http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: UNION OF INDIA & ANR.

       Vs.

RESPONDENT: WING COMMANDER R.R. HINGORANI (RETD.)

DATE OF JUDGMENT30/01/1987

BENCH: SEN, A.P. (J) BENCH: SEN, A.P. (J) NATRAJAN, S. (J)

CITATION:  1987 AIR  808            1987 SCR  (2)  94  1987 SCC  (1) 551        JT 1987 (1)   290  1987 SCALE  (1)203

ACT:     Government  residential accommodation--Retention  beyond the  concessional  period  admissible  under  SR  3   17-B-H (2)--Liability  to  pay market rent for the period  of  such unauthorised occupation under SR 317-B-22 whether contingent upon the Directorate of Estates serving a notice pay  market rent for retention of such accommodation--Whether the amount due (difference between Market rent minas concessional Rent) recovered from the commuted pension was contrary to s. 11 of the Pensions Act, 1871, by process of seizure and sequestra- tion--Whether  presumption of relaxation under SR 3  17-B-25 be drawn and resultant applicability of doctrine of  promis- sory  estoppel--Public Premises (Eviction   of  unauthorised occupants)  Act,  1971,  section  7(2), Supplementary  Rules SR 317-B-11(2)(22) and (25) and Pensions Act, 1871 section I effect of, Allotment of Government Residences (General  Pool in     Delhi)    Rules,    1963--Principle     of     Unjust enrichment--Contract Act section 56 pointed out.

HEADNOTE:     The respondent while he was posted as a Squadron  Leader at Delhi was on June 27, 1968 allotted by the Directorate of Estate  a  residential fiat in the Curzon Road Hostel  on  a monthly  rent of Rs. 161, under sub-r.(1) of  SR  317-.B-11. Although he was transferred from Delhi to Chandigarh on June 11, 1970, he did not give any intimation of his transfer  to the Directorate of Estates and therefore the said  allotment stood automatically cancelled under sub-r. (2) thereof after the  concessional period of two months from the date of  his transfer i.e. w.e.f. August 11, 1970. The respondent contin- ued in unauthorised occupation of the said fiat for a period of  nearly  five  years and in the meanwhile  he  was  being charged  the  normal rent for that period. On  February  28, 1975 the Estate Officer having come to know of the  transfer of  the respondent from Delhi, the Directorate  addressed  a letter dated March 18, 1975 cancelling the allotment  w.e.f. August  11, 1970. On the next day i.e. the 19th, the  Direc- torate  sent another letter asking the respondent to  vacate the fiat, which he did on March 25, 1975. The Estate Officer raised a demand for recovery of Rs.38,811. 17 p. under SR  3 17-B-22 and served the respondent with a notice under s.7(3)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

