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PETITIONER: NATIONAL BUILDINGS CONSTRUCTION CORPORATION

       Vs.

RESPONDENT: S. RAGHUNATHAN & ORS., S. P. SINGH & ORS.

DATE OF JUDGMENT:       28/08/1998

BENCH: S.C. AGRAWAL, S. SAGHIR AHMAD, M. SRINIVASAN

ACT:

HEADNOTE:

JUDGMENT:                             WITH                CIVIL APPEAL NO. 4484 OF 1998          (Arising out of SLP(C) No. 20753 of 1997)                       J U D G M E N T S. SAGHIR AHMAD, J.      Leave granted. 2.   S.L.P.  (C)  10372  of  1997  has  been  filed  by  the appellant (hereinafter  referred to  as ’NBCC’)  against the judgment and  order dated 13.9.96 of the Delhi High Court by which C.W.P.  No. 1464  of 1992  in which  the  respondents’ prayer for directions to NBCC to pay the Foreign Allowance @ 125% of  the basic  pay, as  revised by  a  the  Fourth  Pay Commission, w.e.f. 1.1.1986 while they were still in foreign service in  a  Foreign  Country,  was  allowed,  payment  of Deputation (Duty)  Allowance was  also  allowed  by  another order dated  25.7.97 passed  in CM 8287/96 filed in the same Civil writ.  The other  S.L.P. namely,  S.L.P.  (Civil)  No. 20753 of  1997 arises out of C.W.P. No. 472 of 1994 filed by the respondents in that case for the same reliefs. this writ petition has  also been  allowed by  the Delhi High court by judgment and  order  dated  25.7.97  in  which  the  earlier judgments dated  13.9.96 and 25.7.97 have been followed. The questions involved in both the appeals are the same with the only difference  that in  the first  petition there  are  11 respondents while in the 2nd there are 5, out of whom one is the window of a deceased respondent. 3.   NBCC is  a Government  of India Enterprises (Government Company) engaged  in the  business of  construction work  in India and  abroad. In  addition to  its own  permanent  work force, it  obtained the  services of  personnel  drawn  from other Government Departments, including Central Public Works Department, from  where  the  respondents  were  brought  on deputation for  one of  the overseas projects being executed by  the  NBCC  in  Iraq.  Respondents  joined  the  NBCC  on deputation on  the basis  of certain  office orders  one  of which is  the office  order dated  21.11.1993 which reads as under:      " The  Director General  of  works,      CPWD, has been pleased to place the      services of the following Executive

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    Engineers    (Civil)     of    this      department  at   the  disposal   of      national   Buildings   Construction      Corporation,    New    Delhi    for      appointments as  Resident  Engineer      (Civil)  for   posting   on   their      projects in  Iraq for  a period  of      two years  in  the  first  instance      with  immediate  effect  in  public      interest   as    per   terms    and      conditions of foreign service shown      in the Annexure:      S/Shri      1.   V. Nainani,  Asian Games,  New           Delhi.      2.   A.K. Mittal,  EE(C), O/O  C.E.           (CDO) New Delhi      3.   Pawan  Kumar,  EE(C),  Bikaner           Cen. Divn., Bikaner      4.   KVLN  Rao,   EE(C),   Fly-over           Project, New Delhi.      5.   G.  C.   Khattar  EE(C),   SSW           (Constn.   Zone)   CPWD,   New           Delhi.      6.   SK Mittal,  EO  To  CE  (NDZ),           CPWD, New Delhi      7.   S. Ramamurty,  EE(C), Fly-over           Project, New Delhi.      8.   K.   John    Surgeon,   EE(C),           Hyderabad Cen. Division, CPWD,           Hyderabad      2.   It is  certified that  but for      their   deputation    to   National      building Construction  Corporation,      New  Delhi,  these  officers  would      have  continued   to  officiate  as      Executive Engineer (Civil) in CPWD.      3.   These   Executive    Engineers      (Civil)  may   please  be  relieved      immediately    by    making    dual      arrangements. Their substitutes are      being posted separately.      4. This issues with the approval of      Ministry of  Works &  Housing  vide      their U.O.  No. 1445-SF/FW/82 dated      22.12.82.                   Sd/-             Mrs. Neena Garg          Dy. Director of Admn." 4.   The  terms  and  conditions  of  foreign  service  were contained in  a separate  document annexed  to  this  office order which provided as under:      1.   The  officer   will  have  the      option either to draw his grade pay      in the  Central P.W.D. from time to      time  plus   a  deputation   (duty)      allowance or  the pay  in the scale      of pay  of the  new post  as may be      fixed under  normal  rules  as  per      Ministry  of   Finance  (Deptt.  of      Expenditure)  No.  10/24/E11(6)/60,      dated 4.5.61,  as amended  from the      time to time.      2.   Dearness  allowance   will  be      regulated at  the rates  admissible

