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PETITIONER: THE STATE OF WEST BENGAL & ORS.

       Vs.

RESPONDENT: RANBINDRA NATH SENGUPTA & ORS.

DATE OF JUDGMENT:       31/03/1998

BENCH: G.N. RAY, K. VENKATASWAMI

ACT:

HEADNOTE:

JUDGMENT:                 THE 31ST DAY OF MARCH, 1998 Present:                 Hon’ble Mr. Justice G.N. Ray                 Hon’ble Mr. Justice K. Venkataswami A.K. Mitter, Additional Solicitor General, Joydeep Kai, Rana Mukherjee,  Goodwill  Indeevar,  Advs.,  with  him  for  the appellants. M.C. Bhandare,  Sr, Adv.,  Ranji Thomas and S. Menon, Advs.. with him for the Respondents.                       J U D G M E N T The following Judgment of the Court was delivered: G.N. RAY. J.      Leave granted, Heard learned counsel for the parties.      This  appeal   is  directed   against  Judgment   dated 17.5.1994 passed  by the  Division Bench  of  Calcutta  High Court in  F.M.A.T. No.  1966 of 1992 allowing the appeal and setting aside  the judgment  of the Single Bench of the said High Court  in the  Writ Petition being Civil Rule No. 1136. (W) of 1990.      The aforesaid writ petition was made by the respondents Rabindra Nath Sengupta and other petitioners being employees of the  State Government  who had  been allotted  government flats  and   had  been  paying  assessed  amounts  for  such occupation and were enjoying the House Rent Allowance.      In order  to appreciate  the rival  contentions of  the parties it  will be appropriate to note certain facts. After the submissions  of Third  Pay Commission’s Report, the West Bengal Service  (Revision of  Pay and Allowance) Rules, 1990 (hereinafter referred  to as  ROPA Rules)  was published, In the writ  petition being  CR No. 11360 (W) of 1997, the writ petitioners  challenged   the  provisions   of  House   Rent Allowance in  the ROPA  Rules and the Notification issued in this  regard.   The  ROPA  Rules  provided  for  House  Rent Allowance to the following effect:-           "House  Rent  Allowance:  With      effect from  the 1"  January,  1988      the House Rent Allowance admissible      to a  Government employee  shall be      15%  of  basic  pay  subject  to  a      maximum of  Rs.800/- per month. The

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    ceiling of the House Rent Allowance      drawn by  husband  and  wife  taken      together was  also been  raised  to      Rs. 800/-  per month. The allowance      may be  drawn, without reference to      quantum   rent    paid,   by    all      Government  employees  (other  than      those provided  with  accommodation      owned/hired by  Government) without      requiring  them   to  produce  rent      receipt.  They  should  however  be      required to  furnish a  certificate      to  the   effect  that   they   are      incurring   some   expenditure   on      rent/contributing   towards   rent.      House Rent  Allowance at  the above      rate  shall   also   be   paid   to      Government  employees   living   in      their own  houses, subject to their      furnishing a  certificate that they      are   paying/contributing   towards      house   of    property    tax    or      maintenance of  the house.  Pending      fixation of  licence fees according      to the  system recommended  by  the      Pay Commission, the drawal of House      Rent   Allowance    by   Government      employees       provided       with      accommodation    owned/hired     by      Government and  recovery of licence      fee from them shall be regulated as      follows:-      (1) For  those employees  living in           flats for  which assessment of           rent has  been  made  and  the           occupier pays assessed rent as           licence fee  and  draws  usual           house   rent   allowance   the           drawal of house rent allowance           shall be  further  limited  to           the   actual   assessed   rent           allowance  shall   be  further           limited to the actual assessed           rent paid.      (2)  For   those  employees  paying           licence fee  as percentage  of           pay,  the  recovery  shall  be           frozen at  the level  at which           the licence  fee was recovered           from   the   pay   bills   for           December,    1989    in    the           unrevised scale.                All   other    conditions           regarding  drawal  House  Rent           Allowance    by     Government           employees  and   recovery   of           licence fee  from them  shall,           in so  far  as  they  are  not           inconsistent    with     these           decisions,  continue  to  hold           good."      It may be stated here that till 1994, the occupation of housing  estates  belonging  to  the  State  Government  was regulated by  the West  bengal Premises (Tenancy Regulation) Act, 1976.  The amount assessed for occupation of Government

