K. Madhava Reddy, C.J.
1. The petitioners in Miscellaneous Petition No. 1180 of 1973, an officiating Senior Clerk of the Maharashtra Housing Board (hereinafter referred to as 'the Board'), is the appellant herein. Tenements were constructed by the Board under the Low Income Group Housing Scheme. It is common ground that these tenements were open for allotment even to persons other than the employees of the Board. One such tenement No. 84 in Building No. 5 at Vakola Bridge, Santacruz (East), Bombay was allotted to the Appellant with effect from 16th August, 1970 on payment of a monthly instalment of Rs. 143/- exclusive of service charges which were provisionally fixed at Rs. 19/-. On such allotment, the Board took an undertaking No. II from the appellant which reads as follows :-
'(UNDERTAKING NO. II DATED 12TH AUGUST, 1970)
I hereby undertake that the following bona fide persons of my family will only stay with me in the tenement No. 5/84 at L.I.G. Colony at Santacruz of Maharashtra Housing Board now allotted to me.
Name Ship Sex Age
1. Smt. Rukminibai Mother Female 61 yrs.
2. Shri Promod P. Brother Male 25 yrs.
3. Kum. Rajani P. Sister Female 20 yrs.
I am aware that I should not accommodate non-bona fide members in my tenement without the consent of the Maharashtra Housing Board in writing to that effect and in case of my failure to comply with this undertaking, action as per rules in force of the Maharashtra Housing Board may be taken against me.
Sd/-(S. P. Tendulkar)Signature of tenantTenement No. 5/84'.
On executing that undertaking, allotment letter No. CB/LIC/2093 of 196 dated 10th August, 1970 was issued to the appellant. The appellant was required to produce the employer's certificate showing her monthly total emoluments. She was also required to pay an amount of Rs. 4,151.86 as mentioned in that letter. That allotment letter also stated that she would have to execute a Low Income Tenancy Agreement and we would be bound by the rules of the Board and the terms of the said agreement. It also warned the allottee that 'If you do not turn to pay the aforesaid amount and execute the requisite tenancy agreement within stipulated time, the above tenement will be re-allotted to the next person without any intimation to you.' The appellant paid the amount and executed the agreement and thereupon was given possession of the tenement allotted to her.
2. On the allegation that she had sublet the said tenement, now is Jai Saphalya Co-operative Housing Society, Bandra, the appellant was placed under suspension from the service of the Board by an order communicated through letter No. 6570 MHB-A 1 of 1972 dated 28th April, 1972 with effect from 28th April, 1972. The Housing Commissioner by an order dated 23rd June, 1972 held that there was a prima facie case against the appellant and initiated disciplinary action for sub-letting the said residential tenement. The Enquiry Officer appointed in this behalf with a direction to complete the enquiry within one month framed charges against the appellant as under :
'i. Willingly sub letter residential tenement No. 5/84, in Jai Saphalya Co-operative Housing Society at Sr. No. 383, Bandra allotted to you by the Maharashtra Housing Board under Hire Purchase Scheme to one Shri Sadashiv S. Pathak unauthorisedly.
ii. You accepted Rs. 4,000/- from Shri Sadashiv V. Pathak, sub-letter and allowed him to occupy the tenement No. 5/84 mentioned in charge No. (i) above from the date of allotment to you unauthorisedly.
iii. You violated the undertaking No. II given by you at the time of allotment by unauthorisedly sub-letting the tenement to Shri Sadashiv V. Pathak from the date of its initial allotment to you.
iv. You gave three months notice to surrender the aforesaid tenement on 14th July, 1971, knowing fully that the tenement is occupied by the sub-letter and without getting it vacated.'
The appellant filed her written statement inter alia pleading that the pathak family was temporarily staying with her and that the initial payment of Rs. 4,151.86 was made to the Board out of her own moneys and that the use of the said tenement by Pathak family was permitted temporarily on humanitarian grounds. She, in fact, wanted to surrender the said tenement and had no reason to believe that she would not be able to give vacant possession of the tenement to the Board. The appellant stated that she had not committed any breach of the undertaking and pleaded that in any event any such technical breach of the conditions relating to the allotment of the said tenement had nothing to do with the employment of the appellant and did not attract punishment under the Bombay Civil Service Rules, 1959, or any other provision of law relating to her service. At the most, the Board could initiate ejectment proceedings against Pathak family but not disciplinary proceedings against the appellant allottee. The appellant was, however, found guilty on charges (i) and (iii) and exonerated of the other two charges. She was called upon to show cause why she should not be reverted as Junior Clerk for a period of one year. In her written representation the appellant while denying the charges once again submitted that no punishment could be imposed upon her. However, by order No. GA/102/6511 MHB. A. 1/of 1973 dated 7th, May, 1973, the Housing Commissioner imposed the punishment of reversion to the post of Junior Clerk for a period of one year with immediate effect and reinstated her in service as Junior Clerk stating that separate orders would be passed as to how the period of suspension would be treated. The administrator of the Board, respondent No. 1, while dismissing her appeal against that order, held that the period of suspension be treated as suspension (uncondoned) and that her emoluments for that period be restricted to the subsistence allowance with dearness allowance and compensatory allowance based on it as per Bombay Civil Services Rules. It is these orders impugned in the Miscellaneous petition dismissed by the learned single Judge that have given rise to this appeal.
