Legitimate expectation and foreign allowance fail where no enforceable promise exists and policy discretion is not arbitrary.

Foreign allowance payable to deputationists posted abroad was treated as a compensatory allowance within administrative discretion, not as an automatic component linked to revised basic pay. The doctrine of legitimate expectation failed because there was no pleaded foundation, supporting material, or clear representation creating an enforceable expectation. The employer's policy to retain linkage to pre-revised basic pay was based on posting conditions and financial considerations and was not arbitrary. The claim for enhanced foreign allowance was rejected, and the employer's decision was upheld.

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Issues: Whether foreign allowance payable to deputationists posted abroad could be revised on the basis of the revised basic pay on the doctrine of legitimate expectation, and whether the employer's policy decision to keep such allowance linked to the pre-revised basic pay was arbitrary.

Analysis: The claim to enhanced foreign allowance was not founded on any term of the deputation agreement or on any assurance by the employer. The allowance was treated as a compensatory allowance falling within the discretion contemplated by Fundamental Rule 51(2), rather than as a salary component or an allowance automatically linked to revision of basic pay. The doctrine of legitimate expectation could not be invoked in the absence of pleadings, supporting material, or any representation giving rise to a legally enforceable expectation. The employer's policy decision was based on prevailing foreign posting conditions and financial considerations, and did not disclose arbitrariness.

Conclusion: The claim for revision of foreign allowance on the basis of revised basic pay was rejected, and the employer's decision was upheld.

Final Conclusion: The appeals succeeded and the writ petitions seeking enhanced foreign allowance were dismissed.

Ratio Decidendi: A claim based on legitimate expectation cannot succeed without a pleaded foundation, a clear representation, or arbitrariness in the impugned policy, and a compensatory allowance payable under administrative discretion is not automatically revised with basic pay.

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