Mahendra Kashyap vs WESTERN RAILWAY on 14 October 2026

ORDER

Per: Hon’ble Shri Sanjiv Kumar, Member (A)

1. Applicant has filed the present OA, under Section 19 of the Administrative Tribunals Act, 1985, seeking the following reliefs: “(a) The Hon’ble Tribunal be pleased to declare that the impugned orders dated 17.10.2025 at ANNEXURE-A/1 and order dated 4.11.2025 being order No.E/PB/ENGG/ADI at ANNEXURE-A/2 to this application passed by respondent no.2 and 3 for recover of anamount of Rs. 26,65,770/- toward penal rent is illegal, unjust, arbitrary, without application of mind and in violation of Art. 14 of the Constitution of India and be pleased to quash and set aside the same by directing the respondents to refund the amount already recovered from the salary of the applicant with 12% interest. (B) The Hon’ble Court be pleased to declare that the applicant is not liable to pay penal rent for the period in question, or in the alternative, direct re-calculation of rent strictly in accordance with applicable Railway rules after granting opportunity of being hearing to the applicant; (C) Any other relief which this Hon’ble Tribunal deem just, fit and proper in the interest of justice may be granted together with cost.

2. Brief facts of the case as stated by the applicant are as under: - 2.1 The applicant joined the Railway service on 21.04.1994 as Khalasi and was initially posted at Mumbai Central. He was allotted Railway accommodation and subsequently, upon promotion, was allotted Quarter No. 128/16, Bandra East, Kherwadi Railway Colony, in the year 2012. 2.2 The applicant was subsequently promoted to various posts and was serving as Master Craftsman Fitter (MCF). On 30.10.2023, the competent authority cancelled the allotment of the aforesaid Railway quarter with immediate effect and directed the applicant to vacate the same on account of illegal activities alleged to have been carried out in the Railway quarter. However, the applicant did not vacate the quarter within the stipulated period. P ANUKUMA

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2.3 The applicant states that he made representations requesting retention of the quarter, mainly on the ground that his son was studying at Mumbai and was in the middle of the academic session and the applicant himself had health problems. 2.4 Meanwhile, the applicant was transferred from Mumbai to Nandurbar. He challenged the transfer order before the Mumbai Bench of this Tribunal by way of filing O.A. No. 226/2024. Mumbai Bench, vide order dated 06.11.2024, did not interfere with the transfer order. However, it observed that after joining at the transferred place, the applicant could make a representation regarding his personal difficulties and such representation was required to be considered by the competent authority by passing a reasoned and speaking order. As regards cancellation and eviction of the Railway quarter, the Mumbai Bench held that those proceedings were independent proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and declined to comment upon them. 2.5 In the meantime, proceedings for eviction of the applicant from the Railway quarter were initiated under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. A show-cause notice dated 22.11.2023 was issued. The applicant participated in the proceedings and ultimately an eviction order dated 16.12.2024 was passed.The applicant continued to occupy the quarter and was physically evicted on 07.07.2025. The joint eviction report records that the quarter was vacated and the household articles of the applicant were removed during the eviction activity. 2.6 The applicant thereafter joined Ahmedabad Division on 16.02.2025. He also made representations seeking re-transfer to Mumbai, referring to his own medical condition and the circumstances of his family. 2.7 The respondents subsequently quantified penal rent for the period of alleged unauthorised occupation from 04.11.2023 to 07.07.2025 at Rs.26,65,770/-. The said liability was communicated by the Mumbai P ANUKUMA

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Division to the Ahmedabad Division vide communication dated 17.10.2025. Thereafter, respondent No.3 issued the impugned order dated 04.11.2025, directing recovery of ₹25,000/- per month from the salary of the applicant towards the said amount. 2.8 Thereafter, the applicant submitted a representation dated 11.11.2025, requesting withdrawal of the recovery. According to the respondents, the representation was considered but was not found acceptable. Hence, the present OA.

3. Submissions of Learned Counsel for the Applicant 3.1 It was argued that the respondents have ordered recovery of amount of ₹26,65,770/- without issuing any separate show-cause notice to the applicant with regard to the proposed quantification of penal rent and without giving him an effective opportunity to dispute the calculation. It was further submitted that the applicant had not retained the quarter with any dishonest intention. He had repeatedly approached the authorities seeking permission to retain the accommodation because of his health condition, the education of his son and the circumstances of his family. 3.2 Learned counsel further submitted that the applicant was subjected to repeated transfers between Mumbai, Nandurbar, Vadodara and Ahmedabad. Therefore, his continued occupation of the quarter was not a simple case of wilful unauthorised occupation. 3.3 Learned counsel for the applicant also placed reliance upon the judgment of the Hon’ble Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei, AIR 1967 SC 1269, to contend that even an administrative order having civil consequences must be passed after giving a reasonable opportunity of hearing. She further placed reliance upon Kranti Associates (P) Ltd. & Anr. v. Masood Ahmed Khan & Ors., (2010) 9 SCC 496, to submit that an administrative authority must disclose reasons for its decision. 3.4 It was further argued that the impugned order does not disclose the detailed basis on which the amount of ₹26,65,770/- has been P ANUKUMA