3. The principle question that falls for consideration in this appeal is whether disciplinary proceeding could be initiated against the appellant for the breach of the undertaking given by her on allotment of the tenement under Low Income Group Housing Scheme and the terms of the Low Income Tenancy Agreement.
4. The tenements, one of which was allotted to the appellant, were admittedly constructed under the Low Income Group Housing Scheme and could be allotted to any of the applicants eligible under the Rules irrespective of whether they were employees of the Board or not. In other words, the allotment was not restricted to the employees of the Board. In pursuance of the allotment, the allottees were put in possession of the tenements on payments of the prescribed amount and upon executing a hire purchase agreement agreeing to be bound by the rules governing the Board. The agreement and the rules merely stipulate that upon breach of the terms the allotment was liable to be cancelled and the allottee evicted from the tenement. No other consequence of the breach of the condition of the allotment is laid down by the rule, or agreed to between the parties. Upon breach of the terms of the agreement, no proceedings criminal or disciplinary are envisaged against the allottee of the tenement either under the agreement or the said scheme. If any allottee other than an employee of the Board were to commit a breach of the agreement such as is now alleged against the appellant, the Board could not have taken any action except cancelling the allotment and seeking eviction of the allottee from the tenement. Merely because the appellant happens to be an employee of the Board, she cannot be visited with any further civil consequences. For a variety of reasons, as person may not be able to fulfil the terms of the agreement. Although the allottee may have undertaken to pay the instalments of the hire purchase amount due under the agreement, he may not able to honour that agreement; should such a person be exposed to disciplinary action when there is no specific rule of conduct to that effect What would have been the position if the tenements were allotted exclusively to the employees of the Board under a scheme specially formulated for its employees and the scheme itself laid down that breach of any condition of such allotment would constitute breach of discipline, it is not for us to consider in this case. Admittedly there is no specific rule of conduct or discipline rendering the breach of such agreement misconduct. The obligations arising under the said scheme are purely contractual. A breach of contract even if deliberate cannot, in the circumstances referred to above be deemed to be a breach of discipline so as to warrant initiation of disciplinary proceedings against the employees of the Board. We are however clear in our mind that in the absence of any such specific stipulation or rule, no greater liability could be imposed upon the employees than what could be imposed on other allottees who are not the employees of the Board. Imposition of any such additional liability on the employees of the Board would be unreasonable. Even though the employees of the Board may from a class by themselves, in the absence of a specific rule or stipulation to that effect, upon contravening the terms of the said agreement no disciplinary proceedings could be taken for it is not breach of discipline but breach of contract.
5. When the reversion of an employee is by way of punishment it must be for breach of discipline or misconduct. The impugned reversion is for contravention of the conditions of allotment of a tenement. The allotment of tenement in favour of the appellant is not in the course of the employment or by virtue of the employment; it is made in her favour as in favour of any other member of the public. Any contravention of the conditions of such allotment is outside the scope of the appellant's employment and also not related to any question of discipline. Such contravention cannot be a ground for taking any disciplinary proceedings against her.
6. In Indian Express and Chronicle Press v. M. C. Kapur : (1974)IILLJ240SC , the employee who was a lino-operator in the employer-company and was also a treasure of the Employees Co-operative Society charged with riotous and disorderly behaviour outside the working hours. On enquiry he was found involved in financial irregularities and defalcation of funds of the Co-operative Society and his services were terminated by the Company. When the Company made an application under S. 33(2)(b) of the Industrial Disputes Act, 1947 for approval of the Industrial Tribunal, the Tribunal found that the Co-operative Society was altogether an independent concern in which the Company had no interest and over which it had no control and that the employee's conduct in regard to Co-operative Society's affairs did not affect the working of the Company. The Tribunal held that although the report of the Enquiry Officer was not mala fide or arbitrary, 'the employee's misconduct was outside the purview of the Standing Orders governing him'. The Tribunal therefore declined to approve the dismissal of the employee. The Supreme Court on appeal upheld the order of the Tribunal as fully justified observing : (at P. 242)
'No one charged ... (the employee) with riotous or disorderly behaviour during the working hours. The only other head under which he could be charged was that he had committed an act subversive of discipline. The charges which were preferred against him did not seem to relate, in any manner, to the question of discipline.'
The Court further observed (at P. 242) :
'..... We are wholly unable to accede to the contention ...... that the charges which were preferred and which were found proved by the Enquiry Officer and on the basis of which the dismissal was ordered by the General Manager, constituted acts subversive of discipline.'
