996 while period of NCWA-VI was from 1/7/1996 till 30/6/2001. It is not in dispute that NCWA-VI came to be finalised by JBCCI on 23rd December 2000. It is also not in dispute that Petitioners before this Court are Employees in urban area and as per its Clause 8.1.3 it was decided that for the purposes of payment of H.R.A. to Employees in urban areas, government classification would be followed and rate and date of payment was to be decided within one month and implementation instruction number 7 in this respect was issued on 5/1/2001. Petitioners are in Nagpur which falls in. A class as per these agreements. As per relevant provision of NCWA-V for "A" Class cities rate of H.R.A. applicable was 25% of basic salary with maximum of Rs 1235/only. Implementation instruction No 27 as per Clause 8.1.3 of NCWA-VI came to be issued on 14/6/2001 and for Petitioners in "A" Class cities rate of H.R.A. was maintained at 25% of basic salary but ceiling i.e. maximum amount payable was increased to Rs 2350/only and this revised payment was made applicable from 1/6/2001. As already stated above later on this date has been moved back to 1/7/1999 as per implementation instruction No 43 dated 17/5/2004. Petitioners were paid arrears of H.R.A. at 25% of revised basic salary i.e. salary as revised according to NCWA-VI but then maximum amount or ceiling of Rs 1235/ has been adhered to. Respondents state that out of total 9 regions in which they function, such payment has been made only to present Petitioners and according to them calculation of H.R.A. on revised basic salary for period prior to 1/6/2001 (now 1/7/1999) is contrary to NCWA-VI as said terms relating to payment of H.R.A. can be given effect to only after date fixed as per implementation instruction number 27 and 43. Arrears for period from 1/7/1996 till December 2000 on revised basic salary @25% thereof with ceiling of Rs 1235/ were calculated by Management after receipt of notification dated 5/1/2001 for period up to 31/5/2001. It appears that thereafter some objection was raised to payment of arrears and various Trade Unions pointed out that notification came to be issued on 14/6/2001 and revised H.R.A. has been made effective from 1/6/2001 and till then earlier notification dated 26/3/1996 issued under NCWA-V was legally in force and operating. General Manager (Finance) after receipt of representations requested Regional Director at Nagpur on 10/6/2002 not to effect recovery of H.R.A. already paid till decision on issue was taken by Competent Authority. In spite of this on 5/3/2003, Personnel Manager of Respondent No 2 issued fax message to Respondent No 1 to effect recovery of arrears with immediate effect. It is in this background that the present Petitions have been filed.

3. Defence of Respondents/Management is that when Clause 8.1.3 it self prescribed that new rate and date for payment of H.R.A. on basic salary as revised by NCWA-VI was to be declared latter on, action of paying H.R.A. by taking into account basic salary as revised by NCWA-VI was contrary to said agreement and therefore unsustainable. It is further contended that said provision has been rightly understood and followed in all other Regions and exception has been made only by Region of Petitioners. It is stated that similar controversy was raised before Hon.ble Calcutta High Court by Employees working at Asansol and Calcutta High Court found that in view of provisions of Clause 13.3.0, Employer could not have unilaterally interpreted agreement to hold that there was excess payment by mistake and matter ought to have been referred to and settled by JBCCI or a subcommittee constituted by JBCCI. Accordingly said High Court directed JBCCI or subcommittee to take decision and till then stayed recovery from salaries of employees at Asansol. It is stated that accordingly Standardisation sub-committee has taken decision and found that recovery ordered by Employer was legal and valid. It is further stated that because of persistence of Trade Unions said Standardisation Committee met again and as a result of said meeting, date of implementation was taken back to 1/7/1999. It is further stated that considering the position prevailing in more than 90% of the establishments of Respondents, if recovery is not upheld and H.R.A. payment to Petitioners is maintained, Respondents will be required to release arrears accordingly to large number of Employees in other regions also.