of the Public Premises (Eviction of Unauthorised  Occupants) Act, 1971. The 95 respondent  disputed  his liability to pay damages  for  the period of his unauthorised occupation. Thereupon, the Estate Officer initiated proceedings under s.7 of the Act to recov- er  the amount of Rs.38,811. 17p. Subsequentiy, the  Central Government on a representation being made by the  respondent reduced  the  amount  to  Rs.20,482.78p.  On   compassionate grounds  and deducted the same on October 30, 1976 from  out of the commuted pension payable to him.     The  respondent  filed a petition under Art.226  of  the Constitution  before the High Court. The writ  petition  was allowed by a learned Single Judge holding that although  the allotment of the flat stood cancelled in terms of  sub-r.(3) of SR 317-B-11 w.e.f. August 11, 1970 i.e. after the conces- sional  period of two months from the date of his  transfer, the  government  was estopped from claiming  the  amount  of Rs.20,482.78p.  as  damages equivalent to  the  market  rent under  SR  317-B-22 for the period from August 11,  1970  to March  25, 1975 on the ground that the government  not  only knowingly  allowed the respondent to continue in  occupation till March 25, 1975 but also charged him the normal rent  of Rs. 161 p.m. presumably under its power of relaxation  under SR  317-B-25.  Further, he held that the  government  having failed  to serve the respondent with a notice that he  would be liable to pay market rent for the period of his  unautho- rised  occupation, the doctrine of promissory estoppel  pre- cluded  the government from claiming damages  equivalent  to the  market rent under SR 317-B-22 for the period  in  ques- tion. On appeal, a Division Bench upheld the decision of the learned  Single  Judge mainly on the terms  of  SR  317-B-23 which conferred the power of relaxation on the government. Hence the appeal by Special Leave. Allowing the appeal, in part, the Court,     HELD:  1.1 The Government could not unilaterally  deduct the  amount  of  Rs.20,482.78p. from  the  commuted  pension payable  to the respondent, contrary to s.11 of the  Pension Act, 1871. [106B-C]     1.2  According  to its plain terms, section  11  of  the Pensions  Act,  1871  protects from  attachment  seizure  or sequestration  pension  or  money due or to  become  due  on account  of  any such pension. The words "money  due  or  to become  due on account of pension" by necessary  implication mean money that has not yet been paid on account of  pension or has not been received by the pensioner and therefore wide enough to include commuted pension. [103A-B] 96     Union  of  India v. Jyoti Chit Fund &  Finance  &  Ors., [1976] 3 SCR 763, followed.     Crowe v. Price, [1889] 58 LJ QB 2 15; Municipal Council, Salem v.B. Gururaja Rao, ILR (1935) 58 Mad. 469; C.  Gopala- chariar v. Deep Chand Sowcar, AIR 1941 Mad. 207; and  Hasso- mal  Sangumal  v. Diaromal Laloomal, AIR 1942 Sind  19,  re- ferred to.     2.1 The construction placed by the High Court on the two provisions  contained  in SR 317-B-22 and SR  3  17-B-25  is apparently  erroneous.  It is plain upon the terms of  SR  3 17-B-22  that  the  liability to pay damages  equal  to  the market  rent beyond the concessional period is  an  absolute liability and not a contingent one. The Court was clearly in error in subjecting the liability of a government officer to pay market rent for period of unauthorised occupation to the fulfilment  of  the condition that the  Director  of  Estate should  serve  him with a notice that in the  event  of  his

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

continuing in unauthorised occupation he would be liable  to pay market rent. [101A-C]     2.2  Non-recovery  of  the rent at the  market  rent  as permissible under SR 317-B-22 due to inaction of the govern- ment  and  allowing the allottee to continue  in  authorised occupation  for  a period of nearly five years, as  in  this case,  does not lead to the presumption that the  government had  relaxed the condition in his favour under SR  317-B-25. [101D]     2.3  For  a valid exercise of power of  relaxation,  the condition  pre-requisite  under  SR 3 17-B-25  is  that  the government  may  relax all or any of the provisions  of  the Rules  in  the case of an officer or residence or  class  of officers or types of residences, for reasons to be  recorded in writing. There was no question of any presumption arising for  the relaxation which had to be by a specific  order  by the  government  for  reasons to  be  recorded  in  writing. [101D-E]     3.  There  was no question of  any  promissory  estoppel operating  against the government in a matter of this  kind. Before  an estoppel can arise, there must be first a  repre- sentation  of an existing fact distinct from a mere  promise made  by  one party to the other; secondly  that  the  other party  believing  it must have been induced to  act  on  the faith of it; and thirdly, that he must have so acted to  his detriment.  In  this case, there was  no  representation  or conduct  amounting  to  representation on the  part  of  the government intended to induce the respondent to believe that he  was permitted to occupy the fiat in question on  payment of normal rent or that he was induced to change his position on the faith of it. [101E;102A-C] 97

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 4426  of 1986.     From  the  Judgment and Order dated 11.9.  1984  of  the Delhi High Court in L.P.A. No. 219 of 1981     V.K. Kanth, G.D. Gupta and C.V. Subba Rao for the Appel- lants.     Ram Panjwani, Vijay Panjwani and D.N. Goburdhan for  the Respondent. The Judgment of the Court was delivered by     SEN,  J. This appeal by special leave  directed  against the judgment and order of the Delhi High Court dated Septem- ber  11, 1985 raises a question of frequent occurrence.  The question  is  whether  where a  Government  servant  retains accommodation  allotted to him under SR 317-B-11 beyond  the concessional  period  of two months permissible  under  sub- r.(2)  thereof, the liability to pay damages  equivalent  to the market rent for the period of such unauthorised  occupa- tion  under SR 3 17-B-22 is contingent upon the  Directorate of Estates serving a notice upon him that he would be liable to  pay market rent for retention of such  accommodation  as held by the High Court.     Put very briefly, the essential facts are these. In  the year  1968 the respondent who was then a Squadron Leader  in the  Indian Air Force on being posted at  the  Headquarters, Western Command, Palam, Cantonment, Delhi, applied on May 9, 1968  for  allotment  of accommodation in  the  Curzon  Road Hostel, New Delhi. In the application for allotment he  gave a  declaration that he had read the Allotment of  Government Residences  (General  Pool  in Delhi) Rules,  1963  and  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

