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Chief Justice's Court AFR

Case :- WRIT - A No. - 19106 of 2004

Petitioner :- Uma Shanker Singh and Others

Respondent :- State Of U.P. And Others

Counsel for Petitioner :- V.K. Singh,A.K.Sharma,G.K.

Singh,R.K. Singh Kaosik, R.P.S. Chauhan,Y.P. Singh, A.K. Singh

Counsel for Respondent :- Shashank Shekhar Singh, CSC

Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice

Hon'ble Pradeep Kumar Singh Baghel,J.

Hon'ble Yashwant Varma,J.

(Per : Dr D Y Chandrachud, CJ)

This reference before the Full Bench has been occasioned

by a referring order of a learned Single Judge dated 19 November

2010. The issues which have been referred to the Full Bench for

resolution have been formulated thus:

“(a) Whether the Government Order dated 10.12.2002

which provides for computation of distance of the

institution concerned for the purpose of payment of house

rent allowance from the original Nagarpalika, in the facts of

the case Mirzapur, is binding between the parties;

(b) Whether the Government Order dated 10.12.2002 is in

violation of Article 14 and 16 of the Constitution of India;

(c) Whether the judgment of the Division Bench holding

that it is irrelevant from which Municipal Board the

distance of the institution is less than 8 kilometers, lays

down the correct position in law or not.”

Neutrals7itationsNo)sJsBFlw;LH7;lzFlwvJqH

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In order to appreciate the issues which have been raised, a

brief reference to the factual background would be necessary.

There is an educational institution by the name of Rashtriya Inter

College, Sherpur, Mirzapur which is governed by the provisions

of the Uttar Pradesh Intermediate Education Act, 1921. The

institution receives grant-in-aid from the State Government. All

the petitioners are employees of the institution – the first

petitioner is the Principal, the second to sixth petitioners are

Lecturers, the seventh to seventeenth petitioners are Assistant

Teachers, the eighteenth and nineteenth petitioners are functioning

as Head Clerk and Assistant Clerk and the remaining petitioners

are class IV employees. Village Sherpur in which the institution is

situated falls within the geographical limits of the district of

Mirzapur. The case of the petitioners is that the village is within a

radius of eight kilometers from the municipal limits of the city of

Varanasi. They have placed reliance on a certificate issued by the

Collector, Mirzapur on 17 August 1982, a certificate dated 7

January 1981 issued by the Nagar Adhikari, Nagar Mahapalika,

Varanasi and by the Varanasi Development Authority

1

on 4

December 1986. The dispute which is sought to be raised in the

writ proceedings is in regard to the payment of House Rent

Allowance

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to employees of the institution.

1VDA

2HRA

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A Government Order was issued on 15 December 1981 by

which it was provided that government employees whose place of

work is situated within municipal limits or though situated outside

municipal limits is within a distance of eight kilometers would be

entitled to the payment of HRA. The municipal areas and slabs for

the payment of HRA were indicated in Annexure-1 to the

Government Order. Subsequently, another Government Order was

issued on 22 June 1982. We will separately examine the effect of

the subsequent government orders including those dated 22 June

1982, 29 October 1984, 11 June 1999, 25 February 2000, 21 May

2002 and 10 December 2002.

At this stage, it would suffice to note that the petitioners

were receiving HRA at the rate payable to teachers and employees

working in Varanasi city on the basis that their place of work was

situated within eight kilometers from the limits of the municipal

area of Varanasi. The Accounts Officer in the office of the District

Inspector of Schools

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, Mirzapur raised an objection on 21

November 1982. It appears that the matter was clarified and the

employees continued to draw their HRA at the rate payable to the

employees of Varanasi city. It appears that the salary of the

teachers and employees of the institution was revised in 1991 with

effect from 1 January 1986 and, accordingly, HRA was also

3DIOS

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revised under a Government Order dated 24 July 1992. A further

revision took place with effect from 1 January 1996. The HRA

was also revised by a Government Order dated 11 June 1999 with

effect from 1 June 1999.

The grievance of the petitioners was that though by the

Government Order, they were entitled to receive HRA at the

revised rate and at the rate which was payable to employees of

Varanasi city, that was not paid. This led to the filing of a writ

petition

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which was disposed of on 21 July 2000 permitting the

petitioners to make a representation to the Principal Secretary

(Finance). On 21 May 2002, the Principal Secretary (Finance)

held that the petitioners were entitled to receive HRA at the rate

which was applicable to employees of Varanasi city after due

certification that the village in which the institution was situated

was within a radius of eight kilometers from the municipal limits.