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housing estates  was termed ‘rent’. Previously, some dispute about the  House Rent  Allowance for occupiers of Government flats were  raise in  writ petition  being CR No. 1527(W) of 1973.  (Sri   Deba  Prasad   Mukherjee  vs.   The  Financial Commissioner as Secretary, etc.)      Such Writ Petition was disposed of by the Calcutta High Court by  order dated 28.1.1996 passed by consent of parties in the following terms:-      "Upon the  petitioner being  agreeable to  pay assessed rent  calculated   as  per   relevant  principles  for  such occupation, the petitioners will be entitled to compensatory house rent allowance in accordance with Rules."      The department  of housing,  Government of  West Bengal issued a  memorandum on  28th January, 1978 laying down that the Government employees occupying accommodation provided to them by  the Housing  Department of  State Government in the rental housing  estate,  meant  exclusively  for  the  State government employees,  should  have  option  either  to  pay "assessed rent"  that may  be fixed  by the   Government  in accordance with  the accepted  principles and  to  draw  the admissible house rent allowance or to pay a fixed percentage of their pay as rent and forego the house rent allowance. It is the case of the writ petitioner that they had availed the option of  paying the  assessed rent  and drawing admissible house rent allowance.      A second  opportunity to exercise such option was given to  the   government  employees   occupying  flats   of  the Government Housing  Department  in  1984,  the  West  Bengal Premises (Regulation  and  Occupancy)  Act  1984  came  into force. Under  the said  act, the  occupation charge for such government flats  was termed  ‘licence fee’  instead  of  an ‘assessed rent’.      The contention  raised in  the writ  petition (CR 11360 (w) of 1990 was inter alia that refusal by the government to grant house  rent allowance  to the  writ petitioners at per with government  employees in  occupation of  private rented houses or  personal accommodations  was not only contrary to the decision  rendered by  consent in  C.R, 1527 (W) of 1973 but  also  contrary  to  the  policy  regarding  house  rent allowance  being   persistently  followed   by   the   State Government for  at least  the decade.  it was contended that the government  employees who  had been  living in privately rented accommodations  or in  their own  accommodations were entitled to  15% of  their pay  as house  rent allowance per month subject  to the  ceiling of  Rs. 800/- Irrespective of whatever rent  or expenses  being incurred  by them for such private or personal accommodation. Denial of such privileges to the  writ petitioner in occupation of flats in government housing estates amounted to hostile discrimination not being informed by any valid reason.      Such contentions  of the  writ petitioners were opposed by  the  State  Government  by  contending  that  government employees living in government accommodation had always been treated  as   a  separate  class  distinct  from  government employees either living in privately rented accommodation or in personal  accommodations. Such distinction was not unreal but based on reasonable criteria. It was also contended that the Third Pay Commission had gone into the question referred to it  about the  complications, bifurcations,  division  of payment and  drawal of  house rent  allowance by  government employees  living   in  government  accommodation.  The  Pay Commission addressed  to itself  such question  and made its recommendation as  to how house rent allowance would be paid to government  employees occupying  government  flats.  Such recommendation was  accepted and  ROPA rules were framed. It

