REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7524 OF 2011 (Arising out of SLP (C) No.15714 of 2011)

Mrs. Asha Sharma   … Appellant

Versus

Chandigarh Administration & Ors.         … Respondents

J U D G M E N T

Swatanter Kumar, J.

1. Leave granted.

2. The present appeal is directed against the judgment  

dated  16th May,  2011  of  the  High  Court  of  Punjab  and  

Haryana at  Chandigarh  whereby  the  Division Bench stayed  

the operation of  the directions issued by the learned Single  

Judge in the order dated 10th March, 2011 and referred the  

matter to a larger  Bench keeping in view the nature of the  

dispute and its significance.

3. This Court had issued directions on the same subject  

matter and  approved the draft rules which were placed before  

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it vide judgment dated 7th May, 1996 in Civil Appeal No. 8890  

of 1996. Keeping in view the importance of the issues raised  

and the likelihood of such issues arising repeatedly before the  

High Court, this Court had issued notice vide order dated 3rd  

June, 2011, declined to pass any interim order and directed  

that the matter be listed for final hearing at that stage itself.  

Resultantly, this matter was finally heard by this Court.

4. Before we dwell upon the legal issues arising in the  

present appeal, it will be necessary for us to refer to the basic  

facts  giving  rise  to  the  same.   The  appellant  is  an  officer  

belonging to the Indian Administrative Services and had been  

allocated to the Haryana Cadre. She was allotted House No.  

55, Sector 5, Chandigarh vide order dated 11th October, 1996,  

when  her  husband  was  posted  on  deputation  to  the  

Government  of  India.  She  retired  from  service  on  28th  

February,  2007.  As  per  the  Government  Residences  

(Chandigarh  Administration  General  Pool)  Allotment  Rules,  

1996 which has been amended from time to time, (hereinafter  

referred to as ‘the Allotment Rules’), she was entitled to retain  

the  Government  accommodation  previously  allotted  to  her  

while  she  was  in  service  for  a  period  of  four  months  with  

further possible extension upto six months, in terms of Rule  

13 of  the  Allotment  Rules.  This extension could be granted  

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only in exceptional cases.  In other words, she ought to have  

vacated  the  residential  premises  allotted  to  her  by  31st  

December, 2008.   

5. On 31st December, 2007, the appellant was appointed  

as  the  State  Information  Commissioner  with  effect  from 3rd  

January,  2008.   As per her terms of  appointment,  she was  

entitled  to  Government  accommodation  and  salary/  

allowances of the same type and amount as were given to the  

Chief  Secretary  to  the  Government  of  Haryana.   She  had  

applied to the authorities concerned requesting for allotment  

of  the  same  accommodation, i.e.,  House  No.55,  Sector  5,  

Chandigarh to her,  but her request had not been accepted.  

Proceedings for eviction began against her before the Estate  

Officer.  The Estate Officer vide his order dated 9th April, 2008  

declared the appellant  an unauthorised occupant and passed  

an order of eviction on 16th April, 2008.  Aggrieved by the said  

order, the appellant preferred an appeal before the Additional  

District  Judge,  Chandigarh  which,  however,  came  to  be  

dismissed vide order dated 22nd October, 2008.  This order of  

the  Appellate  Authority  was  challenged  by  the  appellant  

through  a  writ  petition  in  the  High  Court  of  Punjab  and  

Haryana being Writ Petition No. 20252 of 2008.  In this writ  

petition, the contention raised by the appellant was that she,  

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in the capacity of an officer of the Administrative Service and  

later, on becoming the State Information Commissioner, was  

entitled  to  retain  the  accommodation  previously  allotted  to  

her.  It  was contended that she was being evicted from the  

premises  illegally,  without  authorization  and  in  an  illegal  

manner.  The learned Single Judge of that Court vide order  

dated 10th March, 2011, passed certain general directions in  

relation to the procedure for allotment of Government houses,  

their retention and various other aspects relating thereto.  The  

learned Single Judge modified the order dated 1st December,  

2008 passed by the Division Bench when the writ came up for  

hearing before the Single Judge qua the appellant and directed  

that  as soon as any alternate accommodation is  allotted to  

her, as per her entitlement under the Rules, she shall, within  

two weeks of such allotment, vacate the house presently under  

her occupation. Further, he directed the concerned authorities  

to  sympathetically consider  the  case  of  the  appellant  for  

waiving of any penal rent imposed upon her and that no such  

penal  rent  would  be  payable  till  the  Administrator  of  U.T.  

Chandigarh  makes  his  decision  in  this  regard.   However,  

besides granting these reliefs to the appellant, the Court also  

passed the following directions :

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“Having  heard  Dr.  Dhemka  IAS  in  person  and  learned  Senior  Standing  counsel  for  UT.  Administration and keeping in view the fact that a  number  of  Government  houses  kept  un-allotted  under  the  orders  of  this  Court  serve  no  one’s  purpose and rather their condition is deteriorating  for want of proper up-keep and maintenance, the  interim  order  dated  14.12.2009  is  modified  and  the  Chandigarh  Administration  is  permitted  to  allot the vacant houses to the eligible applicants,  subject to the following conditions/ directions:

(i)   No allotment shall be made in exercise of  the  discretionary  powers  of  the  Administrator,  UT.,  or  Chief  Ministers  of  Punjab and Haryana.

