Indian Railways — priority should be given to whom for a vacant seat/berth?

Address:

Vadodara, Gujarat, 390023

Instead of giving vacant seat to a rac ticket holder, tte allowed unreserved ticket holder (By taking money without receipt) to travel on the same berth.
What is the priority for allotting empty/vacant seat?

Is it the tte who will decide to whom the berth should be allocate or the rac passengers should get the first priority, as he has paid full amount for the journey.