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was further  contended that  as a matter of fact, the policy adopted by  the State  Government for  payment of house rent allowance is  less rigid than that of the Central Government where not  only no house rent allowance was allowed to these residing in government accommodation but such employees were required to  pay rent/licence  fee. The  State Government on the  contrary,  has  allowed  the    employees  residing  in Government accommodation  to be paid house rent allowance to the extent of actual rent licence fee paid. it was contended that the  writ petitioner, as a matter of fact were residing in rent  free accommodations  because they  were entitled to reimbursement of  whatever amount of licence fee required to be paid  for  occupying  flats  in  the  Government  Housing Estates.  It   was  also  contended  that  licence  fee  for occupation of  Government flats  by the Government employees was not  only very reasonable but quite low compared to rent for similar  accommodation in  private houses. Precisely for the said reason no government employees had desired to leave government   accommodation    for   shifting    to   private accommodation  on   the   score   of   alternative   cheaper accommodation.      The Single  Bench of  the High Court dismissed the writ petition by  holding inter alia that the writ petitioner did not  controvert.  the  statement  on  behalf  of  the  State Government that  the policy  of house  rent allowance of the State Government  was more  liberal and  beneficial  to  the employees than the policy followed by Central Government and the impugned  house rent  policy of the State Government and the impugned  house rent  policy of the State Government was not  unreasonable.   The  learned   Judge  has  specifically indicated that  the writ  petitioners did  not contend  that they had been living in government accommodation, the rental of which,  if in private accommodation, would have been less than 15%   of  their emoluments. The learned Judge also held that the  Government was  competence to  revise  the  policy decision regarding  payment of  house rent  allowance and it was not  bound by  the earlier  policy decision  or  by  the decision in  the earlier  writ petition since disposed of by consent of parties.      As aforesaid,  such decision  of the  Single Bench  was assailed before  a Division  Bench of the High Court in FMAT No. 1966  of 1992 and by the impugned judgment, the Division Bench has  allowed the  Writ Petition  by holding inter alia that the  State Government had also let out government flats to private  persons on rental basis and it was not disclosed what special benefits were given to the government employees in service  when allowed  to occupy  government flats  which were not  given to  the members  of public  when allowed  to occupy government flats on rent. The Division Bench has held that in  this case,  the State Government has failed to make out  any   reasonable  basis   for  different  treatment  to government  officer   in  occupation   of   their   personal accommodations  or   accommodations  arranged  with  private persons and  the government  employees occupying  government flats on  payment of  assessed licence fee. It has also been held that  the actum of giving some concession in the matter of fixation  of licence  fee  to  the  government  employees occupying government  flats is  wholly  irrelevant  and  "if payability of  the rent is not the factor for the purpose of granting house  rent allowances,  in that event, making some concession in  the matter  of assessment  of rent payable by the second category of the State Government employees is not at all  a relevant consideration for the purpose of making a discrimination.  If   the  object  of  granting  house  rent allowances was  intended to reimburse the house rent paid or

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payable by  the employees  wholly or  in part,  in that even this classification  could have  been said  to be reasonable and such  classification could  have  same  nexus  with  the object  sought  to  be  achieved.  But  those  who  have  no liability to  pay rent and those who pay a nominal amount as rent and on the contrary, get a lumpsum amount as house rent allowances, which  is not  a compensation nor reimbursement, cannot be said to be a different group from the other.". The Division Bench  by allowing  the writ  petition directed the State Government  not to make any discrimination between the government employees  in the matter of payment of house rent allowances.      Mr. A.K.  Mitter, learned  Additional Solicitor General appearing for  the appellants,  has submitted  that for  the purpose  of  house  rent  allowance,  the  State  Government employees have  been classified  into categories  under ROPA Rules, namely,           i)  These  employees  who  are      provided     with     accommodation      owned/hired by the State Government      will get House Rent Allowance (HRA)      limited to  the actual rent/licence      fee.           ii) Those  employees  who  are      not provided with the accommodation      in flats  hired/owned by  the State      Government will get HRA at the rate      of 15%  of  basic  pay  subject  to      maximum of  Rs.800/- per  month and      will have to bear the accommodation      expenses.      The  learned   Solicitor  has   submitted   that   such classification was  in existence  since 1948.  For the first time in 1978, by an executive order it was provided that the State Government  employees will  get full  HRA out of which they would  pay the  charges for  their  accommodation.  The Third Pay  Commission considered  various aspects of HRA and came to  the finding that the principle of HRA as introduced by the  executive order in 1978 had introduced an element of unjust profit  to the  government  employees  who  had  been provided with  government accommodation  and there  had been great demand  or government  accommodation made available at very low rate.      The learned  Solicitor has  contended that  in order to satisfy  the   test  of   reasonable   classification,   two conditions must  be fulfilled  as indicated  by the Division Bench of the High Court, namely, such classification must be founded on intelligible differentia and it would also have a rational nexus to the object of the scheme of HRA.      The learned Solicitor has submitted that the HRA, is in lieu of  accommodation not  made available  to the employees and HRA    is  not  a  matter  of  right.  In  support  such contention, reference  has been made to the decision of this Court  in   Director,  Central   Plantation  Crops  Research Institute, Kesaragod  and Ors. Vs. M. Purushothaman and Ors. (1995  Suppl.  (4)  SCC  633).  The  learned  Solicitor  has contended that  there is  intelligible differential  between two  groups  of  government  employees,  namely,  government employees provided  with accommodation  in government  flats and employees who have not been so provided.      The learned  Solicitor  has  also  submitted  that  the impugned principle  of HRA  has been formulated on the basis of advice  by an  expert body like Pay Commission which took into  consideration  various  aspects  of  HRA.  The  policy decision is  in the  domain of  executive authority  of  the

