THE STATE OF KARNATAKA AND ANR. versus MANGALORE UNIVERSITY NON-TEACHING EMPLOYEES ASSOCIATION AND ORS.

Citation: [2002] 2 S.C.R. 121 · Decided: 28-02-2002 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed

Judgment (excerpt)

THE STATE OF KARNATAKA AND ANR. 
v. 
MANGALORE UNIVERSITY NON-TEACHING EMPLOYEES 
ASSOCIATION AND ORS. 
FEBRUARY 28, 2002 
[S. RAJENDRA BABU AND P. VENKATARAMA REDD!, JJ.) 
Service Law : 
A 
B 
AllowafiCes-House Rent Allowance and City Compensatory Allowance- C 
Grant of-To 'E' class city based employees at par with 'C' class city based 
employees-Withdrawal of such allowance-Order for recovery of excess 
payment-Held, withdrawal justified, since 'E' class city based employees not 
entitled to draw HRAICCA at the rates applicable to 'C' class city based 
employees-However, in the circumstances of the case order of recovery of D 
excess payment not justified 
Constitution of India. 1950--Article 14--Criterion adopted in 'A' class 
city not extended to 'C' class city-Held, does not violate the provision--
legislative provision or executive order of general application does not become 
unconstitutional n1erely because in its actual application it is disadvantageous E 
or inequitable to certain individuals. 
Administrative law-Principles of Natural Justice-Violation of-Held, 
violation itself is not sufficient to set at naught the action taken-In considering 
the effect of violation, genesis and reason of action taken and possibility of 
prejudice are to be taken into account-In the instant case the principle not F 
violated, since ,action iaken was within the parameters of rules-Hence no 
prejudice caused by not affording opportunity of hearing. 
Mangalore University was located in 'E' category town, 5 kms. away 
from Mangalore, a 'C' category city/town. Due to inadequate housing facilities 
in the campus of the University, its employees were allowed payment of House G 
Rent Allowance (HRA) and City Compensatory Allowance (CCA), at par with 
the employees working within limits of Mangalore City Corporation Area. 
After objections from Accountant General Government ordered to 
discontinue such payment of HRA and CCA w.e.f. 1.4.1994 on the ground H 
121 
122 
SUPREME COURT REPORTS 
[2002) 2 S.C.R. 
A that the place where the University was situated, did not fall under the City 
Corporation Area. University was directed to recover the excess amount paid 
from 1.4.1994. However, notwithstanding Government Orders status quo with 
regard to payment of allowances continued upto 31.3.1997. 
The legality of the Government orders withdrawing such payment of 
B HRA and CCA and directing the University to recover excess amount, were 
challenged in writ petition under Article 226 of the Constitution, and direction 
was sought to pay HRA and CCA at the same rate as applicable to 'C' 
category city. It was contended that Government should have treated the 
University employees at par with Government employees posted at a place 
C within 8 k.m. from the periphery of Bangalore City Corporation Limits; and 
that opportunity of being heard was ~ot afforded to them. The petition was 
dismissed by Single Judge of the High Court. 
On appeal, Division Bench held that on the analogy of the benefit given 
to the employees working within the peripheral area of the Bangalore City 
D Corporation, the University employees should have been given the same 
benefit and not doing so would be violative of Article 14 of the Constitution; 
that the allowance being part of service condition, employees should not have 
been deprived of the benefits which have accrued to them; and that 
opportunity to show cause should have been afforded to the affected employees 
as their accrued rights were being curtailed. Hence these appeals. 
E 
Allowing the appeals, the Court 
HELD : 1.1. The impugned orders of the Government do not, by 
themselves, fall foul of Article 14. These orders were issued only to rectify 
the mistake that was committed in extending the benefit of HRA and CCA 
F applicable to 'C' class city to the Mangalore University employees. The 
employees ofMangalore University will only be entitled to draw the said 
allowances at the meagre rate applicable to 'E' class station because the place 
where Mangalore University is located comes under 'E' class.(129-H; 130-A) 
G 
1.2. If 8 Kms. yard-stick is prescribed in the case of Bangalore city, it 
does not mean that the same criterion should be applied for all other cities in 
the State of Karnataka. A legislative provision or an executive order of general 
application. does not become unconstitutional merely because, in its actual 
application, it turns out to be disadvantageous or inequitable to certain

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