The Canara Bank Officer's Association (Regd.) vs Canara Bank

V.S. Sirpurkar, J.—In this writ petition, the first petitioner is an Association of Canara Bank Officers represented by its Vice-President,

while the other petitioners are working in that Bank. The petition is filed solely against Canara Bank, the respondent herein (hereinafter called as

bank"" for the sake of brevity) Clauses 4 and 5 of the Circular dated 25.4.1989 bearing No. 138/89 are in challenge in this petition. The first two

clauses of the said Circular suggests that the Officers in Middle Management Grade Scale II and above and officers in Junior Management Grade

Scale I would be eligible for quarters and such eligibility would be subject to clauses 4 and 5, which clauses are impugned in this petition. Clause 4

and 5 of the circular dated 25.4.1989 provide as under:

(4) No Officer shall be eligible to be provided with quarters by the Bank at a centre/station where he/she has a house in his/her own name or in the

name of his/her spouse or a dependent child. The same station/centre shall mean the houses situated within the Municipal

Corporation/Municipality/Panchayat limit of such places. Such Officers are entitled to HRA as per the provisions of the Canara Bank (Officers'')

Service Regulations.

(5) If any Officer has a house outside the Municipal Corporation/Municipality/Panchayat limit, the bank shall not take such house on lease and

provide for self occupation. In case of Officers who have already leased their houses to the Bank at present and which are situated outside the

Municipal Corporation/Municipality/Panchayat limit, for their own occupation, no quarters will be provided and they will be eligible for only HRA

as per the provisions of Canara Bank Officers'' Service Regulations.

The petitioners in their petition have pointed out that the bank, for the last thirty years, has been providing quarters for its Officers subject to

certain rental limits in selected places and now the said facilities have been extended to all the places and to all the officers and in case of an officer

who owns the flat and himself occupies it, such officer was entitled to rent reimbursement subject to the limits calculated by the bank. The

petitioners have confined the writ petition only to Junior Management Grade Scale I and Middle Management Grade Scales II and III also. It is

pointed out by giving illustrations that in case of Junior Management Grade Scale 1 Officer, Middle Management Grade Scale II Officer and

Middle Management Grade Scale III Officer, such Officers were entitled to stay in the quarters for which the rent limits were Rs. 1,050, Rs. 1,400

and Rs. 1,400 respectively and if they are not provided with the quarters, they could be paid the House Tent Allowance only between Rs. 275

p.m. and Rs. 500 p.m. By way of examples, it has been pointed out in the petition that one Thiru T.R. Ekanathan, who represented the first

petitioner, who was staying in his own flat and was getting the monthly rental reimbursement of Rs. 1,400 was deprived of that rental

reimbursement because of these clauses. So also in the case of other three writ petitioners, who owned their own flats and had rented them out,

were refused the facility of the bank quarters and were made to suffer financially on that count. The petitioners plead that the refusal of the facility

of the bank quarters, holding them to be ineligible for the same, merely because they owned their own house in the same city or town, where they

were working, would be arbitrary and discriminatory and clauses 4 and 5, which authorises the bank to take such steps, are invalid being contrary

to Article 14 of the Constitution of India. It is also pointed out in the writ petition that in the beginning, there was a Circular dated 1.3.1986 which

suggests that there was a Scheme introduce by the Bank in the year 1978 to take on lease the officers'' houses and to allot the said houses to the

owner or other officers in lieu of Bank''s quarters. However, this policy was discontinued owing to the instructions from the Ministry of Finance,

Government of India whereby such officer, who owns a house either in his own name or in the name of his wife or dependent children at the place

of posting, was entitled to only House Rent Allowance and was not entitled to be provided with the bank quarters. It was pleaded in the petition

that even this Circular was challenged in the Calcutta High Court and was stayed by the same. The petitioners further pleaded that on the

backdrop of the Circular dated 1.3.1986, the impugned Circular 25.4.1989, which was discriminatory and illegal, was brought in without prior

consultation of the Reserve Bank of India and the approval of the Central Government and without amending the service regulations as per Section

19 of the Central Act V of 1970. It is also argued that the Circular is not in keeping with the Board''s Resolution as there is no scope for the

discretion in the matter of allotment of quarters to such Officers.