4. Advocate P.D. Meghe for Petitioner Union in W.P. No. 2103/2003 & Advocate Kalpana Pathak for Petitioners in W.P. No. 2190/2003 have raised identical challenges. They state that though revised basic salary as per NCWA-VI has been made effective and payable from 1/7/1996, H.R.A. revised by it has been made payable initially from 1/6/2001 (now 1/7/1999) when period for which said VIth agreement was reached was itself to expire on 30/6/2001. By placing reliance upon judgment of Hon Apex Court in case of Life Insurance Corporation of India v. D.J. Bahadur reported at , it is contended that provisions of NCWA-V about H.R.A. continue to operate till said provisions contained in NCWA-VI are implemented and there cannot be any vacuum or time gap between expiry of earlier provision and commencement of latter provision. They state that till provision governing payment of H.R.A. as per NCWA-VI was not implemented, Petitioners have been paid said allowance in terms of NCWA-V by observing ceiling of Rs 1235/. It is stated that when basic was revised from 1/7/1996, amount of H.R.A. calculated @25% thereof also increased and said increase has been rightly paid by Respondents and received by Petitioners. They point out that though in some cases amount thus worked out exceeded Rs 1235/ still because of ceiling prescribed by NCWA-V such amount in excess of Rs 1235/ has not been paid. In relation to defence raised, it is argued that terms and conditions of NCWA-V and VI are very clear and do not require any interpretation. It is stated that alleged decision of Standardisation Committee is not in accordance with Clause 13.3.0 and said standardisation committee is not subcommittee of JBCCI. It is further argued that in any case recovery could not have been ordered in breach of principles of natural justice. It is further contended that selection of date either as "1/6/2001" or as "1/7/1999" is arbitrary and illegal. Advocate Mehadia has contended that there could not have been any payment of H.R.A. on enhanced basic after 1/7/1996 and till 1/7/1999. He argues that in view of direction of Learned Single Judge of Calcutta High Court, decision is already taken by Standardisation sub-committee in terms of Clause 13.3.0 and said decision is final. He further argues that as arrears have been paid for past period, employees have not spent that amount of increased H.R.A. and hence recovery is legally possible. As facts demonstrate that there was no legal right in Petitioners to receive increased H.R.A., there is no question of breach of principles of natural justice. He reiterates the stand in defence reproduced above and points out that Hon. Division Bench of Calcutta High Court has dismissed L.P.A. filed against the directions issued by Learned Single Judge. Both sides have relied upon certain judgments to which we will make reference little latter.

5. Before proceeding further, it is necessary to briefly point out relevant provisions of (National Coal Wage Agreement) NCWA-VI. As per Chapter I, Clause 1.1, this agreement is to remain effective from 1.7.1996 to 30.6.2001. Its Chapter XII vide provision 12.1.1 states that existing benefits and facilities not covered or altered by this agreement i.e. VI agreement shall continue as earlier. Its Chapter XIII which deals with implementation of agreement vide Clause 13.1.1 lays down that said agreement including the wage structure would come into force and be implemented with effect from 1.7.1996 unless otherwise specified. Clause 13.3.0 deals with interpretation of agreement and Clause 13.4.1 provides for formation of Standardisation Committee for removing any anomalies, discrepancies in the implementation of agreement. Before 1.7.1996, payment of H.R.A. was as per NCWA-V and for. A class city, the rate specified was 25% of basic salary with maximum of Rs. 1,235/-. Clause 8.1.2 of NCWA-VI only laid down that for Petitioners, government classification would be followed, and rate and date of payment would be decided within one month. On 14.6.2001 by issuing implementation Instruction No. 27 for A class cities, rate of H.R.A. has been maintained at 25% of basic pay but maximum amount or ceiling has been hiked to Rs. 2,350/-. This instruction at its end states that it would be effective from date 1.6.2001 which has been preponed to 1.7.1999 by implementation of Instruction No. 43 dated 17.5.2004. Thus, it is obvious that revised salary as per NCWA-VI has been paid to the Petitioners from 1.7.1996 but the Respondents contend that though their basic is revised, they are not entitled to HRA on such revised basic for period up to 1.7.1999. The dichotomy in stand of Respondents is, therefore, apparent. It is to be noted that the Petitioners have not been paid HRA as per NCWA-VI for period prior to 1.6.2001. Even though implementation Instruction No. 43 has been issued on 17.5.2004, the Petitioners have not been given benefit thereof from 1.7.1999. The contention of Respondents that Petitioners have been given HRA as per NCWA-VI is, therefore, factually incorrect. The Petitioners have been paid HRA calculated at 25% only in terms of NCWA-V and therefore ceiling of maximum amount of Rs. 1,235/-has been observed in their case. It is to be noted that a provision in such agreement which is not replaced or repealed continues to operate and this is also recognized by Clause 12.1.1 of NCWA-VI. Reliance by the Petitioners upon judgment in the case of Life Insurance Corporation of India v. D.J. Bahadur (supra) for said purpose again appears to be appropriate. Though in said case, the Hon'ble Apex Court has considered the agreements governed by labour laws in the light of provisions of Sections 18 & 19 of Industrial Dispute Act, we find that in the light of Clause 12.1.1 above, the very same position will also hold good even in present circumstances. As per NCWA-V, the Petitioners are entitled to receive H.R.A. calculated at 25% of their basic salary. Their basic salary has increased from 1.7.1996 and therefore in view of this provision in NCWA-V, their HRA has also been hiked and arrears have been paid to them by the Respondents. It is altogether a co-incidence that rate of HRA in NCWA-VI is again 25% of basic. However, that by itself does not disentitle the Petitioners to claim HRA in terms of NCWA-V. Had any other rate been agreed between parties, that could never mean that no HRA would have been payable to Petitioners for period prior to fixation of such rate as per service conditions then prevailing. There is nothing in NCWA-VI which prohibits release of HRA on amount of basic salary as revised by it in terms of provisions of NCWA-V regulating payment of HRA.

