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2017 DIGILAW 523 (UTT)

Mukesh Tomar v. Kumaon Mandal Vikas Nigam Ltd

2017-10-05

ALOK SINGH, K.M.JOSEPH

body2017
JUDGMENT : K.M. Joseph, J. Petitioner challenges Annexure 1 order dated 24.4.2014 passed by the 5th respondent i.e. Uttarakhand Public Service Tribunal. He also challenges the order dated 17.03.2011 passed by the second respondent, namely, the General Manager, Kumaon Mandal Vikas Nigam Limited. He further seeks a direction commanding the respondents to pay HRA with arrears of HRA with 12 per cent bank interest since it was illegally stopped in December, 2009. 2. The brief facts necessary to appreciate the contentions are as follows: Petitioner joined the second respondent on 07.07.1984. He was being paid HRA from 1984 till 2009. From the year 2009, HRA was stopped. It appears that an application was moved by the petitioner that was rejected by the order, which is impugned before the Tribunal and also before this Court, namely, the order dated 17.03.2011. He approached the Tribunal challenging the said order and seeking relief’s in regard to stoppage of HRA. The claim petition has been rejected. 3. We heard Mr. Jitendra Chaudhary, learned counsel for the petitioner, Mr. Manvendra Singh, Advocate holding brief of Mr. Sandeep Kothari, learned counsel for KMVN and Mr. Bhupendra Singh Bisht, Advocate holding brief of Mr. D.S. Patni, learned counsel for the State Bank of India. 4. Mr. Jitendra Chaudhary, learned counsel for the petitioner would submit that the petitioner was enjoying the benefit of HRA till 2009 when it was suddenly stopped. HRA has been stopped without giving any opportunity of hearing to the petitioner and, therefore, the principle of natural justice has been violated. It was stopped on the ground that the wife of the petitioner is also drawing HRA as an employee of the State Bank of India. He would next contend that actually the building was allotted on rent, initially, to the mother of the petitioner and on the death of the mother of the petitioner, the petitioner has become the tenant and he has the responsibility to pay the rent. This fact is highlighted before us in order to contend that the Government Order dated 16.01.1985, which is the basis for stopping the HRA and apparently relied in the impugned order also, contemplates that when husband and wife are claiming HRA, then HRA may be claimed by the person, who has the liability to pay the rent. This fact is highlighted before us in order to contend that the Government Order dated 16.01.1985, which is the basis for stopping the HRA and apparently relied in the impugned order also, contemplates that when husband and wife are claiming HRA, then HRA may be claimed by the person, who has the liability to pay the rent. In order to deal with this contention, we deem it appropriate to extract the English translation of the Government Order dated 16.01.1985 made available to us by the petitioner in the rejoinder affidavit. The same reads as under: “No. 641-(1) Chawalis-1/84 From, Shri Surendra Mohan, Secretary, Government of Uttar Pradesh. To, All the public enterprises of the State and President/Management Director, Noida. Subject: Clarification regarding permissibility of house rent allowance to both the employed husband and wife living in the same house. Public Enterprise Section-Lucknow: Date: 16 Jan. 1985 Sir, Concerning above subject I have been directed to state to you that under the conditions mentioned in the Notification No. 1/44-1-No.-223/44-1/Upakram Vetan Report 26-83, dated 12 May, 1983 all the officers/employees working in public enterprises/corporations of the state are eligible for house rent allowance. In this concern it has been decided that where husband and wife are living on rent in the same house and being in service the house rent allowance is permissible to both, in that situation the hose rent allowance is permissible to only one of the two and the same is to be given according to the salary of the one on whose name the houses taken on rent or who is responsible for paying tax on his private house/house under ownership of some member of family/house under ownership of Hindu undivided family. If any one of the husband and wife is given the government house on rent or free, the other one will not be eligible for house rent allowance while living in the same house. If any of the husband and wife is employed under the state government and the other is employed in any public enterprise under the state government, in that condition they will be authorized to take house rent allowance only from one place. 2. If any of the husband and wife is employed under the state government and the other is employed in any public enterprise under the state government, in that condition they will be authorized to take house rent allowance only from one place. 