1

INTHEHIGHCOURTOFJUDICATUREATBOMBAY,
NAGPURBENCH:NAGPUR

WritPetitionNo.5950of2010.

Petitioners

1)UnionofIndia,throughtheSecretary,
MinistryofDefence,D(FyII),Sena
Bhawan,NewDelhi
2)TheDGOF/Chairman,OrdnanceFactory
Board,10/A,ShaheedK.BoseRoad,
Kolkata
3)TheGeneralManager,Ordnance
Factory,Chanda
versus

Respondents:

1)M.M.Rangari,ChargemanGradeII,
OrdnanceFactory,r/oJatpura,WardNo.3,
Ghorkhiedki,Chandrapur
2)J.R.Chimurkar,DBW(HS),Ordnance

Factory,Chanda,r/oGautamNagar,Near
DrHakkeHouse,Bhadrawati,District
Chandrapur
3)B.K.Chirde,OrderlyinOrdnanceFactory,
Chanda,r/onearHanumanMandir,BalWadi,
KrishnaNagar,MulRoad,Chandrapur
4)A.R.Majumdar,SupervisorBinOrd
nanceFactory,Chanda,r/oJankiNiwas,
Opp.DrMilmileHospital,GuruNagar,
Bhadrawati,Dist.Chandrapur
5)N.G.Bele,DBW(HSI)inOrdnance
Factory,Chanda,r/oSindhiPanchayat
Bhawan,ZadeComplex,ramMandirRoad,
Chandrapur
6)R.B.Tiwari,LabourerBGradein
OrdnanceFactory,Ambajhari,r/oBenu
Nagar,DattaWadi,PlotNo.58,Nagpur
7)P.K.Khedkar,F.E.DriverGr.IIin

OrdnanceFactory,Chanda,r/onear
TendupattaGodown,SriramNagar,PlotNo.
199,Bhadrawati,Dist.Chandrapur
8)K.K.Tikale,DBW(HS)inOrdnance
Factory,Chandra,r/onearSantoshKirana,
ZadePlot,GhutkalaWard,Bhadrawati,
DistrictChandrapur
9)SmtMangalaN.Dhakate,TGTinOrd
nanceFactorySchool,OrdnanceFactory,
Chanda,r/oAnchaleshwarWard,
KannamwarChowk,Chandrapur
10)GangaramB.Gurle,SupervisorB
(NT)inOrdnanceFactory,Chanda,r/o
BabupethWardNo.3,Chandrapur
11)N.N.Meshram,Machinist(HS)in
OrdnanceFactory,Chanda,r/oManjusha
Layout,PradhanSociety,Bhadrawati,
DistrictChandrapur

12)S.P.Urkude,FEDriverAinOrdnance
Factory,Chandra,r/oc/oP.B.Urkude,Amre
KiranaStores,ZadePlot,Bhadrawati,
DistrictChandrapur
MrS.K.Mishra,AssistantSolicitorGeneralforpetitioners
MrB.Lahiri,Advocateforrespondents

Coram:B.P.Dharmadhikari&A.P.Bhangale,JJ
Dated:26thSeptember2011

Judgment(PerA.P.Bhangale,J)
1.

Rule.Heardforthwithbyconsentofparties.

2.

The short question that falls for consideration in this

Petition is whether the employees of Ordanance Factories the

PetitionerUnion of India, viz., the Ordanance factory Board are
entitledtoHouseRentAllowance(HRA)aftertheyhadconstructed
theirownrespectivehousesbyarrangingloansandaftershiftingto
theirownaccommodationonthegroundthattheyhavenotobtained

nonavailability Certificate in respect of official residential

accommodation.Theanswermustbegiveninthenegative forthe
followingreasons.

3.

ItisnotindisputethatEmployeeswhohaveappliedfor

allotmentofGovernmentaccommodation fromtheGeneralpoolof
residentialaccommodationandhavenotbeenallottedtheirentitled
typeofaccommodationduetononavailabilityoftheaccommodation
would be entitled to claim House Rent Allowance(HRA). The
submission made on behalf of the Petitioner is that the Central
government Employees who are offered official residential
accommodationbuttheyrefusedtooccupythesamewouldnotbe
entitledtoclaimHRA.

4.