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    to Central Government Servants.      3.   House    Rent     and     City      Compensatory  Allowance   will   be      regulated at the rate admissible to      the  employees   of   the   foreign      employer.      4.   Liability for  leave salary in      respect of disability leave granted      on account  of disability  incurred      in or  through foreign service even      though  such  disability  manifests      itself  after  the  termination  of      foreign service,  will be  borne by      the foreign service employer.      5.   He  would   be   entitled   to      travelling and  daily allowance for      journeys  in  connection  with  his      duties  on   foreign  services   as      admissible to  him under  the Rules      framed by the Foreign Employer.      6.   The    contribution    towards      leaves salary  and pension  for the      period  the   officer  remains   on      foreign service  will  be  paid  by      foreign employer  according to  the      rates in force from time to time in      accordance with  the orders  issued      by the President under F.R. 116.      7. He  will remain subject to leave      rules applicable  to the service of      which he is a member.      8.   He will  be  eligible  to  the      Medical    Attendance    and    the      treatment  not   inferior  to  that      admissible to  an  officer  of  the      corresponding   state   under   the      Central Government Rules.      9.   Joining time, joining time pay      and   travelling    allowance    on      transfer to the foreign service and      reversion   therefrom    shall   be      regulated  under  rules  framed  by      foreign Employer  and paid  for  by      him.      10.  He will  be entitled  to leave      travel concessions as admissible to      Central Government Employees of his      status  and   expenditure  on  this      amount will  borne by  the  foreign      employer.      11.  The   whole   expenditure   in      respect   of    any    compensatory      allowance for  the period  of leave      in or at the end of foreign service      shall  be   borne  by  the  foreign      employer.      12.  He will not be allowed to join      pension  scheme  which  may  be  in      force in the Foreign Service.      13.  The   foreign   service   will      commence   from    the   date    he      relinquishes  the  post  under  the      Central P.W.D.  and end  on the day      he  resumes  duty  in  the  Central      P.W.D.

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    14.  The provisions  of  Government      accommodation, if  any, occupied by      him at  the time  of proceeding  on      deputation would  be subject to the      conditions   laid   down   in   the      Ministry of W.H. & S.O.M. No. 12016      (1)/68-PII, dated  13.12.68, as may      be amended from time to time.      15.  He   will    be   subject   to      C.G.F.I.S  Recovery   contributions      towards C.G.F.I.S.  May be effected      from  the   deputationist  and  the      amount  remitted   to  the   pay  &      Accounts officer concerned. 5.   The officer  Orders were  also issued in similar terms. Each of  the respondents  executed separate  and  individual contract/employment agreement  with the NBCC and worked with the NBCC  for different  periods from  1982-83  to  1987-88. Under the  service agreement,  the respondents were given an option either  to draw  their salary  in the  scale  of  pay admissible to  the employees  of Central P.W.D. from time to time together  with Deputation (Duty) Allowance or salary in the scale  of pay for the new posts fixed under normal rules in terms  of Ministry of Finance (Department of Expenditure) No. 10/24/EII(6)  /60 dated 4.5.1961 as amended from time to time. 6.   The respondents  opted for the Central P.W.D. scale and wanted their  salary to  be paid  to them  in that  scale as revised from time to time. 7.   In order  to give  effect to the recommendations of the Fourth Pay  Commission, Central  Civil Service (Revised Pay) Rules, 1986  were made  by the  Government  of  India  which provided, inter alia, that revised pay would be payable with effect from 1st January, 1986. 8.   The pay  of the respondents in their parent Department, namely, C.P.W.D.,  was also  revised and  fixed in  the  new scales with  effect from  01.01.86  by  office  order  dated 02.01.91 which  related to  respondent No. 5. Similar orders were issued in respect of all the respondents. It is pointed out that  although arrears  were paid to other employees, it was not  paid to  the respondents  or the employees who were posted abroad  despite  their  representations.  Ultimately, NBCC  informed   the  respondents   that  in   the  case  of deputationists who were posted on overseas projects and were drawing the pay of their parent Department, their cases were under consideration  and  they  would  be  informed  of  the decision as and when the same was finally taken. 9.   The recommendations  of the  Fourth  Pay  Commission  , allegedly, had  given rise  to some unrest amongst employees of various  public sector  undertakings  who  filed  a  Writ Petition directly  in this  Court.  The  Writ  Petition  was disposed of  on 14th  March, 1986  with the direction to the Government of  India to  appoint a  High Power  Committee to look into  their grievances. Consequently, the Government of India appointed  a High  Power Committee  on 7th April, 1986 under the Chairmanship of Mr. Justice R.B. Mishra, a retired judge of this Court. 10.  The High  Power Committee  submitted its  report to the Government on  24.11.88 and  by Order  dated 03.05.90,  this Court directed that the recommendations of the Committee may be implemented. 11.  In order  to implement the High Power Committee report, NBCC issued  an order  dated 15th October, 1990 for revision of wages  of all  its employees  posted on overseas projects including those who had joined on deputation. This order was