allotment  made to him shall be subject to the  said  Rules, including  the amendments made thereto. The  Directorate  of Estates  by its order dated June 27, 1968 allotted Flat  No. 806-B to the respondent in the Curzon Road Hostel on a  rent of  Rs.  161 per month, exclusive of electricity  and  water charges. The respondent was transferred from Delhi to Chand- igarh  on June 11, 1970 and therefore the allotment  of  the flat  to him stood automatically cancelled under  sub-r..(3) of  SR 317-B-11 after the concessional period of two  months from the date of his transfer i.e.w.e.f. August 11, 1970. He however  did not give any intimation of his transfer to  the Directorate  of Estates with the result that he contined  in unauthorised occupation of the said flat for a 98 period of nearly five years and was being charged the normal rent for that period. On February 28, 1975 the Estate  Offi- cer having come to know about the transfer of the respondent from  Delhi, the Directorate addressed a letter dated  March 18, 1975 cancelling the allotment w.e.f. August 11, 1970 and intimating  that he was in unauthorised occupation  thereof. On the next day i.e. the 19th, the Directorate sent  another letter  asking the respondent to vacate the flat.  On  March 25,  1975  the respondent vacated the flat and  handed  over possession of the same to the Directorate of Estates. But he addressed  a letter of even date by which he repudiated  his liability to pay damages alleging that he was in  possession of  the flat under a valid contract and that at no time  was he  in unauthorised occupation, and further that under  that the said contract he was not liable to pay any damages.     It  appears that there was some  correspondence  between the parties but the respondent disputed his liability to pay damages  for the period of his unauthorised  occupation.  In consequence  whereof,  proceedings  were  initiated  by  the Estate Officer under s.7 of the Public Premises (Eviction of Unauthorised Occupants)’ Act, 1971 to recover Rs.38,811.17p. as  damages. The Estate Officer duly served notices  on  the respondent under s.7(3) of the Act from time to time and the respondent  appeared  in the proceedings and  contested  the claim.  Apparently, the respondent in the meanwhile  made  a representation to the Central Government. On such  represen- tation  being made, the Government on compassionate  grounds reduced  the amount to Rs.20,482.78p. and deducted the  same on October 30, 1976 from out of the commuted pension payable to  the  respondent.  On November 25,  1976  the  respondent appeared and protested against the recovery of the amount of Rs.20,482.78p.  from  the commuted pension  payable  to  him which,  according to him, was contrary to s. 11 of the  Pen- sions  Act, 1871, by process of seizure  and  sequestration. The  respondent  complained that despite  his  repeated  re- quests,  he was not given opportunity of a hearing  and  was informed  that the matter was being examined in  depth,  and that the whole procedure was arbitrary and capricious.     The respondent filed a petition in the High Court  under Art.  226 of the Constitution challenging the action of  the Government    in   making   a   unilateral   deduction    of Rs.20,482.78p. towards recovery of damages from the commuted pension payable to him which, according to him, was contrary to  s. 11 of the Pensions Act, 1871. The writ  petition  was allowed by a learned Single Judge by his judgment and  order dated September 7, 1981 who held that although the allotment of the 99 fiat to the respondent stood cancelled in terms of sub-r.(3) of SR 317-B-11 w.e.f. August 11, 1970 i.e. after the conces- sional  period of two months from the date of his  transfer,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