In short, the contention of the petitioners is that the Bank Officers, who are otherwise eligible for the facility of bank quarters, cannot be refused

that facility, merely because they own houses in their own names or in the names of their wives or dependent children. It is pointed out that the

provision, apart from being discriminatory, is impracticable also as the house owned by the concerned officer may not be commensurate to his own

needs or to his entitlement, considering his status and seniority as a Bank Officer. It is also further reiterated that the said provision would spell out

unnecessary financial loss to the members of the Association.

The petition is opposed by the respondent-bank on various grounds. It is pointed out in the counter that the circular is on account of the clear

instructions by the Central Government, which instructions were binding on the Bank. It is then pointed out that the authority of the Central

Government to issue those instructions themselves has not been challenged in the petition and for that matter, the Central Government has not been

joined as a party-respondent. The bank, then points out that the Board''s resolution issuing these instructions is exact replica of the said instructions

of the Central Government. As a second, but main limb of the argument, the bank pleads that the service regulation, more particularly Regulation

No. 25 very specifically provides that no officers of the bank shall be entitled as of right to have a quarter and it is merely a facility given by the

bank. It is pointed out that if there is no entitlement as of right, so long as the officers were paid their house rent allowance, there could be no

occasion for the officers to complain about this policy.

The bank also pleads that there is absolutely nothing wrong in adopting the policy of not providing the quarters. The officer, who owned their

own houses in the same places, would form a class by themselves as against those officers, who did not have their own houses. According to the

Bank, it was completely justified in leaning towards the officers, who did not have any house of their own and excluding such officers who owned

their own houses and yet, had chosen to let them out and thereby such officers were in a position to have an unfair advantage over the others.

By way of an additional counter affidavit, the bank has suggested that the Circular does not speak about the discretion on the part of the bank to

allot quarters even to the officers who own the houses/flats at the places where they were serving and the said discretion which reflects in the

Board''s resolution would always be shown and has actually been shown. They pointed out that one of the petitioners himself, who became the

Senior Officer and was, therefore, liable to be given a bigger accommodation commensurate to his status, has actually been provided with the

quarters, though he owns a house at the place where he is serving since the house is hot befitting his present status as Senior Bank officer.

Therefore, the Bank also pleads that the Circular should be read in the light of the Board''s resolution. Besides this, the Bank has also pointed out

that though in the beginning, there was a limit on the house rent allowance that was payable to such bank officer who was owning a house of his

own and there was discrepancy between the rent limit to which he is entitled and the house rent allowance payable to him, if he is not provided

with the quarter, now the discrepancy no more exists, and therefore, on that count also the argument that the said officers would suffer financially,

is opposed.

On the backdrop of these rival contentions, it has to be seen whether the challenge of unreasonableness and arbitrariness to the Circular, is in

any way justified.

Before the legal merits and demerits of the Circular are considered, it will be better to see some admitted factual position. It is an admitted fact

that now the third and fourth petitioners are not in service at all and retired from the bank service on 30.4.1991 and 31.8.1996 respectively. It is

also an admitted position that the second petitioner, though owns a flat in Madras, has been provided with a quarter commensurate to his status in

Madras, while the first petitioner who is also serving in Delhi, is staying in a Bank quarter. None of the individual petitioners would now be in a

position to claim any additional benefit in terms of money merely because they were refused the quarters on the basis of the Circular at the time

when the writ petition was filed, because it is an admitted position that they were paid the house rent allowance admissible to them at that time.

Much grievance was made that while the officer concerned was entitled at that time to stay in a bigger house or quarter having a bigger rent

liability, he was deprived of that facility and he had to spend from his own pocket on account of rent and further had to content himself by getting

the house rent allowance only. Even if it is accepted at this juncture that factually the contention is correct, now it would not be possible for those

officers to claim any monetary benefit on that count, nor would it be possible for any such officers/members of the first petitioner-association to

claim such a benefit by way of writ petition under Article 226 of the Constitution. In the first place, in this writ petition, that is not the prayer and

even if such a prayer had been made, it could not possibly be entertained in this writ petition. It cannot be argued by the bank officers that merely

because they were eligible to stay in the quarters, for which a higher sum was payable by the bank as the rent as compared to the house rent

allowance which they got as they were not provided with those quarters, they would be entitled to claim the difference from the bank, much less in

a writ petition like this. Such a contention is not possible to be accepted in a writ petition, apart from the fact that it cannot be made on merits also,

the main reason being that there is no entitlement for a quarter, which is clear from clauses 25 of the Bank Regulations, which is specific in the

following terms:

