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The Public Premises (Eviction of Unauthorised Occupants) Act, 1971
S. Banerjee vs Union Of India And Ors on 24 October, 1989
Mohan Kr. Singhania And Others vs Union Of India And Others on 7 December, 1990
Section 7 in The Public Premises (Eviction of Unauthorised Occupants) Act, 1971
Khem Chand vs The Union Of India And Others on 13 December, 1957

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Central Administrative Tribunal - Bangalore
Dr. M.R. Choudary vs Union Of India (Uoi) And Ors. on 8 June, 1999
Bench: S V Vice-, G A S.K.

JUDGMENT

S. Venkataraman, Vice-Chairman

1. The applicant retired from service as Director, Central Poultry Training Institute, Hessarghatta, Bangalore on 30.6.1997. He had been allotted Type-VI quarter and he continued to occupy the same ever after his retirement. The second respondent by his letter dated 31.12.1997 informed the applicant that he will have to pay market rent at Rs. 8,717/- per month for the period beyond the permissible period. The applicant's representation for permission to retain the quarter till April, 1998 was turned down by the 1st respondent by letter dated 12.2.1998. Ultimately, the applicant vacated the quarter on 4.6.1998. The applicant's grievance is that the respondents have deducted out of his gratuity a sum of Rs. 1,03,135/- towards licence fee by leying the licence fee at Rs. 95/- per sq.mtr. from 1.11.1997 to 4.6.1998 and paid him Rs. 2,45,865/-. By annexure-A6 letter the deduction of Rs. 1,03,135/- towards licence fee from 1.7.1997 to 4.6.1998 and a sum of Rs. 1,000/- towards unassessed Government dues has been intimated to the applicant. In Annexure-A7 the mode by which the outstanding licence fee has been worked out to Rs. 1,03,135/- has been given. In Annexure-A7 deduction has been given to Rs. 4,848/- which has been remitted by the applicant by D.D. dated 25.4.1998. The applicant has challenged the deduction of the penal rent or licence fee at market rate for the period from 1.11.1997 to 4.6.1998 from the gratuity payable to him. He has sought for a direction to the respondents to refund Rs. 1,03,135/- to the applicant with interest at 18% per annum. He has also sought for payment of interest on Rs. 2,45,865/- from 1.7.1997 to 12.6.1998 as there was delay in payment of that amount.

2. It is contended on behalf of the applicant that the respondents could not have charged the rate of market rent fixed for general pool accommodation as the quarter in question was the designated departmental quarter and that Rule 317-B-11 of Supplementary Rules do not apply to the quarter in question, that the respondents could not have charged penal licence fee without giving an opportunity to the applicant to put forth his say, that the market rate should have been assessed by the appropriate authority and that charging of the market rate at Rs. 15,155/- per month is arbitrary. In the course of arguments he also submitted that the market rate or penal rent should be determined by the competent authority under Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 ('PP Act' for short) read with Rule 8 of the Public Premises (Eviction of Unauthorised Occupants) Rules, 1971 ('PP Rules' for short) and that the respondents could not have levied the market rate without having recourse to the provisions of the PP Act. He lastly contended that the gratuity could not have been withheld for the reason that the applicant had not yet vacated the quarter, that the market rate or penal rate of licence fee even if payable could not have been deducted from gratuity and that the respondents are therefore, liable not only to pay interest for the delayed payment of gratuity, but also to refund the amount deducted by them.

3. The respondents in their reply have pleaded that inspite of the rejection of the applicant's request for continuance of occupation of the quarter, he did not vacate the same, that the second respondent after assessing the market value in consultation with CPWD directed the petitioner to pay Rs. 8,717/- per month for the period of his over-stayal pending consideration of his representation (Annexure-R3), that the Ministry rejected the request of the applicant by letter dated 12.2.1998 (Annexure-R1) and directed recovery of the market rent in consultation with CPWD, that as per the O.M. dated 30.5.1995 penal rent is levied at Rs. 95/- per sq.mtr. and the applicant is, therefore, liable to pay the penal rent at Rs. 15,153/- per month and the same has been recovered from the gratuity. The learned counsel for the respondents relying on some authorities contended that it is not necessary for the respondents to approach the competent authority under the PP Act for fixation of the damage rent or market rate and that such penal or market rate of rent can be recovered from the DCRG payable to the party.