Consequently, the DIOS issued an order dated 14 August 2002

sanctioning HRA at the aforesaid rate.

On 10 December 2002, another Government Order was

issued in respect of the teachers and employees of Om Prakash

Jwala Devi Higher Secondary School, Shuklaganj. By a

Government Order dated 22 June 1982, the employees of the

institution had been held to be entitled to receive HRA at the rate

4Writ Petition No. 29617 of 2000

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payable to employees of Kanpur since the institution was situated

within a radius of eight kilometers of Nagar Mahapalika, Kanpur.

Shuklaganj is situated in the district of Unnao but since the

institution was situated within a radius of eight kilometers of the

municipal limits of the Nagar Mahapalika of Kanpur, the State

Government had issued the said direction. On 10 December 2002,

however, the State Government issued a Government Order

following the creation of the Nagar Palika Gangaghat, Unnao in

1999 revoking its earlier order.

The DIOS, Mirzapur passed an order on 17 April 2004 by

which he cancelled the earlier order dated 14 August 2002 passed

in favour of the petitioners, based on the Government Order

dated 10 December 2002 which had been issued in the case of Om

Prakash Jwala Devi Higher Secondary School. As a result, the

petitioners were directed to receive HRA at the rate payable to

employees working in institutions in district Mirzapur. This has

given rise to the filing of writ petition.

On 20 November 2003, a learned Single Judge of this Court

delivered a judgment in Rajwanta Singh and others vs. DIOS,

Mirzapur

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. The learned Single Judge relied upon (i) the decision

dated 21 May 2002 in the case of the institution of the petitioners

(Rashtriya Inter College, Sherpur, district Mirzapur) holding that

5Writ Petition No. 12523 of 1987

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since the institution was situated within eight kilometers of the

limits of the Nagar Nigam, Varanasi, HRA should be paid to the

teachers of the college; (ii) the decision dated 22 June 1982 in

respect of Om Prakash Jwala Devi Higher Secondary School,

Shuklaganj, district Unnao wherein HRA was directed to be paid

by the State Government since the institution was within eight

kilometers of the limits of Kanpur Nagar Mahapalika.

In Rajwanta Singh's case the Inter College though situated

in district Mirzapur was located within eight kilometers of the

border of Nagar Nigam, Varanasi. In the counter affidavit which

was filed by the State in that case, it was asserted that the

institution was situated in the district of Mirzapur and HRA would

be payable only if the institution is within eight kilometers of the

border of Mirzapur Municipality. The learned Single Judge held

that this view in the counter affidavit was contrary to the decision

of the State Government in the two cases referred to above.

Explaining the rationale for the prescription that the institution

should be situated within the territory of the Nagar Palika or not

beyond eight kilometers from the municipal limits, the learned

Single Judge held as follows:

“Further the prescription of location within the

territory of Nagar Palika or 8 kms. outside those limits

appears to have been made because in those areas on

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account of shortage of accommodation, the rent of houses is

likely to be high. Outside those limits there is not much

pressure of population and therefore, houses are expected to

be available on lower rent.

On that logic whether the institution is located within

8 kms. of the municipality of that district or within the same

distance of the municipality of any other district would

make no difference as the rent in both such cases is likely to

be high and, therefore, on that logic also the house rent

would be payable in both the cases.

Because it is not denied in the counter affidavit

specifically that the petitioner's institution is not located

within 8 kms. of the Nagar Nigam, Varanasi therefore, the

writ petition is allowed and it is held that House Rent would

be payable to teachers of that institution.”

The writ petition was, accordingly, allowed. An appeal was

carried before the Division Bench by the DIOS, Mirzapur from

the judgment of the learned Single Judge in DIOS, Mirzapur &

Ors. vs. Rajwanta Singh and Ors.

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. While dismissing the special

appeal, the Division Bench observed as follows:

“4. The institution is within eight kms. from the

Municipality (Nagar Nigam) of Varanasi. The intention in

granting the House Rent Allowance is to overcome the

difficulty of the persons who are staying in the near vicinity

of a Municipal Body. This is because the cost of

accommodation in such area is generally high. It is

6Special Appeal (Defective) No. 1051 of 2007

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immaterial whether the institution is within the same

district or not. That is the view taken by the learned Single

Judge. The view is absolutely correct.”