2. I have also been directed to state that in a situation where one of the husband and wife is employed in state government or in any or its subordinate corporation and the other is employed in Indian Government or any of its subordinate corporation and if the husband or wife working under Indian Government or its subordinate corporation is getting the house rent allowance, the house rent allowance from the state government or its corporations will not be permissible to them. Strict compliance of these orders may kindly be ensured and the receiving of these orders to be accepted. Yours, (Surendra Mohan) Secretary” 5. Mr. Jitendra Chaudhary, learned counsel for the petitioner when confronted with the contents of Paragraph 2 of the said order, which is necessary, contended that actual provision, which is applicable is the earlier part, namely, the portion of the Government Order, which declares that where the husband and wife are living in the same house, HRA is permissible to only one of the two and the same is to be given according to the salary of the one on whose name the house is taken on rent and who is responsible for paying tax of his private house/house under ownership of some member of family/house under ownership of Hindu undivided family. Next, even going by Paragraph 2 of the order, he would contend that the State Bank is an autonomous body and it cannot be treated as a corporation subordinate to the Central Government. He would in this regard assail the findings of the Tribunal. Still further, he would contend that a perusal of the Government Order would reveal that it contemplates that the spouses are living together in the same house and both are claiming HRA, and it is only in such a situation that HRA can be denied to one. In this case, he reinforces his contention based on violation of the principle of natural justice, also in the context of his argument; in that if an opportunity of hearing was given, this aspect could have been highlighted before the Authority. In this case, he reinforces his contention based on violation of the principle of natural justice, also in the context of his argument; in that if an opportunity of hearing was given, this aspect could have been highlighted before the Authority. Next, he would refer to Section 87 of the State Reorganisation Act, 2000 (hereinafter referred to as the Reorganisation Act) and contend that Government Order dated 16.01.1985 has not been adapted by the Government of Uttaranchal, as contemplated in Section 87 and, therefore, it cannot be made applicable to him. Still further, he would submit that no decision has been taken by the State Bank of India, even though the wife of the petitioner had moved an application before the State Bank of India for stopping the HRA, which was being given to her. 6. Per contra, learned counsel for the respondent Corporation would support the order. 7. Since everything turns on the applicability of the Government Order dated 16.01.1985, which was, in fact, issued by the Government of Uttar Pradesh and as there is a case based on Section 87 of the Reorganisation Act, we deem it appropriate to deal with the said argument. Section 87 of the Reorganisation Act reads as follows: “87. Power to adapt laws.—For the purpose of facilitating the application in relation to the State of Uttar Pradesh or Uttaranchal of any law made before the appointed day, the appropriate Government may, before the expiration of two years from that day by order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repeated or amended by a competent Legislature or other competent authority. Explanation.—In this section, the expression “appropriate Government” means as respects any law relating to a matter enumerated in the Union List, the Central Government, and as respects any other law in its application to a State, the State Government.” 8. Section 2(f) of the Reorganisation Act defines ‘law’, which reads as under: “(f) “law” includes any enactment, ordinance, regulation, order, bye-law, rule, scheme, notification or other instrument having, immediately before the appointed day, the force of law in the whole or in any part of the existing State of Uttar Pradesh;” 9. Section 2(f) of the Reorganisation Act defines ‘law’, which reads as under: “(f) “law” includes any enactment, ordinance, regulation, order, bye-law, rule, scheme, notification or other instrument having, immediately before the appointed day, the force of law in the whole or in any part of the existing State of Uttar Pradesh;” 9. We would think that there is an insuperable obstacle in the path of the petitioner relying on Section 87 in this case. The argument runs that since the Government Order has not been adapted by the State of Uttaranchal, it can have no application. As to whether, it has been adapted or not is a matter of fact. In this connection what is conspicuous by its absence is that no case has been set up