Holding

The Court held that under Rule 11 of the Orissa Service Code the Government is empowered to levy penal rent at five times the standard rent for overstay beyond the prescribed four‑month period, and the Tribunal’s contrary view was erroneous.

Summary

The Supreme Court examined whether the Government of Orissa could levy a penal rent of five times the standard rent on retired government servants who overstayed in allotted government quarters beyond the four‑month period prescribed under Rule 11 of the Orissa Service Code. The respondents, former government servants, had continued to occupy their allotted houses after retirement and were charged penal rent, which they challenged before the Central Administrative Tribunal. The Tribunal held that the Government could not assess damages exceeding one‑time standard rent, but the State argued that Rule 11 expressly authorises a five‑fold penal rent for overstay. The Court analysed the relevant rules, noting that Rule 11, together with Rule 5 and Rule 104, empowers the Government to collect penal rent after the four‑month limit, subject to exceptional circumstances and proper procedure. It concluded that the Tribunal’s view was erroneous and that the Government does have the statutory power to levy the higher penal rent, except where specific location‑based rules are lacking. Accordingly, the appeals were allowed, affirming the Government’s right to impose the penal rent, without costs.

Issues considered

Whether Rule 11 of the Orissa Service Code authorises the Government to levy penal rent at five times the standard rent for overstay beyond four months after retirement.
Whether the Central Administrative Tribunal erred in holding that the Government cannot assess damages exceeding one‑time standard rent.
Whether the Government has power to levy penal rent for overstay in government quarters located outside Cuttack and Bhubaneswar without specific rules.

Subjects

service lawgovernment housingpenal rentoverstayOrissa Service CodeRule 11retirementadministrative tribunal

Judgment

A STATE OF ORISSA & ORS. ETC.
v.
SADASIVA MOHANTY

OCTOBER 25, 1996 I

B [K. RAMASWAMY AND S.P. KURDUKAR, JJ.)
'
Service Law:

Orissa Service Code-Rules 2(ii), 11,JO+-Allotment, of Govt.
C residence-Employees retiring-Continued to occupy the houses-f'enal rent
for overstay-Power of Government to levy--Upheld-#'here the rules are not
made applicable Govt. is devoid of power to levy penal rents for over-
stay-<Jovemment servants to pay penal rent beyond the period permitted by
·the order of competent authority or High Court-High Court to consider each
case only on exceptional circumstances for giving directions to permit a
D Government servfl!lt beyond prescribed period.
. . , .I . .
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14534 of
1996 etc. etc. "-<

From the Judgment and Order dated 7.1.1993 of the Orissa Ad-
E ministrative Tribunal at Bhubneshwar in OA No. 'J27 of 1992
P.N. Misra'for the Appellants.

K.N. Tripathi, Janaranjan Das, K. Vishwanatiian and K.V.
Venkataraman for the Respondents.
F
The following Order of the Court was delivered :

· Leave granted.

We have heard learned counsel on both sides.
G
These appeals by- special IeaVe arise from the order of the Central
Administrative Tn"bunal, Bhubaneswar made on 255.1992 in OA No.
1549/90 and batch.
-··
The admitted position iS that all the respondents are Government
H servants. They were allotted Government houses in Bhubaneswar and
820
STATE v. S. MOHANTY 821

Cuttack during their tenure of office as Government servants. On their A

-
.., retirement, they did not vacate the premises, though their allotments have
been cancelled. Consequently, the Government had charged them with
penal rents of 5 times the standard rent prescribed under the Orissa
Service Code. When they challenged the levy in the Tribunal, it held that
the Government have no power to assess damages by way of penalty in
B
excess of one time standard rent. Therefore, the order passed by the
Government is not valid in law. Mr. P.N. Misra, learned counsel for the
State, contends that the vi_eWtaken by the Tribunal is contrary to Rule 11
of the Orissa Service Code, (for short, the 'Code') which contemplates that
' ' a Government servant, after retirement, if he over-stays beyond the maxi-
mum period of four months as provided under the Rules, is required to c
pay penal rate of rent at the rate of 5 times the standard rent charged for
the period of occupation of the quarter beyond four months. Therefore,
the view taken by the Tribunal is not correct in law.