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State Government.  So  long  such  policy  decision  is  not arbitrary,  capricious   and  based  on  no  reason  thereby offending Article  14 of  the Constitution, the Court should not   outstep its limit and  tinker with the policy decision of the  State Government.  In the  connection, reference has been made  to  the  decision  of  this  Court  in  M.P.  Oil Extraction and  Anr, Vs.  State   of M.F. and Ors, (1997 (7) SCC 592).      The learned  Solicitor has  further submitted  that the writ petitioners  have  alleged that some o f the government employees  who   have  not  been  provided  with  government accommodation are  paying less  than the  amount received as HRA for  their private accommodations. The learned Solicitor has contended  that particulars or instances in support such contention   have not  been given  by the  writ petitioners. Even  if  in  some  cases,  some  government  employees  are required to  pay for  their private  accommodations  at  the rates less  than the  amounts receivable by way of HRA, such few   instances   cannot affect  the policy  decision.   The fortuitous circumstances,  even in  a few cases, under which some government employees not being provided with government accommodation may  gain pecuniary advantage,  cannot  affect the  HRA policy which is otherwise reasonable and not wholly capricious and arbitrary.      The learned  Solicitor has  submitted that although the Division Bench has correctly indicated the import of Article 14  of   the  Constitution   in  the   matter   of   hostile discrimination but  it has  failed to  appreciate  the  fact situation in  this case and has proceeded erroneously on the footing that  the government  employees being given full HRA for not  being provided  with government accommodation stand on  advantageous  position  than  the  government  employees provided with  government accommodation  and  therefore  not being paid the full HRA and such discriminatory treatment to two sets of government employees offends Article 14 and such discrimination does not  conform to reason.      The learned   Solicitor   has  contended that under the West Bengal  Government Premises  (Tenancy Regulation)  Act, 1976, the government premises were defined as premises owned by the  State Government  or by  the government undertaking. The grounds  of termination  of tenancy  were enumerated  in Section  3.   Cessation  of   employment  under   the  State Government was  not a ground for termination of tenancy. The State buildings  which were  thrown open  to the  public for residential accommodation, were not allotted to the occupant qua government  employees. Such  position was  substantially altered by  the West  Bengal Government Premises (Regulation of Occupancy) Act, 1984. Section 24 of the 1984 Act given an overriding effect  to the  said Act  and  Sub-Section  2  of Section  24   expressly  provides   that  the   West  Bengal Government Premises (Tenancy Regulation) Act. 1978 shall not apply to  the government  premises. The Preamble of the said 1984 Act  indicates that there are government premises meant for  a  employees  of  State  Government  only  and  it  was necessary to  prevent unlawful  occupation of such premises. The ‘State  premises’ means  any premises  belonging  to  or taken on  lease or  licence or  requisitioned by  the  State Government. Under  Section 2  (n)  ‘Public  Premises’  means State premises  in respect  of which  a declaration has been made under  Section 3  of the  said Act  and includes  these mentioned in Schedule if of the Act (Section 2 (k)).      The learned  Solicitor has  submitted that  ‘government premises’ are  earmarked only for the employees of the State government and  a licence for such occupation can be granted only to an employees of the State government under Section 4