A Special Leave Petition against the judgment of the

Division was dismissed by the Supreme Court on 21 April 2008 in

Director of Education U.P & Ors. vs. Rajwanta Singh & Ors.

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When the present proceedings came up before the learned

Single Judge, the judgment of the Division Bench dated 22

November 2007 affirming the earlier judgment of the learned

Single Judge dated 20 November 2002 was placed before the

Court. In the view of the learned Single Judge, the Government

Order dated 10 December 2002 (in the case of Om Prakash Jwala

Devi Higher Secondary School, Shuklaganj) had altered the mode

and manner of determination of the distance for purposes of

payment of HRA. The learned Single Judge while referring the

issue before a larger Bench observed as follows:

“In my opinion, the Government Order dated 10.12.2002

has altered the mode and manner of determination of the

distance for the purposes of payment of house rent

allowance. Such Government Order has not been

challenged, nor it has been quashed by the Division Bench.

So long as the Government Order stands a direction to

compute the distance for the purposes of payment of house

rent allowance for teachers and employees of aided

institution has to be made from Mool Nagarpalika which in

7Special Leave Petition (Civil) 5539 of 2008

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the facts of the case would be Municipal Board, Mirzapur.

Preference to the Municipal limits of Varanasi is wholly out

of context. It may be clarified that the right to get house

rent allowance is derived from the G.O. only and therefore

if the State Government in its wisdom has laid down the

conditions for grant of such house rent allowance and

determination of distance of the institution for the purposes,

the same would be binding upon the parties.

Subject however to the condition that the conditions so

imposed may be granted by the High Court. However any

order by this Court may come in conflict with the Division

Bench judgement of this Court in Special Appeal No. 1051

of 2007. It is therefore desirable that the falling questions of

law may be examined by a larger Bench of this Court.”

With this background, we proceed to consider the issues

referred to the Full Bench.

The entire field is governed by Government Orders on the

subject. On 15 December 1981, a Government Order was issued

in the context of the recommendations which were made by the

Second Pay Commission laying down the conditions for the

payment of HRA. The relevant part of the Government Order

reads as follows:

“bu vkns'kksa ds v/khu edku fdjk;k HkRrk jkT;iky ds fu;ekdkjh

fu;a=.k ds v/khu dsoy dk;Z izHkkfjr vFkok izklafxd vkns'kksa ls osru ikus

okys O;fDr;ksa dks NksM+dj ,sls leLr ljdkjh lsodksa dks fn;k tk;xk

¼pkgs og iqujhf{kr osruekuksa esa osru izkIr djrs gksa ;k orZeku osrueku

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esa½ ftuds dk;Z djusa dk LFkku layXud&1 esa mfYyf[kr uxjksa dha

uxjikfydk lhekvksa ds Hkhrj vFkok uxjikfydk lhekvksa ds ckgj fdUrq

muds vkB fdyksehVj dh nwjh ds Hkhrj fLFkr gksaA”

Again para 4 of the Government Order clarifies the position

as follows:

“4-¼1½ dsoy dk;Z djus ds LFkku ds vuqlkj gh edku fdjk;k

HkRrk dh ik=rk fu/kkZfjr dh tk;xhA ,slh ljdkjh lsod] ftlds dk;Z

djus dk LFkku layXud&1 esa bafxr uxjksa dh vgZdkjh lhekvksa ds Hkhrj

vFkok muds ckgj ijUrq 8 fdyksehVj dh nwjh ds Hkhrj fLFkr gks] edku

fdjk;k HkRrk ikus dk ik= gksxk ;fn og vU; 'krksZ dks iwjh djrk gks] pkgs

mldk fuokl LFkku ,slh lhekvksa ds Hkhrj gks ;k ckgjA”

This Government Order makes it clear that for determining

the admissibility of HRA, what is relevant is the place of work of

the employee. Annexure-1 to the Government Order is a list of

municipal areas with reference to which HRA is admissible. The

Government Order lays down that an employee whose place of

work is situated within a municipal area specified in Annexure-1

or though outside municipal limits is within a distance of eight

kilometers would be entitled to the payment of HRA. This is

clarified in Para-4 of the Government Order which has been

extracted above.