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challenged by  the respondents  directly in  this  court  in Civil Writ Petition No. 1091 of 1991 but it was dismissed as withdrawn on  18.12.91 with  liberty to  approach  the  High Court. The  respondents then  filed the Writ Petition in the High Court claiming the following reliefs:-      (i) To issue a writ of mandamus, or      a writ,  order or  direction in the      nature of  mandamus  directing  the      respondent to  make payments due to      the petitioners  from 1.1.1986 till      their repatriation  to India on the      basis  of  the  CCS  (Revised  Pay)      Rules,  1986   announced   by   the      Government, and  in accordance with      the terms originally agreed upon at      the time of deputation;      ii) To  pass a writ of mandamus, or      a writ,  order or  direction in the      nature of  mandamus  directing  the      respondent Corporation  to pay duty      allowance and DA from the due dates      announced  by  the  Government  for      admissibility  of   DA  from   1982      onwards;      iii) To  issue a  writ of mandamus,      or a  writ, order  or direction  in      the nature  of  mandamus  directing      respondent to  effect proportionate      increases  in   HRA,   CCA,   other      Special  allowances  (like  foreign      allowance, area  allowance, medical      allowance,           non-practising      allowance, food  subsidy etc.)  and      terminal    benefits     of     the      Petitioners also, as in the case of      deputationists who  are  posted  in      India;      iv) To issue a writ of mandamus, or      a writ,  order or  direction in the      nature   of    mandamus   directing      respondent to  make the  payment of      arrears of pay as admissible to the      petitioners;      v) To  issue a writ of mandamus, or      a writ,  order or  direction in the      nature   of    mandamus   directing      respondent to pay interest @ 18% on      the amounts  due to the petitioners      from   1.1.1986   for   the   delay      committed by the respondents;      vi) To  issue a writ of certiorari,      or a  writ, order  or direction  in      the nature  of certiorari  quashing      the order  dated 15.10.1990  passed      by respondent corporation.      vii) To grant cost of the petition;      and      viii) To  pass such  other order or      orders, as  may be  deemed fit  and      proper in  the facts of the present      case. 12.  In this  writ petition,  a statement  was given  by the counsel for  NBCC on  30th, October,  1992 that the claim of the respondents  was not  disputed but the payment could not be made  to them  on account  of the  embargo put  up by the

