Radhey Shyam vs Indian Oil Corporation Ltd.
2010 Latest Caselaw 3007 Del

                 *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             W.P.(C) 12216/2004

%                                             Date of decision: 1st July, 2010

RADHEY SHYAM                                                     ..... Petitioner
                              Through:      Mr. S.D. Singh with Mr. Rahul Kumar
                                            Singh, Advocates.

                                       Versus

INDIAN OIL CORPORATION LTD.                     .... Respondent
                  Through:  Mr. Jagat Arora, Advocate.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                 NO

2.       To be referred to the reporter or not?                 NO

3.       Whether the judgment should be reported                NO
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner, working with the respondent Indian Oil Corporation Ltd.

(IOC), by this writ petition impugns the action of respondent IOC of seeking to

recover back the House Rent Allowance (HRA) paid to the petitioner w.e.f. 1st

January, 1997 to 31st January, 2003; the petitioner seeks further direction for

payment to him of HRA from 1st February, 2003 onwards.

2. It is the case of the petitioner that as per Clause 7 of the Memorandum of

Settlement between the respondent IOC and its workmen, HRA is payable on

revised basic pay effective 1st January, 1997, without production of rent receipt

and merely upon the workmen furnishing a certificate that they have incurred

expenditure on rent/contributed towards rent/residented accommodation etc; that

he was being so paid HRA w.e.f. 1st January, 1997; however the payment of HRA

to him was stopped w.e.f. February, 2003 on the ground that his wife was also

employed with the respondent IOC and also drawing HRA and as per the policy of

respondent IOC, in case of both husband and wife working with IOC and posted at

the same location, HRA without production of rent receipt is admissible to only

one of the spouses, except when the rental value of the house exceeds the HRA

paid to one of the spouses and in which case the other spouse may draw HRA to

the extent of shortfall in the assessed rent and HRA paid to one of the spouses. It is

the case of the petitioner that under the rules relating to HRA applicable to Central

Government employees, HRA is allowed even if an employee shares private

accommodation with spouse (both husband and wife are allowed HRA separately)

and HRA is not allowed only if an employee shares accommodation allotted rent

free to the spouse. It was thus the contention of the petitioner that the action of

respondent IOC of stoppage of payment of HRA to him w.e.f. 1st February, 2003

and the further action of respondent IOC of seeking to recover back HRA paid to

him from 1st January, 1997 to 31st January, 2003 is bad.

3. This Court vide ex-parte order dated 27th July, 2004, while issuing notice of

the writ petition, on the contention of the petitioner that the HRA Rules applicable

to Central Government employees should also apply to the employees of the

respondent IOC, stayed the recovery of HRA by respondent IOC from the

petitioner. The said order was confirmed on 8th October, 2007.

4. The respondent IOC has contended that the HRA Rules applicable to the

Central Government employees are not applicable to IOC. It is contended that

payment of HRA to employees of IOC is governed only by the Memorandum of

Settlement between IOC and its employees/workmen.

5. The Memorandum of Settlement relied on by the petitioner does not

provide that in the event of both the husband and the wife working for IOC, HRA

without production of rent receipt would be payable only to one. The respondent

IOC has however along with its counter affidavit filed a Long Term Settlement

signed between IOC and its workmen on 4th January, 2001 (New Settlement), in

supersession/modification of the Memorandum of Settlement relied upon by the

petitioner (Old Settlement). Clause 5.4 of the New Settlement does provide that

HRA shall be admissible to only one of the spouses as aforesaid. However,

notwithstanding the New Settlement of 4th January, 2001, HRA as aforesaid

continued to be paid to both, the petitioner and his wife till 31st January, 2003 as

aforesaid.

6. In view of the New Settlement of 4th January, 2001, the disputed HRA from

1st January, 1997 can for adjudication be split into two parts, i.e. from 1st January,

1997 till 3rd January, 2001 (i.e. till the New Settlement came into force) and from

4th January, 2001 onwards. During the hearing, it was informed that the petitioner

and his wife in accordance with the New Settlement had on 18th April, 2005

applied for assessment of rent of the accommodation occupied by them and the

rent assessed was found to be more than HRA entitlement of both petitioner and

his wife and as such w.e.f. 1st April, 2005, HRA is being paid to both, the

petitioner as well as his wife. Thus the dispute qua HRA is till 31st March, 2005

only.

7. As far as the first part of disputed HRA, i.e. w.e.f. 1st January, 1997 to 3rd

January, 2001 is concerned, the question which arises is, whether the respondent

IOC can apply the New Settlement (and owing to Clause 5.4 wherein the payment

of HRA to petitioner was stopped and HRA paid sought to be recovered)

retrospectively. In my opinion, no. The contention of the respondent IOC is that

payment of HRA is governed only by the Settlement. In the absence of any such

clause in the Old Settlement prevalent/in force from 1st January, 1997 till 3rd

January, 2001, the respondent IOC could not unilaterally impose its own

interpretation of any clause therein or a change/clarification/amendment in the

New Settlement, on the petitioner. I had during the hearing enquired from the

counsel for the respondent IOC whether there was any term in the Old Settlement

entitling the respondent IOC to so interpret the terms of settlement or to impose

any further conditions therein. The counsel for the respondent IOC was unable to

show any. The only requirement in the Old Settlement for payment of HRA was of

furnishing of a certificate. It is presumed that payment of HRA to the petitioner

from 1st January, 1997 till 3rd January, 2001 was against issuance of such

certificate. The respondent IOC is not entitled to impose any additional term and

conditions regarding payment of HRA and is thus found not entitled to recover

HRA paid to the petitioner for the period before coming into force of the New

Settlement. The New Settlement also does not provide for application thereof

retrospectively or for recovery/refund of payments already made to both spouses.