4. It is not disputed that the applicant who retired from service on 30.6.1997 vacated the quarter only on 4.6.1998. The liability of the applicant to pay market rent for the period beyond the permissible period of 4 months cannot also be disputed or gone into in these proceedings. Though the respondents in their letter dated 31.12.1997 (Annexure-A2) intimated the applicant that he is to pay rent of Rs. 8,717/- per month as fixed by CPWD, they have subsequently levied the market rate at Rs. 95/- per sq.mtr. which works out to Rs. 15,153/- p.m. The sum of Rs. 8,717/- is stated to have been worked out on the basis of the Office Memorandum dated 5.5.1994 issued by CPWD Estate Officer, Bangalore. In that letter the rates of the damage for unauthorised occupation are fixed in respect of different types of quarters at Vijayanagar and Koramangala. For Type-E quarter the market rate has been fixed at Rs. 8,717/-.

5. Subsequent to Annexure-A2, the Ministry of Agriculture by their letter dated 12.2.1998 while rejecting the applicant's prayer for permission to continue to occupy the quarter, instructed the second respondent to get the market rent assessed by CPWD Executive Engineer situated at Bangalore as per the Rules in force and recover the same from the applicant. When the 2nd respondent made a reference to CPWD to determine the market rent for the quarter in question, the Estate Manager-cum-Superintending Engineer, CPWD by his letter dated 19.5.1998 informed the 2nd respondent that on the basis of the circular issued by the Director of Estate, New Delhi, the Estate Officer, CPWD, Bangalore had issued a circular, that the rate fixed by the Director of Estates, New Delhi is applicable to Bangalore as well as all other places and that specific assessment of Type-VI quarters at Hessarghatta does not arise. In that letter, he mentioned that market rent of licence fee for Type-VI quarters is Rs. 95/- per sq.mtr. It is on the basis of this information, the second respondent has worked out market rate of rent at Rs.15,153/- per month.

6. The points that arise for consideration in this application are-- (1) Whether in respect of the departmental quarter in question which admittedly is located at Hessarghatta, the damages/market rate as fixed in the O.M. dated 31.10.1997 at Rs. 95/- per sq.mtr. can be levied? (2) Whether the damages for unauthorised occupation could be levied and recovered without reference to the provisions of the PP Act? and (3) Whether the market rate/damages for unauthorised occupation for a period in excess of the permissible period after retirement can be deducted from the gratuity?

7. FR 45-A deals with the fixation of standard licence fee. SR 317-B contains the Rules known as Allotment of Government Residences (General Pool in Delhi) Rules, 1963. Prior to 1995 the charging of damage from unauthorised occupants of general pool residential accommodation was governed by the O.M. dated 31.7.1976. The matter relating to recovery of damages from the unauthorised occupants for occupation of residential accommodation and also the quantum of licence fee to be charged when allotments are made to ineligible individuals7organisations on the basis of existing market fee formula was considered by Government and fresh instructions have been issued as per Government of India, Ministry of Urban Development (Director of Estates) O.M. No. l8011(12)773-Pol.III dated 27.8.1987 read with O.M. No. 18011/3/92-Pol.III, dated 30.5.1995. The instructions contained in the above O.Ms are given in Swamy's compilation of FRSR Part-I, General Rules, 13th Edn. at pages 196-197. It is under these instructions the rates of damages have been revised from Rs. 50/- to Rs. 80/- per sq.mtr. per month for Type-E quarter in respect of general pool accommodation in Delhi. The relevant instructions as found in Swamy's compilation are as hereunder:

(i) The decision taken in the year 1970, indicating the formula for fixation of market rate of licence fee and the orders issued by the Directorate of Estates in Memorandum No. 18011/12/73-Pol.I, dated 31.7.1976 (not printed), for pooling of market rate of licence fee, fixing pooled unit market rate of licence fee and recovery of damages from unauthorised occupants at three times the market rate of licence fee after the period allowed by the Estate Officer for vacation of the accommodation has expired, is hereby withdrawn.