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United  Nations   and  that  the  Government  of  India  had approached the  United Nations  Authorities for  lifting the embargo. On 15th February, 1993, another statement was given by the  counsel for NBCC before the High Court that NBCC had applied for  loan to  make payment  to the employees who had worked in Iraq and who were entitled to be paid on the basis of the  Fourth Pay Commission Report. Consequently, the time was prayed for making the payment. 13.  On the basis of these two statements of the counsel for NBCC, the  Writ Petition  was disposed of on 21st July, 1993 by issuing  a direction  to NBCC  to  make  payment  to  the respondents within  eight  weeks.  NBCC,  however,  filed  a review application  before the High Court on the ground that the  statements  of  the  counsel  made  before  it  do  not correctly reflect  their stand  bu the  High Court dismissed the review application on 12th October, 1993. It was against this order  that NBCC  filed Special  Leave Petitions before this Court.  Leave was granted and the two Civil Appeals No. 7113/95 and  7114/95 were  disposed of  by this Court on 4th August, 1995.  The appeals  were allowed and the order dated 21st July,  1992, passed  by the  High Court, was set aside. The Writ  Petitions were  directed to  be restored for being disposed of on merits. 14.  The High Court by the impugned judgment dated September 13, 1996  and 25.7.97  disposed of both the petitions and it is its  direction to NBCC to pay Foreign Allowance @ 125% on the revised basic pay with effect from 01.01.86 which is the only contentious issue between the parties in these appeals. 15.  Shri   Altaf  Ahmad,   Additional  Solicitor   General, appearing on  behalf of NBCC has contended that the claim of the respondents  could not  have been legally allowed by the High Court  merely on  the basis of "Legitimate Expectation" particularly when  it has been found, as a fact, by the High Court itself  that Foreign  Allowance was not covered by the terms of  the contract  which contemplated only a Deputation (Duty) Allowance. It is also contended that NBCC had taken a policy decision  that Foreign Allowance will be payable only on the  basis of  pre-revised basic pay and not on the basis of basic  pay as  revised in terms of the recommendations of the Fourth  Pay Commission  and, therefore,  the doctrine of "Legitimate Expectation"  stood excluded. Moreover, the High Power  Committee   had  not,   it  is   further   contended, recommended any  increase in  the Foreign Allowance and had, on the  contrary, followed  the principle  contained  in  FR 51(2)  in   respect  of   perquisites  and,  therefore,  the residuary perks  as also  their  quantum  was  left  to  the discretion of the Corporation and it was for the Corporation to allow  or not  to allow any of the residuary perks. It is also  pointed   out  that   the  doctrine   of   "Legitimate Expectation" was  not pleaded  in the  Writ Petition  and no foundation was  laid for applying this doctrine to the facts of the  present case  and, therefore, it was not open to the High Court  to entertain this plea at the stage of arguments and to decide the question on that basis. 16.  Learned counsel for the respondents contended that NBCC was paying  Foreign Allowance  to the  respondents @ 125% of their basic  pay and  since after the recommendations of the Fourth Pay  Commission, NBCC  itself had decided to increase certain allowances on the basis of revised pay, it could not deny such increase in respect of Foreign Allowance. Freezing of Foreign Allowances on pre-revised basic pay was arbitrary and consequently  the High Court was justified in holding it to be  illegal. It  is pointed out that when the respondents were sent  to Iraq,  the Foreign Allowance, payable to them, was linked  to their  basic pay  and, therefore,  it was not