Even in the instant case there is no rule of conduct or of discipline which renders the contravention of the conditions of allotment of a tenement under the Low Income Group Housing Scheme an act of misconduct or of breach of discipline warranting initiation of any disciplinary proceedings. No punishment for contravention of such a condition of allotment could, therefore, be imposed on the appellant.
7. It is, however, urged that the Government had issued a Circular Memorandum dated 10th December, 1956 directing that 'serious notice including disciplinary action should be taken, if any Govt. servant is found to sub-let or allow unauthorised use of the tenements allotted to him.' This Circular does not refer to allotment of tenement to the Government servants or the employees of the Board and Bombay Municipal Corporation under the Low Income Group Housing Scheme of the Board. Much less does it speak of tenements allotted to the members of the public under any scheme of hire purchase evolved by the Board in discharge of its statutory obligations. It would apply to tenements allotted exclusively to the Government servants by virtue of they being Government servants. That circular does not govern allottees of tenements under the Low Income Group Housing Scheme of the Board of hire purchase basis merely because the allottee happens to be an employee of the Board.
8. The Maharashtra Housing Board (Allotment, Management and Sale of Tenements) Regulations, 1970 under which the Low Income Group Housing Scheme was formulated and tenements allotted on hire purchase basis, were framed in exercise of the powers conferred on the Board under S. 67 of the Bombay Housing Board Act, 1948. Regulation 15(4) provides for restriction against sub-letting and states that no allottee shall sub-let the whole or any part of the tenement allotted to him. Regulation 3 relating to 'the remuneration and conditions of service of the ........ servants of the Bombay Housing Board' stipulates,
'As far as possible the Board shall follow the Bombay Civil Service Conduct Discipline and, Appeal Rules .....................
Rule 4 of the Bombay Civil Services Conduct, Discipline and Appeal Rules provides :
'All departmental rules and orders in respect of the subjects dealt with in these rules which have been approved or may hereafter be approved by Government, so far as they do not conflict with any provisions of these rules, shall be deemed to apply to Government servants to whom they relate.'
Rule 33 of these Rules, in so far as it is relevant for our purpose, reads as follows :
'Without prejudice to the provisions of any law for the time being in force the following penalties may, for good and sufficient reasons, be imposed upon any member of subordinate service ....
XX XX XXXX XX XX (iii) Reduction to a lower post on a fixed pay or a time-scale or to a lower stage in a time-scale;
XX XX XXXX XX XX (iv) Suspension;'
The respondents seek to justify the penalty imposed upon the appellant on the ground that sub-letting of the premises is in contravention of Regulation 15(4) read with the above referred to Govt. Circular.
9. It must be noticed that when Regulation 15(4) prohibits or restricts sub-letting, it does not lay down the consequence of contravention of this Regulation. Breach of any rule such as this does not necessarily amount to misconduct. More so, when the scheme itself is not one framed to benefit only the employees of the Board, but is one intended to apply to all allottees under this scheme irrespective of whether they are employees of the Board or of the Government or members of the public at large. A breach of a solemn undertaking given by the appellant or a term of the agreement binding on her as a party to the agreement can only visit the appellant with specific consequence provided therein. The Govt. Circular cannot override the express terms of the order of allotment, the rules under which the allotment is made and the specific terms of the agreement entered into between the allottee and the Board. The operation of this general Circular of Govt., in any event, must be excluded in the face of the special terms and conditions subject to which allotments are made by the Board under the Low Income Group Housing Scheme. The special rules and terms and conditions must prevail over the general circular relied upon by the Board Respondents.
10. Misconduct is something more than mere breach of a term of the agreement or the rule. It must ordinarily be something which must impinge upon the conduct expected of an employee with reference to or in discharge of his duties as an employee or violation of a condition subject to which he was conferred a benefit as an employee or the violation of a special obligation imposed upon him as a condition or the conferment of a privilege upon him or must be something related to discipline. We, however, hasten to add that we do not lay down as a general rule that misconduct for which disciplinary action could be taken must always be in the discharge of his duties in the course of employment; conduct outside the employment may have a bearing on the employment and may constitute sufficient reason under Rule 33 for inflicting one of the penalties stated therein. In the present case, breach of the undertaking in question would not amount to sufficient reason for inflicting punishment. The allotment in favour of the appellant not being under any scheme specially framed for the employees of the Board or public servants but being a Low Income Group Housing of Hire Purchase framed by the Board in discharge of its obligation under the statue towards citizens in general, cannot expose the employees of the Board to any special penal consequences or disciplinary proceedings which the other allottees under the said scheme are not exposed to. Breach of condition of such a rule, being condition of allotment or term of the agreement, could only visit the allottee with specific consequences provided thereunder and cannot expose the allottee to any disciplinary action even if the allegation of breach thereof is admitted. In our view, the disciplinary proceedings against the appellant are misconceived. The order imposing penalty of reduction in rank for a period of one year upon the appellant as also the order of respondent No. 1 confirming the said order are therefore quashed.
11. In the result, the appeal is allowed and the rule issued in Miscellaneous Petition is made absolute. In the circumstances of the case, we make no order as to costs.