Subsequently, on 22 June 1982, a Government Order was

issued in the case of Om Prakash Jwala Devi Higher Secondary

School, Shuklaganj which was situated in the district of Unnao.

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The Government Order stated that HRA would be admissible

since the institution was situated within a distance of eight

kilometers from the limits of Kanpur Nagar Mahapalika. On 29

October 1984, another Government Order was issued by which it

was clarified that admissibility of HRA would be based on the

place of work of the employee, in terms of the Government Order

dated 15 December 1981 irrespective of where the place of

residence is situated. The Government Order also dealt with the

payment of HRA in the case of local bodies which are situated

adjacent to notified Nagar Palikas in which case, it was stated that

HRA would be admissible within the entire limits of the adjacent

local body. However, it was clarified that in respect of institutions

situated outside the territorial limits governing the local body, it

was the distance from the original Nagar Palika (ewy uxj ikfydk)

that would be computed and not from the limits of the adjacent

local body. A clarificatory Government Order was issued on 29

February 2000. In the meantime, on 11 June 1999, a Government

Order came to be issued following the recommendations of the

Pay Commission. Under paragraph 4 of the Government Order, it

was clarified that in the case of aided institutions, technical

institutions, local bodies, public corporations and government

corporations, it was left open to the institution concerned to take

an appropriate decision having regard to its own financial

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condition and the date from which the modified rates should be

applicable.

On 21 May 2002, following a judgment of this Court in

Writ Petition No. 29617 of 2000 which related to the same

educational institution to which the present reference relates, a

Government Order was issued following the directions of this

Court for the examination of the claim for the payment of HRA.

The Government Order stated that the distance between the

institution and the limits of Varanasi Nagar Nigam was less than

eight kilometers and hence, HRA would be admissible on the

basis of the rates prescribed for Varanasi city. This was however

made subject to a due certification by the competent authority that

Rastriya Inter College, Sherpur is actually situated within a

distance of eight kilometers from the limits of the municipal area.

A discordant note was struck on 10 December 2002 by the

Government Order which was issued in the case of Om Prakash

Jwala Devi Higher Secondary School, Shuklaganj. By the

Government Order dated 10 December 2002, a decision was taken

in the case of the aforesaid institution to the effect that since the

institution was situated in the district of Unnao, the earlier

Government Order of 22 June 1982 allowing HRA would stand

revoked and the employees would not be entitled to HRA

admissible in the case of Kanpur Nagar though the institution was

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situated within a distance of eight kilometers of municipal limits.

The principle that emerges from the Government Order

dated 15 December 1981 is that the admissibility of HRA would

be dependant on two factors. The first is the place of work and the

second is the distance from a notified municipal area. If the place

of work is either situated within the limits of the municipal area or

though beyond the municipal limits is within a distance of eight

kilometers from the municipal limits, HRA would be paid at the

rate which would be admissible to the municipal area.

The rationale for the aforesaid decision is that HRA is

intended to compensate an employee with reference to the cost of

rental accommodation. The underlying principle is that the

economic factors which have a bearing on rental values within a

municipal area would also affect rental values up to a reasonable

distance from the municipal limits. That reasonable distance is

pegged at eight kilometers. Hence, though the place of work may

be situated outside a municipal area, so long as it falls within a

distance of eight kilometers from the municipal limits, the same

HRA would be paid. In the present case, for instance, the

institution is stated to be situated within a distance of eight

kilometers from the municipal limits of Varanasi which is now a

municipal corporation. The institution is however situated within

the geographical limits of the district Mirzapur. Mirzapur is a

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municipality. The economic factors which affect rental values

would be dependent on the geographical proximity of the

institution which lies within a radius of eight kilometers of

Varanasi as distinct from the geographical location of the

institution in the district of Mirzapur. This logic which underlies

the Government Order dated 15 December 1981 was in fact

noticed in the judgment of the learned Single Judge dated 20

November 2003 in Rajwanta Singh's case (supra). The learned

Single Judge, in our view, correctly observed that on account of a

shortage of accommodation the rent of houses within a municipal

area or within eight kilometers of municipal limits is likely to be

high but outside those limits, the same pressure of population may

not necessarily exist. In the judgment of the Division Bench dated

22 November 2007, it was observed that the intention of granting

HRA is to overcome the difficulty of persons who are staying in

the near vicinity of a municipal body. This is because the cost of

accommodation in such areas is generally high. Hence, the

Division Bench observed that it is immaterial whether the

institution is within the same district or otherwise. We are in

respectful agreement with the judgment of the Division Bench

dated 22 November 2007 in the case of DIOS, Mirzapur vs.