the  Government  was estopped from claiming  the  amount  of Rs.20,482.78p.  as  damages equivalent to  the  market  rent under  SR 3 17-B-22 for the period from August 11,  1970  to March  25, 1975. In coming to that conclusion,  the  learned Single  Judge  held that the Government not  only  knowingly allowed the respondent to continue in occupation till  March 25,  1975  and charged him the normal rent of  Rs.  161  per month  presumably  under its power of  relaxation  under  SR 317-B-25. Further, he held that the Government having failed to  serve  the  respondent with a notice that  he  would  be liable  to pay market rent for the period of  such  unautho- rised  occupation, the doctrine of promissory estoppel  pre- cluded  the Government from claiming damages  equivalent  to the  market rent under SR 317-B-22 for the period  in  ques- tion.  Aggrieved,  the appellant preferred an appeal  but  a Division  Bench  by its judgment under appeal  affirmed  the decision of the learned Single Judge. It based its  decision mainly on the terms of SR 317-B-25 which confer the power of relaxation on the Government and held that since the Govern- ment  had not recovered the rent at the market rate as  per- missible under SR 317-B-22 w.e.f. August 11, 1970 and having knowingly allowed the respondent to retain the flat for  the period in question, it must be presumed that the  Government had  acted in exercise of its power of relaxation  under  SR 317-B-25.     In  support  of the appeal Shri  G.  Ramaswamy,  learned Additional  Solicitor  General mainly advanced  two  conten- tions. First of these is that where a Government servant has retained the government accommodation allotted to him  under SR 317-B-11(1) beyond the concessional period of two  months allowed  under sub-r.(2) thereof, the liability to pay  dam- ages equal to the market rent for the period of his unautho- rised occupation is not a contingent liability. It is  urged that the High Court was in error in holding that the  appel- lant  was  not entitled to deduct  Rs.20,482.78p.  from  the commuted  pension payable to the respondent because  of  the failure of the Directorate of Estates to serve the  respond- ent  with a notice after the allotment of the flat in  ques- tion  stood automatically cancelled w.e.f. August 11,  1970. Secondly,  he  submits that the construction placed  by  the High  Court  upon SR 317-B-22 was plainly erroneous.  It  is submitted  that the High Court was wrong in  assuming  ’that there  was some kind of estoppel operating against the  Gov- ernment  and in proceeding upon the basis that  recovery  of damages equivalent to the market rent for use and occupation for  the period of unauthorised occupation was  punitive  in nature and 100 therefore the Court had power to grant relief against recov- ery  of damages at that rate. These contention must, in  our opinion, prevail.     It  would  be convenient here to set  out  the  relevant statutory  provisions. Sub-s.(2) of s.7 of the Public  Prem- ises (Eviction of Unauthorised Occupants) Act, 1971  invests the Estate Officer with authority to direct the recovery  of damages from any person who is, or has at any time been,  in unauthorised  occupation  of  any  public  premises,  having regard to such principles of assessment of damages as may be prescribed. R.8 of the Public Premises (Eviction of Unautho- rised  Occupants) Rules, 1971 lays down the  principles  for assessment  of  such  damages. Among  other  things,  r.8(c) provides  that in making assessment of damages for  unautho- rised us,’ and occupation of any public premises, the Estate Officer  shall take into consideration the rent  that  would have been realised if the premises had been let on rent  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

the  period of unauthorised occupation to a private  person. Allotment  of  residential premises owned by  Government  in Delhi is regulated by the Allotment of Government Residences (General  Pool  in Delhi) Rules, 1963. Sub-r. (1)  of  SR  3 17-B-  11  provides  inter alia that an  allotment  of  such premises  to  a Government officer shall continue  in  force until  the  expiry of the  concessional  period  permissible under  sub-r.(2) thereof after the officer ceases to  be  on duty in an eligible office in Delhi. Sub-r.(2) of SR  317-B- 11  provides  that a residence allotted to an  officer  may, subject to sub-r.(3), be retained on the happening of any of the events specified in Column 1 of the Table underneath for the period specified in the corresponding entry in Column  2 thereunder.  The  permissible period for retention  of  such premises in the event of transfer of the Government  officer to  a  place outside Delhi is a period of two months.  SR  3 17-B-22 insofar as material provides as follows:               "Where, after an allotment has been  cancelled               or is deemed to be cancelled under any  provi-               sion  contained in these rules, the  residence               remains  or has remained in occupation of  the               officer  to  whom it was allotted  or  of  any               person  claiming  through  him,  such  officer               shall  be  liable to pay damages for  use  and               occupation of the residence, services,  furni-               tures and garden charges, equal to the  market               licence fee as may be determined by Government               from time to time."     It  is  difficult to sustain the judgment  of  the  High Court  or the reasons therefore. The construction placed  by the High Court on the 101 two  provisions contained in SR 317-B-22 and SR 317-B-25  is apparently  erroneous.  It is plain upon the terms of  SR  3 17-B-22  that  the  liability to pay damages  equal  to  the market  rent beyond the concessional period is  an  absolute liability and not a contingent one. Both the learned  Single Judge as well as the Division Bench were clearly in error in subjecting  the  liability of a Government  officer  to  pay market rent for the period of unauthorised occupation to the fulfilment  of  the condition that the Director  of  Estates should  serve  him with a notice that in the  event  of  his continuing in unauthorised occupation he would be liable  to pay market rent. They were also in error in proceeding  upon the  wrongful assumption that since the Government  had  not recovered  the rent at the market rate as permissible  under SR 3 17-B22 and allowed the respondent to continue in  unau- thorised  occupation for a period of nearly five  years,  it must be presumed that the Government had relaxed the  condi- tion in favour of the respondent under SR 317-B-25. The view expressed by the High Court that there was a presumption  of relaxation of the condition for payment of market rent under SR 3 17-B-22 due to inaction on the part of the  Government, is  not  at all correct. For a valid exercise  of  power  of relaxation, the condition pre-requisite under SR 317-B-25 is that  the Government may relax all or any of the  provisions of  the  Rules in the case of any officer  or  residence  or class of officers or types of residences, for reasons to  be recorded  in writing. There was no question of any  presump- tion arising for the relaxation which had to be by a specif- ic  order  by the Government for reasons to be  recorded  in writing. Nor was there a question of any promisory  estoppel operating against the Government in a matter of this kind.     In the facts and circumstances of the present case,  the respondent  had given a declaration in his  application  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