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calculated. The applicant was merely informed of the final figure and was thereafter subjected to monthly deductions of ₹25,000/- from his salary. 3.5 Learned counsel submitted that the applicant is at the fag end of his service and has already suffered a disciplinary penalty in connection with the alleged unauthorised occupation. It was therefore prayed that the impugned orders be quashed and the amount already recovered be refunded.

4. Submissions of Learned Counsel for the Respondents 4.1 Per contra, respondents have filed their reply and opposed the submissions of the applicant 4.2 Learned counsel for the respondents submitted that Quarter No.128/16 was allotted to the applicant as service accommodation and that such allotment did not create any vested or permanent right in favour of the applicant to retain the quarter indefinitely. 4.3 It was submitted that a vigilance decoy check had disclosed material indicating illegal subletting and misuse of Railway accommodation. On the basis of the vigilance findings, the competent authority cancelled the allotment of the quarter on 30.10.2023 and directed the applicant to vacate it within three days. 4.4 Learned counsel submitted that despite the cancellation, the applicant continued to occupy the quarter. A show-cause notice dated 22.11.2023 was issued under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, and the applicant participated in the statutory proceedings. Thereafter, an eviction order dated 16.12.2024 was passed. However, the applicant continued to occupy the premises until actual eviction on 07.07.2025. Therefore, the period from 04.11.2023 to 07.07.2025 was treated as unauthorised occupation for the purpose of levy of penal rent. 4.5 Learned counsel submitted that the penal rent of ₹26,65,770/- was calculated under the applicable Railway rates and that the respondents have a period-wise penal-rent roll and recovery statement supporting the amount. It was further submitted that the P ANUKUMA

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recovery at ₹25,000/- per month was deliberately fixed so that the entire amount would not have to be recovered in one lump sum and the immediate financial burden upon the applicant could thereby be moderated. 4.6 Learned counsel contended that the earlier O.A. No.226/2024 before the Mumbai Bench did not grant any stay against cancellation of the quarter or authorise the applicant to continue occupying the premises. On the contrary, the Mumbai Bench expressly held that the quarter cancellation and eviction proceedings were independent proceedings under the Public Premises Act. 4.7 In this regard, learned counsel for the respondents placed reliance upon the judgments of the Hon’ble Supreme Court in the case of Wazir Chand v. Union of India, (2001) 6 SCC 596, Secretary, ONGC Ltd. v. V.U. Warrier, (2005) 5 SCC 245, and Steel Authority of India Ltd. v. Raghbendra Singh, (2021) 18 SCC 272, to contend that unauthorised retention of Government accommodation can result in recovery of penal rent/damages. 4.8 Learned counsel therefore submitted that there is no violation of natural justice since the applicant was already aware of the cancellation, was issued a show-cause notice in the eviction proceedings, participated in those proceedings and continued in occupation despite the eviction order.

5. Heard learned counsel for the parties and perused the material available on record. 5.1 On the basis of the pleadings and submissions made by learned counsel for the parties, the following questions arise for consideration:

(i) Whether the applicant had any authority to retain the Railway quarter after cancellation of its allotment?

(ii) Whether the respondents were justified in treating the period from 04.11.2023 to 07.07.2025 as a period of unauthorised occupation? P ANUKUMA

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(iii) Whether the respondents could quantify and recover Rs.26,65,770/- from the salary of the applicant without granting him a specific and effective opportunity to dispute the calculation of penal rent?

(iv) Whether the recovery amounts to double jeopardy on account of the disciplinary penalty imposed upon the applicant?