(ii) Revised rates of damages to be recovered - Effective from 1.6.1995. The Government have decided to revise the rates of damages from the present rate of Rs. 45 per sq.mtr. of living area per month to Rs. 55 per sq. mtr. per month in respect of Types 'A' to 'D' (Types 'I' to 'IV') and from Rs. 50 per sq.mtr. of living area per month to Rs. 80 per sq.mtr. per month in respect of Type 'E' and above (Type 'V' and above) including hostel accommodation to be recovered from unauthorised occupants of general pool accommodation in Delhi. In addition, garden charges as applicable will also be recovered.

These rates will be effective from 1.6.1995 and will be in force for a period of two years or till further orders. In old cases, where the unauthorised occupation exists before 1.6.1995 and the same continues thereafter, the damages at the revised rates as mentioned above will be recovered with effect from 1.6.1995.

(iii) Similar damages rate may be worked out by the CPWD for other stations where general pool accommodation is available and the rates so assessed may be adopted for recovery of damages in such stations.

(iv) In respect of other departmental pools of accommodation in Delhi/other stations, the rates of damages prescribed for the general pool accommodation wherever the general pool accommodation exists, may be adopted by various other Ministries/Departments. In stations where there is no general pool accommodation, the Ministry/Department concerned may get suitable unit rates worked out by the CPWD.

(v) The rate of damages as above would be the rate to be charged from the unauthorised occupant and if he/she is not agreeable to pay it, the damages to be recovered from him/her will have to be pleaded before the Estate Officer in terms of Rule 8 of the Public Premises (Eviction of Unauthorised Occupants) Rules, 1971.

Suitable amendments are being carried out in the Allotment of Government Residences (General Pool) in Delhi Rules, 1963, to delete the words "market licence fee" and to substitute the same by the word "damages". Similar amendments may be carried out by the Ministries/Departments in their Allotment Rules.

The term "market rate of licence fee" will no more be applicable either for

recovery of licence fee for residential accommodation or for charging/recovery

of damages..."

8. By O.M. No. 18011/I/97-Pol.III dated 31.10.1997 the Government have revised the rates of damages as fixed under O.M. dated 30.5.1995 and in respect of Type-VI Special and above accommodation the rate of damages which has to be recovered from unauthorised occupants of general pool accommodation in Delhi has been raised from Rs. 80/- per sq.mtr. to Rs. 95/- per sq.mtr.

9. It is seen that the damage rate of rent at Rs. 95/- per sq. mtr. is fixed in respect of general pool accommodation in Delhi. Clause (iii) of O.M. dated 30.5.1995 referred to above stipulates that similar damage rate should be worked out by the CPWD for other stations where general pool accommodation is available and the rates so assessed could be adopted for recovery of damages in such stations. In view of this, the statement made by the Estate Manager of CPWD in his letter dated 19.5.1998 stating that the market rate of licence fee fixed at Rs. 95/- per sq. mtr. by the Director of Estates, New Delhi is applicable to all places including Bangalore and Hessarghatta is untenable. That apart, the damage rate of rent or market rate of rent leviable at Delhi cannot automatically be applied in all the places. That is why even the Government has given instructions that wherever there is general pool accommodation, the damage rate of rent will have to be worked out by the CPWD for those stations.

