Judgment · High Court · 2008

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 21.4.2008CoramTHE HONOURABLE MR.JUSTICE K.CHANDRUW.P.No.8826 of 1998andW.M.P.No.13433 of 1998 Indian Bank Officers' Association, No.19, Moocker Nallamuthu Street, Chennai-600 001rep.by its General Secretary... Petitioner vs.

Indian Bank, rep.by its Chairman & Managing Director, having its Head Office at: No.31, Rajaji Salai, Post Box No.1384, Chennai-600 001.

The General Manager(Personnel), Indian Bank, No.31,Rajaji Salai, Post Box No.1384, Chennai-600 001 ... Respondents Petition filed under Article 226 of the Constitution of Indiapraying for issuance of a writ of mandamus to direct the respondents not to stop the payment of House Rent Allowance in the monthly salary of the members of the petitioner Association from May 1998 onwards without reference to Regulation No.22(1) and (2) of the Indian Bank(Officers'Service Regulations 1979.For Petitioner : Mr.M.Venkatachalapathy, Sr.counsel for Mr.M.SriramFor Respondents : Mr.G.Venkataraman for M/s.Aiyar & DoliaORDER The petitioner is the Indian Bank Officers' Association, which is aregistered body, functioning in the respondent Bank. It is also https://hcservices.ecourts.gov.in/hcservices/ recognised by the Bank and in respect of the major issues relating to service conditions, they are having negotiations and have arrived at minutes of understanding on such matters. 2. In the prsent case the short question that arises for consideration is as to the rate of House Rent Allowance. The issue relating to the House Rent Allowance for officers is governed by IndianBank Oficers' Service Regulations, framed under Section 19(2) read with Section 12 of the Banking companies (Acquisition and Transfer of Undertakings) Act 1970(Central Act 5 of 1970). Regulation 22 deals with House Rent Allowance. The House Rent Allowance has been revised with effect from 1.11.1994 and different rates of house rent allowance is paid depending upon the place where the banks are situated.

The area of location of the banks have been clasified into fourZones. The first one is major 'A' class cities. The second one isplaces in area I and project area centres in Group-B. Then area III and State capitals and fourth zone is area III. Depending upon such classifications, different rates of house rent allowance was paid. Forexample for major 'A' class cities the house rent allowance is fixed at13% and for the last categorisation i.e. area III, it is fixed at 9.5%.

A dispute arose in respect of officers, who work in major 'A'class cities, but reside in area III claiming house rent allowance at the rate of 13% and also in terms of the proviso to Regulation 22(1) at the rate of 150% in case of renting out premises. This came to the adverse notice of the bank and the vigilance also was alerted. It was found out that some officers, though residing in the nearby sub-urbanareas were claiming higher house rent allowance. This was objected toby the bank and in certain cases notices were given to individual officers for recovery of the alleged excess amount paid by the bank. This became concern for the petitioner association. Therefore, they demanded talks on this issue.

As per the counter affidavit, meetings were held on 13.3.1998and 14.3.1998 between the representatives of the petitioner association and the bank and the bank also claims that they have informed the members that they will not allow unauthorised drawal of house rent allowance. It is at this stage, the writ petition was filed challenging the action of the bank in making recoveries on the basis of alleged wrong understanding of Regulaion 22.

While the writ petition came to be admitted by this Court, initially an interim order was granted. But the same was vacated subsequently. The matter was taken up to the Division Bench and the Division Bench directed that no recovery should be made until the disposal of the writ petition. https://hcservices.ecourts.gov.in/hcservices/

When the main matter is listed Mr.Venkatachalapathy, learned senior counsel for the association, contended that while the concept of different rates of House Rent Allowance was prescribed in terms of classification of Zones in which the banks are located, the area in which the officers actually reside is immeterial.

Per contra, Mr.G.Venkataraman for M/s.Aiyar and Dolia appearing for the bank contended that Regulation 22 cannot be read in isolation and it will have to be read along with Regulation 47 & 48, wherein it is clearly stated that an officer should be available for bank's duties at any time of the day and that an officer was also liable for transfer to any office or branch of the bank or to any place in India. In that view of the matter, the learned counsel contended that the concept of different rates of house rent allowance prescribed for officers, depending upon the areas in which the bank is situated, is with the understanding that such officers must reside in the Zone in which the bank is situated and not as a matter of right to claim house rent allowance even though their residence is situated in other zones. Itwill do harm to the Regulation and the idea of compensating the officers working and residing in metro-cities and compared to the officers who were working and residing in area III.

With reference to the submission made by the learned Seniorcounsel appearing for the petitioner association that no notice was given in respect of recovery of alleged excess payment, the learned counsel for the bank submitted that in individual cases if details are sought for, it may be furnished and no recovery will be made without notice. Therefore it only bring to the core issue as to what is thereal purport of the payment of house rent allowance under Regulation 22.

It is seen from the Regulation that it requires production of rent receipt by an officer in case he claims 150% of House RentAllowance and in case where he is provided accommodagtion by the bank, then 4% recovery is also made. With reference to others, the areas of location and the place of work are clearly classificed and the rates arefixed. If it is seen in isolation then it may sound that the payment is made depending upon the location of the bank and not the actual location of the residence of the officer in question. But however, the idea of neutralizing the increased cost of living for the officers, in which alarger percentage is spent on house rent, the metro cities have been notified and different rates are given as a compensatory measure. If itis read in conjunction with Regulation 48 then it clearly shows that an officer is expected to live closer to the place of work as he had to be available at the beck and call of the Bank.

Though Mr.Venkatachalapathy, learned Senior counsel may contend that unlike the Government Servant there is no Regulation providing fordisciplinatry action, if they chose to reside elsewhere, this Court is not concerned with the right of the officer to live whereever he wants. https://hcservices.ecourts.gov.in/hcservices/ In the present case the bank gives an increased house rent allowance in respect of major cities and also expects, in terms of the statutoryRegulation, that they should be available for Bank's duties at any time of the day. It should be supposed that their residence must have closer proximity to the place of work. If read in this context, Regulation 22will only mean that even if the rate is fixed in respect of the location of the Bank, unless the officer resides in the very same area, he is ineligible to get the higher rate of house rent allowance. In that view of the matter, the writ petition filed by the petitioner Association ismis-conceived and liable to be dismissed. If the bank finds that any officer has drawn in excess of the statutory Regulation, it is always open to the respondent bank to recover the same, after proper notice to such officers.