(ii) No  house  shall  be  allotted  ‘out  of  turn’  without prior permission of this Court.

(iii) No  house  shall  be  ‘earmarked’  for  any  particular  office/officer  till  the  earlier  ‘earmarked’ house which were subsequently  ‘de-earmarked’ and allowed to be retained by  the  officers,  who  were  not  entitled  to  such  allotment  as  their  seniors  in  terms  of  pay,  rank or status were still awaiting allotment of  that Type or above houses,  are got vacated  except in the case of the SSP, Chandigarh in  relation  to  whom  one  time  concession  has  been granted vide order dated 07.03.2011.

(iv) A  list  of  the  ‘prospective  allottees’  shall  be  prepared  and  displayed  on  the  websites  of  the Chandigarh Administration two weeks in  advance inviting objections, if any, from the  aggrieved officers/officials  who might  assert  their  preferential  claim.   It  is  only  after  considering/deciding their objections that the  allotment letters shall be issued.

(v) The list of the prospective allottees shall be  placed  before  this  Court  also  on  the  adjourned  date  and  any  aggrieved  officer/official  shall  be  entitled  to  submit  objections thereto;

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(vi) A public notice of the information at Sr. Nos.  (iv)  and (v)  above shall  be got published by  the  Chandigarh  Administration  at  least  in  two daily newspapers;

(vii) No further  ‘addition’  of  the houses shall  be  made to the discretionary quota of the Chief  Ministers  of  Punjab  and  Haryana  nor  the  possession  of  the  vacant  houses  exceeding  the  said  quota,  as  it  exists  today,  shall  be  given to the allottees.

(viii) An  order  of  precedence  amongst  the  functionaries of Constitutional, Statutory and  Executive Authorities shall be prepared and  placed  before  the  Court  on  the  adjourned  date.”

6. Aggrieved  by  the  directions  issued  by  the  learned  

Single  Judge,  as  afore-noticed,  Chandigarh  Administration  

preferred an appeal before the Division Bench of that Court  

being LPA No. 752 of 2011 which resulted in the order dated  

16th May, 2011, whereby the Court stayed the directions of the  

learned Single Judge and directed the matter to be heard by a  

larger Bench.  The basic contention raised before the Division  

Bench was that since the prevalent Allotment Rules had been  

framed with the approval of this Court as per its order dated  

7th May, 1996, no directions contrary thereto could be issued  

by the learned Single Judge.  A somewhat similar argument is  

also raised before us in the present appeal.  

7. It is an undisputed position, which also appears from  

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the record, that a Full Bench of the High Court of Punjab and  

Haryana, in Writ Petition No. 16863 of 1994 entitled Court on  

its  own  motion v.  Advisor  to  the  Administration,  U.T.  

Chandigarh   &  Ors. had  noticed  the  arbitrariness  in  the  

practice  of  allotment  of  houses  in  the  Union  Territory  of  

Chandigarh (hereinafter referred to as ‘U.T., Chandigarh’).  It  

was noticed in that judgment that the allotments were being  

made  contrary  to  the  earlier  Allotment  Rules.  The  Bench  

struck down Rule 7 of the earlier Allotment Rules, that had  

been  in  force  at  the  relevant  time,  as  arbitrary,  quashed  

certain allotments made in favour of the officers and issued  

certain directions vide its judgment dated 1st June, 1995.  The  

Chandigarh  Administration  had  preferred  an  appeal  before  

this Court against this judgment which, as already noticed,  

was registered as C.A. No. 8890 of 1996 and finally disposed of  

vide order dated 7th May, 1996.  A three Judge Bench of this  

Court had set aside the order of the High Court and approved  

the draft rules which were placed before it.  This Court in its  

judgment also directed certain amendments to be carried out  

to the  draft  rules  particularly  Rules 2(k),  4 and provisos to  

Rules  13  and  19.   In  furtherance  to  this,  the  Chandigarh  

Administration  issued  a  notification  dated  28th June,  1996  

duly publishing the Allotment Rules of 1996 with which we are  

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concerned in this case.  This Court had granted liberty to the  

Chandigarh Administration to carry out amendments to the  

Allotment  Rules,  if  necessary.   These  Allotment  Rules  were  

thereafter amended from time to time, but the Allotment Rules  

of 1996 still substantially remain in force till date.

8. The  allotment  of  government  accommodation  is  

governed by the statutory regime and the Allotment Rules are  

concerned with various facets of this concept. The Allotment  

Rules  of  1996  cover  concepts  such  as  allotment,  vacation,  

cancellation  and  preferential  allotments  of  government  

accommodations.   Despite the fact that the Allotment Rules  

are  in  force  their  proper  implementation  still  remains  an  

elusive endeavour.  The grievance of the officers/officials has  

still  persisted  with  regard  to  the  manner  in  which  the  

discretion  under  the  Rules  were  being  exercised.   In  other  

words, the element of discretion vested under these rules has  

caused  serious  dissatisfaction  with  the  implementation  of  

these Allotment Rules.

9. Arbitrariness in State action can be demonstrated by  

existence  of  different  circumstances.   Whenever  both  the  

decision making process and the decision taken are based on  

irrelevant facts,  while  ignoring relevant considerations,  such  

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an action can normally be termed as ‘arbitrary’.   Where the  

process of decision making is followed but proper reasoning is  

not recorded for arriving at a conclusion, the action may still  

fall in the category of arbitrariness.  Of course, sufficiency or  

otherwise  of  the  reasoning  may  not  be  a  valid  ground  for  

consideration within the scope of judicial review.  Rationality,  

reasonableness, objectivity and application of mind are some  

of the pre-requisites of proper decision making.  The concept of  

transparency in the decision making process of the State has  

also become an essential part of our Administrative law.

