Supreme Court Upholds University’s Right to Evict Retired Employees from Housing: Ranchi University vs. Jharkhand State Housing Board (2018)

Date of the Judgment: 23 October 2018

Citation: (2018) INSC 973

Judges: Abhay Manohar Sapre, J., Indu Malhotra, J.

Can a university be compelled to allow its retired employees to continue occupying the residential flats allotted to them during their service tenure? The Supreme Court of India recently addressed this question in a dispute between Ranchi University and its retired employees, who claimed a right to the flats based on a cancelled allotment and subsequent payments made to the Jharkhand State Housing Board. This case clarifies the rights of a university over its housing and the limitations on employees’ claims after retirement. The judgment was delivered by a bench of Justices Abhay Manohar Sapre and Indu Malhotra, with the opinion authored by Justice Sapre.

Case Background

The case revolves around a housing colony in Ranchi, originally allotted by the Jharkhand State Housing Board (the Board) to Ranchi University (the University) in 1976. The Board allotted 192 flats to the University for its employees’ residence, known as “Ranchi University Housing Colony,” for a total of Rs. 42,24,000. The University was to pay 10% of the total amount initially and the rest in 180 monthly installments of Rs. 31,195.30.

The University paid the initial 10% and continued to pay monthly installments regularly until 1991. However, they defaulted on some payments. The University had taken possession of the flats and allotted some to its employees, and even converted some into a Girls Hostel Block. The University also made a lump sum payment of Rs. 5 lakh towards the total cost.

On 19 October 1989, the Board demanded Rs. 2,62,44,149 from the University, which included the remaining principal amount and interest on the defaulted sum. When the University failed to pay, the Board cancelled the allotment on 29 November 1992. The Board then decided to allot the flats to the retired employees who were still occupying them, based on a request from the University. However, the University realized there was foul play involved in sending the request and cancelled it on 29 January 1993. The University warned its employees not to act on the request or make payments to the Board. Despite this, 19 employees deposited Rs. 10,000 each for the allotment of the flats. The University also continued to make payments to the Board, which the Board accepted.

Timeline:

Course of Proceedings

The retired employees filed three writ petitions in the High Court of Jharkhand at Ranchi, seeking a writ of mandamus to compel the Board to execute lease deeds in their favor. The University contested these petitions, arguing that the employees had no right to the flats after their retirement.

The Single Judge of the High Court dismissed the writ petitions on 8 August 2006, holding that the employees were in unauthorized occupation and had no right to the flats. The employees then filed an intra-court appeal before the Division Bench of the High Court.

The Division Bench, on 21 November 2006, allowed the appeal, set aside the Single Judge’s order, and directed the Board to execute lease deeds in favor of the employees based on prevailing terms and conditions. This decision was challenged by the University in the Supreme Court.

Legal Framework

The judgment primarily deals with the contractual obligations between the University, the Board, and the University’s employees. There are no specific sections of any statute mentioned in the judgment. However, the core legal principle revolves around the concept of contractual rights and obligations. The initial allotment agreement between the Board and the University established the University’s right to the flats. The employees’ right to occupy the flats was derived from their employment with the University, and their right to occupy the flats was contingent upon their employment.

Arguments

Arguments by the University (Appellant):

• The original allotment was in favor of the University, and they had made substantial payments.
• The employees were allotted flats by virtue of their employment with the University.
• The employees’ right to occupy the flats was contingent upon their service tenure.
• The University had cancelled its request to the Board for allotment of flats to employees.
• The University continued to make payments to the Board, which the Board accepted, thus restoring the initial allotment.
• The employees had no independent right to the flats and were in unauthorized occupation after retirement.

Arguments by the Employees (Respondents):

• They had deposited money with the Board for allotment of flats in their personal capacity.
• The University’s decision to allow them to seek individual allotment from the Board created a right in their favor.
• They had a right to remain in occupation even after retirement, based on their payments to the Board.

