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5. Relying upon the various provisions of the Rules, the Tribunal observed as follows:
"26. Here I have to see whether the action of the respondents for denying HRA is proper. Admittedly, as per rules, the applicants are not eligible for allotment of quarters. When the applicants are not fulfilling the benefit of residing in quarters they are eligible for HRA. When the respondent has forcibly allotted the quarters the applicants have refused the allotment. Immediately without hearing the applicants, the respondent has issued a circular for recovery of the HRA paid to the applicants from the pay bill June, 2004 which is capricious and against law.
7. The main contention of the petitioners/KVS in their challenge against the order of the Tribunal is that Rule 4(1) of the Rules will not be applicable in the present case. On the contrary, allotment of quarters was as per Rule 4(4) of the Rules. Further, the petitioners had prepared a priority list for allotment of quarters and the staff members were allotted only as per the priority list. Since the staff members refused to accept the quarters, they were rightly disentitled to HRA, which is not part of the pay and it cannot be claimed as a matter of right. When the quarters are allotted to the staff members by the petitioners, they cannot refuse to take such allotment and also claim the HRA. The conduct of the staff members in refusing to occupy the quarters and claim HRA, will amount to imposing unwanted liability on the petitioners. Further, the Tribunal has failed to take into consideration the ratio of the judgment reported in AIR 1994 SC 254 1 (Director, C.P.Crops Reserach Institute vs. M.Purushothaman), which would apply squarely to the present case and the reliance of the earlier order of the Tribunal in O.A.No.981 of 2000 and batch, dated 20.7.2001, was totally misconceived and it will not apply to the facts of the present case.
9. In the above circumstances, it will be useful to refer to the observations of the judgment of the Apex Court in the said decision reported in AIR 1994 SC 2541. The Tribunal in that case held that the employees cannot be compelled to occupy official quarters and hence on their refusal to occupy the same, they cannot be denied the benefit of HRA. The Tribunal gave two reasons and the first reason was that under the relevant provisions, it is only those employees who had applied for official accommodation and who refused to occupy the same, are liable to forfeit the benefit of HRA and not others. The second reason given by the Tribunal in that case was that the HRA is a part of wages and no deduction from the wages can be made merely on account of the refusal to accept the accommodation. Paragraphs 5 to 10 of the judgment of the Supreme Court in that case (AIR 1994 SC 2541) read as follows:
"5. It is clear from the aforesaid provisions that paragraphs 4
(a)(i) and (ii) lay down the procedure for making application for accommodation. Paragraph 4(b)(i) lays down the consequences on refusal to accept the accommodation when offered. There is no doubt that paragraphs 4(a)(i) and (ii) state that an application has to be made to secure accommodation. However, that does not mean that Government or the organisation such as the appellant-organisation to which the said provisions apply cannot on their own offer accommodation to the employees. Hence the reason given by the Tribunal that it is only if the employee applies for such accommodation and he refuses to accept the same when offered that he would be disentitled to the HRA, is not correct. It must be remembered in this connection that the Government or the organisation of the kind of the appellant spends huge public funds for constructing quarters for their employees both for the convenience of the management as well as of the employees. The investment thus made in constructing and maintaining the quarters will be a waste if they are to lie unoccupied. The HRA is not a matter of right. It is in lieu of the accommodation not made available to the employees. This being the case, it follows that whenever the accommodation is offered the employees have either to accept it or forfeit the HRA. The management cannot be saddled with double liability, viz. to construct and maintain the quarters as well as to pay the HRA. This is the rationale of the provisions of paragraph 4 of the said Government Office Memorandum.