10. The  Government  is  entitled  to  make  pragmatic  

adjustments and policy decisions, which may be necessary or  

called for  under  the  prevalent  peculiar  circumstances.   The  

Court  may  not  strike  down a  policy  decision  taken  by  the  

Government  merely  because  it  feels  that  another  decision  

would have been more fair or wise, scientific or logical.  The  

principle  of  reasonableness  and  non-arbitrariness  in  

governmental action is the core of our constitutional scheme  

and structure.  Its interpretation will always depend upon the  

facts  and circumstances of  a  given case.   Reference in this  

regard can also be made to Netai Bag v. State of West Bengal  

[(2000) 8 SCC 262].

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11. Action  by  the  State,  whether  administrative  or  

executive, has to be fair and in consonance with the statutory  

provisions and rules.  Even if no rules are in force to govern  

executive  action  still  such  action,  especially  if  it  could  

potentially affect the rights of the parties, should be just, fair  

and transparent.  Arbitrariness in State action, even where the  

rules vest discretion in an authority, has to be impermissible.  

The exercise of discretion, in line with principles of fairness  

and  good  governance,  is  an  implied  obligation  upon  the  

authorities,  when  vested  with  the  powers  to  pass  orders  of  

determinative  nature.   The  standard  of  fairness  is  also  

dependant upon certainty in State action, that is, the class of  

persons, subject to regulation by the Allotment Rules, must be  

able to reasonably anticipate the order for the action that the  

State is likely to take in a given situation.  Arbitrariness and  

discrimination  have  inbuilt  elements  of  uncertainty  as  the  

decisions of the State would then differ from person to person  

and  from  situation  to  situation,  even  if  the  determinative  

factors  of  the  situations  in  question  were  identical.   This  

uncertainty must be avoided.  The Allotment Rules have been  

framed with the approval  of  this  Court  and thereafter  have  

been amended by the State Government with the intention to  

give some clarity and certainty to the implementation of the  

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Allotment Rules, rather than subjecting it to further challenge  

on  the  ground  of  arbitrariness  or  discrimination.   A  

Government  servant  has  a  reasonable  expectation  of  being  

dealt with justly and fairly in receiving rights that are granted  

to  him/her  under  the  Allotment  Rules.  Allotment  of  

Government accommodation is  one of  the statutory benefits  

which a Government servant is entitled to under the Allotment  

Rules and, therefore, fair implementation of these Rules is a  

sine qua non to fair exercise of authority and betterment of the  

employee-employer  relationship  between  the  Government  

servant and the Government.

12. The  public  law  principles  controlling  the  

administrative  actions  of  the  public  authorities  are  well  

settled.  Right  from the  case  of  Ramana  Dayaram  Shetty  v.  

International Airport Authority of India [(1979) 3 SCC 489] this  

Court cautioned that conditions of work cannot be arbitrarily  

altered and held that even the power of relaxation has to be  

exercised within the limited scope available, failing which, it  

would tantamount to denial of opportunity to employees.  

13. Another  settled  principle  of  law,  applicable  to  the  

present case, is the scope of judicial review of such actions,  

which  is  usually  quite  limited.   The  Court  has  the  power,  

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depending on the facts and circumstances of a given case, to  

issue appropriate directions in exercise of  jurisdiction under  

Article 226 of the Constitution of India (by the High Court) and  

under Article 32 read with Article 141 of the Constitution of  

India (by this  Court).

14. In the case of E.S.P. Rajaram and Ors. v. Union of India  

and  Ors. [(2001)  1 SCR 203],  this  Court  explained that the  

source of power of this Court to issue directions and pass the  

orders,  as was explained in paragraph 18 of  the case titled  

Union of  India  & Ors.  vs.  M. Bhaskar  & Ors.  [(1996) 4 SCC  

416],  could  be  traced  to  Article  142  of  the  Constitution  of  

India.  This provision vests power in this Court to pass such  

decree or make such orders as would be necessary for doing  

complete justice in the context of any case or matter pending  

before it.  This provision contains no limitation which provides  

the  causes  or  circumstances  in  which  such  power  may  be  

exercised.   The  exercise  of  power  is  left  completely  to  the  

discretion of the highest Court of the country and its order or  

decree  is  thereafter  binding  on  all  Courts  or  Tribunals  

throughout  the  territory  of  India.   However,  in  the  case  of  

Guruvayoor  Devaswom  Managing  Committee vs.  C.K.  Rajan  

[(2003) 7 SCC 546] this Court, while specifying the scope and  

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ambit  of  the  Public  Interest  Litigation,  clearly  distinguished  

between the powers of the High Court under Article 226 of the  

Constitution and the powers of this Court under Article 142 of  

the  Constitution and observed ‘[T]he  Court  would ordinarily  

not step out of the known areas of judicial review.  The High  

Courts although may pass an order for doing complete justice  

to the parties, it does not have a power akin to Article 142 of  

the  Constitution  of  India’.   Usefully,  reference  can  also  be  

made to the judgment of  this Court  in the case of  Reliance  

Airport Developers (P) Ltd. v. Airport Authority of India and Ors.  