8. The next question is qua second part of HRA, i.e. from 4th January, 2001 to

31st March, 2005. The petitioner under the New Settlement was not entitled to

HRA, unless conditions of New Settlement were met. Nevertheless the payment

continued to be made to the petitioner till 31st January, 2003, though in

contravention of the New Settlement. However, in my view the respondent IOC is

estopped from recovering back the payment so made from 4th January, 2001 to 31st

January, 2003. Clause 5.4 of the New Settlement was not a complete bar to

payment of HRA to both husband and wife. Under the said clause also, both were

entitled to draw HRA to the extent of the assessed rent of their accommodation. If

the respondent IOC, in accordance with the New Settlement had stopped payment

of HRA to the petitioner, the petitioner could have exercised the option of having

the rent of the accommodation occupied by him and his wife assessed and if the

assessed rent thereof was found to be in excess of the HRA paid to the wife of the

petitioner, the petitioner would still have been entitled to HRA to the said extent.

Owing to the respondent IOC continuing to pay HRA to the petitioner, the

petitioner did not have the occasion to apply for assessment of the rent and the

respondent IOC is now estopped from contending otherwise. The petitioner and

his wife are informed to have shifted to a new accommodation on 22nd March,

2004 (and rent whereof they got assessed as aforesaid); now, assessment of rent of

earlier accommodation is highly unlikely. The respondent IOC is thus not found

entitled to recover back any amount paid to the petitioner as HRA.

9. The question of entitlement of the petitioner to HRA from 1st February,

2003 to 31st March, 2005 remains. During the said period the New Settlement was

in force and whereunder the petitioner and his wife, both were not entitled to HRA

unless the assessed rent of the accommodation occupied by them was more than

the HRA of one. The petitioner though occupied the new accommodation on 22nd

March, 2004 applied for assessment of rent thereof only on 18th April, 2005 and

owing whereto is receiving HRA w.e.f. 1st April, 2005.

10. The accommodation earlier occupied by the petitioner and his wife from 1st

February, 2003 to 21st March, 2004 was not got assessed. I am now not inclined to

grant an opportunity to the petitioner to have the rent of that accommodation

assessed. The petitioner and his wife ought to have known of the New Settlement

and acted thereunder. The petitioner himself being at fault, is not entitled to HRA

from 1st February, 2003 to 21st March, 2004. The contention of the petitioner that

as per rules of HRA applicable to Government employees, he is entitled to HRA is

not acceptable in view of Clause 5.4 in the New Settlement and with which the

petitioner is bound. A Five Judge Bench of the Supreme Court in Hindustan

Antibiotics Ltd. Vs. The Workmen AIR 1967 SC 948 has held that though in

fixing the pay structure of public corporations (as IOC is), due regard should be

had to pay structure in Civil Services, the same is only advisory in nature and does

not mean that wage structure of public corporation should be of same pattern

obtaining in departments of the Government.

11. I however am inclined to direct payment of HRA to the petitioner w.e.f.

22nd March, 2004 i.e. from the date of occupation of the new accommodation, on

the basis of assessed rent whereof the petitioner is being paid HRA w.e.f. 1st April,

2005. The reason therefor being that it is also the plea of the petitioner that the

respondent IOC is discriminating against the petitioner; it is paying HRA to other

couples employed with the respondent IOC. An affidavit giving particulars of such

other couples has been filed. No counter thereto has been filed by the respondent

IOC. On enquiry during the hearing, the counsel for the respondent IOC could

only state that the documents filed by the petitioner in this regard, are of divisions

of IOC other than that in which the petitioner and his wife are employed.

However, the counsel for the respondent IOC fairly admitted that the Settlements

aforesaid, govern employees of all divisions of IOC and not merely of the division

in which the petitioner and his wife are employed. In these circumstances, it is felt

that the petitioner should be paid HRA since the date of occupation of the new

accommodation inspite of delay in having the rent thereof assessed.

12. The counsel for the respondent IOC has relied on Committee of

Management, Victoria Inter College, Agra Vs. Amar Nath Gupta 2005 (105)

FLR 168 where a Division Bench of the Allahabad High Court held that if both

husband and wife are in service, then both are not entitled to HRA and on

Narayan Ram Palli Vs. State 2007 Lab. IC 52 relating to HRA payable to

Government Servants. However, in view of the contention of the respondent IOC

that payment of HRA to employees of IOC is governed by the Settlements of IOC

with its workmen, the said judgments are of no avail.

13. The counsel for the petitioner has with rejoinder also filed Inter Office

Memo dated 9th August, 2004 regarding HRA; however that is with respect to

cases where accommodation is "provided" to one of the spouses and is not

applicable in the facts of this case.

14. The writ petition, therefore, succeeds to the aforesaid extent. The demand

dated 15th March, 2004 of the respondent IOC of Rs.2,29,015/- from the petitioner

for recovery of HRA already paid is struck down/quashed. The respondent IOC is

also directed to pay to the petitioner HRA w.e.f. 22nd March, 2004 till 31st March,

2005. The payment as aforesaid, be made to the petitioner within six weeks failing

which the respondent IOC shall also be liable for simple interest thereon at the rate

of 9% per annum. The claim of the petitioner for HRA from 1st February, 2003 to

21st March, 2004 is however declined.

In the facts of the case, no order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 1st July, 2010 bs