6. Shri Mehadia, learned Counsel has contended that in similar matter before learned Single Judge of Calcutta High Court, the learned Single Judge held that question of interpretation of NCWA-VI was involved and therefore the learned Single Judge directed the matter to be placed before JBCCI or a Special Committee named by JBCCI. It is to be noted that the employees working at Asansol Regional Institute, Coal Mine Planning and Design Institute approached the Calcutta High Court claiming that they were entitled to HRA at 10% of basic pay fixed in terms of NCWA-VI. The defence of present Respondents there was that by mistake those employees were paid HRA accordingly. The learned Single Judge found that in view of Clause 13.3.0 of NCWA-VI, the Respondents were not free to unilaterally interpret the agreement and therefore directed the controversy to be placed before JBCCI for taking decision preferably within two months. It is to be noted that till such decision was taken, the learned Single Judge directed the Respondents to maintain status quo in relation to recovery. Shri Mehadia, learned Counsel has informed that Letters Patent Appeal filed before the Division Bench of High Court is pending before the Hon'ble Division Bench there. However, no such order copy is produced before us. Moreover, in the light of discussion undertaken above by us, we find that it is not the question of interpretation of provisions of NCWA-VI at all. The entitlement to HRA at 25% of revised basic salary of Petitioners flows from NCWA-V and accordingly the Regional Officers at Nagpur have paid the arrears to present Petitioners after issuance of implementation Instruction No. 7 dated 5.1.2001. It is to be noted that till then the employees were getting HRA calculated at 25% of their basic salary as fixed by NCWA-V. NCWA-VI has not effected any change in formula of computing HRA but only ceiling of Rs. 1,235/ has been hiked to Rs. 2,350/-therein and this change is applicable after 1/07/1999.

7. The learned Advocates for the Petitioners have also in alternative contended that even if it is presumed that Respondents were right in recovering the alleged excess amount paid to them, still no action could have been taken in breach of principles of natural justice. The judgments in the case of Bhagwan Shukla s/o Sarabjit Shukla v. Union of India and Ors. reported at 1994 II CLR 645 (SC), Shyam Babu Verma v. Union of India, reported at , are relied upon by them for this purpose. In first ruling, the Hon'ble Apex Court has held that in these circumstances, the employee is visited with civil consequences and therefore he needs to be granted an opportunity to show cause against the reduction of his basic pay or against the recovery. In latter ruling, the Hon'ble Apex Court has held that when higher basic was erroneously given to employee since 1973 and was reduced in 1984, recovery of excess amount paid to him could not be permitted as he was not at fault in the matter. Shri Mehadia, learned Counsel in reply has stated that here, the Petitioners have not incurred any expenditure from the amount paid to them because what is paid to them is only arrears. According to him, in these circumstances, in view of judgment of Hon'ble Apex Court in the case of State of Karnataka v. Mangalore University Non-Teaching Employees Association, reported at , the recovery must be held to be possible. Therein in paragraphs 11 & 12 while considering the question of recovery & principles of natural justice, the Hon'ble Apex Court has found that:

11. It is true, in a case of this nature where the payment already made is sought to be recovered, thereby visiting the employees with adverse monetary consequences, the affected employees should have been put on notice and their objections called for. But, it is by now well settled that in all cases of violation of principles of natural justice, the Court exercising jurisdiction under Article 226 of the Constitution need not necessarily interfere and set at naught the action taken. The genesis of the action contemplated, the reasons thereof and the reasonable possibility of prejudice are some of the factors which weigh with the Court in considering the effect of violation of principles of natural justice. When undisputably the action taken is within the parameters of the Rules governing the payment of HRA and CCA and moreover the University authorities themselves espoused the cause of employees while corresponding with the Government, it is difficult to visualize any real prejudice to the respondents on account of not affording the opportunity to make representation. We cannot, therefore, uphold the view of the Appellate Bench of the High Court on this aspect of this case.