allotment  that  he  had read the  Allotment  of  Government Residences (General Pool in Delhi) Rules, 1963 and that  the allotment made to him shall be subject to the said Rules  as amended  from  time to time. According to  sub-r.(3)  of  SR 317-B-11  the allotment was to continue till the  expiry  of the concessional period of two months under sub-r.(2) there- of after June 11, 1970, the date of transfer and  thereafter it would be deemed to have been cancelled. It is not disput- ed that the respondent continued to remain in occupation  of the premises unauthorisedly from August 11, 1970 even  after his  transfer outside Delhi. He was not entitled  to  retain any  accommodation either from the general pool or  the  de- fence pool once he was transferred to a place outside Delhi. The  respondent  retained the flat in question  at  his  own peril with full knowledge of the consequences. He was  bound by the declaration to abide by the Allot- 102 ment Rules and was clearly liable under SR 3 17-B-22 to  pay damages  equal  to  the market rent for the  period  of  his unauthorised occupation. Before an estoppel can arise, there must be first a representation of an existing fact  distinct from a mere promise made by one party to the other; secondly that the other party believing it must have been induced  to act  on the faith of it; and thirdly, that he must  have  so acted to his detriment. In this case, there was no represen- tation or conduct amounting to representation on the part of the Government intended to induce the respondent to  believe that  he  was permitted to occupy the flat  in  question  on payment of normal rent or that he was induced to change  his position  on the faith of it. If there was any omission,  it was  on  the part of the respondent in concealing  the  fact from the Director of Estates that he had been transferred to a place outside Delhi. There was clearly a duty on his  part to disclose the fact to the authorities. There is nothing to show  that he was misled by the Government against  whom  he claims  the estoppel. It is somewhat strange that  the  High Court  should have spelled out that the respondent  being  a Squadron  Leader was an employee of the  Central  Government and  therefore  the Government of India to whom  the  Curzon Road  Hostel belongs must have had knowledge of the fact  of his transfer. The entire judgment of the High Court proceeds upon this wrongful assumption.     In the premises, it is difficult to sustain the judgment of  the High Court and it has to be  reversed.  Nonetheless, the writ petition must still succeed for another reason.  It is  somewhat strange that the High Court should have  failed to  apply  its mind to the most crucial  question  involved, namely, that the Government was not competent to recover the amount  of  Rs.20.482.78p.  alleged to be  due  and  payable towards  damages on account of unauthorised use and  occupa- tion  of the flat from the commuted pension payable  to  the respondent  which was clearly against the terms of s. 11  of the Pensions Act, 1871 which reads as follows:               "Exemption  of  pension  from   attachment:-No               pension granted or continued by Government  on               political  considerations,  or on  account  of               past  services or present infirmities or as  a               compassionate  allowance, and no money due  or               to  become due on account of any such  pension               or  allowance,  shall be  liable  to  seizure,               attachment or sequestration by process of  any               Court at the instance of a creditor, for,  any               demand against the pensioner, or in  satisfac-               tion of a decree or order of any such Court." 103