by the petitioner before the Tribunal or even before this Court to the effect that the Government Order dated 16.01.1985 passed by the State of Uttar Pradesh has not been adapted by the State of Uttaranchal. In absence of a plea, we are of the clear view that the petitioner cannot be permitted to rely on Section 87 of the Reorganisation Act. We reject the argument of the learned counsel for the petitioner that it is a question of law and it can be raised. Though an attempt was made to seek an adjournment to amend the writ petition, we are not inclined to allow such a prayer at this stage. Moreover, we would also think that what Section 87 appears to us to contemplate is that it gives a power to the Government to adapt and modify any law. Since the word “order” is included in law, it would also include the order dated 16.01.1985 and the adaptation can be made either by way of repeal or amendment; even in absence of any formal adaptation, the orders which have been passed by the undivided State of Uttar Pradesh would continue to have operation. Since the word “order” is included in law, it would also include the order dated 16.01.1985 and the adaptation can be made either by way of repeal or amendment; even in absence of any formal adaptation, the orders which have been passed by the undivided State of Uttar Pradesh would continue to have operation. Section 87 of the Reorganisation Act only appears to us to give power to the State of Uttaranchal to either repeal or modify the order by way of amendment in its application to the Sate of Uttaranchal, but we do not intend to rest the rejection of the case of the petitioner, in this regard, on this basis as perhaps more inquiry and discussion may be necessary and as we are on surer foundation, when we reject this contention on the basis that there is no such case pleaded before the Tribunal or even before this Court. 10. Having cleared the ground for applying the Government Order dated 16.01.1985, we must pass on to consider other contentions of the petitioner based on interpretation of the order. The order, undoubtedly, in the first part contemplates that where husband and wife are living together on rent and both are in receipt of HRA, in such a situation, it appears to suggest that HRA is permissible to only one of the two and the same is to be given according to the salary of the one on whose name the house is taken on rent. The petitioner appears to be the tenant on the demise of his mother and can be described as tenant. We also proceed on the basis that they are living together and, therefore, the HRA of the petitioner cannot be stopped, but it may be the HRA of his wife, which has to be stopped. This is the provision, which is included in the earlier part of the Government Order and is followed in the second paragraph, which is the latter paragraph. By the injunction against the grant of HRA, in such a situation, to a spouse, who is employed with the State Government or with a Corporation of the State Government, when his spouse is employed with the Government of India or its corporations, we would think that this provision would clearly affect the fate of the petitioner’s case. By the injunction against the grant of HRA, in such a situation, to a spouse, who is employed with the State Government or with a Corporation of the State Government, when his spouse is employed with the Government of India or its corporations, we would think that this provision would clearly affect the fate of the petitioner’s case. This appears, as we have noticed, to be the latter clause, which deals with the special category of cases, namely, where one of the spouses is employed by the State Government or its corporation and the other spouse is employed by the Central Government or its corporation. Since in this case, the petitioner is employed by a State corporation, namely, the second respondent; whereas the wife of the petitioner is employed by the State Bank of India, which we proceed to treat as the corporation coming under the subordination of the Central Government, then it is this clause, which will certainly apply and we reject the argument to the contrary. 11. Next contention is that the State Bank of India cannot be treated as corporation under the control of the Central Government. 12. Mr. Jitendra Chaudhary, learned counsel for the petitioner would contend that the State Bank of India is an autonomous body and therefore it is not controlled by Government of India. In this regard, we must notice the discussion in the judgment of the Tribunal. The tribunal, inter alia, discussed the matter in the following manner: “9. Section 17 of the Act defines the management of the Bank, Section 18 specifically provides the board constituted under the preceding Section of the Act is to be guided by the directions of the Central Government. Section 17 & 18 is extracted as below: “17. Management- (1) The general superintendence and direction of the affairs and business of the State Bank shall be entrusted to the Central Board which may exercise all powers and do all such acts and things as may be exercised or done by the State Bank and are not by this Act expressly directed or required to be done by the State Bank in general meeting. (2) The Central Board in discharging its functions shall act on business principles, regard being had to public interest. 