[(2006)  10  SCC  1],  where  while  considering  the  scope  for  

judicial  interference  in  matters  of  administrative  decisions,  

this  Court  held  that  it  is  trite  law  that  exercise  of  power,  

whether legislative or administrative, will be set aside if there  

is  manifest  error  in  the  exercise  of  such  power  or  if  the  

exercise  of  power  is  manifestly  arbitrary.   Courts  would  

exercise such power sparingly and would hardly interfere in a  

manner which may tantamount to enacting a law.  They must  

primarily serve to bridge any gaps or to provide for peculiar  

unforeseen  situations  that  may  emerge  from  the  facts  and  

circumstances of a given case.  These directions would be in  

force only till  such time as the competent legislature enacts  

laws on the same issue. The high courts could exercise this  

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power,  again,  with  great  caution  and  circumspection.  

Needless to say, when the High Court issues directions, the  

same ought not to be in conflict with laws remaining in force  

and with the directions issued by this Court.  In the case of  

Chandigarh  Administration v.  Manpreet  Singh [(1992)  1 SCC  

380] while dealing with a matter of admission to engineering  

colleges and reservation of seats etc., this Court held as under:

“11. Counsel for Chandigarh Administration and  the  college  (petitioners  in  SLP  Nos.  16066  and  16065 of 1991) contended that the High Court has  exceeded its jurisdiction in granting the impugned  directions.  He  submitted  that  High  Court,  while  exercising the writ jurisdiction conferred upon by  Article 226 of the Constitution of India, does not sit  as  an  appellate  authority  over  the  rule-making  authority nor can it rewrite the rules. If the rule or  any portion  of  it  was found to  be  bad,  the  High  Court could have struck it down and directed the  rule-making  authority  to  re-frame  the  rule  and  make admissions on that basis but the High Court  could  not  have  either  switched  the  categories  or  directed that Shaurya Chakra should be treated as  equivalent  to  Vir  Chakra.  By  its  directions,  the  High  Court  has  completely  upset  the  course  of  admissions  under  this  reserved  quota  and  has  gravely affected the chances of candidates falling in  category  4  by  downgrading  them  as  category  5  without even hearing them. These are good reasons  for the categorisation done by the Administration  which was adopted by the college.

21. While this is not the place to delve into or detail  the  self-constraints  to  be  observed by the courts  while exercising the jurisdiction under Article 226,  one of  them, which is  relevant herein,  is  beyond  dispute  viz.,  while  acting  under  Article  226,  the  

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High Court does not sit and/or act as an appellate  authority  over  the  orders/actions  of  the  subordinate  authorities/tribunals.  Its  jurisdiction  is supervisory in nature. One of the main objectives  of this jurisdiction is to keep the government and  several other authorities and tribunals within the  bounds  of  their  respective  jurisdiction.  The  High  Court  must  ensure  that  while  performing  this  function it  does  not  overstep the well  recognised  bounds of its own jurisdiction.”

15. It is a settled canon of Constitutional Jurisprudence  

that  this  Court  in  the  process  of  interpreting  the  law  can  

remove any lacunae and fill up the gaps by laying down the  

directions with reference to the dispute before it; but normally  

it cannot declare a new law to be of general application in the  

same manner as the Legislature may do. This principle was  

stated by a Seven-Judge Bench of this Court in the case of  P.  

Ramachandra Rao v. State of Karnataka [(2002) 4 SCC 578].

16. On a proper analysis of the principles stated by this  

Court in a catena of judgments including the judgment afore-

referred,  it is clear that the courts can issue directions with  

regard to the dispute in a particular case, but should be very  

reluctant to issue directions which are legislative in nature.  

Be  that  as  it  may,  because  of  the  new  dimensions  which  

constitutional law has come to include, it becomes imperative  

for the courts in some cases, to pass directions to ensure that  

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statutory  or  executive  authorities  do  not  act  arbitrarily,  

discriminatorily or contrary to the settled laws.  It was in light  

of these principles that this Court, vide its judgment dated 7th  

May,  1996 set  aside  the  Full  Bench Judgment  of  the  High  

Court  of  Punjab  and  Haryana,  brought  into  force  some  

appropriate  rules  and sought  to ensure  that  the  competent  

authority  acted in accordance  with law and that  it  avoided  

total  arbitrariness in allocation of government houses to its  

officers and employees.  Once those rules have come into force  

and were amended from time to time as per the leave granted  

by  this  Court,  in  our  considered  view,  it  was  not  proper  

exercise  of  judicial  discretion  and  jurisdiction  to  pass  

directions,  which  were  in  direct  conflict  with  the  Allotment  

Rules which were approved by in conflict this Court or with  

the  directions  which  were  issued  by  this  Court  on  earlier  

occasions.  Shortly, we shall proceed to discuss the scope and  

effect of the directions issued by the learned Single Judge of  

the  High  Court,  their  correctness  and  impact  upon  the  

existing rules and the lacuna, if any, which still exists in day-

to-day implementation of the Allotment Rules.