Rajwanta Singh (supra). The decision of the Division Bench

which affirms the view of the learned Single Judge was plainly in

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accordance with the terms of the Government Order dated 15

December 1981.

The subsequent Government Order dated 29 October 1984

did not make any alteration to the principle and in fact, clarified

that what was relevant was the place of work irrespective of

where the employee resides. The reference to the expression “ewy

uxj ikfydk” occurred in the Government Order dated 29 October

1984. The context of this reference was that there may be a local

body which is adjacent to a notified Nagar Palika. The

Government Order clarified that HRA would be admissible where

the local body is adjacent to a notified municipal area. However,

if the place of work is situated outside the limits of the local body,

the distance would be computed with reference to the “Original

Nagar Palika” (ewy uxj ikfydk) and not from the adjacent local

body. This was reiterated in a subsequent Government Order

dated 25 February 2000.

In the case of Rashtriya Inter College, Sherpur, a

Government Order was issued on 21 May 2002 following a

direction of this Court for the examination of the matter where it

was clarified that since the institution was within a distance of

eight kilometers from the municipal limits of Varansi, HRA would

be admissible. The Government Order was obviously a conscious

decision since it referred to the fact that the institution was

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situated in the district of Mirzapur. Since the distance from the

municipal limits of Varanasi was less than eight kilometers, HRA

was held to be admissible on that basis.

The Government Order dated 10 December 2002 which has

given rise to the present reference to the Full Bench has, in fact,

no bearing on the issue. The Government Order was in the context

of one particular institution namely Om Prakash Jwala Devi

Higher Secondary School, Shuklaganj. In that case, an earlier

decision by which HRA had been held to be admissible at the rate

prescribed for Kanpur Nagar was revoked on the ground that the

institution was situated in the district of Unnao.

In the circumstances, we are of the view that there is no

reason to doubt the correctness of the judgment of the Division

Bench in the case of DIOS, Mirzapur vs. Rajwanta Singh

(supra), decided on 22 November 2007. The Division Bench, in

fact, did construe the Government Order dated 10 December 2002

and the judgment was rendered after the Court had duly

considered the Government Order. Hence, we see no reason to

doubt the correctness of the interpretation which has been placed

in the judgment of the Division Bench noted above. We,

accordingly, answer the reference in the following terms:

Question (a)- The Government Order dated 10 December 2002

was in the context of the facts of a particular educational

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institution, namely, Om Prakash Jwala Devi Higher Secondary

School, Shuklaganj and does not lay down a binding principle of

interpretation in regard to the admissibility of HRA under the

terms of the Government Order dated 15 December 1981 and

consequential Government Orders which have been referred to in

the earlier part of the present judgment.

Question (b)- The issue as to whether the Government Order

dated 10 December 2002 is violative of Articles 14 and 16 will

not arise in this reference.

Question (c)- The judgment of the Division Bench in DIOS,

Mirzapur vs. Sri Rajwanta Singh (supra) dated 22 November

2007 is affirmed as laying down the correct principle of law. The

relevant principle for the purposes of computing and determining

the admissibility of HRA in terms of the relevant Government

Order dated 15 December 1981 and the Government Orders

which have been referred to in the present judgment, is the place

of work. If the place of work falls within a notified municipal area

or though beyond municipal limits is within a distance of eight

kilometers of the municipal limits, HRA would be payable at the

rate as applicable in respect of the municipal area. The district

within which the institution is situated would not be material so

long as the institution or place of work is within the municipal

limits or within a distance of eight kilometers beyond the

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municipal limits.

We also clarify that the interpretation which we have placed

is on the basis of Government Orders which form the subject

matter of these proceedings. Since the field falls within the

purview of Government Orders, any subsequent modification of

the position by the Government would be governed by the extant

Government Orders.

The reference is, accordingly, disposed of. The writ petition

shall now be listed before the learned Single Judge for disposal in

the light of the questions so answered.

Order Date :- 18.9.2015

RK (Dr D Y Chandrachud, CJ)

(P K S Baghel, J)

(Yashwant Varma, J)