V.V.S.Rao, J.

1. The petitioner is aggrieved by the order dated 17.12.2009 in O.A.No.804 of 2009 passed by the Central Administrative Tribunal, Hyderabad Bench whereby and whereunder the application filed by the petitioner for a direction to respondents not to withhold House Rent Allowance (HRA) on the basis of letter of allotment of an official quarters, duly declaring the said proceedings issued by the third respondent as illegal and arbitrary, was dismissed.

2. The petitioner is working as Lower Division Clerk in Kendriya Vidyalaya School (hereafter, the School) run by Kendriya Vidyalaya Sangathan (KVS), which is a fully financed Government of India Organization registered under the Societies Registration Act, 1860. Her husband is working in the Office of the Assistant Commissioner, KVS. Statedly she is staying in her own house, which is at a distance 3 KMs from the School since 1991. By a letter dated 27.8.2009, the third respondent allotted one of the eleven quarters within the premises of the School to the petitioner. In response thereto, the petitioner sent a letter dated 31.8.2009 declining to accept the allotment of quarter on the ground that she is staying with her husband in their own house and she did not require the official quarters. In view of this, she was not paid HRA with effect from 01.9.2009, aggrieved which she filed the OA. She contended that she is staying in her own house since 1991, which was renovated by taking bank loan; as per the Kendriya Vidyalaya Sangathan (Allotment of Residence) Rules, 1998 (the Rules), unless she applies for quarters she cannot be compelled to accept the quarters which was unilaterally appointed by the third respondent; Rule 11 of the Rules disentitling an employee from claiming HRA would have no application when the quarters is allotted against the wishes of an employee; and the action of the third respondent in not cancelling the allotment is illegal and arbitrary.

3. The Assistant Commissioner, KVS, Secunderabad filed reply statement on behalf of the respondents opposing the OA. Placing reliance on Director, Central Plantation Crops Research Institute, Kesaragod v M.Purushothaman AIR 1994 SC 254, it was contended that even when the allotment is made without an application, in the event of refusal to accept the allotment, the employee would not be eligible for HRA. It was further submitted that as clarified by the KVS, by proceedings dated 30.7.2003 all the authorities should ensure that all the quarters at their disposal are allotted to the eligible members of staff and no HRA is allowed to such staff and that when the petitioner refused to accept the allotment made in accordance with the Rules she would not be entitled to claim HRA.

4. The learned Tribunal considered two points that arose for adjudication, namely, whether the impugned order of allotment of quarters to the applicant is liable to be set aside? and, whether the respondents are not entitled to deny HRA in the event of refusal of the applicant to occupy the quarters allotted to her. Both the points were answered against the petitioner and in favour of the respondents. The learned Tribunal held that though under Rule 4(1) of the Rules the employer has got a right to refuse to allot Government quarters, it does not disable to allot the quarters if available under Rule 4(4) of the Rules; when there is no competition and there are sufficient number of quarters available for allotment to its employees the employer is at liberty to allot the same in order to save the HRA payable to the employees; and that whenever accommodation is offered the employee has either to occupy the same or forfeit the HRA.

5. The Counsel for the petitioner would contend that the learned Tribunal committed an error in interpreting Rule 4 of the Rules; the ratio in Purushothaman has no application; and when the official quarters is allotted to an employee against his/her wishes which is not accepted on the ground that he/she alr