Mr. Janaranjan Das, learned counsel appearing for the respondents
D
relying upon Appendix to the rules, contends that the Government have
prescribed the procedure for allotment of the house and for utilisation, the
Government servants are required to pay standard rent fixed for the house.
In other words, there is no power to fix five times the standard rent for
overstay.
E
The question, therefore, is: whether the Tribunal's view is correct in
law? It is seen that under Rule 104 of the Rules, the Government have
... reserved its power to regulate the allotment of the houses, subject to the
terms and conditions, as may be regulated under the instructions issued in
furtherance thereof by the Government. Rule 11 deals with allotment of F
the house to the officers either owned by the Government or leased by the
Government, as the case may be, Rule 2(ii) provides, by general or special
order, for fixing fee in excess of what is prescribed in clause (b) referred
to earlier. Clause (6) provides that wl.iere the Government servant does not
vacate the residence, after cancellation of the allotment, the Government
is empowered to collect penal rent. For that, procedure has been laid down· G
Ir· by the proceedings of the Government dated December 12, 1986. Therein
Clause (2) adumberates that a Government servant who cannot vacate the
quarters, for genuine reasons of health or other absolutely. compelling
reasons, may retain the quarter for a further period of one month only,
with the prior written permission of the Director of Estates on advance H
822 SUPREME COURT REPORTS [1996) SUPP. 7 S.C.R.

A payment of standard rent Fixed for the quarter. In other words, the
Government servant after retirement/transfer is required to vacate the
(
quarter except for genuine reasons with prior written permission of the
Director of Estates. He shall be entitled to retain the quarter only for a
period of one month that too on paying in advance the standard rent.
Clause (5) envisages that a Government servant after retirement may be
B allowed to retain the quarter occupied by him for a maximum period of
four months as provided in the Rule of the Code on advance payment of
normal rent for four months. But his DCRG will be released only after he
vacates the Government quarter. Rent at the rate of five times the standard
rent will also be charged for the period of occupation of the quarter beyond • '
c four months.

Thus, it could be seen that a Government servant, after he ceases to
be the Government servant, is required to vacate the premises after the
expiry of four months, subject to his paying the standard rent as prescribed
under Clause (5). If he overstays beyond four months, he shall be charged
D
the rent at the rate of five times the standard rent prescribed under the
Rules. Appendix to the Rules relied upon by Mr. Janaranjan Das, has no
bearing to these cases. Therein, where a Government servant is having a
house but fraudulently has obtained allotment of the house, the Govern-
ment is entitled to have him dispossessed in accordance with the Rules but
E he is required to pay only the standard rent. While he was in possession
of the out-house of the allotted house and lets it out and without permission
of the Estate Officer, he is required to pay the standard rent prescribed
for the house which was allotted to him and for the out-house as well. That to<

would indicate that it was required to deal with special circumstances. But
F in general circumstances, Appendix to Rule 11 is of little assistance to the
Government servant who overstays after four months. The Tribunal, there-
fore, was wholly illegal in its conclusion that the Government is not entitled
to levy penal rents, after the expiry of four months.

In regard to appeal arising out of SLP (C) No. 14606/94 filed against
G the order of the Tribunal in OA No.2078/92 dated 18.11.1993, the admitted
position is that the respondent was staying in a Government quarter at
Karanjia. It is seen that the above regulation referred to earlier relate to
·•
the quarter allotted to the Government servant in Cuttack and Bhubanes-
war. Under these circumstances, the levy prescribed by special order for
H payment of the penal rents in excess of the prescribed limit to the houses
STATEv. S. MOHAN1Y 823

occupied or owned by the Government at Cuttack and Bhubneshwar, the A
Government thereby, has denied itself any power· to charge penal rentals
to buildings owned or occupied by the Government in other places unless
rules or general directions are issued. The Tribunal, therefore, was right in
respect of that case only. But in all other cases, the order passed by the
competent authority has become final. The Government is devoid of power B
to levy penal rents for the overstay. E\'.en in respect of the cases where the
Government servant overstays beyond the period permitted by the High
Court, the Government servants are required to pay penal rent beyond the
period permitted by the order passed by the competent authority or by tqe
' .. High Court, as the case may be. The High Court requires to consider each
case only on exceptional circumstances for giving directions to permit a C
Government servant beyond prescribed period. The object is to enable the
\
Government servants on transfer or waiting for allotment to be entitled to
be provided with accommodation. '

The appeals are accordingly allowed to the above extent, but, in the
circumstances, without costs. D
G.N. Appeals allowed.

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