1987 (1) TMI 501 - SC - Indian Laws

Summary

Issues Involved:
1. Liability to pay damages for unauthorized occupation of government accommodation.
2. Applicability of promissory estoppel against the government.
3. Authority to deduct damages from commuted pension under Section 11 of the Pensions Act, 1871.

Detailed Analysis:

1. Liability to Pay Damages for Unauthorized Occupation of Government Accommodation:
The central issue is whether a government servant who retains accommodation beyond the concessional period is liable to pay damages equivalent to the market rent without receiving a specific notice from the Directorate of Estates. The respondent, a former Squadron Leader, retained a government-allotted flat beyond the permissible period after his transfer from Delhi, leading to unauthorized occupation. The High Court had ruled that the liability to pay market rent was contingent upon the Directorate serving a notice. However, the Supreme Court held that under SR 317-B-22, the liability to pay damages is absolute and not contingent on any notice. The Court clarified that the rule mandates payment of market rent for unauthorized occupation, irrespective of any notice from the Directorate.

2. Applicability of Promissory Estoppel Against the Government:
The High Court had applied the doctrine of promissory estoppel, stating that the government was estopped from claiming market rent due to its inaction and acceptance of normal rent. The Supreme Court disagreed, stating that there was no representation or conduct by the government that could induce the respondent to believe he could occupy the flat on normal rent. The Court emphasized that the respondent was aware of the rules and the consequences of unauthorized occupation. Therefore, the doctrine of promissory estoppel does not apply in this case, as there was no inducement or detrimental reliance by the respondent.

3. Authority to Deduct Damages from Commuted Pension under Section 11 of the Pensions Act, 1871:
The respondent challenged the unilateral deduction of damages from his commuted pension, arguing it was contrary to Section 11 of the Pensions Act, 1871. The High Court failed to address this crucial issue. The Supreme Court held that Section 11 protects pension and commuted pension from attachment, seizure, or sequestration. The Court cited precedents and government circulars supporting the view that commuted pension retains its character as pension until it reaches the hands of the pensioner. Therefore, the government's action of deducting Rs. 20,482.78 from the respondent's commuted pension was unlawful. The Court directed the government to refund the deducted amount and suggested that the government consider dropping proceedings for recovery if the respondent foregoes his claim for interest.

Conclusion:
The Supreme Court reversed the High Court's judgment, holding that the liability to pay market rent for unauthorized occupation is absolute and not contingent on notice. The doctrine of promissory estoppel does not apply, and the government's deduction from the commuted pension was unlawful under Section 11 of the Pensions Act, 1871. The Court ordered the refund of the deducted amount and suggested the government consider dropping further recovery proceedings.