Therespondentemployeesareoccupyingvariouspostsi.e

Machinist,TrainedGraduateTeacher,Supervisor,Orderly,LaborersB
Gradeetc.intheOrdanancefactoriescontrolledbyPetitionerUnion
ofIndia/OrdananceBoard. Therespondentshaveconstructedtheir

respectivehousesafterarrangingLoanandafterConstructionoftheir
houses shifted to their own accommodation. Thus they are not
occupying the government accommodation though available and
offered to them by the Administration. Respondents made a
grievancethataftershiftingtotheirownhousestheHRAwasstopped
and has not been paid to the respondents by the Petitioner .The
RespondentsaftertheirrequestforHRAwasrejectedbythePetitioner
on the ground that they had not obtained the Non availability
certificates as prerequisite condition for the payment of HRA,filed
independentOriginalApplicationsO.A.no2001/2010to2012/2010
raisinggrievanceofnonpaymentofHRA.TheoriginalApplications
filed by the Respondent no 2 to 13 were allowed by the Central
Administrative Tribunal by the impugned order .The Petitioner
challenged it before us mainly on the ground that the Office
Memorandum No. 120341/88Pol .III dated 27.06.2001 of the
GovernmentofIndia,Directorateofestates,NewDelhi,wouldgovern
thepresentcase.Therelevantportionofthesaidparagraphreadsas
follows:

It has been found that the General Pool Accommodation in

Certain types are presently surplus in five cities:Kolkata, Shimla,
Faridabad,GhaziabadandNagpur.Ithasthereforebeendecidedthat
theGovtServantswhoareeligibleforGeneralPoolAccommodation
butwhodonotsubmitapplicationsforsuchaccommodationorthose
who after submitting such applications refuse to accept the
accommodationoffered/allottedorthosewhoafterhavingaccepted
accommodation surrender it , may be paid HRA, if otherwise
admissible, without obtaining No Accommodation Certificate from
theDirectorateofEstatesoritsregionalofficesasthecasemaybein
respect of all types of accommodation at the under mentioned
stations:
1.Delhi4.Chandigarh

2Mumbai5Bangalore

3Chennai6.Indore
InanotherGovtofIndiaMinistryofFinanceOfficememorandomnoF.

12034/1/2007 Pol.III, dated 14/11/2007 there was review of

demand availability situation in cities having General Pool
accommodationtodeterminetheadmissibilityofHRAtotheCentral
Governmentemployees.InthecityofNagpursinceithasasurplus
stock of Central Government s General pool residential
accommodation (GPRA)administered by Directorate of Estates ,
employeeseligibleforthesame shallbeabletodrawHRAonlyif
they can produce a No Accommodation Certificate The policy is
applicabletotheCentralGovernmentEmployeesinNagpuramongst
other notified cities .Necessary directions in this regard as to the
currentpoliciesareissuedbythecentralgovernmenttotheheadsof
thedepartmentsandheadsofalltheofficesconcerned.
In other words therefore for Nagpur city obtaining No
AccommodationCertificate forgovernmentservantisnecessaryto
claimHRAasmaybepayableoradmissible.
ItiscontendedonbehalfofthePetitionerthattheTribunal(CAT)was
inerrortopasstheimpugnedorderwithoutconsideringthesettled
principleoflawand HRAandCCA generalrulesandguidelinesby

office memorandums issued from time to time. Central

administrative Tribunal making reference to its earlier decisions
observedthattherequirementofobtainingtheNoAccommodation
Certificate as a prerequisite is not shown to have been emanated
fromthebindinglaworstatutoryruleswhileallowingtheOriginal
applicationsfiledbytherespondentsherein.Ourattentionisbrought
totherulingbytheApexCourtinDirector,CentralPlantationcrops
ResearchInstitutevs..MPurushottamanandothers reportedin AIR
1994SC2541.ItisexplainedthusinPara4:
It must be remembered in this connection that the
Government or the organisation of the kind of the
appellant spends huge public funds for constructing
quarters fortheiremployeesbothfortheconvenience of
the management as well as of the employees. The
investmentthusmadeinconstructingandmaintainingthe
quarterswillbeawasteiftheyaretolieunoccupied.The
HRA is not a matter of right. It is in lieu of the
accommodationnotmadeavailabletotheemployees.This

10

being the case, it follows that whenever the

accommodation is offered the employees have either to
acceptitortoforfeittheHRA,Themanagementcannotbe
saddled with double liability, viz., to construct and
maintainthequartersaswellastopaytheHRA.Thisisthe
rationale of the provisions of paragraph 4 of the said
Government Office Memorandum. It is for this reason
againthatparagraph4[b](I)providesthattheHRAshall
not be admissible to those who occupy accommodation
provided for them as well as to those to whom
accommodationhasbeenofferedbutwhohaverefusedit.