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

According  to its plain terms, s. 11 protects  from  attach- ment,  seizure or sequestration pension or money due  or  to become due on account of any such pension. The words  "money due  or  to become due on account of pension"  by  necessary implication mean money that has not yet been paid on account of  pension  or has not been received by the  pensioner  and therefore  wide  enough  to include  commuted  pension.  The controversy  whether on commutation of pension the  commuted pension becomes a capital sum or still retains the character of pension so long as it remains unpaid in the hands of  the Government,  is  not a new one till it was  settled  by  the judgment of this Court in Union of India v. Jyoti Chit  Fund &  Finance  & Ors., [1976] 3 SCR 763. We may  briefly  touch upon  the earlier decisions on the question. In  an  English case,  in  Crowe v. Price, [1889] 58 LJ QB 215 it  was  held that money paid to a retired officer of His Majesty’s  force for  the  commutation  of his pension does  not  retain  its character as pension so as to prevent it from being taken in execution. On p.217 of the Report, Coleridge, CJ. said:               "It  is  clear to me  that  commutation  money               stands  on an entirely different  ground  from               pension money, and that if an officer commuted               his  pension for a capital sum paid down,  the               rules  which apply to pension money  and  make               any  assignment  of it void, do not  apply  to               this sum." Following  the  dictum of Coleridge, CJ.,  Besley,  CJ.  and King, J. in Municipal Council, Salem v. B. Gururaja Rao, ILR [1935] 58 Mad. 469 held that when pension or portion thereof is  commuted, it ceases to be pension and becomes a  capital sum.  The  question in that case was  whether  the  commuted portion  of the pension of a retired Subordinate  Judge  was income for purposes of assessment of professional tax  under s.354  of the Madras District Municipalities Act, 1920.  The learned Judges held that where pension is commuted there  is no  longer  any periodical payment; the  pensioner  receives once  and for all a lump sum in lieu of the periodical  pay- ments.  The pension is changed into something else  and  be- comes  a  capital sum. On that view they held that  the  sum received  by  the retired Subordinate Judge in lieu  of  the portion  of his pension when it was commuted was  no  longer pension  and therefore not liable to pay a professional  tax under s.354 of the Madras District Municipalities Act.  That is  to  say, the commuted portion, of the  pension  was  not income  for purposes of assessment of professional tax in  a municipality.  The question arose in a different form in  C. Gopalachariar v. Deep Chand Sowcar, AIR 1941 Mad. 207 and it was  whether  the commuted portion of the  pension  was  not attachable in 104 execution of a decree obtained by certain creditors in  view of s. 11 of the Pensions Act. Pandurang Row, J. interpreting s.  11 of the Act was of the opinion that not only the  pen- sion but any portion of it which is commuted came within the provisions  of the section. He particularly referred to  the words  "money  due or to become due on account  of  pension" appearing in s. 11 of the Act which, according to him, would necessarily include the commuted portion of the pension.  He observed that the phrase "on account of" is a phrase used in ordinary  parlance and is certainly not a term of art  which has  acquired a definite or precise meaning in law.  Accord- ingly to its ordinary connotation the phrase "on account of" means "by reason of" and he therefore queried:               "Now can it be said that the commuted  portion               of the pension is not money due on account  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