10. In the instant case, the quarters allotted to the applicant is not from the general pool and it is a departmental accommodation. Both in the O.M. dated 30th May, 1995 as well as in O.M. dated 31.10.1997 it is specifically mentioned that in respect of other departmental pools of accommodation in Delhi/other stations, the rates of damages prescribed for the general pool accommodation wherever such accommodation exists, may be adopted by various other Ministers/Departments and that in stations where there is no general pool accommodation, the Ministry/Department concerned may get suitable unit rates worked out by the CPWD. The CPWD at Bangalore had worked out the market rate of rent leviable in respect of general pool accommodation at Vijayanagar and Koramangala in their office Memorandum dated 5.5.1994 and the respondents have not placed any material to show that those rates have subsequently been revised to Rs. 95/- per sq.mtr. In fact, in the O.M. of 1994 the rate fixed is at Rs. 50/- per sq.mtr. When the CPWD at Bangalore revised the rate leviable in respect of general pool accommodation at Bangalore separately, the rate of Rs. 95/- per sq.mtr. fixed in respect of Delhi accommodation could not have been automatically adopted.

11. There is also a-controversy on the question as to whether the market rate/damage rate of rent fixed in respect of general pool accommodation at Bangalore could be adopted for the accommodation at Hessarghatta. While the learned counsel for the applicant contended that Hessarghatta does not come inside Bangalore agglomeration, the learned counsel for the respondents sought to contend that it does come within that limit. It is seen that the Ministry of Agriculture in its letter dated 12.2.1998 has advised the 2nd respondent to get the final market rate assessed by the CPWD Executive Engineer situated at Bangalore as per the Rules in force and recover the same from the applicant. If the market rate7damages rate of rent fixed for general pool accommodation at Bangalore was applicable to quarters in question, there was no need for the 2nd respondent to get the same fixed afresh by the CPWD. Be that as it may, on the material on record, it cannot be said that the CPWD has fixed the market rate/damages rate of rent for general pool accommodation at Bangalore at Rs. 5/- per sq.mtr. and as such even if Hessarghatta comes within the limits of Bangalore Urban Agglomeration that rate could not have been levied. We make it clear that we have not gone into the question as to whether the rate prescribed in respect of general pool accommodation at Bangalore could be adopted to Hessarghatta area at this juncture as we feel that it is unnecessary, in view of the fact that even in respect of general pool accommodation at Bangalore the rate is not fixed at Rs. 95 per sq.mtr.