6. It is not in dispute that the applicant was allotted Railway Quarter No.128/16, Bandra East, Kherwadi Railway Colony, but the allotment thereof was cancelled by the competent authority on 30.10.2023 and the applicant was directed to vacate the premises. The cancellation was preceded by vigilance proceedings in which allegations of illegal subletting/misuse of the Railway accommodation had arisen. After cancellation of the allotment, the applicant had no subsisting authority to retain the said accommodation merely on the ground that he had been allotted the same earlier. 6.1 It is also evident from the record that the applicant was issued a show-cause notice dated 22.11.2023 under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and participated in the proceedings. An eviction order was thereafter passed on 16.12.2024. Despite the said order, the applicant continued to remain in occupation and was evicted only on 07.07.2025. Thus, the respondents were justified in treating the period from 04.11.2023 to 07.07.2025 as unauthorised occupation for the purpose of levy of penal rent. 6.2 The plea of the applicant that his continued occupation was occasioned by the education of his son, his health condition and his family circumstances cannot confer a legal right to retain Government accommodation after cancellation of the allotment. The applicant admittedly approached the authorities for retention of the quarter, but there is nothing on record to show that any competent authority granted him permission to continue occupying the quarter after cancellation of the allotment. Likewise, the pendency of his P ANUKUMA

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transfer-related grievance before the Mumbai Bench did not confer any authority upon him to retain the accommodation. The order dated 06.11.2024 passed in O.A. No.226/2024 did not stay the cancellation or eviction proceedings; rather, the issue relating to cancellation and eviction was treated as an independent proceeding under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. Issues (i) and (ii) are, therefore, answered against the applicant as he had occupied the quarter without authority even after cancellation and respondents were justified in treating the period from 04.11.2023 to 07.07.2025 as unauthorized occupation. 6.3 As regards the contention regarding violation of principles of natural justice, we are unable to accept that the applicant was wholly unaware of the basis of the action taken against him. The applicant had been informed of cancellation of the allotment, was directed to vacate the premises, was subsequently issued a statutory show-cause notice in the eviction proceedings and participated therein. The applicant continued to occupy the premises even after an eviction order had been passed and was finally evicted physically on 07.07.2025. The respondents have also stated that the penal rent was calculated on the basis of the applicable Railway rates and that the period-wise penal-rent roll and recovery statement are mentioned by them. 6.4 The judgments in Dr. (Miss) Binapani Dei (supra) and Kranti Associates (P) Ltd. (supra), relied upon by the learned counsel for the applicant on the requirement of natural justice and of reasons, do not assist the applicant in the facts of the present case. The principle of natural justice cannot be invoked to legitimise continued unauthorised occupation of Government accommodation after cancellation of allotment, particularly when the occupant had already participated in the statutory eviction proceedings. 6.5 The contention that the recovery amounts to double jeopardy merely because the applicant had allegedly suffered a disciplinary penalty also cannot be accepted. Levy of penal rent/damages for P ANUKUMA

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unauthorised retention of Government accommodation and disciplinary action for misconduct operate in different fields and have different purposes. Penal rent is compensatory/recoverable in consequence of unauthorised occupation, whereas disciplinary proceedings relate to misconduct. Therefore, recovery of penal rent cannot be held to constitute double jeopardy merely because disciplinary action was also taken against the applicant. Issue (iv) is answered in the negative. 6.6 We also take note of the fact that the respondents have not ordered recovery of the entire amount of ₹26,65,770/- in one lump sum but have directed recovery at the rate of ₹25,000/- per month. The said mode of recovery, as explained by the respondents, was adopted to avoid imposing an immediate financial burden upon the applicant. The applicant has not placed sufficient material before us to establish that the calculation of penal rent is patently erroneous, contrary to the applicable Railway rates or otherwise arbitrary. 6.7 In view of the foregoing discussion, we find that the applicant has failed to establish any legal right to retain the Railway accommodation after cancellation of the allotment. His continued occupation until 07.07.2025 was unauthorised, and consequently the respondents were within their authority to levy penal rent in accordance with the applicable rules. This is in consonance with the decisions relied upon by the respondents in Wazir Chand (supra), V.U.Warrier (supra) and Raghbendra Singh (supra) in which the Hon’ble Supreme Court has held that penal rent is the natural consequence of occupying a quarter beyond the permissible period and may be adjusted against the dues payable to the employee. The grounds urged by the applicant, either individually or collectively, do not warrant interference with the impugned orders. The impugned orders dated 17.10.2025 and 04.11.2025 are upheld. The recovery of penal rent, as determined by the respondents in accordance with the applicable Railway rules, shall stand. P ANUKUMA

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6.8 However, it is made clear that if there is any clerical error in the period-wise calculation of penal rent, the respondents shall, upon a specific representation by the applicant, verify the same and make necessary correction, if warranted, strictly in accordance with the applicable rules. This limited observation shall not confer any right upon the applicant to reopen the issue of his liability for unauthorised occupation. Issue (iii) is answered accordingly.

7. In view of the facts mentioned above, we find no merit in the present OA and the same is dismissed.

8. There shall be no order as to costs.

9. MA Pending, if any, also stands disposed of.

(Sanjiv Kumar)

(Jayesh V Bhairavia)

Member (A)

Member (J)

//Anu// P ANUKUMA