Bombay High Court

Bombay High Court: The petitions were filed by All India Service Engineers Association, Aviation Industry Employees Guild, and Air Corporation Employees Union (‘Petitioner Unions) representing employees working in Air India Limited (AIL), Air India Engineering Services Limited, and Air India Airport Services Ltd (Respondent Companies) challenging the order dated 12-10-2022 wherein the Central Government declined to make a reference to Central Government Industrial Tribunal (CGIT) under section 10 of Industrial Disputes Act, 1947, inter alia holding that housing is not a term of employment and that therefore the demand cannot be considered as an industrial dispute. A Division of S V Gangapurwala, CJ., and Sandeep V Marne, J., did not interfere with the impugned order as the grievance regarding the alleged right to occupy the premises will be dependent on the terms and conditions of leave and license agreements and thus, open to be decided in appropriate proceedings.

AIL was incorporated as a government company under the Companies Act, 1956. Air India Engineering Services Ltd. and Air India Airport Services Ltd. came to be incorporated as wholly owned subsidiaries of AIL for handling its engineering and ground handling departments. Several employees of AIL were allotted residential accommodations in accordance with provisions of Air India Housing Allotment Rules, 2017 (Housing Allotment Rules). After the Government of India approved the plan for the privatization of AIL, all the lands and properties of AIL were vested in the newly formed company Air India Assets Holding Company Limited (AIAHCL).

A decision was taken by Air India Specific Alternate Mechanism (AISAM), a body constituted by the Cabinet Committee on Economic Affairs for strategical disinvestment of AIL, to permit all employees of respondent companies to occupy residential accommodations for a period of six months post divestment or till the property was monetized, whichever was earlier. After total privatization, the employees were directed to vacate the accommodations.

The issue under consideration is whether the Central Government is justified in declining to make an order of reference in respect of disputes raised by Petitioner-Unions to CGIT for adjudication. Thus, it is necessary for the appropriate Government to first determine whether the dispute is covered by the expression ‘industrial dispute’ and whether the reasons recorded for declining to make an order of reference are legally sustainable.

On perusal of the Housing Rules, the Court noted that it is not that every employee is granted accommodation as a matter of right but as per availability and priorities specified in Rule 5 of Housing Rules. Upon allotment of accommodation, payment of House Rent Allowances (HRA) is to be stopped. The Rules further make it apparent that the allottee of the accommodation would merely be a licensee.

The Court observed that under Rule 22, though an employee is permitted to retain the accommodation during the tenure of his service, it is still clear that housing is merely a welfare function. Furthermore, the Housing Rules become applicable only after accommodation is allotted and the rules essentially deal with the terms and conditions of occupation. The Housing Rules do not, by themselves, create or confer any right on the employees for allotment of accommodation.

On further perusal of various terms and conditions of the Leave and License Agreement makes it clear that the employees have agreed that they are mere licensees in respect of allotted flats. The respondent companies have an absolute right under the Leave and License Agreement to determine the same at any time without assigning any reason. Thus, a perusal of the Housing Rules, Leave and License Agreement and order of appointment clearly suggests that ‘housing’ does not appear to be a term of employment.

On the aspect of whether the present dispute comes within the ambit of the expression ‘industrial dispute’, the Court noted that the right to retain accommodation is governed by stipulations of leave and license agreement. Thus, no right is created in favour of the employee to seek allotment of accommodation. Therefore, the dispute relating to housing is not capable of being termed as one connected with employment.

The Court remarked that monetization of lands and properties of AIL is one of the essential terms of the disinvestment process. If a small number of employees continue to hold on to the accommodations, the AIAHCL will not be able to monetize the land to reduce the burden of debt AIL put on it.

Thus, the Court held that all issues regarding alleged rights of employees to retain their accommodations are however left open to be decided in appropriate proceedings.

[Air India Services Engineers Association v Union of India, 2023 SCC OnLine Bom 596, decided on 13-03-2023]

Advocates who appeared in this case :

Mr. Sanjay Singhvi, Senior Advocate with Ms. Rohini Thyagarajan for the Petitioner in WPL 34307 of 2022;

Mr. Mihir Desai, Senior Advocate i/b Mr. Mihir Joshi for the Petitioner in WPL 34165 of 2022;

Mr. Ashok Shetty a/w Ms. Rita K. Joshi and Mr. Swapnil Kamble for the Petitioner in WPL 34902 of 2022;

Mr. Anil Singh, Additional Solicitor General a/w Mr. Aditya Thakkar, Ms. Savita Ganoo a/w Mr. Pranav Thakkar, Ms. Smita Thakur for Respondent Nos.1 and 2 in WPL 34165 of 2022, WPL 34902 of 2022 and WPL 34307 of 2022;

Mr. Kevic Setalvad, Senior Advocate a/w Mr. Jehan, Ms. Sneha Prabhu, Mr. S.D. Shetty, Mr. Rakesh Singh & Ms. Heena Shaikh i/b M/s. M.V. Kini & Co. for Respondent Nos.3 to 5 in WPL 34307 of 2022 and for Respondent Nos.4 to 6 in WPL 34902 of 2022 and WPL 34165 of 2022;

Mr. Aditya Mehta a/w Mr. Vijay Purohit, Ms. Nikita Bangera, Mr. Samkit Jain, Mr. Faizan M. Mithaiwala, Mr. Mithil Shah i/b M/s. P & A Law Offices for Respondent No.6 in WPL 34307 of 2022 and for Respondent No.3 in WPL 34165 of 2022 and WPL 34902 of 2022.

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