12. The next point to be considered is whether the market/damages rate of rent as determined by the department in consultation with the CPWD could be straight away recovered even if the unauthorised occupant objects to the rate so fixed. It is no doubt true that in some of the decisions cited by the learned counsel for the applicant, most of which pertain to Railway quarters, it has been held that it is not necessary for the department to have recourse to the proceedings under the PP Act for fixation of damages and that they can recover the same at the rate fixed by them. Those decisions indicate that the department has an option either to get the damages determined under the provisions of the PP Act or to recover the amount fixed by them. In Ranadhir Kr. De v. Union of India and Ors., (1996) 33 ATC 575), the Calcutta Bench has held that in the case of Government servants, when departmental rules and instructions under FR and other statutory rules are available, the Government has the option to choose either to follow the provisions of the PP Act or the service rules to recover the damage/market rate of licence fee. The editor has made a note in that decision that there is conflict of opinion on this question. It is seen that all the decisions which indicate that it is open to the department either to take action under the PP Act or to follow the service rules for recovering damage/market rate of licence fee pertain to a period prior to the issue of O.M. dated 30.5.1995. Clause (v) of the instructions contained in the relevant O.Ms, which have been extracted above, clearly stipulates that if the unauthorised occupant is not agreeable to pay the damages al the rate charged, then the damages to be recovered from him or her will have to be pleaded before the Estate Officer in terms of Rule 8 of the PP Rules. The above clause clearly indicates that in case of the unauthorised occupant disputing his liability to pay the damages at the rate worked out by the department, then it will have to be pleaded before the competent authority under the PP Act and the PP Rules. These instructions appear to have been given after taking note of the divergent views on the matter. When the parliament had enacted an Act containing provisions for determining the damages payable for unauthorised occupation of public premises and rules have been framed under the Act prescribing the factors to be taken into consideration while determining the damages, it is but appropriate that the damages are got determined by that competent authority, more so in view of the fact that under the provisions of the Act the unauthorised occupant is given an opportunity of being heard in the matter and he is also provided with a right of appeal against the order passed by the competent authority. Possibly taking into consideration the wholesome nature of the provisions contained in the Act and the Rules, the Government itself has decided that if the unauthorised occupant is not agreeable to pay the damages at the rate fixed by the department, the matter will have to be placed before the authority under the PP Act and the Rules. A feable attempt was made by the learned counsel for the respondents to contend that if the occupant is aggrieved by the rate fixed by the department, it is for him to approach the Estate Officer under the PP Act. There is no provision under the PP Act to entertain such an application from the occupant of the public premises challenging the quantum of damages levied by the Government. The provisions of the Act indicate that it is at the instance of the department the damages will have to be determined after notice to the occupant. In view of the instructions contained in the O.M. referred to above and as the O.M. dated 31.10.1997 only revises the rates fixed in the O.M. dated 30.5.1995 and it does not purport to delete other clauses, the instructions contained in Clause (v) would still hold good and in case of disagreement the damages/market rate of rent for unauthorised occupation will have to be got determined by taking recourse to the provisions of Section 7 of the PP Act read with Rule 8 of the Rules. In the instant case, the applicant has objected to the levy of damages or market rate of rent either at Rs. 8,717/- per month or at Rs.95/- per sq. mtr. As such, the respondents could not have straight away recovered the damages at Rs. 95/- per sq. mtr. from gratuity.

13. The last point to be considered is as to whether the damages for unauthorised occupation of the premises for a period beyond the permissible period after retirement can be recovered from gratuity.

14. The learned counsel for the applicant relied on a single Member judgment in Kessu Thadharam Dudani v. Union of India and Ors., (1996(1) (CAT) SLJ 587) in support of his contention that penal rent cannot be deducted from gratuity. The learned counsel for the respondents cited some authorities some of which are of single Member to contend that penal rent can also be deducted from gratuity. He strongly relied on the judgment of the Division Bench of the Calcutta Bench of the Tribunal in Ranadhir Kr. De's case, (1996) 33 ATC 575). In that case the Division Bench has relied on an earlier decision in Ranjit Kr. Banerjee v. Union of India, reported in (1996) 32 ATC 761 to hold that the Government dues including penal rent/damages as levied under the Rules can be deducted from the gratuity payable to the employee.

15. In Ranjit Kr. Banerjee's case the applicant had continued in unauthorised occupation of Government accommodation when he was still in service and the question arose whether the penal rent payable by him could be subsequently deducted out of the gratuity payable to him. That decision does not clearly indicate as to when the applicant retired from service. But, the facts would indicate that he became liable for payment of penal rent when he was in service. Why we are highlighting this circumstance is that under the provisions of Rules 71 and 72 of the Pension Rules a distinction will have to be made between the Government dues as on the date of retirement of the employee which may include penal rate of rent, which has become payable by the date of his retirement and the amount which becomes due towards penal or market rate of rent after the expiry of the permissible period of occupation of the premises subsequent to the date of retirement.

16. Rule 71 of the Pension Rules deals with recovery and adjustment of Government dues. Clause (1) of Rule 71 stipulates that it is the duty of the Head of office to ascertain and assess dues payable by a Government servant due for retirement. Clause (2) stipulates that the Government dues as ascertained by the Head of Office which remain outstanding till the date of retirement of the Government servant shall be adjusted against the amount of retirement gratuity becoming payable. Clause (3) indicates as to what are the dues which would come within the expression Government dues. Dues pertaining to Government accommodation including arrears of licence fee would come within the ambit of the expression "Government Dues". It is clear from Rule 71 that it is only the Government dues out-standing till the date of retirement which could be adjusted against the amount of retirement gratuity.

