LexNATIONAL BUILDING CONSTRUCTION CORPORATION versus S. RAGHUNATHAN AND ORS.
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A NATIONAL BUILDING CONSTRUCTION CORPORATION B v. S. RAGHUNATHAN AND ORS. AUGUST 28, 1998 [S.C. AGRAWAL, S. SAGHIR AHMAD AND M. SRINIVASAN, J.I.] Administrative Law : C Legitimate Expectation-Doctrine of-Nature-Invoking of-Cmuli- D tions f 01-National Building Constmction C01poration decided to grant foreign allowance according to pre-revised basic pay and not according to revised basic pay-Validit}-Held: Docuine of Legitimate Expectation is akin to natural justice, reasonableness and promissmy estoppel--Jt assures fair play in administrative action--State cannot disregard policy statement unfairly or apply it selectivelJ-17re doctn.ne is a source of substa11tive as well as procedural 1ight.1-17re docuine can be invoked by an aggiieved person who altered his position by acting upon state action--Wlzether an expectation is legitimate or not is a question of fact--171is question has to be decided not according to the claimant's perception but in larger public interest-Jn the E circumstances of the case, policy decision which was based 011 objective assessment of prevailing circumstance displaced legitimate expecta- tion-Hence, C01poration's decision, upheld-Constitution of India, 1950, A1t. 14--Evidence Act, 1872, S. ·115. Legitimate Expectation-ls a question off act-Hence must be pleaded F in writ petition. Se1vice Law : Allowances-Foreign allowance-Linked with basic pay-Increase of G basic pay-Effect on foreign alloww1ce-171ere was no assurance by the employer that foreign allowance would be increased with i11crease of basic pay-'-Held, no11-gra11t of foreig11 allowance according to increase in basic pay, valid. Fundamental Rule 5 J--Compensat01y and foreign allowances-Grant H of-To employees on deputation-Held: Grant of such allowances is at the 156 ' - . . NATIONAL BUILDING CONSTRUCTION CORPN. v. S. RAGHUNATHAN 157 absolute discretion of the President-Further, foreign allowance cannot be A treated as a salary component akin to deputation (duty) allowance as it is in the nature of a residuary perk. Practice and Procedure : Pleadings-Writ petition-Question of fact-Not raised in writ petition B but raised during arguments-Petitioners neither raised question of legitimate expectation in writ petition nor laid a foundation for such a plea in the pleadings nor in the affidavits-But High Court entertained the plea dudng arguments and allowed the petition on this ground only-Correctness of-Held :In the absence of pleadings and affidavits of petitioners, allowing C the petition only ~n the ground of legitimate expectation which is a question off act is a speculative exercise, and is erroneous. The respondents who were engineers in the Central Public Work Department (CPWD) were sent on deputation to the National Building Construction Corporation (NBCC) for one of the overseas projects being D executed by NBCC in Iraq. Under the servi.~e agreement the respondents were given the option either to draw theji' salary in the scale of pay of CPWD together with deputation (duty) allowance or get their pay fixed under normal rules applicable to the posts for which they were selected by NBCC. The respondents opted for the first choice. The respondents were E also granted foreign allowance @f 125% of their basic pay by NBCC. In the meanwhile the pay scale of the respondents in CPWD were revised w.e.f. 1.1.1986 as a result of the recommendation of the Fourth Central Pay Commission and consequently the pay scale of the respon- dents increased. The respondents filed a writ petition before the High Court for a direction that the respondents be paid foreign allowance @ 125% of the revised basic pay which was allowed on the basis of the Doctrine of "Legitimate Expectation". Hence this appeal. F On behalf of the appellants it was contended that foreign allowance G was not part of the agreement between the respondents and NBCC; that NBCC issued an order dated 15.10.1990 fixing foreign allowance @ 125% of the pre-revised pay; that the High Power Committee constituted to look into the wage structure of public sector undertakings after the recommen- dations of the l<'ourth Central Pay Commission had not recommended any H 158 SUPREME COURT REPORTS [1998) SUPP. 1 S.C.R. A increase in foreign allowance, that the Doctrine of "Legitimate Expectation" was not pleaded in the writ petition; and that it was not open to the High Court to entertain this plea at the stage of arguments
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