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of the  1984 Act,  Every licence  in respect  of  government premises will stand automatically terminated on constitution of employment  of the licenses under the State Government or on his  death (Section  2 (i).  The 1984  Act  provides  for licence fees.  The Third  pay Commission has recommended for nominal made  of licence fee. The learned Solicitor has also submitted that  there is  distinction  between  licence  and tenancy. While lease or tenancy confers some interest on the land, licence  gives only personal privilege to the licensee with  no  interest  in  the  land.  The  test  of  exclusive possession is  not conclusive.  The Act  of  1984  expressly provides  for   terminator  of   licence  on   cessation  of employment. It  is thus  clear that  no personal interest in the accommodation  has been  created by  such licensee.  The privilege  of   accommodation  in   government  premises  as licensee is co-terminus with the government service.      The  learned   Solicitor  has   also   submitted   that acceptance  of   government  accommodation  as  licensee  is optional  and   the  writ  petitioners  have  accepted  such government accommodation.  It  has  been  contended  by  the learned solicitor  that the  writ petitioners intend to take advantage  twice  over.  The  writ  petitioners  only  claim accommodation in government premises by paying at a low rate of licence fee, but they also claim full amount of HRA so as to make  unreasonable profit. The learned Solicitor has also contended that  the consent order passed in the earlier writ proceeding being  binding between the parties, the order was implemented by  the State  Government by  issuing Memorandum dated 20th  January, 1978.  Such consent  was given  on  the basis of  existing policy  of the  state government  in  the matter of  grant of  HRA.  When  the  Third  Pay  Commission recommended  for   change  of   policy  regarding  HRA,  the government framed ROPA Rules of 1990 under which the earlier policy about grant of HRA was changed. The said 1984 Act was passed  for   regulating  the  licence  in  respect  of  the government  premises   allotted  only   to  the   government employees In  service making  such licence  co-terminus with the employment.  That apart, the State Government was within its rights  to change  the policy.  The consent order on the basis of the earlier policy will not preclude the government from revising  the policy  in the matter of HRA. The learned Solicitor has  informed in response to the querry that there are about  12000 employees  of the State Government who have been provided  with government  accommodation and  the  writ petitioners are only 134 in number. He has submitted that it will be not just and proper to allow these 134 employees the benefit of  full  amount  of  HRA  by  occupying  government accommodation as licensees by paying nominal licence fee for such accommodation.  The learned  Solicitor has,  therefore, submitted that  the impugned  judgment of the Division Bench should be  set aside  and the judgment passed by the learned Single Bench  dismissing the  writ petition should be uphold by this Court.      Mr. M.C. Bhandare, learned senior counsel appearing for the writ  petitioners-respondents, has  submitted  that  the government employees  going to  be affected  by the  revised decision of the State Government relating to grant of HRA to the government  employees given  accommodation in government premises, are  only about  10,000 out of about total 10 lacs State government  it employees  i.e. only  1% of  the  total strength of  the government employees. Mr. Bhandare has also submitted that  the government accommodation allotted to the writ petitioners  are not  staff  quarters.  The  government premises are also let out to private individuals who are not government employees.  Initially,  the  government  premises

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were governed  by the  said West  Bengal  Premises,  Tenancy Regulation Act,  1976 and  from 1976 to 1990, all government employees irrespective of the fact whether they has occupied government accommodation or not were paid HRA at 8% of their salaries. After  the enactment  of  West  Bengal  Government Promises  (Regulation   of  Occupancies)   Act,  1984,   the government  premises   were  divided  into  two  categories, namely, ‘government’  premises’ and  ‘public premises’ Under Section  ***)   or  1984,  Act,  Government  promises  means premises which  has not  public premises and under Section 2 (k) public premises means State premises in respect of which a declaration has been made under Section 3 and includes the State government  premises mentioned  in Schedule  II. Under Section  3(1)  of  the  said  Act,  the  government  may  be Notification, declare  any premises  to be  public premises. Under Section  27, the State Government may dispense with or relax the requirement of any of the provision of this Act in respect of  any government premises. Under the 1984 Act, the government employees residing in government houses have been deprived of  tenancy rights  and such  employees have become licensees. But government employees who are residing in some LIG/MIG/HIG flats termed as ‘public premises’ under the 1984 Act have  not become licensees but they retain their tenancy right sin  the flats  owned by  the government. Mr. Bhandare has submitted  that the  1984 Act  has made unreasonable and illegal  distinction  between  ‘government    premises’  and ‘public premises’.  The public  premises have been taken out of the  regulation  and control under the 1984 Act. The Writ Petitioners-respondents after   enactment  of the  said Act, became licenses  of the  premises  and  thus  forfeited  the tenancy right  to continue  occupation in  government  flats after their  retirement as  well as  their heirs loosing the right to  inherit the  right to reside in such premises. Mr. Bhandare has  submitted  that  the  government  premises  as defined under  the 1984  Act is  not  correct.  It  is  also contended that  the ‘government  premises’ are  not occupied exclusively  by  the  government  employees  and  government premises are  also occupied  by  the  private  persons.  Mr. Bhandare has  submitted that  the classification between two sets of  employes,  namely,  the  employees  who  have  been provided with accommodation owned or hired by the government and the  employees who  have not  been  provided  with  such accommodation and consequential different treatment to these two types  of government employees in the matter of HRA, are without any  reasonable basis  and the  Division  Bench  has rightly struck down such distinction as offending Article 14 of the Constitution.      Mr. Bhandare  has submitted  that even  after the  1984 Act, in  respect of government premises and public premises, both government  employees and the general members of public are   residing. Mr. Bhandare has also submitted that even if it is  accepted that  the status of the government employees living in  government premises  after 1984  Act has  changed from tenant to licensee, such change has no relevance to the payment  of  HRA.  Mr.  Bhandare  has  submitted  that  some LIG/MIG/HIG flats are treated as ‘government premises’ while many other  similar flats  are treated as ‘public premises’. No reasonable basis of such distinction has been made out by the State government.      Mr. Bhandare  has also submitted that it will be unjust and improper  to allow  the government  employees living  in LIG/MIG/HIG flats  and employing  the status  of a tenant to draw full  HRA and  not to  allow such  HRA   to unfortunate employees who  held the  status of  licensee in  ‘government premises’  even if they are occupying similar flats. As such