17. Rule 72 deals with the adjustment and recovery of dues pertaining to Government accommodation. Clause (1) requires the Directorate of Estate to notify the Head of Office 8 months, prior to the date of retirement of the allottee if any licence fee is recoverable from him in respect of the period prior to 8 months of retirement. If that information is not given, it, should be presumed that no licence fee is recoverable from the allottee. Clause (2) casts a burden on the Head of Office to ensure that licence fee for the next 8 months, that is upto the date of retirement of the allottee is recovered every month from the pay and allowances of the allottee. If the Director of Estates intimates that any amount of licence fee is recoverable for the period mentioned in Sub-clause (1), then the Head of Office should ensure its recovery and where the entire amount is not recovered from the pay and allowances, balance shall be recovered out of the gratuity.

18. Sub-clause (4) of Rule 72 requires the Director of Estates to notify the Head of Office the amount of licence fee for the retention of Government accommodation for the permissible period of 4 months beyond the date of retirement of the allottee and it authorises the Head of Office to adjust that amount of licence fee from the amount of gratuity together with unrecovered licence fee, if any, mentioned in Sub-clause (3). All these clauses pertain to the licence fee payable by the allottee upto the date of his retirement and for the permissible period of 4 months after the date of retirement. Clause (5) provides that if it is not possible to determine the outstanding licence fee in any particular case, the Directorate should inform the Head of Office that 10% of the gratuity or Rs. 1000/- whichever is less may be withheld pending receipt of further information. Clause (6) of Rule 72 of the Pension rules which is relevant for the purpose reads as hereunder:-- (6) The recovery of licence fee for the occupation of the Government accommodation beyond the permissible period of four months after the date of retirement of allottee shall be the responsibility of the Directorate of Estate. Any amount becoming due on account of licence fee for retention of Government accommodation beyond four months after retirement and remaining unpaid may be ordered to be recovered by the Directorate of Estates through the concerned Accounts Officer from the dearness relief without the consent of the pensioner. In such cases no dearness relief shall be disbursed until full recovery of such dues have been made".

There is a specific provision that any amount which becomes due for a period beyond 4 months after the date of retirement will have to be recovered from the dearness relief. A plain reading of Rule 72 makes it clear that only the licence fee which may include even the penal or market rate of licence fee due from the allottee upto the date of his retirement and the licence fee for the permissible period of 4 months after the date of retirement can be deducted out of the gratuity. Any amount whether it is at the standard rate or at the damages/market rate which becomes payable only 4 months after the date of retirement cannot be deducted out of the gratuity. It has to be recovered from the dearness relief. The object of making this provision is very clear. Specific provisions have been made in the pension rules- in Rules 58, 59, 60, 61 and 63 regarding the preparation of pension papers and stages for completion of the pension papers. Rule 64 stipulates that in a case where the Government servant is likely to retire before his pension and gratuity or both can be finally assessed and settled in accordance with the provisions of the Pension Rules, he should without delay take steps to determine the qualifying years of service and the emoluments qualifying for pension after a careful summary investigation and determine the amount of provisional pension and provisional gratuity. Under that provision 100% gratuity will have to be paid as provisional gratuity withholding 10 per cent of Rs. 1000/- whichever is less. Clause (7) of Rule 64 stipulates that if the final amount of pension and gratuity have not been determined by the Head of Office in consultation with the Accounts Officer within a period of 6 months, the Accounts Officer shall treat the provisional pension and gratuity as final and issue pension payment order immediately after expiry of 6 months. Rule 65 stipulates that pension payment order should be issued not later than one month in advance of the date of the retirement of the Government servant, if the pension is payable in his circular of accounting unit. These provisions have been enacted to ensure that the Government servant should get his gratuity immediately on his retirement. Rule 68 contains a provision for payment of interest if the gratuity is authorised later than the date when it becomes due and if the delay is attributable to the administrative lapses. When the gratuity becomes payable immediately after the retirement and the statutory rules require that the gratuity is to be paid immediately on retirement, the only deduction that could be made from that amount under Rules 71 and 72 is the amount that would have become due on the date of retirement of the Government servant. Taking into consideration similar provisions in the Railway Rules, the Full Bench of this Tribunal in Wazir Chand v. Union of India and Ors. (1996) 32 ATC 370) has held that gratuity cannot be withheld on the ground that the employee has not vacated the quarters. When such is the case the question of withholding DCRG till the Government servant vacates the quarters or till the market rate of licence fee is assessed and levied against him for a period more than 4 months after his retirement is wholly unwarranted, more so in view of the specific provision in Rule 72 regarding mode of recovery of that amount which becomes payable after the lapse of 4 months from the date of retirement. The Division Bench in Ranadhir Kr. De's case has not considered the specific provisions of Rules 71 and 72 of the Pension Rules and has also failed to note that the earlier decision in Ranjit Kr. Banerjee's case was in respect of penal rent becoming due when the applicant was in service. That decision also runs counter to the reasoning of the Full Bench in Wazir Chand's case to hold that gratuity cannot be withheld till the employee vacates the quarters. As such, that decision will have to be treated as per incurium so far as it purports to hold that even the penal rent becoming due more than 4 months after the date of retirement of an employee could be deducted out of the gratuity. After careful consideration of the relevant provisions of the Pension Rules we are of the clear opinion that the penal/market/damage rate of rent payable by the retired Government servant for occupying the Government accommodation for a period after his retirement cannot be deducted out of the gratuity.