No Officer shall be entitled as of right to be provided with residential accommodation by the Bank. It shall, however, be open to the Bank to

provide residential accommodation on payment by the Officer on and from 1.11.1994 a sum equal to 4% of the basic pay in the first stage of the

scale of pay in which he is placed or the standard rent for the accommodation whichever is less.

Provided that a further sum equal to 1% of basic pay in the first stage of the scale of pay will be recovered by the bank from an Officer if furniture

is provided at such residence.

Provided further that, where such residential accommodation is provided by the bank, the charges for electricity, water, gas and conservancy shall

be borne by the Officer.

It is, therefore, clear that basically, there is no entitlement or right in favour of any bank officer for a residential accommodation and it is merely a

facility given by the bank.

Once the entitlement by way of a right is found to be absent in case of the bank officers, then, the whole picture takes a different shape. The

question which would then fall for consideration is that while giving the facilities to its officers, has the bank discriminated, as it has refused to give

the quarters to such officers, who own their houses/fiats in the same city where they served. The learned Counsel very vociferous argues that in the

light of socialistic philosophy that our Constitution is wedded to, it must be held that such a provision is discriminatory and suffers from the vice of

arbitrariness. The learned Counsel argues that the officer has his own fiat or residential premises in the same place is really irrelevant, as the said

premises may not be available, may not suit his status in the Bank as the Senior Officer. The learned Counsel points out that while the facility of a

quarter would be available to the officers who do not own any house of their own, the refusal of such facility merely on the ground of the officers

owning a house or a flat would clearly be impermissible under the scheme of Article 14 of the Constitution. In support of his argument, the learned

Counsel heavily relies on the celebrated Apex Court judgment in Ramana Dayaram Shetty Vs. International Airport Authority of India and Others,

, which was followed in Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and

Kashmir and Another, . The learned Counsel points out that unlike a private individual, the State cannot act as it pleases in the matter of giving

largesse. Though it is further argued that though a private individual would be guided by economic considerations of self-gain in any action taken by

him, the Government is all the same, not free to act as it likes in granting largesse. The principles stated in paragraph 11 of Kasturi Lal''s case, were

very heavily relied upon by the learned Counsel to suggest that the Canara Bank was after all a ''State'' and, therefore, it could not arbitrarily act in

the matter of giving largesse. It will be seen that both the cases cannot be held to be applicable to the present case at all. In the first place, this is

not a case of distribution of largesse. What is to be considered here is whether it is permissible for the Bank for formulating a policy while giving

any facilities to its employees and whether such policy by itself is discriminatory and, therefore, arbitrary. There cannot be any doubt in holding that

the Bank cannot discriminate against one set of employees even in the matter of granting the facilities, but however, the question here is whether the

bank has so acted and I am of the clear opinion that the policy of the bank, in this case, is not discriminatory nor arbitrary. The law laid down in

both the above cases cannot be made applicable to the present case which essentially is in the realm of service jurisprudence. In allotting the

residential quarters to its officers, the bank does not distribute any largesse and further in the absence of any rights in favour of the bank officers

regarding the allotment of a quarter, which is merely a facility, the law laid down in these two cases would not be applicable at all. Similar logic

would apply in case of two other cases which have been relied upon by the learned Counsel, they being:

(1) Centre for Public interest Litigation v. Union of India and Ors. (1995) 3 S.C.C. (Supp.) 382. (2) Common Cause, A Registered Society v.

Union of India and Others (1996) 6 S.C.C. 530.