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distinction is  wholly unjust, improper having no reasonable basis on  which HRA is to be paid. The Division Bench of the High Court  has rightly  held that  such distinction offends Article ‘4  of the  Constitution and no interference against such judgment is called for.      Mr.  Bhandare   has  also  submitted  that  the  policy decision may  be the prerogative of the State Government but such policy  decision must  conform  to  the  mandate  under Article 14 of the Constitution. If the policy decision being unjust and  discriminatory offends the guarantee of equality under Article  14, the  State government  is not permitted o contend that  within its prerogative, it has framed a policy and such  revised policy  should not be tinkered with by the Court.      Mr. Bhandare  has further  submitted that the basic for the payment  of HRA is that nobody should be allowed to keep any money  in excess  of the  actual house rent paid. If 99% employees are  allowed to retain HRA in excess of the actual rent paid  by them,  only 1%  of  the  employees  cannot  be singled out  and treated with discrimination by limiting the quantum of  HRA to the extent of licence fee payable by such employees.      Mr. Bhandare  has also  submitted  that  the  flats  in government  premises   which  have   been  allotted  to  the petitioners and  similarly circumstanced  employees are  not being properly maintained and considering the quality of the accommodation and  the amenities in such accommodation a low rate of licence fee has been assessed. It will be unjust and improper to  disallow payment  of full HRA to the government employees who are occupying the government flat as licensees under  the   1984  Act   only  because   they  are   to  pay comparatively  low  licence  fee  because  of  the  inferior quality  of   accommodation  made  available  to  them.  Mr. Bhandare  has  submitted  that  in  equity  and  justice  no interference is called for against the impugned judgment and this appeal should therefore be dismissed.      After giving our careful consideration to the facts and circumstances of  the case  and the  submissions made by the respective counsel  for the  parties, it appears to use that distinction between  two classes  of  government  employees, namely,  those   who  have  been  provided  with  government accommodation  qua   government  employees  and  licence  in respect of  such government  accommodation being co-terminus with the  service, stand  on a  different footing  from  the other government  employees who  have not been provided with such government  accommodation. In  the instant case, it has not  been  demonstrated  with  relevant  documents  that  in LIG/MIG/HIG  flats   belonging  to   the   government,   the government employees  are allowed to continue as tenant like ordinary members  of  the  public  by  virtue  of  being  in government  service.   Even  if  it  is  assumed  that  some government employees have got tenancy rights under the State Government in  respect of public premises such tenancy right has not  been given  qua government servant but as member of public. Under  the 1984 Act, allotment of government flat in ‘government premises’  can only  be made as licensee, period of  licence   being  co  terminus  with  employment.  Hence, occupation of  a government  servant as  a tenant  under the State is  not similar  as the  occupation as  a licensee  in ‘government premises’.  It has  also not  been  demonstrated with  supporting   documents  as   to  how  many  government employees have been given tenancy in government premises and how many  members of public have also been allowed to remain there as tenant. Under the 1984 Act, allotment of government flat in  ‘government premises’ can only be made as licensee,

