HON’BLE SRI JUSTICE GODA RAGHURAM AND HON’BLE SRI JUSTICE R.KANTHA RAO W.P.No. 16885 OF 2010 Date: 28.07.2010 BETWEEN: Union of India and others .. Petitioners And V.Sita .. Respondent HON’BLE SRI JUSTICE GODA RAGHURAM AND HON’BLE SRI JUSTICE R.KANTHA RAO W.P.No. 16885 OF 2010 ORDER: (Per Hon’ble Sri Justice Goda Raghuram,J) Heard Smt. Pushpinder Kaur, the learned counsel for the petitioners and Sri G.Sanyasi Rao, learned counsel for the respondent. The Railways assail the order of the learned Central Administrative Tribunal, Hyderabad Bench (the Tribunal) dated 15.04.2001 in O.A.No.291 of 2009. The respondent moved the Tribunal for invalidation of an order dated 23.12.2008 of the Financial Advisor and Chief Accounts Officer, South Central Railway (second petitioner herein) effecting recovery of Rs.2,58,861/-; sought refund of Rs.2,58,861/- ; to revise the pensionery benefits in the revised pay scales of Rs.4500-7000 (RSRP) w.e.f. 01.01.1996; and consequent revision of family pension. The applicant’s husband while working as a Junior Clerk in the Railways died on 10.05.2002. When the applicant (respondent herein) sought employment on compassionate grounds, she was intimated by the Railways that her husband was removed from service w.e.f. 14.10.1997 on account of unauthorized absence from duty and therefore, she was in eligible for compassionate appointment. The respondent challenged the order declining grant of compassionate appointment in O.A.No.880 of 2005. The Tribunal allowed the O.A by the order dated 04.04.2007 and declared the removal of the respondent’s husband from service as illegal (as the said order was not served on him during his life time) and directed the Railways to consider the respondent’s case for compassionate appointment. The Railways challenged this order of the Tribunal in W.P.No.16278 of 2007. The writ petition was disposed of modifying the punishment of removal to that of compulsory retirement. A consequent order was passed by the Railways on 26.11.2007 modifying the penalty of removal of the deceased-employee to one of compulsory retirement w.e.f. 25.05.1995 with consequent benefits granted including the terminal benefits. Consequent on the alteration of the penalty as above, the first petitioner prepared a bill for settlement of dues determining Rs.3,63,302/- as due to be paid to the widow-respondent herein. However, the second petitioner herein-The Financial Advisor and Chief Accounts Officer imposed recovery of Rs.2,58,861/- including damage rent of Rs.2,03,160/-, over payment of Rs.52,201/- and Railway Employees Liberalised Health Scheme (RELHS) is Rs.3,500/-. But these details were not intimated to the respondent (widow) and only withholding of Rs.2,58,861/- was revealed. Aggrieved thereby, the respondent lodged an application with the Tribunal. The Tribunal by the order impugned directed the petitioners to refund Rs.2,58,861/- within a period of two months from the date of receipt of a copy of the order and in default that the petitioners are interest liability @ 10% per annum on the amount till the date of actual payment. In paragraph 7 of the order, the Tribunal after recording that the recoveries were made without notice and opportunity to the respondent either as to the amount to be recovered or details of such recoveries including the principles on the basis of which each of the amounts quantified were to be recovered, however observed on the merits of the Railways’ entitlement to recoveries that since the overpayment was not on account of any misrepresentation on the part of the deceased-employee, no recovery is permissible; that in case of damage rent for unauthorized occupation of the Government Quarters, no penal rent could be recovered in view of the decision in RADHA BALLABH v UNION OF INDIA AND ANOTHER[1]. In our considered view these observations of the learned Tribunal are misconceived. Sri G.Sanyasi Rao, learned counsel for the respondent would strenuously contend in view of the decision of the Supreme Court in Radha Ballabh (supra), no damage rent or penal rent could be recovered (on account of unauthorized occupation of a Government quarter by the Government employee) from retiral benefits. We have perused the judgment in Radha Ballabh. On facts, the petitioner before the Supreme Court was an employee of the Railways and was in unauthorized occupation of the Government quarter from 10.04.1964, despite direction by the authorities and refused to vacate the quarter. He retired from service on 31.12.2004 and was entitled to retirement benefits of Rs.4 lakhs, but the Railway authorities deducted Rs.3,20,539/- which was challenged. It would appear from the judgment that pursuant to Court direction, the learned Additional Solicitor General of India filed a statement which disclosed that Rs.29,705/- was due from the petitioner towards electric charges; Rs.12,169/- towards normal rent; Rs.6,705/- towards other charges; and Rs.4,170/- was paid as HRA wrongly despite the petitioner occupying the railway quarters unauthorisedly. These amounts were sought to be recovered. The Apex Court did not expound any principle which constitutes ratio decidendi or a law in the context of Article 141 of the Constitution. The Apex Court