17. On the  analysis  of  the  above  principles,  it  emerges  

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that  the  Court  would  exercise  its  jurisdiction  to  issue  

appropriate writ, order or directions with reference to the facts  

and  circumstances  of  a  given  case.   Normally,  the  courts  

would not step in to pass directions, which could, at times, be  

construed as a form of legislation.  Articles 32 and 226 of the  

Constitution  confer  on  this  Court  and  the  High  Court  the  

power  to  issue  directions,  orders  or  writs  for  achieving  the  

objectives  of  those  Articles.   The  courts,  in  the  past,  have  

issued directions for various purposes.  In public interest, the  

courts may pass directions and even appoint committees for  

inducing  the  Government  to  carry  out  the  constitutional  

mandate.   The  courts  have  been  taking  due  care  while  

exercising such jurisdiction so that they do not overstep the  

circumscribed judicial limits.

18. In light of the above legal framework, we would now  

revert to examine the legal questions raised before us.  There  

are primarily three issues which require the consideration of  

this Court :

1. The interpretation and enforcement of the Allotment Rules  

framed  by  Notification  dated  28th June,  1996  and  the  

amendments made to it from time to time;

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2. The relevancy of the directions issued by this Court vide its  

judgment dated 8th December, 1995 ; and

3. The conflict  between the directions of  this Court  and the  

Rules framed thereafter  and the  directions issued by the  

learned  Single  Judge  of  the  High  Court  of  Punjab  and  

Haryana.   

19. We would further be required to examine whether the  

Allotment Rules, as amended from time to time, are in conflict  

with the earlier judgment of this Court or whether they suffer  

from any basic legal infirmity or are  ex facie arbitrary and, if  

so, what directions could be passed to remedy such elements  

of arbitrariness, particularly, in view of the directions issued  

by the learned Single Judge of the High Court.  We may notice  

that  during the course of  arguments  before  us,  it  was also  

pointed  out  that  because  the  action  of  the  authorities  in  

allotting two houses of the same category, one at Chandigarh  

and the other outside Chandigarh (both within the State of  

Punjab  and/or  Haryana)  which  is  not  permissible,  great  

hardship  and  discrimination  has  been  caused  to  the  

employees placed in the same category.  Secondly, it was also  

argued that taking advantage of the time factor involved in the  

decision  making  by  the  Committee,  the  officers  allotted  to  

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higher  category  accommodation  continue  to  retain  both  

houses  i.e.  one  of  a  lower  category  and  other  of  a  higher  

category  for  an  unnecessarily  long  period,  thus,  causing  

prejudice to the interests of others.  For example, it is alleged  

that in the case of the appellant, she is retaining the higher  

category  house  and continues  to  hold such accommodation  

even now, when she is actually entitled to an accommodation  

of  lower  category.   However,  according  to  the  appellant,  as  

State  Information Commissioner  also,  she  is  entitled  to  the  

same accommodation and perks that the Chief  Secretary of  

the State is entitled to.  It is argued on behalf of the appellant  

that  there  is  no  transparency  in  the  functioning  of  the  

Allotment Committee.  According to the respondents, she will  

not be entitled to retain an earmarked accommodation.   

20. It is also contended on behalf of different parties that  

arbitrariness in allotment of houses still persists.  There is no  

need  for  adding  houses  to  the  Chief  Minister’s  pool  and  

increasing  the  discretionary  quota.   It  is  the  claim  of  the  

appellant that the imposition of  damages/charges on her is  

arbitrary  and  she  is  entitled  to  retain  the  same  

accommodation.  First and foremost, we have to consider the  

nature of the changes in the Allotment Rules as approved by  

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this Court, whether such changes are disadvantageous to the  

government  servants  and  whether  they  increase  the  

arbitrariness  in  the  implementation  of  the  Allotment  Rules.  

We have already noticed that the rules in force at the relevant  

time were  the  subject  matter  of  controversy before  the  Full  

Bench of the High Court of Punjab and Haryana and had given  

rise to filing of a Special Leave Petition (converted into C.A. No.  

8890 of 1996). It was in this petition that the draft rules had  

been filed, approved with certain amendments, as directed by  

this Court and thereafter published vide Notification dated 28th  

June, 1996, to finally result in the Allotment  Rules.  These  

rules were also subjected to different amendments from time  

to time and major amendments were carried out in the years  

1997,  1998,  2004,  2007  and 2009.   Besides  these,  certain  

guidelines  were  also  framed  which  became  part  of  the  

Allotment Rules.  These amendments related to changes in the  

definition  clauses  as  well  as  the  substantive  rules.   For  

example, Rule 7, which is related to the earmarking of houses  

was  amended  on  7th May,  1998;  Rule  8,  concerning  the  

Controlling Authority was amended vide Notification dated 2nd  

June, 1997; Rule 11, which related to Out-of-Turn Allotment,  

was  amended  vide  Notifications  in  1997  and  again  vide  

Notification dated 4th August, 2004;  Rules 13 and 14 relating  

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to the period for which allotment subsists and concessional  

period  for  further  retention  and fixation  of  licence  fee  were  

amended by different amendments including those dated 17th  

December, 2009 and 11th October, 2007 respectively.  These  

amendments have to be examined in light of the fact that this  

Court granted leave vide its judgment dated 7th May, 1996 to  

the  Chandigarh  Administration  to  amend the  rules,  as  and  

when it  considered  such amendment  necessary.   The  leave  

granted by this Court obviously means that the amendment  

should be necessity based and not be intended to introduce  

the element of arbitrariness or discrimination in the rules and  

resultantly in the allotment of the houses to the government  

officers/ officials.

