THE STATE OF WEST BENGAL AND ORS. versus RANBINDRA NATH SENGUPTA AND ORS.

Citation: [1998] 2 S.C.R. 599 · Decided: 31-03-1998 · Supreme Court of India · Bench: G.N. RAY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

THE STATE OF WEST BENGAL AND ORS. 
v. 
RANBJNDRA NA TH SENGUPTA AND ORS. 
MARCH 31, 1998 
[G.N. RAY AND K. VENKATASWAMI, JJ.] 
Service Law-West Bengal Services (Revision of Pay and Allowances) 
Rules, 1990-House Rent Allowance (HR.A.)-Dijferential Payment-
Classification for grant of HR.A.-Reasonableness of-HR.A. payable to 
Govt. employees living in Govt. accommodation and paying assessed rent as 
licence fee limited to the extent of licence fee paid while HR.A. admissible 
to a Govt. employee living in privately rented accommodations or in their 
own accommodations paid 15% of basic pay subject to a maximum of Rs. 800 
per month-Fairness of-Held, the two classes of Govt. employees stand on 
A 
B 
c 
a different footing and such distinction is fair and just having a reasonable D 
basis on which HR.A. is to be paid-Accrual of unreasonable and unjust 
profit if full amount of HR.A. paid to employees residing in Govt. 
accommodation by paying nominal licence fee-Held, there is justification 
that such Govt. employees are not given the full amount of HR.A. but they 
will be reimbursed to the extent of licence fee paid by them-Constitution of 
India, 1950-Article 14.-West Bengal Govt. Premises (l?.egulation of E 
Occupancy) Act, 1984--Section 2(d), (k), (n), 3, 11, 24, 27-W.B. Govt. Premises 
(Tenancy Regulation) Act, 1976-Sections 2(a), 3. 
Administrative Law-Policy regarding rates of-House Rent 
Allowance-Revision of-Validity-Formulation of the policy regarding 
payment of HR.A. by the Govt. after considering the recommondations of the F 
Third Pay Commission-Intelligible differentia between two groups of Govt. 
Employees viz. Govt. Employees provided with accommodation in Govt. flats 
and those not so provided-Held, such revision of policy cannot be held to 
be arbitrary, capricious, or without any basis-interference with the policy 
decision not called for. 
G 
The occupation of housing estates belonging to the State Govt. was 
regulated by the West Bengal Premises (Tenancy Regulation) Act, 1976 
initially. The amount assessed for occupation of Govt. housing estates was 
termed 'rent'. On 28th Jan. 1978, the department of Housing, Govt. of West 
Bengal issued a memorandum providing an option to the Govt. employees H 
599 
600 
SUPREME COURT REPORTS 
[ 1998] 2 S.C.R. 
A occupying accommodation provided by the Housing Department of the State 
Govt. to either pay "assessed rent" that may be fixed by the govt 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. The respondents had opted for 
paying the assessed rent and drawing admissible house rent allowance. In 
B 1984, the West Bengal Premises (Regulation of Occupancies) Act, 1984 
came into force under which the occupation charge for such govt. flats was 
termed as 'licence fee' instead of an 'assessed rent'. Pursuant to the 
r~commendations of the Third Pay Commission, the West Bengal Services 
(Revision of Pay and Allowances) Rules, 1990 (ROPA Rules) was published. 
The ROPA Rules provided that the House Rent Allowance (H.R.A.) admissible 
C to Govt. employees living in privately rented accommodations or in their own 
accommodations would be 15% of basic pay subject to a maximum of Rs. 800 
per month. On the other hand, the HRA payable to Govt. employees living in 
Govt. accommodation and paying assessed rent as licence fee, was limited to 
the actual assessed rent paid. 
D 
The respondents who had been allotted govt. accommodation being 
employees of the State Govt and who had been paying assessed amounts for 
such occupation and were enjoying the House Rent Allowance challenged the 
ROPA Rules by way of a petition before the High Court which was dismissed 
by Single Judge and subsequently allowed by the Division Bench of the High 
E Court. Aggrieved, the State preferred the present appeal. 
F 
On behalf of the appellant State it was contended that there was 
intelligible differentia between two groups of govt. employees, namely, govt, 
employees provided with accommodition in govt. flats and employees who have 
not been provided. The H.R.A. was in lieu of accommodation not made available 
to the employees and was not a matter of right. Acceptance of govt. 
accommodation as licensee was optional and the respondents had accepted 
such govt. accommodation. It was further contended that it would not be just 
and proper to allow the respondents the benefit of full amount of URA by 
occ
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