             the  pension?  Though  the  pension  has  been               commuted, still can it be said that money  due               by  reason of such commutation or  because  of               such commutation, is not money due on  account               of pension?" He referred to s. 10 of the Act which provides for the  mode of  commutation and is part of Chapter III which  is  headed "Mode of Payment", and observed:               "In other words, the commutation of pension is               regarded  as a mode of payment of pension.  If               so, can it be reasonably urged that payment of               the  commutation  amount  is  not  payment  on               account  of  the pension, though  not  of  the               pension  itself, because after commutation  it               ceases to be pension? I see no good reason why               it should be deemed to be otherwise. No  doubt               money is due immediately under the commutation               order, but the commutation order itself is  on               account  of a pension which was commuted or  a               portion of the pension which was commuted. The               intention  behind  the provisions  of  s.  11,               Pensions  Act, is applicable to ’the  commuted               portion  as well as to the uncommuted  portion               of the pension and the language of s. 11  does               not appear to exclude from its protection  the               money  that is due under a  commutation  order               commuting a part of the pension."     In Hassomal Sangumal v. Diaromal Laloomal, AIR 1942 Sind 19.  Davis,  CJ. speaking for a Division Bench  referred  to Gopalachariar’s  case and pointed out that it does  not  lay down that once a 105 pension  has  been commuted and the money paid over  to  the pensioner,  the exemption from attachment  still  continues. The  learned  Chief Justice went on to say  that  the  words "money due or to become due" used in s. 11 must by necessary implication mean the money that has not yet been paid to the pensioner.     In Jyoti Chit Fund’s case the Court repelled the conten- tion  that since the civil servant had already retired,  the provident fund amount, pension and other compulsory deposits which were in the hands of the Government and payable to him had ceased to retain their character as such provident  fund or  pension  under ss.3 and 4 of the  Provident  Funds  Act, 1925. Krishna Iyer, J. speaking for himself and Chandrachud, J. observed:               "On first principles and on precedent, we  are               clear  in our minds that these sums,  if  they               are  of the character set up by the  Union  of               India,  are  beyond the reach of  the  court’s               power  to attach. Section 2 (a) of the  Provi-               dent  Funds  Act has also to be read  in  this               connection  to remove possible doubts  because               this definitional clause is of wide amplitude.               Moreover, s.60(1), provides (g) and (k), leave               no  doubt on the point  of  non-attachability.               The  matter  is so plain  that  discussion  is               uncalled for.                         We may state without fear of contra-               diction that provident fund amounts,  pensions               and  other compulsory deposits covered by  the               provisions  we have referred to, retain  their               character  until they reach the hands  of  the               employee.  The  reality of the  protection  is               reduced to illusory formality if we accept the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

             interpretation sought."     The learned Additional Solicitor General has very fairly brought  to  our notice Circular No.  F.7(28)E  .V/53  dated August 25, 1985 issued by the Government of India,  Ministry of Finance to the effect:               "When  a pensioner refuses to  pay  Government               dues--The failure or refusal of a pensioner to               pay  any  amount  owed by  him  to  Government               cannot  be said to be ’misconduct’ within  the               meaning of Article 351 of the C.S.R. (Rule  8,               C.C.S.  (Pension) Rules, 1972).  The  Possible               way  of recovering/damanding  Government  dues               from  a retiring officer who refuses to  agree               in writing, to such dues being recovered  from               his pension is either to delay the final sanc-               106               tion  of his pension for some time which  will               have the desired effect for persuading him  to               agree to recovery being made therefrom or take               recourse to Court of law." It  bears out the construction that the words "money due  or to  become due on account of pension" occurring in s. 11  of the Pensions Act, 1871 includes the commuted portion of  the pension payable to an employee after his retirement. It must accordingly be held that the Government had no authority  or power  to unilaterally deduct the amount  of  Rs.20,482.78p. from  the commuted pension payable to the  respondent,  con- trary to s. 11 of the Pensions Act, 1871.     For  these  reasons, the appeal partly succeeds  and  is allowed.  The judgment and order of the High Court  are  set aside. We allow the writ petition filed by the respondent in the High Court and direct that a writ of mandamus be  issued ordaining  the  Central Government to refund the  amount  of Rs.20,482.78p.  deducted from the commuted pension  paid  to the respondent. The Government shall be at liberty to initi- ate  proceedings under s.7(2) read with s. 14 of the  Public Premises (Eviction of Unauthorised Occupants) Act, 1971  for recovery  of  Rs.20.482.78p. due on account of  damages  for unauthorised use and occupation of the fiat in question from the respondent as arrears of land revenue, or have  recourse to its remedy by way of a suit for recovery of damages.     Before  parting  with  the case, we wish to  add  a  few words.  The  Government should consider the  feasibility  of dropping  the  proceedings for recovery of damages,  if  the respondent  were to forego his claim for interest.  In  this case, the deduction of the amount of Rs.20,482.78p. from the commuted  pension payable to the respondent was made as  far back as October 30, 1976. Since then, 10 years have gone by. Even if interest were to be calculated at 9% per annum,  the interest alone would aggregate to more than Rs.18,000. Since the  Government had the benefit of the money for  all  these years,  it may not be worthwhile in pursuing the matter  any further. There shall be no order as to costs. S.R.                                                  Appeal allowed. 107