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open to  NBCC to  freeze the  Foreign Allowance  on the pre- revised basic  pay even  after  the  implementation  of  the recommendations of  the Fourth  Pay Commission  by which all other  allowances   stood  payable,  according  to  the  own decision of NBCC,   on the basis of revised basic pay. There was,  therefore,   no  rationale  or  reasonable  basis  for rejecting any such increase in respect of Foreign Allowance. 17.  Form the  facts set  out above and those pleaded before the High  Court, it  will be seen that Foreign Allowance was not part  of the agreement between the respondents and NBCC. The respondents  were inducted  into NBCC on deputation and, therefore, NBCC had agreed to pay them the Deputation (Duty) Allowance. As  pointed out  earlier,  with  regard  to  this allowance or, for that matter, any other allowance, there is no dispute between the parties involved in this petition and the only  question with  which  we  are  concerned  in  this petition is payment of Foreign Allowance payable at the rate of 125%  of the  revised basic  pay. The further question is whether the  High Court  merely on the basis of the doctrine of "Legitimate  Expectation" was  justified in  allowing the claim of the respondents.? 18.  The  doctrine   of  "Legitimate  Expectation"  has  its genesis in  the field  of administrative law. The Government and its  departments, in  administering the  affairs of  the country are expected to honour their statements of policy or intention  and   treat  the   citizens  with  full  personal consideration without  any iota  of abuse of discretion. The policy statements  cannot be disregarded unfairly or applied selectively. Unfairness  in the  form of unreasonableness is making to  violation of  natural justice.  It  was  in  this context that  the doctrine  of "Legitimate  Expectation" was evolved which  has today  became a  source of substantive as well as  procedural rights.  But claims based on "Legitimate Expectation"  have   been  held   to  require   reliance  on representations and  resulting detriment  to the claimant in the same way as claims based on promissory estoppel. 19.  Lord Scarman  in R.  v. Inland Revenue Commissioners ex p.  Preston  (1985)  AC  835  laid  down  emphatically  that unfairness in  the purported exercise of power can amount to an  abuse   or  excess   of  power.  Thus  the  doctrine  of "Legitimate Expectation"  has been  developed, both  in  the context of  reasonableness and  in the  context  of  natural justice. 20.  Lord Diplock  in Council  of Civil  Service  Unions  v. Minister for  the Civil Service (1985) AC 374 laid down that doctrine of  "legitimate Expectation"  can be invoked if the decision which  is challenged  in the  Court has some person aggrieved either  (a) by  altering rights  or obligations of that person  which are  enforceable by  or  against  him  in private law;  or (b)  by depriving  him of  some benefit  or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to  be permitted  to continue  to do  until there has been  communicated   to  him   some  rational   grounds  for withdrawing it  on which he has been given an opportunity to comment;  or   (ii)  he  had  received  assurance  from  the decision-maker that  it will not be withdrawn without giving him first an opportunity of advancing reasons for contending that it should not be withdrawn. (Emphasis supplied). 21.  The   Indian  scenario  in  the  field  of  "Legitimate Expectation" is  not different.  In  fact,  this  Court,  in several of  its decisions,  has explained the doctrine in no uncertain terms. 22.  In Navjyoti  Coop. Group Housing Society and others vs. Union of India and others, (1992) 4 SCC 477, the decision of

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the House  of Lords  in Council  of Civil  service Unions v. Minister for the Civil Service (supra) was followed and that decision was summarised in the following words:-      " It  has been  held  in  the  said      decision that  an aggrieved  person      was entitled  to judicial review if      he could  show that  a decision  of      the public  authority affected  him      of some  benefit or advantage which      in the  past he  had been permitted      to enjoy  and which he legitimately      expected   to   be   permitted   to      continue to  enjoy either  until he      was given  reasons  for  withdrawal      and the  opportunity to  comment on      such reasons." 23.  This Court further observed as under:-      "  The   existence  of  ’legitimate      expectation’ may  have a  number of      different consequences  and one  of      such  consequences   is  that   the      authority  ought   not  to  act  to      defeat the "legitimate expectation’      without some  overriding reason  of      public policy  to justify its doing      so.  In   a  case   of  ’legitimate      expectation’   if   the   authority      proposes  to   defeat  a   person’s      ’legitimate expectation’  it should      afford him  an opportunity  to make      representations       in        the      matter.............................      ...............      It may  be indicated  here that the      doctrine       of       ’legitimate      expectation’ imposes  in essence  a      duty on  public  authority  to  act      fairly by taking into consideration      all relevant  factors  relating  to      such ’legitimate  expectation’  the      reasonable  opportunities  to  make      representation   by   the   parties      likely to be affected by any change      of  consistent  past  policy,  come      in." 24.  In  Food   Corporation  of   India  vs.   M/s  Kamdhenu Cattlefield Industries, (1993) 1 SCC 71, it was held that in all state  actions, the  State has  to conform to Article 14 of  the   Constitution  of   which  non-arbitrariness  is  a significant facet.  It was further observed that there is no unfettered discretion  in public  law and a public authority possesses powers  only to  use them  for public good. It was further observed as under:-      " The mere reasonable or legitimate      expectation of a citizen, in such a      situation, may  not by  itself be a      distinct  enforceable   right,  but      failure to  consider and  give  due      weight  to   it  may   render   the      decision arbitrary, and this is how      the     requirement      of     due      consideration   of   a   legitimate      expectation  forms   part  of   the      principle of  non-arbitrariness,  a      necessary concomitant  of the  rule

