2006 Supreme(SC) 517

2006(6) Supreme 430
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
K.G. Balakrishnan & R.V. Raveendran, JJ.
P.S.E.B., Patiala & Anr. — Appellants
versus
Sudarshan Prasad & Ors. — Respondents
Civil Appeal Nos. 7586-7587 of 2002
With
Civil Appeal Nos. 7588-7589/2002, 7590-7591/2002 and 7592-7593/2002
Decided on 18-5-2006
Counsel for the Parties :
For the Appellants : Harinder Mohan Singh, Kaushal Yadav and Ms. Shabana Saifi, Advocates.
For the Respondents : R.K. Kapoor, M.K. Verma, N.K. Gajua for P.N. Puri, Advocate and I.N. Gupta, Advocates.
Respondent-in-person.

Headnote:SERVICE LAW — Protection of higher House Rent Allowance drawn upto 31.8.1988 by respondent employees of appellant Board — Respondents were posted in towns within the municipal limit of City and upto 31.8.1988 they were being paid HRA as applicable to City (class ‘A’ city) in view of proximity of those towns to City as per Board Policy where such place fell within radius of 8 kms. from periphery of Municipal Corporation — Board adopted revised rates of HRA introduced by State Govt. by order dated 7.3.1989 and classified Cities and towns in State into four classes — Writ petitions seeking benefit of protection of higher HRA drawn upto 31.8.1988 High Court disposed writs permitting respondents to file representation — Board rejected the representation — Respondents challenged the order in writ petitions — High Court allowed writs with a direction that HRA admissible to respondents prior to 31.8.1988 shall be protected — Appeal — Disputed question fact whether towns where respondents were posted fell within 8 kms. or not of municipal limit of City was not needed to be considered — Clause (ii) of order dated 7.3.1989 protected HRA at higher rates already being drawn upto 31.8.1988, such higher HRA stood protected — Protection of higher HRA under clause (ii) of order dated 7.3.1989 was recognized and accepted in Mohinder Singh’s case — No reason to interfere.

       Held : 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 Doraha 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."

       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.(Paras 12 and 13)