18. (2) The Central Board in discharging its functions shall act on business principles, regard being had to public interest. 18. Central Board to be guided by directions of Central Government- (1) In the discharge of its functions 1 [including those relating to a subsidiary bank] the State Bank shall be guided by such directions in matters of policy involving public interest as the Central Government may, in consultation with the Governor of the Reserve Bank and the chairman of the State Bank, give to it. (2) All directions shall be given by the Central Government shall be given through the Reserve Bank and if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final. 10. Section 19 also provides that the Central Board constitutes the Chairman and other Directors, who are to be appointed by the Central Government in consultation with the Reserve Bank of India. The composition of the board is also given under Section 19 which is as under:- “19. Composition of the Central Board- 2 [The Central Board shall consist of the following, namely:- (a) a chairman and a vice-chairman to be appointed by the Central Government in consultation with the Reserve Bank 3[; (b) not more than two managing directors, if any, appointed 4 [by the Central Government in consultation with the Reserve Bank]; (bb) [the presidents of the Local Boards appointed under sub-section (5) of section 2] exofficio; (c) if the total amount of the holdings of the share holders, other than the Reserve Bank, whose names are on the 1. Ins. By Act 38 of 1959, s. 64 and Sch. III (w.e.f. 10-9-1959). 2. Omitted by Act 3 of 1994, s. 8 (w.e.f. 15-10-1993), 3. Certain words omitted by Act 73 of 1976, s. 4 (w.e.f. 11-6-1976), 4. Subs. By s. 4, ibid., for certain words (w.e.f. 11-6-1976), 5. Subs. by Act 35 of 1964, for cis. Ins. By Act 38 of 1959, s. 64 and Sch. III (w.e.f. 10-9-1959). 2. Omitted by Act 3 of 1994, s. 8 (w.e.f. 15-10-1993), 3. Certain words omitted by Act 73 of 1976, s. 4 (w.e.f. 11-6-1976), 4. Subs. By s. 4, ibid., for certain words (w.e.f. 11-6-1976), 5. Subs. by Act 35 of 1964, for cis. (c) and (d) (w.e.f. 1-12-1964), 1[register of shareholders] three months before the date fixed for election of directors is— (i) not more than ten per cent of the total issued capital, two directors; (ii) more than ten per cent but not more than twenty-five per cent of such capital, three directors, and (iii) more than twenty-five per cent of such capital four directors, to be elected in the prescribed manner by such shareholders.” 11. Thus, there are also nominations of the Directors by the Central Government in the board. This Act also deals about the sharing of the shares of the Central Government in the State Bank. Thus, it is controlled by the Central Government and it can be held that it is an undertaking as of the Central Government within the meaning of the State Government Order. It is true that the said Government Order cannot restrain the wife of the petitioner but at the same time the petitioner being an employee of the Corporation is bound by the Government Order. It is not in dispute that the petitioner’s wife is not working in the State undertaking thus, if the wife of the petitioner is getting the benefit from the State Bank, the petitioner cannot get the benefit of the rent allowance from the State Government in view of the Government Order dated 16.01.1985. , 10 and 11 of the Tribunal’s judgment” 13. We are in agreement with the said reasoning of the Tribunal. We may also notice the following provisions in the State Bank of India Act, 1955 (hereinafter referred to as the 1955 Act). 14. The State Bank of India was constituted by the Act. Therefore, the State Bank of India is clearly a statutory Corporation. It was done so as to transfer to it of the undertaking of the Imperial Bank of India. The Statement of Objects and Reasons would state as follows: “STATTEMENT OF OBJECTS AND REASONS The Reserve Bank of India had appointed in August 1951 a Committee of Direction for conducting an all-India rural credit survey. It was done so as to transfer to it of the undertaking of the Imperial Bank of India. The Statement of Objects and Reasons would state as follows: “STATTEMENT OF OBJECTS AND REASONS The Reserve Bank of India had appointed in August 1951 a Committee of Direction for conducting an all-India rural credit survey. The General Report of the survey embodying the Committee’s recommendations