IMPORTANT POINT
Higher HRA drawn by employees of Punjab State Electricity Board upto 31-8-1988 as protected by Board’s order dt. 7-3-1989 could not be withdrawn when Board adopted revised rates of HRA introduced by State Govt.

Headnote:SERVICE LAW — Protection of higher House Rent Allowance drawn upto 31-8-1988 by employees of appellant who were posted in places within a radius of 16 kms from international border — Respondents were getting higher rate of HRA applicable to I-class/‘A’ class cities — State Govt. revised rates of HRA vide circular dt. 30-8-1988 and Board adopted revised rates of HRA by order dt. 7-3-1989 and classified cities and towns into four classes — Clarificatory circular dt. 19-9-1990 issued in view of different interpretations of HRA orders by different offices being taken — Protection of higher HRA drawn upto 31-8-1988 not extended to respondents — Writ petitions filed by respondent were allowed with direction that HRA that was admissible to respondents prior to 31-8-1988 shall be protected — Appeal — Order dt. 7-3-1989 protected higher House Rent Allowance drawn by employees of Board under existing orders upto 31-8-1988 — Clarificatory order did not cancel that protection clause — Board could not avoid its liability to protect the higher HRA of respondents in terms of order dt. 7-3-1989 — No reason to interfere.
Held : The Order dated 7.3.1989, clearly protects the higher House Rent Allowance drawn by the employees of the Board under the existing orders, upto 31.8.1988. The clarificatory Circular dated 19.9.1990 of the State Government, adopted by the Board by Circular dated 29.5.1992, does not cancel or delete the protection clause in regard to the higher HRA extended under the order dated 7.3.1989. The fact that those posted in places falling within 16 km radius of international border were paid a higher HRA as in the case of Class I or Class A cities on account of special circumstances, is not a ground to exclude them from the protection of higher HRA, available under the order dated 7.3.1989. It is unfortunate that the Board having given protection of higher HRA drawn by its order dated 7.3.1989, has tried to avoid the obligation on untenable grounds. The alleged clarification contained in the letter dated 19.9.1990 in no way assists the Board to avoid liability to protect the higher HRA of Respondents in terms of the order dated 17.3.1989. At all events, the matter being squarely covered by the decision in Mohinder Singh, it is not open to the Board to contend otherwise. We, therefore, find no reason to interfere with the impugned orders/judgments.(Paras 10 & 11)

JUDGMENT

Raveendran, J. — These appeals are filed against the judgments of the Punjab & Haryana High Court in the following cases :

S.No.Civil AppealCase No. beforeDate of No. High CourtJudgment of High Court

i)7567/2002CWP 12606/14.5.19981995

ii)7569/2002RSA 2990/199622.1.1999

iii)7600-01/2002CWP 12810/14.5.19981995

iv)7607/2002RSA 3237/199622.1.1999

v)7606/2002CWP 12830/14.5.19981995

vi)2323/2004CWP 3752/20023.11.2003

vii)2987/2004CWP 4903/20023.11.2003

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.

2. 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 were posted at Ajnala, Ramdas, Patti, Khem Karan in the district of Amritsar and at Ferozepur, in places within a radius of 16 kms from the international border. As employees posted in the border areas within a radius of 16 km from the international border, they were paid HRA applicable to I class or A class cities in Punjab, by taking note of the special problems relating to border areas. Thus all the Respondents were getting the higher rate of HRA applicable to I Class/A Class cities.

3. 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 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 :-

"(ii)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 Class B Class C Class D City City City Town

Rs. Rs. Rs. Rs.

750-124920015010075

1250-1749300225150100

1750-2249400300200150

2250-2749500375250175

2750-3249600450300225

3250-3749700525350250

3750-4249800600400300

4250-4749900675450325

4750-52491000750500375

5250 1000750500375onwards

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.

(iii)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.

(iv)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 onwards house rent allowance shall continue to be in force.

4. 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.

5. 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 :

"a)

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2006 Supreme(SC) 515

IMPORTANT POINTHigher HRA drawn by employees of Punjab State Electricity Board upto 31-8-1988 as protected by Board’s order dt. 7-3-1989 could not be withdrawn when Board adopted revised rates of HRA introduced by State Govt.

IMPORTANT POINT
Higher HRA drawn by employees of Punjab State Electricity Board upto 31-8-1988 as protected by Board’s order dt. 7-3-1989 could not be withdrawn when Board adopted revised rates of HRA introduced by State Govt.