NDLI: National Building Construction Corporation Vs. S. Raghunathan and Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Constitution of India 1872 1950 Art. 14 Evidence Act S. 115 Doctrine of Legitimate Expectation
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Indian Evidence Act, 1872 (1 of 1872)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Administrative Law :Legitimate Expectation-Doctrine of-Nature-Invoking of-Conditions for-National Building Construction Corporation decided to grant foreign allowance according to pre-revised basic pay and not according to revised basic pay-Validity-Held: Doctrine of Legitimate Expectation is akin to natural justice, reasonableness and promissory estoppel--It assures fair play in administrative action--State cannot disregard policy statement unfairly or apply it selectively-The doctrine is a source of substantive as well as procedural rights-The doctrine can be invoked by an aggrieved person who altered his position by acting upon state action-Whether an expectation is legitimate or not is a question of fact-this question has to be decided not according to the claimant's perception but in larger public interest-In the circumstances of the case, policy decision which was based on objective assessment of prevailing circumstance displaced legitimate expectation-Hence, Corporation's decision, upheld-Constitution of India, 1950, Art. 14--Evidence Act, 1872, S. 115. Legitimate Expectation-ls a question off act-Hence must be pleaded in writ petition.Service Law :Allowances-Foreign allowance-Linked with basic pay-Increase of basic pay-Effect on foreign allowance-there was no assurance by the employer that foreign allowance would be increased with increase of basic pay-Held, non-grant of foreign allowance according to increase in basic pay, valid. Fundamental Rule 51-Compensatory and foreign allowances-Grant of-To employees on deputation-Held: Grant of such allowances is at the absolute discretion of the President-Further, foreign allowance cannot be treated as a salary component akin to deputation (duty) allowance as it is in the nature of a residuary perk.Practice and Procedure :Pleadings-Writ petition-Question of fact-Not raised in writ petition but raised during arguments-Petitioners neither raised question of legitimate expectation in writ petition nor laid a foundation for such a plea in the pleadings nor in the affidavits-But High Court entertained the plea during arguments and allowed the petition on this ground only-Correctness of-Held :In the absence of pleadings and affidavits of petitioners, allowing the petition only on the ground of legitimate expectation which is a question off act is a speculative exercise, and is erroneous.The respondents who were engineers in the Central Public Work Department (CPWD) were sent on deputation to the National Building Construction Corporation (NBCC) for one of the overseas projects being executed by NBCC in Iraq. Under the service agreement the respondents were given the option either to draw their salary in the scale of pay of CPWD together with deputation (duty) allowance or get their pay fixed under normal rules applicable to the posts for which they were selected by NBCC. The respondents opted for the first choice. The respondents were also granted foreign allowance @125% of their basic pay by NBCC. In the meanwhile the pay scale of the respondents in CPWD were revised w.e.f. 1.1.1986 as a result of the recommendation of the Fourth Central Pay Commission and consequently the pay scale of the respondents increased. The respondents filed a writ petition before the High Court for a direction that the respondents be paid foreign allowance @ 125% of the revised basic pay which was allowed on the basis of the Doctrine of "Legitimate Expectation". Hence this appeal.On behalf of the appellants it was contended that foreign allowance was not part of the agreement between the respondents and NBCC; that NBCC issued an order dated 15.10.1990 fixing foreign allowance @ 125% of the pre-revised pay; that the High Power Committee constituted to look into the wage structure of public sector undertakings after the recommendations of the Fourth Central Pay Commission had not recommended any increase in foreign allowance, that the Doctrine of "Legitimate Expectation" was not pleaded in the writ petition; and that it was not open to the High Court to entertain this plea at the stage of arguments and decide the petition on that basis.
Judge	Hon'ble Mr. Justice S. Saghir Ahmad
Neutral Citation	1998 INSC 325
Petitioner	National Building Construction Corporation
Respondent	S. Raghunathan And Ors.
SCR	[1998] Supp. (1) S.C.R. 156
Judgement Date	1998-08-28
Case Number	4483

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National Building Construction Corporation Vs. S. Raghunathan and Ors.

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