The employees argued that by depositing money with the Board, they had created an independent right to the flats, separate from their employment with the University. They contended that the University’s initial request for the Board to allot flats to them individually created a legitimate expectation. The University, on the other hand, argued that the employees’ right to occupy the flats was solely derived from their employment and that the University had withdrawn its request for individual allotments, and that the acceptance of payment from the University by the Board restored the original allotment in favour of the University.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the employees of the University had any right to continue in occupation of the flats after their retirement, based on the cancellation of the initial allotment and subsequent payments made to the Board?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court did not cite any specific cases or books in this judgment. The judgment primarily relied on the facts and circumstances of the case and the contractual relationship between the parties. The legal provisions were not specifically cited, but the judgment was based on the principles of contract law and the concept of unauthorized occupation.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court did not rely on any specific authorities.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the contractual relationship between the University and the Board, and the derivative nature of the employees’ right to occupy the flats. The Court emphasized that the employees’ right to occupy the flats was solely based on their employment with the University, and this right ceased upon their retirement. The Court also noted that the University had cancelled its request to the Board for individual allotments, and that the acceptance of payment from the University by the Board restored the original allotment in favour of the University. The Court rejected the employees’ claim of an independent right to the flats, stating that their possession became unauthorized after retirement.

The Court’s reasoning was based on the following points:

• The original allotment was in favor of the University.
• The employees’ right to occupy the flats was contingent on their employment.
• The University had cancelled its request for individual allotments.
• The University continued to make payments, which the Board accepted, restoring the original allotment.
• The employees’ possession became unauthorized after retirement.

The Court rejected the employees’ argument that their payments to the Board created an independent right. The Court emphasized that the University had the right to control the allotment of its housing and that the employees’ occupation was unauthorized after their retirement.

The Court quoted that: “In our considered opinion, the writ petitioners’ (respondent nos. 4 and 5) right to remain in lawful occupation of the flats could subsist only so long as they were in the employment of the University, and that too on payment of house rent fixed by the University as per their policy.”

The Court further stated, “The day on which their services came to an end, whether due to their tendering the resignation, or on attaining the age of superannuation or for any other reasons, their right to continue in occupation of the flats came to an end. Their possession in the flats became unlawful and unauthorized.”

The Court also observed, “mere payment of Rs.10,000/- to the Board by the writ petitioners contrary to the directions issued by the University did not create any independent right in their favour and nor such payment even if made by the employees impaired the rights of the University in any manner in relation to the allotment of flats qua Board”

Key Takeaways

• Universities have the right to control and manage their housing facilities.
• Employees’ right to occupy university-allotted housing is contingent upon their employment.
• Retired employees have no automatic right to continue occupying university housing.
• Universities can evict retired employees who continue to occupy housing without authorization.
• Payments made by employees to a housing board, without the university’s consent, do not create an independent right to the property.
• The acceptance of payment by the Housing Board from the University can be construed as a restoration of the original allotment.

Directions

The Supreme Court directed that:

• The University is at liberty to proceed against the employees for eviction under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.
• The University can claim arrears of penal rent from the employees for their unauthorized occupation.
• The University is at liberty to finalize the issue of allotment of flats with the Board.
• The employees are at liberty to seek a refund from the Board for the amounts they deposited, along with interest.
• The Board will refund the money to the employees within three months of a demand, after verification.

Specific Amendments Analysis

There are no specific amendments discussed in the judgment.

Development of Law

The ratio decidendi of this case is that an employee’s right to occupy university-allotted housing is derivative of their employment and ceases upon retirement. The judgment reinforces the university’s right to manage its housing and evict unauthorized occupants. This case clarifies that payments made by employees to a housing board, without the university’s consent, do not create an independent right to the property. There is no change in the previous position of law, but this case reiterates the established principles of contractual rights and obligations.

Conclusion

The Supreme Court allowed the appeal filed by Ranchi University, setting aside the Division Bench’s order and restoring the Single Judge’s decision. The Court held that the retired employees had no right to continue occupying the university flats and were in unauthorized occupation. The Court emphasized that the employees’ right to occupy the flats was contingent upon their employment and that the University’s initial allotment remained valid. The judgment reaffirms the principle that an employee’s right to occupy employer-provided housing is linked to their employment and does not extend beyond it.