The first case pertains to the allotment of retail outlets for petroleum products, LPG and SKO dealership by the Central Government. It has been

held in that case by the Apex Court that the said allotment should be in terms of the guidelines for discretionary allotment of petroleum products

agencies. This is not a question of such a discretionary allotment, but this case pertains to a definite policy whereby the concerned officers, who

own their flats and have probably let them out, would not be allowed to have the unfair advantage of letting out their flats earning profits thereby

and yet getting a cozy and prestigious quarter in their favour. This alone, probably, seems to be the basis of the banks policy. Be that as it may, the

abovementioned case on facts would not be applicable at all. Similar is the matter with the second case mentioned above. In that also, the

allotments of retail outlets for petroleum products made by the Honourable Minister for Petroleum and Natural Gas were struck down on the

ground that they were arbitrarily made and as such were bad in law. In paragraph 26, the Supreme Court has relied upon the aforementioned

ruling in Ramana Dayaram Sheety''s case. The learned Counsel more particularly invited my attention to paragraphs 19 and 24. In paragraph 19, a

reference is made to Ramana Dayaram Shetty''s case and it has been pointed out that in the matter of State largesse, there cannot be an unlimited

discretion in favour of the Government and the allotments, 15 in number, have been found to be not in order. The principle stated in this case

cannot be disputed, but in the set of present facts, they are clearly inapplicable. The learned Counsel also relied upon another decision reported in

Dwarkadas Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, . This was a case where the Port Trust had sought to evict its tenant

and grant the land in question to another tenant. It was an admitted position that being a statutory authority, the Port Trust of Bombay did not come

under the mischief of rent Act. It was held in that case that being a public body, even in respect of its dealings with its tenants, the Port Trust must

act in public interest and an infraction of that duty is amenable to the examination either in civil suit or in writ jurisdiction. I do not find any similarity

in facts, nor in principles stated in this case with the present case. The case is completely inapplicable. Further case relied upon by the learned

Counsel is reported in All India Bank Officers'' Confederation and Others Vs. Union of India and Others, . Here, the officers'' Union was

aggrieved by a Circular issued by the Central Government, whereby the Central Government declined to restrict the choice of the representative

Director to the Office-bearers of the Association alone. Mr. Prasad, learned Counsel appearing on behalf of the petitioners, pointed out that the

Supreme Court, in this case, struck down the said Circular holding it null and void. He more particularly invited my attention towards the

observations to the following effect in paragraph 9:

They are well-identified, well-organised, well-motivated and interested associates and participants in the banking industry. They are as much a part

of the bank as the management is. There can be no legitimate management culture foreign to their vital interests. There can be no valid management

policy contrary to their genuine needs...In a nationalised bank, everyone is as much an employee as he is an employer. There is no antithesis

between the management and the employees. The distinction that traditionally existed prior to nationalisation is no longer applicable. The true

management culture is indeed the culture that represents the various interest of all persons specified u/s 9 as well as the larger and wider interests of

national economy as postulated in the preamble to the Act.

Relying heavily on this observation, Mr. Prasad, learned Counsel for the petitioners, points out that the policy of the Bank herein, which is

reflected in the Circular, is against the interests of the bank officers in general and suffers from the defects pointed out by the Supreme Court as

above. I do not agree with the contention. The above quoted observations of the Supreme Court are tried to be read totally out of context by the

learned Counsel for the petitioner. This was a question where a Director was to be appointed and as such the question involved was not germane

at all to the controversy involved in the present petition. That apart, I do not find anything against the interests of the employees in the

aforementioned case. The observations of the Apex Court in this case, therefore, are of no avail in so far as the controversy in this case is

concerned.

In short, the cases relied upon by the learned Counsel appear to be of no avail. After all, in declaring the officers, who owned their own

house/flats in the place where they were working in-eligible for the allotment of staff quarter,"" there is a clear distinction made between the officers

who owned their own flats either in their name or in the names of their spouses and their children and the officers who did not own any such

houses. In the case of class of the officers, who can be described as house owners, there is an advantage to them that they would have the benefit

firstly, in letting out their flats or utilising it for their own benefits and then also claiming a staff quarter for which they were not entitled as per the

clear verdict of Regulation No. 25. It cannot be forgotten that this was a mere facility provided and not a matter of right. It also cannot be forgotten

that such officers, who were declared ineligible, could all the same claim the House Rent Allowance which has also been increased after 1992 as is

clear from the counter by the respondent-bank. If the management leaned in favour of those officers, who did not have any house by declaring the

house owners/officers to be ineligible for the allotment of the staff quarters, it cannot be said that there is anything arbitrary and/or discriminatory in