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    of    law.     Every     legitimate      expectation is  a  relevant  factor      requiring due  consideration  in  a      fair    decision-making    process.      Whether  the   expectation  of  the      claimant    is     reasonable    or      legitimate  in  the  context  is  a      question  of  fact  in  each  case.      Whenever the question arises, it is      to be  determined not  according to      the claimant’s  perception  but  in      larger  public   interest   wherein      other more important considerations      may outweigh  what would  otherwise      have    been     the     legitimate      expectation of the claimant. A bona      fide   decision   of   the   public      authority reached  in  this  manner      would satisfy  the  requirement  of      non-arbitrariness   and   withstand      judicial scrutiny.  The doctrine of      legitimate     expectation     gets      assimilated in  the rule of law and      operates in  our  legal  system  in      this  manner   to   this   extent."      (Emphasis supplied) 25.  In Union  of India and others vs. Hindustan Development Corporation and  others, (1993)  3 SCC  499, the  meaning of word "Legitimate  Expectation" was again considered. Quoting from the  case of  Attorney General  for New  South Wales v. Quin, (1990) 64 Aust LJR 327, the following lines:-      " To  strike down  the exercise  of      administrative power  solely on the      ground     of      avoiding     the      disappointment  of  the  legitimate      expectations of an individual would      be to  set the  Courts adrift  on a      featureless  sea   of   pragmatism.      Moreover,   the    notion   of    a      legitimate   expectation   (falling      short of  a  legal  right)  is  too      nebulous  to   form  a   basis  for      invalidating  the   exercise  of  a      power when  its exercise  otherwise      accords with law."      the Court observed as under:-      "If   a    denial   of   legitimate      expectation in a given case amounts      to denial of right guaranteed or is      arbitrary,  discriminatory,  unfair      or biased,  gross abuse of power or      violation of  principles of natural      justice, the same can be questioned      on    the     well-known    grounds      attracting Article  14 but  a claim      based    on     mere     legitimate      expectation without  anything  more      cannot ipso  factor give a right to      invoke these  principles. It can be      one of  the grounds to consider but      the court  must lift  the veil  and      see   whether   the   decision   is      violative   of   these   principles      warranting interference. It depends      very much  on  the  facts  and  the

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    recognised  general  principles  of      administrative  law  applicable  to      such  facts   and  the  concept  of      legitimate expectation which is the      latest recruit  to a  long list  of      concepts fashioned  by  the  courts      for the  review  of  administrative      action, must  be restricted  to the      general      legal      limitations      applicable and  binding the  manner      of   the    future   exercise    of      administrative    power     in    a      particular case.  It  follows  that      the    concept     of    legitimate      expectation is  "not the  key which      unlocks  the  treasury  of  natural      justice and  it ought not to unlock      the gates which shuts the court out      of   review    on   the    merits",      particularly when  the element   of      speculation  and   uncertainty   is      inherent is that very concept." 26.  This doctrine was reiterated in M.P. Oil Extraction and another vs.  State of  M.P. and others, (1997) 7 SCC 592, in which it  was also  laid down  that though  the doctrine  of "Legitimate  Expectation"   is  essentially   procedural  in character and assures fair play in administrative action, it may, in  a given  situation, be  enforced as  a  substantive right. 27.  Applying the  principles discussed above in the instant case, it  will be seen that Foreign Allowance was not one of the  allowances  which  was  promised  to  be  paid  to  the respondents at the time of their induction in the service of NBCC nor  had NBCC,  at any time, given any assurance to any of the  respondents that  this allowance would be payable to them at  the revised  rate. The agreement or the contract of service, executed between the respondents and the NBCC, does not stipulate payment of Foreign Allowance to them. Even the High Court  has observed  that Foreign Allowance was not one of the  allowances mentioned in the terms of deputation. The exact observations  of the  High Court need to be reproduced here:      " No  doubt, foreign  allowance  is      not one of the allowances mentioned      in terms of deputation but the same      is akin  to the  deputation  (duty)      allowance referred to in clause (1)      of the  terms of  deputation.  When      the  same  was  made  intrinsically      linked with  the basic  pay and  in      the    past    there    has    been      correspondingly increase  on  every      revision  of   pay  on   the   same      percentage basis, there i no reason      forthcoming that  why the  same now      stands frozen  on  the  pre-revised      basic pay and why it is not allowed      at  the   same  percentage  on  the      revised basic  pay. In  the absence      of any justifiable reasons this act      of the  respondents will have to be      held to  be illegal  and arbitrary.      Petitioners  legitimately  expected      that on  revision of the basic pay,      the foreign  allowance  would  also