ordered: “as the petitioner was in unauthorized occupation of the quarters despite repeated requests, he shall pay a sum of Rs.12,169/- as rent in addition to the amount of Rs.12,169/- which is due from him towards normal rent, however, the damage rent indicated in the statement may not be recovered.” The above observation/direction in the judgment, in our respectful view is only a decision of the Apex Court in the facts and circumstances of the case and does not expound a principle of general application which could be characterized as law within the meaning of Article 141 of the Constitution. From the decision in Radha Ballabh, we are unable to discern a principle of general application that penal rent is not deductable, even if authorized by the relevant rule/regulation, from the retiral benefits of an employee who continued in unauthorized occupation of the Government quarters. It is trite principle that what is binding in the judgment of a superior Court on Courts of inferior jurisdictions is the law declared or the ratio decidendi and not the conclusion. For this reason, we are of the considered view that the decision in Radha Ballabh affords no assistance to the respondent to claim immunity from deduction of penal rent, if that is so authorized by law on account of the illegal occupation of Railway quarters either by the deceased husband or after his death by the respondent. The petitioner-Railways are therefore entitled to deduct penal rent in accordance with law including relevant statutory rules governing the deduction of penal rent including the principles for quantification of the penal rent as spelt out in the relevant rules/regulations. The deduction of Rs.2,58,861/- from the terminal benefits of the deceased has however been rightly invalidated by the Tribunal as the deduction was without notice or opportunity to the respondent including the details as to the several components of the total deduction of Rs.2,58,861/-, the norms on the basis of which the amount in respect of each head of deduction is arrived at, and other relevant particulars. Thought Smt. Pushpinder Kour, learned counsel for Railways valiantly tried to justify the deduction (without notice or opportunity to the respondent), on the ground that the Railway Services (Pension) Rules, 1993 do not require any notice to the retired railway employee while deducting the amounts due to the Railways from the retiral benefits, the contention of the learned counsel in this behalf does not commend acceptance by this Court. It is a trite principle of administrative law that principles of natural justice, in particular the principle of audi alteram partem are components of Article 14 of the Constitution. In the absence of any Rule, expressly or by any compelling implication, dis-applying the requirement of affording a reasonable opportunity, this requirement constituting an essential ingredient of fair-play in action cannot be avoided on the jejune pretext that the relevant statutory context is silent-vide SWADESHI COTTON MILLS VS. UNION OF INDIA[2]. The contention of the learned counsel for the Railways that no notice or opportunity need be issued or provided is therefore, misconceived and is rejected. On the aforesaid analysis, we dispose of the writ petition directing the petitioners to issue a notice to the respondent within a period of 15 days from today (ensuring its communication by registered post with acknowledgment due or by any other verifiable means of communication) setting out details of amounts and the several heads under which deductions are proposed to be made from the retiral benefits payable to the respondent; in case of penal rent or damage rent, the period for which the penal rent is sought to be levied the principle or provision on the basis of which the amount of damage rent or penal rent is arrived at; and the relevant rules on the basis of which the damage rent is quantified. Similar details and principles shall be furnished in respect of the other heads of deductions. On receipt of such a notice from the petitioners, the respondent would be at liberty to submit a response/objections within (15) days from the date of receipt of such notice by registered post with acknowledgment due addressed to the second respondent/the Financial Advisor and Chief Accounts Officer, South Central Railway, Secunderabad. On receipt of such objections from the respondent, within the time stipulated above, the second petitioner shall consider the same and pass detailed and reasoned order in respect of each objection of the respondent, in the decision taken as to withdrawals. The final decision shall be communicated to the respondent. The liability of the petitioners to pay the respondent the amount of Rs.2,58,861/- (which may be withheld for the present) shall be subject to the decision taken by the second petitioner in the manner and following the procedure set out above. The writ petition is disposed of as above. There shall be no order as to costs. _____________________ GODA RAGHURAM,J ___________________ R.KANTHA RAO,J Date: 28.07.2010 kvrm/ccm HON’BLE SRI JUSTICE GODA RAGHURAM AND HON’BLE SRI JUSTICE R.KANTHA RAO W.P.No. 16885 OF 2010 Date: 28.07.2010 [1] 2007(1)SCC(L&S)679 [2] AIR 1981 SC 818