Case Note & Summary
The dispute arose from orders of the Central Administrative Tribunal, Bhubaneswar, which had set aside penal rent levied by the State of Orissa on retired government servants who overstayed in government quarters. The respondents were government servants who had been allotted government houses in Bhubaneswar and Cuttack during their service. After retirement, their allotments were cancelled, but they did not vacate the premises. The State government charged penal rent of five times the standard rent prescribed under the Orissa Service Code. Aggrieved, the respondents challenged the levy before the Tribunal, which held that the Government had no power to assess damages by way of penalty in excess of one time standard rent. The State appealed by special leave to the Supreme Court. The State's counsel argued that the Tribunal's view was contrary to Rule 11 of the Orissa Service Code and the proceedings dated December 12, 1986, which contemplated penal rent at five times the standard rent for retired government servants who overstayed beyond four months. The respondents' counsel relied on the Appendix to the Rules and contended that the Government had no power to fix five times the standard rent for overstay. The Supreme Court examined Rule 104, Rule 11, Rule 2(ii), and the clauses of the Government proceedings. It observed that Rule 104 reserved to the Government the power to regulate allotment of houses subject to terms and conditions. Rule 11 dealt with allotment of houses to officers. Clause (6) empowered the Government to collect penal rent where a government servant did not vacate after cancellation of allotment. The procedure was laid down by the Government proceedings dated December 12, 1986. Clause (2) permitted a government servant to retain the quarter for one month only with prior written permission of the Director of Estates on advance payment of standard rent for genuine reasons. Clause (5) allowed a retired government servant to retain the quarter for a maximum of four months on advance payment of normal rent, with DCRG released only after vacation, and rent at five times standard rent charged for occupation beyond four months. The Court found that the Appendix relied upon by the respondents dealt with special circumstances such as fraudulent allotment or use of out-house without permission, and was of little assistance for general overstay. The Court held that the Tribunal was wholly illegal in concluding that the Government could not levy penal rents after the expiry of four months. However, in the appeal concerning a government quarter at Karanjia, the Court noted that the regulations related specifically to quarters in Cuttack and Bhubaneswar. The Government had denied itself any power to charge penal rentals to buildings in other places unless rules or general directions were issued. Therefore, the Tribunal was right only in respect of that case. For all other cases, the State's power to levy penal rent for overstay was upheld. The Court also stated that even where the High Court extended the period of retention, government servants were required to pay penal rent beyond the permitted period, and the High Court should consider only exceptional circumstances. The appeals were allowed to that extent without costs.
Headnote
A) Service Law - Government Accommodation - Overstay Penal Rent - Orissa Service Code, Rule 11, Rule 104, Rule 2(ii), Clause 2, Clause 5, Clause 6 - Respondent government servants were allotted government houses in Bhubaneswar and Cuttack and did not vacate after retirement despite cancellation of allotment; State levied penal rent of five times standard rent. The Central Administrative Tribunal held the State could not charge more than one time standard rent. The Supreme Court examined Rule 104, Rule 11, and the proceedings dated December 12, 1986, which in Clause 5 allow a retired government servant to retain the quarter for a maximum of four months on advance payment of normal rent and impose rent at five times standard rent for occupation beyond four months. Held that the Tribunal's conclusion was wholly illegal and the State is entitled to levy penal rent after the expiry of four months. B) Service Law - Government Accommodation - Territorial Applicability of Penal Rent Order - Orissa Service Code, Rule 11, Rule 104, Clause 5 - In an appeal relating to a government quarter at Karanjia, the regulations for penal rent were found to apply only to quarters in Cuttack and Bhubaneswar. The Government had denied itself power to charge penal rentals to buildings in other places unless rules or general directions were issued. Held that the Tribunal was right only in respect of that case; in all other cases the State's power to levy penal rent for overstay was upheld.
Issue of Consideration
Whether the Central Administrative Tribunal was correct in holding that the Government lacked power to levy penal rent exceeding one time standard rent for overstay in government quarters under the Orissa Service Code, and whether such power extended to quarters outside Cuttack and Bhubaneswar.
Final Decision
Appeals allowed to the extent indicated: the Central Administrative Tribunal's order is set aside except in respect of the appeal arising out of SLP(C) No.14606/94 concerning a government quarter at Karanjia; the State of Orissa is entitled to levy penal rent at five times the standard rent for overstay beyond four months in Cuttack and Bhubaneswar; no costs.
Law Points
- A retired government servant must vacate government quarter within four months
- overstay beyond four months attracts penal rent at five times standard rent under Orissa Service Code
- Government's power to levy penal rent extends to quarters in Cuttack and Bhubaneswar but not to other places without general directions
- Tribunal's restriction to one time standard rent is erroneous.