was received last year. The Report makes compressive recommendations relating to numerous aspects of the problem of rural credit. One of the important recommendations and an intergral part of the solution of the rural credit problem propounded by the Committee is the setting up of a State Bank of India as one strong integrated State-partnered commercial banking institution with an effective machinery of branches spread over the whole country for stimulating banking development by providing vastly extended remittance facilities for Co-operative and other banks and following a policy which would be in effective consonance with national policies adopted by Government without departing from the canons of sound business. Such a State Bank of India is envisaged as coming into being by the amalgamation of the Imperial Bank of India with certain “State-associated” banks. On the 28th December, 1954, Government announced that they accepted in principle this recommendation of the Committee and that they had decided as a first step towards the setting up of such an institution, to assume effective control over the Imperial Bank. This Bill seeks to give effect to this decision. Suitable provisions are made relative to the acquisition of the undertaking of the Imperial Bank, the taking over of its business and staff, the payment of compensation to shareholders, the setting up of an appropriate machinery for the governance of the State Bank of India, the business which the Bank may and may not transfer etc. It is contemplated that the Reserve Bank will always hold a minimum shareholding of 55 per cent, in the paid up capital of the Bank. By virtue of this holding and the composition of the Board of Directors of the Bank as well as by virtue of the power to give directions in matters of policy involving public interest vested in the Central Government policies while the autonomy of the institution in its day-to-day working will be fully maintained. By virtue of this holding and the composition of the Board of Directors of the Bank as well as by virtue of the power to give directions in matters of policy involving public interest vested in the Central Government policies while the autonomy of the institution in its day-to-day working will be fully maintained. Amendments necessary to the Reserve Bank of India Act, 1934, and to the Banking Companies Act, 1949, and to the Banking Companies Act, 1949, consequently to the establishment of this institution, have been provided for in the Third and Fourth Schedules to this Bill.” 15. We further notice that Section 3 of the 1955 Act provides for establishment of the State Bank. It reads as follows: “3. Establishment of the State Bank.—(1) A Bank to be called the State Bank of India shall be constituted to carry on the business of banking and other business in accordance with the provisions of this Act and for the purpose of taking over the undertaking of the Imperial Bank. (2) The [Central Government], together with such other persons as may from time to time become shareholders in the State Bank in accordance with the provisions of this Act, shall, so long as they are shareholders in the State Bank, constitute a body corporate with perpetual succession and a common seal under the name of the State Bank of India, and shall sue and be sued in that name. (3) The State Bank shall have power to acquire and hold property, whether movable or immovable, for the purposes for which it is constituted and to dispose of the same.” 16. Section 4 of the 1955 Act deals with the Authorised Capital. Section 5 deals with the Issued Capital. Coming to the management, Section 17, as already noticed, provides that it will be entrusted to the Central Board. Section 18 provides that the Central Board is to be guided by the directions of Central Government in the matter of policy. Section 19 deals with the composition of the Central Board. A Chairman is to be appointed by the Central Government in consultation with the Reserve Bank. Then, law contemplates such number of managing directors not exceeding four, being appointed again by the Central Government in consultation with the Reserve Bank. Section 19 deals with the composition of the Central Board. A Chairman is to be appointed by the Central Government in consultation with the Reserve Bank. Then, law contemplates such number of managing directors not exceeding four, being appointed again by the Central Government in consultation with the Reserve Bank. One Director, from among the employees of the State Bank, who are workmen, is to be appointed by the Central Government; one director again from among the employees of the State Bank, who are not workmen, is to be appointed by the Central Government. Other directors are all have to be appointed and nominated by the Central Government. Section 24A of the 1955 Act deals with super-session of Central Board in certain