19. The respondents have worked out the licence fee due from 1.7.1997 to 31.8.1997 at Rs. 808/- at Rs. 404/- per month and for the period from 1.9.1997 to 31.10.1997 at Rs.808/ per month i.e., Rs. 1,616/-. The applicant has not objected to these two items. The main objection is with regard to the levy at Rs. 95/- per sq. mtr. from 1.11.1997 to 4.6.1998 which comes to Rs. 1,08,091/-. The applicant has admittedly remitted Rs. 4,848/- and another sum of Rs. 1,532/-. As such the respondents could not have deducted Rs. 1,03,135/- out of the gratuity and they are liable to refund the same.

20. The question is whether the respondents are liable to pay the interest on the above amount. We have found that the levy of market rate at Rs. 95/- per sq. mtr. was not warranted. Under the Rules, the respondents could not have deducted this amount out of the gratuity. The applicant has been deprived of that amount for more than one year. Taking into consideration all the other facts and circumstances of the case, we feel that it would be just and proper to award interest on that amount from 1.1.1998.

21. So far as the applicant's claim for interest on the balance of Rs. 2,45,865/- which was paid by demand draft in July, 1998 is concerned, no other reason for not paying this amount immediately after retirement is put forth. The only obvious reason is that the department waited for the fixation of the penal rate of rent. When the Rules stipulate that even when the licence fee cannot be immediately ascertained only 10 per cent of the gratuity or Rs. 1,000/- whichever is less will have to be withheld and the balance paid, there was no justification for withholding the entire gratuity for over one year after retirement. As such, the applicant is entitled to award of interest on the sum of Rs. 2,45,865/- atleast from 1.10.1997.

22. For the above reasons, this application is allowed and the respondents are directed to refund the sum of Rs. 1,03,135/- deducted by them from gratuity together with interest at 12 per cent per annum from 1.1.1998 and also to pay interest at 12 per cent on Rs. 2,45,865/- from 1.10.1997 till the date of payment. This direction shall be complied with within a period of 3 months from the date of receipt of a copy of this order. Liberty is given to the respondents to get the market rate of licence fee for the period from 1.11.1997 to 4.6.1.998 assessed in accordance with law and to recover the same in accordance with Rule 72 of the Pension Rules.