this attitude. The object of the circular is clearly discernible i.e., to improve the performance of the officers by giving the facility of staff quarters. In

declaring the house owners/officers to be ineligible for the allotment of staff quarters, it is clear that the management had leaned in favour of the

officers, who did not now own houses/flats. Such a distinction, according to court, was clearly permissible in the two classes of the officers, they

being the house owners/officers and the others who are not so fortunate. There is nothing unreasonable, according to court, in preferring the other

class by declaring the house owners class to be ineligible for the allotment of staff quarters. At any rate, the exclusion of such officers from the

facility cannot attract an argument that it is the socialistic philosophy and order of the constitution of India as was tried to be contended by the

learned Counsel.

The learned Counsel then pointed out that there is an obvious incongruity in the Board''s Resolution and the Circular which is the child of the

Board''s Resolution. The counsel points out that the Board''s Resolution spells out an elasticity and a discretion in favour of the management to

consider favorably a case of the Officer who may be a house owner/officer and yet, might require the quarter. On the basis of peculiar facts

applicable to his case, such as his very genuine need or the house owned by him not being commensurate to his status as an officer in the bank, the

Circular provides no such discretion and the argument is apparently right. The wording of the Board''s Resolution, which is on record, undoubtedly

provides such an elasticity. It was, therefore, necessary that the said discretion and/or elasticity also reflects in the circular which is the direct

outcome of the Board''s Resolution. However, in the affidavit filed on its behalf, the Bank had specifically reiterated that the Circular was merely in

the nature of an information or the communication of the Board''s Resolution. It is reiterated in the affidavit as follows:

It cannot be said that the omission to mention Clause 5 of the Board Resolution in the circular has prevented any Officer to avail the concession

available to him. Many Officer employees, who own their houses had made applications to provide quarters and such applications were favourably

considered. The two petitioners are the beneficiaries of this clause. In any event, the impugned Circular except to the extent of non-incorporation

of Clause 5 cannot be attacked as being inconsistent with the Board Resolution.

It is pointed out that it was not the case of the petitioner in the Petition that the Circular was vitiated on account of the non-incorporation of Clause

5 of the Board Resolution which provided for such a discretion. The affidavit clearly spells out the binding nature of the Board Resolution in

comparison to the Circular, which is a fall out therefrom and which is described as a communication to the Officers, of the conditions of

employment. It is reiterated as under:

Wherever any matter is left to the discretion of the Bank or is available as a concession or as an exception, it is incorporated in the Manual which is

invariably known to all the officers.

From this, it is clear that it was not the intention of the bank to shut the doors to the house owner-officers permanently from getting the facility of

the staff quarters, even where such a facility is available to them on account of various factors as contemplated in the Board''s Resolution. In view

of this position taken as an answer to the petition, the objection raised by the learned Counsel on that count must be rejected. The learned Counsel

then argued that the Board''s Resolution itself was not valid and the instructions in this behalf issued by the Central Government could not be said

to be binding on the Board of the respondent-bank. The learned Counsel wanted to suggest that the directions issued by the Central Government

were not in the nature of involving the public interest and, therefore, u/s 8 of the Banking Companies (Acquisition etc.) Act, 1970, they could not

be said to be binding, and, therefore, the Board''s Resolution itself was not in Order which followed the so-called direction of the Central

Government even when those directions did not involve any matter of policy involving public interest. The learned Counsel argues that such

directions merely considered the question of the entitlement of the bank officers or their service conditions and there could be no question of any

policy involving public interest. A reliance is sought to be placed on the judgment of Calcutta High Court in Canara Bank Officers'' Association and

Ors. v. Canara Bank and Ors. Matter No. 533 of 1986 dated 29.7.1988, wherein a learned single Judge of the Calcutta High Court has held that

the directions regarding the conditions of service of the employees could to be meant to be the directions involving public interest. That was a case

where a Circular dated 1st March, 1986 being No. 84/86 came to be challenged. By that circular, the bank proposed to discontinue the practice

which was then in vogue, of taking on lease the officers house and to allot them to the owner or other officers in lieu of the banks quarters and the

bank was to pay the House Rent Allowance to an Officer who owns a house in his own name or in the name of the spouse or dependent child at

the place of posting. The said Circular also provided that those officers owning the house could not be provided with the Bank Quarters and make

over possession to the respective authorities before 1st June, 1986 by occupying either own house or making alternative arrangements. It was

further provided that wherever the said officer is occupying his own house, he would be eligible for drawing house rent allowance only permissible

under the rules with effect from 1.4.1986. It will be seen that though on the same subject, the said Circular is entirely different in nature, the learned