12. When the concerned employees drew the allwances on the basis of financial sanction accorded by the Competent Authority i.e. the Government and they incurred additional expenditure towards house rent, the employees should not be penalized for no fault of theirs. It would be totally unjust to recover the amounts paid between 1-4-1994 and the date of issuance of the G.O. No. 42, dated 13-2-1996. Even thereafter, it took considerable time to implement the G.O. It is only after 5th March, 1997 the Government acted further to implement the decision taken a year earlier. Final orders regarding recovery were passed on 25-3-1997, as already noticed. The Vice-Chancellor of the University also made out a strong case for waiver of recovery upto 31-3-1997. That means, the payments continued upto March, 1997 despite the decision taken in principle. In these circumstances, we direct that no recovery shall be effected from any of the University employees who were compelled to take rental accommodation in Mangalore City limits for want of accommodation in University Campus upto 31-3-1997. The amounts paid thereafter can be recovered in instalments.----. We find that above reasoning about recovery cannot be extended in the facts of present case in view of our conclusions reached above. The other rulings on which learned Counsel for the Petitioners have placed reliance are in the case of E. Visweswaraiah v. State of Karnataka reported at 1997 (3) L.L.N. 223 and Goverdhan Lal v. State of Rajasthan and Ors. reported at 2004 I CLR 492 (Rajasthan) which again state that without giving employee an opportunity of representing against the contemplated action, a step to his prejudice could not have been taken. In Rajasthan ruling, it has been held that when employee receives benefit without any fault on his part, it is just and proper to allow him to retain such benefit. In the facts of present case, we have noticed that there is no fault on the part of the Petitioners in receiving HRA on revised basic. We have also found that Respondents have not committed any mistake by paying HRA arrears as per provisions of NCWA-V on revised basic salary from 1.7.1996 till 30.6.1999. In fact, Chief General Manager in his communication dated 23.5.2002 addressed to General Manager (Finance) stated that maximum ceiling of Rs. 1,235/-was applicable from 1.4.1994 onwards and therefore even after 1.4.1996. The said authority also pointed out that revised HRA rate with maximum limit of Rs. 2,350/-as per NCWA-VI was given to Nagpur employee from 1.6.2001 as per implementation Instruction No. 27. This communication which the Petitioners have filed along with their applications for amendment of Petitions clearly show that only after due deliberation, the arrears have been paid. We, therefore, find that the stand of Respondents that said arrears have been paid under erroneous impression is incorrect.

8. Shri Mehadia, learned Counsel has contended that said erroneous payment has been made only in two regions/areas i.e. Ranchi and Nagpur. He has contended that there was no such payment in other areas or regions. We find this fact totally irrelevant because the provisions of NCWA-V are and were applicable to everybody. The perusal of implementation Instruction No. 43 dated 17.5.2004 also reveals that after issuance of Implementation Instruction No. 27 dated 14.6.2001, Trade Unions were persistently raising demand for giving effect to revised formula as per NCWA-VI from an earlier date. Because of said insistence of Unions, date 1.6.2001. originally fixed was required to be taken back to date 1.7.1999. thereby conferring benefit of revised HRA upon employees for a period of 23 months more. We, therefore, find the argument that if the Writ Petitions are allowed, it would have wide financial implications on all employees in all regions/ares is without any substance and also not relevant. The Petitioners have also attempted to show that the body which has taken decision as per directions of the Hon'ble Calcutta High Court is not Standardisation Committee as it was not authorised by JBCCI. They have invited our attention to provisions of Clause 13.3.0 and 13.4.1 for said purposes. However, in view of the discussion above, we do not find it necessary to consider said argument in these Writ Petitions.

9. Accordingly, we allow Civil Application No. 4090 of 2007 and 4140 of 2007 filed by respective Petitioners for amendment. The Petitioners to amend their Writ Petitions accordingly immediately. We quash and set aside the order for recovery dated 5.3.2003 and hold that the Petitioners were rightly paid arrears of HRA from 1.7.1996 till 31.5.2001. As the amounts are already taken back from the Petitioners by the Respondents, we direct the Respondents to refund the said amount to respective Petitioners as early as possible and in any case within a period of four months from the date of receipt of copy of this judgment by any of them. If the amounts are not so refunded, the Respondents shall pay interest calculated @ 6% per annum on said amount thereafter till the date of actual payment. Writ Petitions are allowed accordingly. Rule is made absolute in above terms. However, in the facts and circumstances of the case, there shall be no order as to costs.