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period of  licence being  co-terminus with employment. Under the 1984  Act, the  status of government employees occupying ‘government premises’ have been statutorily altered and such employees have  become licensees.  Therefore, such licensees stand entirely  on a different footing. Such distinction has a reasonable  basis and  it cannot  be contended  that  such distinction is  without any  nexus to the object of grant of HRA. It  is the  positive case  of the State Government that the writ  petitioners are  occupying government  premises as defined under 1984 Act holding the status of licensee. It is the case  of  the  State  Government  that  they  have  been provided  such   government  accommodation  as  licensee  in ‘government premises’  which are not meant for occupation by the members  of the  public. Even  if it  is assumed that in government  premises,   non  government  employee  has  been allowed to  occupy as  tenant, the  grant of such tenancy is not a  regular affair  and  such  tenancy  even  if  any  in ‘government premises’  is against  the scheme under the 1984 Act. It  is also  the case  of  the  State  government  that nominal  licence  fee  is  required  to  be  paid  for  such occupation  in   ‘government  premises’.   Since  the   writ petitioners and the similarly circumstanced employees having accommodation  in   government   premises   qua   government employees are  licensees and the licence is co-terminus with the service,  they are  required to pay only nominal feo for such occupation  as found  by the Pay Commission. Therefore, there is  justification that  such government  employees are not to  be given  the full  amount of  HRA but  they will be reimbursed to the extent of licence fee paid by them.      In our  view, the revised policy decision in the matter of payment  of HRA  is not only reasonable but also fair and just. It  will be  improper and unjust if by virtue of being government employees they are favoured with accommodation in ‘government premises’  as licenses  and on such account, are required to  pay only  nominal licence  for such occupation, yet they  will be  paid the  full amount of HRA so that they can make profit out of HRa.      It is  not the  case that  each  and  every  government employee is  offered government  accommodation  as  licensee subject to  the option  of the concerned government employee either to  take such  government accommodation or not. It is an admitted  position that  such government accommodation is very limited  and only  1% of  the government employees have been provided with such government accommodation. It has not been demonstrated that the writ petitioners have been living in government  accommodation, the rental of which in similar private accommodation  would have been less than the licence fee payable  by them.  One the  contrary, after  considering relevant facts,  the Third Pay Commission has held that such government employees  have been  allowed to enjoy government accommodation on payment of nominal sum for such occupation.      So  long  the  previous  policy  continued,  the  State Government had  given effect  to the consent order passed by the High  Court. The respondents are not entitled to contend that the government is precluded from revising its policy in respect of  grant of  HRA and once a decision is taken, such decision will remain binding for ever. The Third  Pay Commission  has considered various aspects of HRA and  it has  been indicated  by the said Commission that the payment  of full  HRA (subject  to the extent of maximum limit) to  the government  employees who  have been allotted government accommodation qua government employees and paying nominal licence fee should not be permittee to draw full HRA and thereby permitted to make profit. It is to be noted that barring one  per cent,  all other  government employees have

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not been  provided with  government accommodation  and  they have been  compelled to  arrange for their own accommodation under   competitive    market    rent.    Considering    the recommendation of  the Third  Pay Commission, the government has revised  the policy  regarding the  payment of HRA. Such revision  of   policy,  therefore,  cannot  be  held  to  be arbitrary, capricious  without any  basis and  taken on  the ipsi dixit of the State Government. Since the revised policy decision of  the State Government is informed by reasons and as the  distinction between  different  sets  of  government employees is  also reasonable,  in our view, no interference against that  policy decision  is warranted.  We, therefore, allow this appeal and set aside the impugned decision of the Division Bench  of the High Court and we uphold the decision of the  learned single Bench. In the facts and circumstances of the  cast it,  however, appears to us that it would cause great hardship  to the  writ petitioners-respondents if they are asked  to refund  any excess HRA which have been paid to them. It  is, therefore,  directed that  any  excess  amount which have  been paid  to the said respondents by way of HRA need not be refunded. The aspect is accordingly, disposed of without any order as to costs.