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    correspondingly stand  enhanced  on      percentage      basis.      Foreign      allowance, which  is  akin  to  and      deputation (duty)  allowance has to      be  regulated   as  per  the  rates      specified for  the purpose, namely,      on percentage  basis of  the  basic      pay and  in case  there has  been a      revision of  basic  pay,  it  would      automatically  stand  revised.  The      deputation (duty) allowance is also      an allowance  payable on percentage      basis and on revision of pay, it is      payable on  percentage basis on the      revised basic pay." 28.  At another place, the High Court has observed as under:      " Petitioners  were to  be governed      by   the   terms   and   conditions      contained in  order of  deputation,      copy of  which was also sent to the      respondent. The respondent accepted      the   petitioners    services    on      deputation   on   the   terms   and      conditions, as attached to the said      order. Since the respondent has not      produced  on   record  the  alleged      contract or  its copy  and  nothing      was alleged  during the  course  of      arguments on  the alleged contract,      we have  no hesitation  in  holding      that the  office order  similar  to      annexure P-I, issued in the case of      each  petitioner  containing  terms      and conditions  of deputation would      govern their  case and in so far as      the foreign allowance is concerned,      the same  would be  payable to  the      petitioners on  the same percentage      on the  revised basic  pay at which      it was  a payable prior to revision      on the  pre-revised basic  pay  and      the action  of  the  respondent  as      regards    this    allowances    is      concerned, is bad in as much as the      petitioners  legitimately  expected      that  this  allowance  would  stand      revised and become payable to them,      as in the past, on percentage basis      of the  revised pay.,  In case  the      respondents wanted  to  effect  any      change  in   the   same,   it   was      reasonably   expected    that   the      respondents ought  to have informed      the petitioners  and  in  case  the      fresh proposed terms would not have      been acceptable to the petitioners,      the petitioners  might have taken a      decision    to    get    themselves      repatriated or got terminated their      deputation." 29.  The above  extracts  indicate  the  reasoning  and  the approach of the High Court. They indicate the precise ground on which  the claim  of the  respondents was allowed. We are constrained to  observe that  the approach of the High Court was  wholly   erroneous  and   the  reasoning   is   equally

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fallacious. 30.  As pointed  out by  this Court  in Food  Corporation of India vs.  Kamdhenu Cattlefield  Industries (1993) 1 SCC 71, which has  already been  referred  to  above,  the  question whether the  expectation and  the  claim  is  reasonable  or legitimate, is  a question of fact in each case. It was also observed  that  this  question  had  to  be  determined  not according to  the claimants’ perception but in larger public interest. 31.  Incidentally, in this case, the question of "Legitimate Expectation"  was   not  raised   in  the  petition  and  no foundation was  laid in  the pleadings for such a plea being advanced before the Court. Strangely, the High Court allowed this plea at the stage of argument and allowed the petitions only on the ground of "Legitimate Expectation" without least realising that  there was  hardly at legitimacy in the claim of the  respondents. In  the absence  of  pleading  and  the affidavit of  the respondents  in support thereof, the whole exercise done  by the  High court cannot but be termed to be speculative. 32.  That  apart,   the   High   Court   suffered   from   a misconception that  whenever there was a revision of the pay scales, Foreign  Allowance as also the other allowances were correspondingly raised  on the  basis of  the revised  basic salary. Respondents  had served  on deputation with the NBCC in their  foreign projects  at Iraq  from 1982-83 to 1986-87 and during  this period  the pay  structure was revised only once to  implement the  recommendations of  the  Fourth  Pay Commission.  Was   there  any  other  revision  in  the  pay structure of  the respondents  or any  of them  during their tenure with  the NBCC; if so, when ? To whom was the benefit of such revision available? who are those other officers and employees serving  on deputation  in a  foreign country  who were benefitted  by any revision in the pay structure during the period  1982-83 to  1986-87? These are the few questions which legitimately  arise, and  unless there  is material on record to  answer these  questions, the  observations of the High Court  that whenever  there was  a revision  in the pay scales, Foreign Allowance was correspondingly increased and, therefore, the respondents had come to entertain "Legitimate Expectation"  ,   are  wholly   speculative,  besides  being erroneous. 33.  Foreign Allowance could also not be treated as a salary component or  akin to  Deputation (Duty) Allowance as it was in  the   nature  of  a  residuary  perk  regulated  by  the provisions of F.R. 51(2). 34.  Fundamental Rule 51 provides as under:-      " F.R.  51. (1)  When a  Government      servant is,  with proper  sanction,      temporarily deputed for duty out of      India either in connection with the      post held  by him  in India  or  in      connection with any special duty on      which he  may temporarily be place,      he may  be allowed by the President      to  draw   during  the   period  of      deputation the  same pay  which  he      would have drawn had he remained on      duty in India:      Provided that a Government servant,      who is  placed on  deputation while      already on  leave out  of India  on      average pay, may be required by the      President  to  continue  to  be  on      leave, in  which case  he shall  be