Inpara9,HonourableSupremeCourtfurther
observed:
9. The HRA would be covered by the definition of
Compensatory Allowance. It is compensation in lieu of
accommodations. This definition itself further makes it
clearthatcompensatoryallowanceisnottobeusedasa

11

source of profit. It is given only to compensate for the

amenities which are not available or provided to the
employee. The moment, therefore, the amenities are
prodicedoroffered,theemployeeshouldceasetobe in
receipt of the compensation which is given for want of
it....

5.

ThusitappearsthatHRAisastatutoryright,andcanbe

subjected to restrictions which are reasonable. Furthermore, it

appearsclearthattheemployeemusthavearighttogetHouseRent
Allowance (HRA ) as per existing Rules or Decisions of The
GovernmentofIndiawhichhavebindingforceoracontract.Itisnot
a matter of right, it is an compensatory allowance given by an
employertoanemployeetowardstherentalaccommodationexpenses
of the employee when Government isunable toprovide residential
accommodation suitable for the residence of its employee. The
employee if own his property he may not be entitled to claim the
HRA,becauseHRAispaidtoCentralGovt.employeestocompensate
thempartlyfortheespeciallyhigherrentswhichtheyhavetopayfor

12

hiredorrentedresidentialaccommodationinbigcities,butnotasa
sourceofprofit..HRAispaidatdifferentslabratesindifferentcities
andforthispurposecitieshavebeenclassifiedwithreferencetotheir
growthandpopulation.ForthedrawlofHRA,aGovt.servanthasto
incur some expenditure on rent/contribute towards rent or
pay/contributetowardshouseorpropertytaxandfurnishacertificate
tothateffectasperAnnexureIIinPara.8ofSwamysCompilationof
FR & SR, PartV, HRA and CCA. In our opinion the Central
governmentregulationswhichareinforceunlesstheyaredeclaredas
arbitrary or illegal would govern the Central government
Employees.InouropinionunlessabindinglaworspecificRegulation
governing ispointedout forpaymentofHRAtotherespondents
employeesofOrdananceFactoriesthePetitionerUnionofIndia,(viz.,
theOrdanancefactoryBoard) therespondentsarenot entitledto
claimHouseRentAllowance(HRA) asamatterofrightafterthey
hadconstructedtheirownrespectivehousesbyarrangingloansand
aftershiftingtotheirownaccommodationwithoutobtainingtheNo
AccommodationCertificate(NAC)fromtheEstateofficerconcerned.

13

PrimafacieinouropiniontheprerequisiteofNACaslaiddownin
theofficememorandumasoperativeincityofNagpurwhenCentral
government accommodation is available in surplus and Central
governmentisrequiredtospendhugeamountstowardsConstruction
andmaintenance OfGovernmentbuildingsisneitherarbitrarynor
malafide .The policy decision in this regard must be left to the
Governments sounddiscretion. TheCourtoughtnot tosubstitute
the judgment of the executive by its own opinion merely because
anotherviewmaybepossible.Theinterference inwritjurisdiction
may be justified only if the administrative authority concerned
transgresseditsconstitutionallimitsorstatutorypower.

6.

Fortheabovereasonsandinthefactsandcircumstances

disclosed before us, the impugned Order is unsustainable and

therefore quashed and set aside as Original applications were
wronglyallowed bytheimpugnedOrder.Wedirectdismissalofthe
OriginalApplicationsintermsofPrayer(1)intheWritpetition.The
Petitionisallowedaccordingly.Ruleisthusmadeabsolute. Inthe

14

facts and circumstances of the case, there shall be no order as to

costs.

A.P.BHANGALE,J

joshi

B.P.DHARMADHIKARI,J