21. Having stated the aforementioned principles,  we will  

now  proceed  to  discuss  the  scope  and  desirability  of  the  

directions  issued  by  the  learned  Single  Judge  of  the  High  

Court  of  Punjab  and  Haryana.   The  learned  Single  Judge,  

while dealing with the case of the present appellant,  issued  

certain  general  directions  with  regard  to  Out-of-Turn  

Allotment, the addition and earmarking of houses, allotment of  

discretionary quota and the Chief Minister’s quota, instances  

of allotment of two houses to one officer, the display of lists of  

21

prospective allottees on the website and the drawing up of an  

order of precedence amongst the Constitutional, Statutory and  

Executive functionaries.  The Court issued prohibitory orders  

as well.   All these directions had been stayed by the Division  

Bench of that Court in an appeal preferred by the Chandigarh  

Administration.  

22. As  already  noticed,  fairness  in  State  action  is  the  

essence of proper governance.  Where the authorities exercise  

their powers under the rules, they are expected to exercise the  

discretion vested in them fairly and with the intention to attain  

a  balance  between  exercise  of  discretionary  power  and  the  

larger public interest sought to be achieved by such discretion.  

Arbitrariness or irresponsible exercise of the power vested in  

the authorities, has been a matter of great concern before the  

courts.  The Full Bench of High Court of Punjab and Haryana  

had  declared  Rule  7  of  the  Allotment  Rules  of  1972  as  

unconstitutional  and  being  without  any  proper  guidelines  

because the possibility of exercising unguided power resulted  

in arbitrariness on various occasions. Though that judgment  

had been set aside by this Court, surely it was still expected  

that the draft rules, as approved by this Court, would be acted  

upon fairly and without arbitrariness.  However, the matters  

22

have not ended with the implementation of the new rules and,  

therefore,  litigation  in  respect  of  these  rules  has  been  a  

continuous affair.   The matter,  which can be said to  be of  

some public importance is not a question of the interpretation  

of the Allotment Rules as such, but is one of the manner of  

exercise of power with reference to the Allotment Rules.   

23. Rule 7 of the Allotment Rules, which deals with the  

creation  of  pools  of  residences,  provides  for  earmarking  of  

houses  for  specified  officers  from  different  branches  of  the  

State Administration and those houses which have not been  

so  earmarked  for  any  particular  class  of  Government  

employees  would  be  allotted  to  the  general  pool  of  the  

Chandigarh Administration.  This Rule and its sub-Rules read  

together  do  not  suffer  from  the  vice  of  arbitrariness,  as  

earmarking  of  houses  is  a  known  concept  in  relation  to  

allotment of  houses.   The learned Single  Judge of  the High  

Court  of  Punjab  and  Haryana  has  given  a  clarificatory  

direction  that  when  earmarked  houses  are  occupied  by  an  

officer, who is at that time not entitled to that house, another  

house would not be earmarked for any particular officer, until  

the occupied house is vacated. One exception is carved out in  

favour of SSP, Chandigarh in terms of order dated 7th March,  

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2011.   We  do  not  think  that  this  clarificatory  direction  is  

violative  of  any  rule  or  is  otherwise  impermissible.   These  

directions attempt to ensure that there should not be more  

than one earmarked house for the same post as per the need.  

This clarification or explanatory direction would also ensure  

timely  vacation  of  the  earmarked  houses  by  the  officers  

concerned, upon their transfer, promotion or posting to a post  

where they are not entitled to an earmarked accommodation.  

Thus, we see no reason to interfere with imposition of such a  

condition which is in conformity with the spirit of the aforesaid  

Rule.    We,  thus  direct  that  no  new  house  for  any  

category/post should be earmarked unless the house already  

earmarked  for  such  category/post  has  been  vacated  and  

placed in the general pool of the Chandigarh Administration  

for allotment in accordance with the Allotment Rules.

24. The  next  direction  to  which  certain  objections  were  

raised by the parties appearing before this Court is with regard  

to Out-of-Turn Allotment and allotment of houses in exercise  

of  the  discretionary  powers  of  the  Administrator,  U.T.,  

Chandigarh  and the  Chief  Minister  of  Punjab  and Haryana  

respectively.  At the outset, it may be noticed that there is no  

specific  rule  controlling  the  discretionary  allotment  by  the  

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Administrator,  U.T.,  Chandigarh  and  the  Chief  Minister  of  

State of Punjab and Haryana respectively.  However, Rule 8  

identifies the Controlling Authority which is the Administrator,  

U.T.  Chandigarh,  who  would  be  the  co-ordinating  and  

controlling  authority  in  respect  of  the  houses  belonging  to  

Chandigarh Administration.  He has been given the power to  

add or  withdraw houses from any pool  for  the  purposes of  

allotment  to  any  class  or  category  of  eligible  government  

employees and may also change the classification of houses on  

the recommendation of the House Allotment Committee.  Rule  

11 deals with Out-of-Turn Allotments, i.e. the House Allotment  

Committee  may  allot  a  house  on  Out-of-Turn  basis  to  the  

cases  specified  under  clauses  (a)  to  (g)  of  that  Rule.   The  

House Allotment Committee in its Meeting dated 27th March,  

2003 has further approved certain guidelines for the Out-of-

Turn Allotments.