cases. The power in this regard is lodged again with the Central Government. Casual vacancy is to be filled up by the Central Government in regard to the vacancy of Chairman or Managing Director, no doubt in consultation with the Reserve Bank. The State Bank is to act as an agent of the Reserve Bank. Section 45 of the 1955 Act places a bar on the liquidation of the State Bank as provision relating to winding up of companies is not to apply to the State Bank of India and the State Bank of India shall not be placed in liquidation save by order of the Central Government. The Central Government also is empowered to make Rules under Section 49 of the 1955 Act. The Central Board may make regulation with the previous sanction of the Central Government, after consultation with the Reserve Bank in regard to the matters provided in Section 50. 17. We are of the clear view that having regard to the scheme of the Act, the State Bank of India cannot be merely treated as an autonomous body and not as a subordinate Corporation of the Central Government. Going by the translation, we take it that the requirement is that the Corporation must be subordinate to or in other words subject to the control of the Central Government. The State Bank of India, as we noticed, is a creation of an Act of Parliament and we have noticed the nature of the control, which is overwhelming in nature, which is exercised over the State Bank of India. The State Bank of India, as we noticed, is a creation of an Act of Parliament and we have noticed the nature of the control, which is overwhelming in nature, which is exercised over the State Bank of India. Therefore, we would take the view that while it may be true that in law, the State Bank of India is separate from the Central Government, being an autonomous body in the said sense, it is also a body, which is in the direct control of the Central Government. If that be so, it is quite clear that since the petitioner was working in a Government of Uttarakhand Corporation, namely, the second respondent, whereas his wife is an employee of the State Bank of India and both were in receipt of HRA under the second paragraph of the order, the grant of HRA to the petitioner was impermissible. 18. An attempt was made by Mr. Jitendra Chaudhary to raise the argument that for applying the order, the premise must be that both the petitioner and his wife are living together in the same house. For this, he seeks support from the earlier part of the Government Order, which we have already extracted. If we go by the latter part of the order, what is relevant is that both are in receipt of HRA. However, proceeding on the basis that the order is intended only to apply to a situation, where the husband and wife are living in the same house and drawing HRA and it cannot apply in the case, where both are living at two different places and drawing HRA in their own right, we would think that there is no such case at all pleaded either before the Tribunal or before this Court. In the absence of any such plea, we are not called upon to adjudicate the said dispute. 19. The upshot of the above discussion is that there cannot be a slightest doubt that the withdrawal of HRA from 2009 was done legally. We say this as the petitioner has a case that he was not heard. Ordinarily, when a person is deprived of the benefit, which he/she has been getting for a long time, either as a right or even as a legitimate expectation, he would be entitled to look forward to a hearing or at least an opportunity to represent against the same. Ordinarily, when a person is deprived of the benefit, which he/she has been getting for a long time, either as a right or even as a legitimate expectation, he would be entitled to look forward to a hearing or at least an opportunity to represent against the same. It is also well settled that if granting of an opportunity of hearing is absolutely futile, the Court would not grant such an opportunity as it would be an empty formality. In this case, the matter has been discussed at the level of the Tribunal and we have also dealt with the matter in detail. Furthermore, this is a case, where the petitioner made a representation and the matter received the attention of the Authority and the Authority has referred to the order dated 16.01.1985 as the basis. Therefore, the Government Order, which is the basis having been spelt out and having found merit in the case of the respondents, we do not see any reason to interfere on the ground that the principle of natural justice has been violated. Resultantly the writ petition will stand dismissed. This, however, will not stand in the way of the petitioner’s wife pursing her request allegedly made to the State Bank of India for withdrawal of HRA and if HRA is withdrawn from the wife by the State Bank of India and in the way of the petitioner moving the second respondent for grant of HRA.