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    given  during   that   period,   in      addition to  his leave  salary,  an      honorarium of  one-sixth of the pay      which he  would have  drawn had  he      remained on duty in India; the cost      of passages from and to India shall      be borne by him.      (2)   A   Government   servant   on      deputation may  also be  granted  a      compensatory allowance in a foreign      country  of   such  amount  as  the      president may think fit.      (3) The foreign exchange equivalent      of   the    pay,   honorarium    or      compensatory  allowance  admissible      under  sub-rule  (1)  Sub-rule  (2)      shall be calculated at such rate of      exchange as  the President  may  be      order prescribe." 35.  Sub-rule  (2)   of  Rule  51,  quoted  above,  gives  a discretion to  the  Government  to  pay  to  the  Government servant,  on   deputation  in   a  foreign   country,   such compensatory  allowance   as  may   be  though  fit  by  the president. The payment of compensatory allowance as also the quantum of such allowance is left to the absolute discretion of the  President. It  was for  this reason perhaps that the High Power  Committee did  not make  any  recommendation  in respect of  Foreign Allowance  and left it to the discretion of NBCC to decide whether it would be payable or not at all, and if  payable, at  what rate.  The  Ministry  of  External Affairs had already fixed Foreign Allowance under F.R. 51(2) for its  officers and  other staff  working in  its Missions abroad. The  NBCC, therefore,  issued the  order dated  15th October,  1990   specifying  the  benefits  which  would  be available to  its employees  and deputationists  with effect from 1.1.1986.  It was  in this  order that it was indicated that Foreign  Allowance would  continue to be payable at the rate of  125% of  the basic  pay (prerevised)  as on or upto 31.12.1985. There  was  thus  no  increase  in  the  Foreign Allowance payable  to the  respondents; nor  was the  amount reduced in any way. 36.  NBCC had  taken a policy decision on account of strange situations  and   conditions  prevailing   in   Iraq   where respondents were  deputed on  foreign projects  assigned  to NBCC, that  Foreign Allowance  would be  payable only on the original basic  salary of  the respondents  and not  on  the salary as  revised on  account of the recommendations of the Fourth Pay  Commission. In  such  a  situation,  the  policy decision shall have the effect of displacing the doctrine of "Legitimate Expectation",  particularly as  the decision was based   on    objective   assessment   of   the   prevailing circumstances including  the financial  stringency in  which Iraq came  to be  placed. There is, therefore, no element of arbitrariness in that decision. 37.  The  respondents  were  the  prisoners  of  hope.  they attempted to water the leaves when the tree itself was found cut off  at its  root. This is the least that can be said of this case which had no pleadings and yet the plea prevailed. 38.  For the  reasons stated  above, he appeals are allowed, the judgment  and order  dated 13.9.96 and 25.7.97 passed by the Delhi  High Court  are set  aside and the writ petitions relating to Foreign Allowance are dismissed, but without any order as to costs.

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