25. Rule 11 is a very comprehensive rule which deals with  

the  specific  situations  where  Out-of-Turn  Allotment  is  

permissible.   The  Allotment  Rules  and these  guidelines  are  

intended to control the exercise of discretion by the authorities  

concerned in granting out-of-turn allotments.  There is some  

vagueness in  Rule  11(1)(e),  i.e.  Out-of-Turn Allotments  to  a  

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government employee due to the ‘functional requirements’ of  

the post.  This expression is neither explained nor have any  

guidelines been issued in this regard.  The criteria provided in  

Guideline (2) for allotments made in public interest under Rule  

11(1)(f)  is  quite  similar  to  the  criteria  for  determining  

functional requirements.  Both these heads refer to the nature  

of official duties and functions to be performed by the officer  

concerned.   Thus,  the  category  of  ‘functional  requirement’  

allotment is nothing but a category created to allow more and  

more allotments under this head.  In light of these rules, the  

absolute restriction on Out-of-Turn Allotments imposed by the  

learned  Single  Judge  may not  be  just  and fair  and will  be  

opposed to  the  statutory  provisions  of  the  Allotment  Rules.  

Therefore,  we  are  unable  to  sustain  such  a  restriction.  

However, we would further clarify that the powers vested in  

the concerned authority under Rules 8 and 11 of the Allotment  

Rules will only be exercised: (a) upon recommendation of the  

House Allotment Committee; (b) such recommendation should  

be supported by reasons with the requirements of the job and  

the data in support thereof; and (c) no allotments would be  

made under the provisions of  Rule  11(1)(e).   The maximum  

restriction of 10 per cent of all allotments being Out-of-Turn  

Allotments, as contemplated under Rule 11(2) of the Allotment  

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Rules, shall be operative to entire Rule 11 as well as to Rule 8  

of  the  Allotment  Rules.   In  no  event  shall  Out-of-Turn  

Allotment exceed 10 per cent of all houses allotted in a year.  

This is primarily to control the exercise of discretionary power  

as well  as to ensure that the persons entitled to residential  

accommodation  in  the  general  pool  are  not  made  to  wait  

unduly for an indefinite period.

26. Allotments  under  different  categories  and  with  the  

restrictions  as  stated  in  the  Allotment  Rules  and  the  

guidelines  shall  continue  to  be  in  force  and  should  not  be  

amended or altered except in exceptional circumstances by the  

appropriate body.  This alone can add some certainty to the  

application of these provisions and to the expectations of the  

government employees, who have a legitimate expectation of  

allotment of government accommodation as part of their perks.

27. We  also  direct  that  the  purpose  of  Rule  8  of  the  

Allotment Rules is not to allow discretionary allotment but is  

to provide overall  powers of coordination and control  to the  

Administrator,  U.T.,  Chandigarh.   When  the  words  ‘for  the  

purposes  of  allotment  to  any  class  or  category  of  eligible  

government servant’ appearing in Rule 8 are examined, these  

have to necessarily be construed to mean the allotment made  

27

in  terms  of  the  Allotment  Rules.   Adding  or  withdrawing  

houses to the general pool is a power vested in the authority  

under  Rule  8,  but  allotments  still  are  to  be  made  in  

accordance with the substantive rules enabling the authorities  

to make regular allotments.

28. Neither  the  judgment  of  this  Court  passed  in  Civil  

Appeal No. 8890 of 1996 nor the Allotment Rules duly notified  

by the Government,  require publishing of list  of  prospective  

allottees on website and inviting objections to the same.  Rule  

9  of  the  Alltoment  Rules  requires  the  authorities  to  invite  

applications for allotment of accommodation and also provides  

the manner in which the allotment of houses is to be made  

including  showing  the  seniority  of  the  applicants  category-

wise.  There is no provision requiring invitation of objections.  

Once there is no rule, in our considered view, it will not serve  

any  fruitful  purpose  to  invite  objections  to  each  allotment  

apart  from unnecessarily  delaying  allotments  and rendering  

the working of the Rules more complex and difficult. Further,  

Rule 9(5)  of  the Allotment Rules is a complete safeguard in  

regard  to  proper  maintenance  of  the  seniority  list  of  the  

applicants.  Thus,  we set  aside  the  directions issued by the  

learned Single Judge in that behalf.  However, we direct that  

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the  final  list  of  allotments  made  by  the  House  Allotment  

Committee  should  be  placed  on  the  website  of  the  

Government,  as  all  interested  persons  would  be  entitled  to  

know whether they have been allotted the accommodation or  

not.

29. Now, we will deal with the other two arguments that  

were raised before us.  One argument was in regard to the  

allotment of two houses to a single officer and/or to his family,  

one in Chandigarh and one in some other part of the same  

State; and the second was regarding the period of retention of  

the  allotted  house  after  the  employee  is  retired,  promoted,  

transferred or is sent on deputation etc.  These are matters of  

serious concern.  There is no rule that has been brought to  

our  notice  or  is  available  on  the  records  providing  that  an  

officer who is posted outside Chandigarh/Panchkula/Mohali  

and  whose  spouse  is  not  entitled  to  any  Government  

accommodation  of  any  category  can  be  provided  with  two  

houses, one at the District/Division level to which he/she is  

transferred  and  another  at  Chandigarh  and  its  adjourning  

areas.  In absence of any such specific  rule,  we consider it  

appropriate to direct that the State shall not allot two different  

houses to one government servant.  In terms of Rule 11(1)(b) of  

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the  Allotment  Rules,  such  allotment  can  be  made  in  some  

circumstances but we are constrained to observe that every  

effort should be made to ensure that such situations arise only  

in  exceptional  circumstances.   We  are  informed  that  even  

under  the  rules  of  transfer  of  the  Government  servant,  a  

married couple,  both of  whom are  government  servants  are  

normally posted at the same place.  Be that as it may, it will  

be in the interest of all concerned that Rule 11(1)(b) is invoked  

sparingly  and  only  by  the  authorities  concerned,  upon  the  

recommendation of the House Allotment Committee.