Judge of the Calcutta High Court quashed the said Circular. However, the learned single Judge clarified that it would not prevent the respondent-

bank from taking any decision pursuant to the Government guidelines in respect of the future policy relating to the official residence or quarters and

the House Rent Allowance of the Officers of the Bank concerned in accordance with law. The learned Judge quashed the said Circular only on the

ground that the bank, by issuing such Circular, could not take away the hitherto advantages given to the Bank Officers and could not, thus, change

the service conditions. On the technicalities of the Circular, the learned Judge observed that the General Manager had no power to issue the same

as it was not issued pursuant to any resolution of the Board of Directors. The learned Judge observed that the Circular was defective on that

account and even otherwise, the Circular could not have taken away the existing rights settled under the earlier scheme of the officers as it was only

prospective in nature. It was merely on these grounds that the Circular was quashed. The learned Counsel appearing for the petitioner Mr. Prasad

is not, however, right in contending that the Circular was quashed, as the High Court had held that the directions regarding the conditions of service

of the employees by the Central Government were not in the nature of the directions involving policy of public interest. Undoubtedly, there are

observations to that effect in the judgment suggesting that the said guidelines or policies could not be treated as directives u/s 8 of the Banking

Companies (Acquisition etc.) Act, 1970 as this was the direction regarding the internal management of the bank. However, the learned Judge

hastens to add as under:

In any event, however, it is also not necessary to determine whether this can be treated as a directive u/s 8 of the said Act. In any event, the said

guidelines does not direct the public sector Banks to take away the existing rights and privileges granted to its officers particularly relating to the

existing contracts. The guideline refers to the future policy to be followed by the bank concerned. Therefore, it is not intended to operate in a

manner so as to take away the rights and privileges and obligations under the existing contract of tenancy with the individual officers concerned or

relating to the existing arrangement of practice or existing contract of tenancy or monthly tenancy entered into by the Bank concerned with the

individual officers.

In short, though some observations were made regarding the directive by the Central Government not being in terms of Section 8 of the Banking

Companies (Acquisition etc.) Act, the question was not decided by the learned Judge and the petition came to be allowed sheerly on the grounds

that firstly the said circular was ultra vires the powers of the General Manager who had issued it as there was no Board Resolution and secondly,

the Circular was intended to operate only in future and was not related to the existing contracts. It cannot, therefore, be said that the Calcutta High

Court has held the said guidelines of the Central Government are not in regard to the matters of policy involving public interest. Another reason for

quashing the circular is that there was no evidence of the prior consultation with the Governor of the Reserve Bank of India, discernible from the

affidavit of the Central Government, which was filed before the learned Judge. Therefore, the Calcutta High Court judgment cannot provide a safe

basis to suggest that the Circular which is a fall out of the bank resolution and also the bank resolution are in any manner in contravention of

Section 8 of the Act.

Indeed, this question cannot even be raised in the present Petition for the simple reason that not only has the petitioner not chosen to challenge

the resolution of the Board from which the Circular flows, but has also not chosen to join the Central Government as a party to this petition. In

order to raise a contention that it was not within the powers of the Central Government to issue the guidelines and in pursuance of such guidelines,

no resolution could be passed, as has been passed by the Board of Directors of the Bank, it is imperative that the Central Government was joined

as a party to this petition and secondly, the validity of the Board resolution was itself challenged. Both these aspects are conspicuously absent in

the Petition. It cannot, therefore, be heard from the petitioners that at this stage that the Board resolution itself was bad as the guidelines issued by

the Central Government were not binding on the Board u/s 8 of the Act. It must be remembered that before the Calcutta High Court, the Central