30. The issue with regard to the retention of government  

accommodation  is  controlled  by  Rule  13  of  the  Allotment  

Rules.   The table  under  clause  2 of  the  said Rule  provides  

different periods of retention in different situations. Rule 13,  

sub-rule 5 further carves out an exception, allowing the period  

of  retention to be extended beyond the period stated in the  

table under Rule 13(2) of the Allotment Rules on payment of  

higher  licence  fee.   We  see  no  reason  why  a  government  

servant  should  be  permitted  to  retain  the  accommodation  

beyond 4 to 6 months, which period is permissible under the  

substantive rules.   A government servant knows in advance  

the period within which he has to vacate the accommodation  

30

allotted to him as part of his employment and so he has to  

surrender the house in question within the scheduled time.  

31. What exceptional cases are contemplated under Rule  

13(5)  of  the  Allotment  Rules  is  nowhere  indicated.   No  

guidelines  are  provided  and  it  is  only  for  the  authorities  

concerned to decide whether the case falls in that category or  

not.  We are unable to see any compelling circumstances for  

permitting discretion to the authorities under Rule 13(5) of the  

Allotment Rules.   Rules  13(1)  and 13(2)  are  comprehensive,  

specific  and  provide  more  than  reasonable  time  for  a  

government servant to vacate the accommodation allotted to  

him/her.  The Court cannot lose sight of the fact that a large  

number of employees under different categories, are awaiting  

their allotments and are being deprived of this benefit for long  

periods because of excessive invocation of such discretionary  

powers.  The provision is unguided and arbitrary and cannot  

stand the scrutiny of law.  More so, the licence fee indicated is  

obviously minimal in comparison to the market rent for the  

said premises.  It is a matter which a Court can safely take  

judicial notice of.  

32. Compelled by these circumstances, we find Rule 13(5)  

not sustainable and the authorities are directed not to take  

31

recourse to the said provision under any circumstance.  No  

case  of  retention of  government  accommodation beyond the  

periods specified in the table to Rule 13(2)  of  the Allotment  

Rules  shall  be  entertained  by  any  authority  under  the  

Allotment Rules.

33. We have issued the above directions being conscious  

of the fact that the Allotment Rules are in place and that the  

authorities  are acting fairly  and judiciously.   The directions  

that  we  have  issued  are  primarily  explanatory  and  are  

intended to narrow the scope of discretion exercisable by the  

concerned authorities.  It is a settled canon of Administrative  

Jurisprudence that wider the power conferred, more onerous  

is the responsibility to ensure that such power is not exercised  

in excess of what is required or relevant for the case and the  

decision.

34. We  expect  the  authorities  to  be  consistent  in  their  

decisions and bring certainty to the Allotment Rules.  This can  

only be done by making fair, judicious and reasoned decisions  

on the one hand and refraining from amending the Allotment  

Rules except in exceptional and extraordinary circumstances  

on the other.  The Doctrine of Certainty can appropriately be  

applied  to  legislative  powers  as  it  is  applicable  to  judicial  

32

pronouncements.  We must not be understood to say that the  

power  of  the  Legislature  to  amend  rules  is  restricted  by  

judicial  pronouncements,  but we want to impress upon the  

Legislature that the rules of the present kind should not be  

amended so frequently that no established practice or settled  

impression  may  be  formed  in  the  minds  of  the  employees.  

Where the employer has limited resources, there the employee  

has  a  legitimate  expectation  of  being  dealt  with  fairly  in  

relation  to  allotment  to  such  government  accommodation.  

Consequently,  reverting to  the  case of  the  appellant,  she is  

admittedly  occupying  an  earmarked  house.   An  order  of  

eviction and damages has been passed against her and she  

has taken recourse to an appropriate remedy or against which  

she has already taken an appropriate remedy.  The matter in  

that  behalf  is  still  pending  final  hearing  before  the  learned  

Single Judge.  The parties are left to raise all their contentions  

before the learned Single Judge, who shall decide the matter  

in accordance with law.  However, with regard to the interim  

order passed by the High Court, we direct the State to allot to  

her an alternative accommodation under the category which  

she is entitled to, in pursuance of her appointment as State  

Information Commissioner, within fifteen days from today and  

she shall be liable to vacate the accommodation presently in  

33

her occupation within two weeks thereafter.  We make it clear  

that in the event the Government is  unable to allot  her an  

alternative accommodation of  her category for  the reason of  

non-availability  of  such  accommodation,  she  should  be  

provided with  appropriate  accommodation,  including  private  

accommodation of her status, within the same period.

35. The appeal,  for  the reasons afore-recorded and with  

the  directions  afore-given,  is  disposed  of  while  leaving  the  

parties to bear their own costs.

.....................................J.             [Dr. B.S. Chauhan]

....................................J.              [Swatanter Kumar]

New Delhi August 30, 2011

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