Government was a party and had filed its affidavit. As I already pointed out, the question is unanswered in the Calcutta High Court judgment. This

is apart from the fact that the nature of the circular involved in that Petition was also different from the one in question here. That challenge also

must, therefore, fail. As I have already pointed out, in the counter, it has been clearly shown that there has been a salary revision from 1992 in

which the maximum limit of House Rent Allowance payable has been removed, Previously, in case of ''A'' Class Cities, the House Rent Allowance

payable to the Officers was 14% of the pay subject to a maximum of Rs. 450 per month. In respect of Area I and Project Area Centers in Group

''B'', it was 12% of the pay subject to a maximum of Rs. 375 per month. In respect of Area II and State Capitals and Capitals of Union Territories

not covered by Categories (i) and (ii), it was 10% of the pay subject to a maximum of 325 per month and in respect of Area III, it was 8% of the

pay subject to a maximum of Rs. 300 per month. However, while the percentages have been revised, the maximum limit has been taken away. It is

also submitted that a rule has been introduced to the effect that if an officer produces a rent receipt, the House Rent Allowance payable to him shall

be the actual rent paid by him or his residential accommodation in excess of 4% of the pay in the first stage of the scale of pay in which he is placed

with a maximum of 150% of the House Rent Allowance payable, as per the aforesaid rates mentioned in column II above, whichever is lower. It

is, therefore rightly reiterated in the counter that the officers, who have not been provided with any residential accommodation by the Bank, are

getting House Rent Allowance at the rates mentioned above without any maximum limit and they are not deprived of any pecuniary benefits as

alleged in the petition. Much was tried to be said regarding the monetary loss suffered by the Bank Officers. It was tried to be given illustration that

while the House Rent Allowance payable to Scale I Officer was Rs. 828.75, Scale II Officer was Rs. 1211.25 and Scale III Officer was Rs.

1569.75, the rental eligibility of the Officers at Madras in case of Scale I Officer was Rs. 2300 per month, Scale II Officer was Rs. 2400 per

month and Scale III Officer was Rs. 2600 per month. It was in that sense that it was being argued that if the quarters were made available to these

officers, they could have been able to stay in the quarters of the higher rent, while they are paid the low House Rent Allowance compared to the

rental eligibility. It was on this account that it was being argued that there is a financial loss. I do not at all agree. There is no question of a financial

loss merely because the officer is entitled to a quarter, the rent of which is more than the House Rent Allowance payable to him. The house rent

allowance is given as of right, while in so far as the question of allotment of staff quarter is concerned, it will be only by eligibility and by way of a

facility. There can be no comparison between those two concepts. The effort on the part of the petitioners to compare these two aspects is

completely impermissible. It was tried to be suggested that because of this policy, the senior officer may be paid the house rent allowance, whereas

the junior officer may be provided with quarters and that the Bank was willing to spend, if accommodation was provided, but was not prepared to

do so when the monetary equivalent was provided by way of house rent allowance. In my opinion the submission lacks the merits completely. It is

not the prayer in the petition that the House Rent Allowance should match with the amount of rent paid by the Bank if the officer is allotted such a

rented quarter. In trying to match these two aspects, the petitioners are, in fact, trying to claim higher House Rent allowance than permissible under

the rules, which is behind the scope of this petition, apart from the said demand being completely without any basis. It cannot, therefore be argued

that there is any unreasonableness merely because the House Rent Allowance is less than a particular officers eligibility to stay in a quarter, the

permissible rent of which is more than the House Rent Allowance. In my opinion, the two aspects cannot be compared at all.

In short, the petition has absolutely no merits. As if all these are not sufficient, Mr. Ibrahim Kalifulla, learned Counsel for the respondent-bank

pointed out that precisely this very Circular was challenged before, the Bombay High Court and precisely identical prayers were made before that

Court by this very petitioner-association. It will be interesting to see, after hearing the other side, the said petition was allowed to be -- withdrawn.

However, as shown by the learned Counsel for the respondent-bank, this fact has not been stated in this petition which has been subsequently

filed. Undoubtedly, the withdrawal of the petition may not be a deciding factor. All the same, in all fairness, the petitioner was bound to disclose

this fact in the present petition.

The writ petition has no merits and it is dismissed. In the circumstances of the case, the court orders costs of Rs. 5,000 to be paid to the

respondent. W.M.P.No. 1221 of 1990 is dismissed.