Delhi High Court

Delhi High Court: In a case wherein the employees of Air India Ltd. were allotted accommodation in Air India Colony and post disinvestment, the employees who failed to vacant the accommodation were liable to pay penal rent for the period of unauthorised occupancy, a Single Judge Bench of Mini Pushkarna, J.* held that no penal rent could have been deducted by the respondents randomly and in such arbitrary manner, without following the due process of law.

The present writ petition was filed by employees of Air India Ltd. (‘Respondent 2’), wherein earlier 100% shareholding was with the Government of India and subsequently, pursuant to Share Purchase Agreement in 2021 entered between the respondents, the entire shareholding of Air India Ltd. was transferred to Talace (P) Ltd., a subsidiary of Tata Sons (P) Ltd. The transaction for privatisation of Air India Ltd. was completed in 2022.

The petitioners were allotted accommodation in the Air India Colony in terms of Air India Housing Allotment Rules. The present writ petition was filed primarily with prayer that the employees of Air India Ltd., who had been allotted flats in the Air India Colony, be allowed to stay in the said colony for the time being. The petitioners further prayed that the letter issued by the Ministry of Civil Aviation, Government of India, by which it was informed that post disinvestment, the employees of Air India were required to provide an undertaking that they shall vacate and handover the peaceful possession of the accommodation at Air India Colonies within a period of 6 months post disinvestment, that is, by 27-7-2022, in terms of the decision of the group of Union Ministers who were part of the Air India Specific Alternative Mechanism (AISAM) constituted by the Cabinet Committee on Economic Affairs to drive the disinvestment process.

A notice was also issued by Air India on 23-5-2022, to the various occupants of the Air India Colony that in case of failure to vacate the accommodation, the said occupants would be liable to pay penal rent equivalent to the sum of normal occupancy charges and double the market rent for period of unauthorised occupancy. In addition, it was stated that they would also be liable to pay damage charges of Rs. 10 lakhs. The petitioner also prayed for the quashing of this notice.

Analysis, Law, and Decision

The Court noted that the process of privatisation of Air India was completed on 27-1-2022 and thus, the period of one year for permission to stay, as prayed for by the residents of Air India Colony, got over on 27-1-2023. The Court further noted that even during the pendency of the present writ petition, many of the employees of Air India had already vacated their houses in Air India Colony and further, categorical statement was made before this Court on behalf of the various employees of Air India Ltd., who were residents of the Air India Colony that they were willing to vacate the premises being occupied by them, however, they needed some time for vacation. The Court opined that the submissions made on behalf of the employees of Air India occupying the aforesaid colony that they would vacate their flats within one month of monetisation of the land in question, could not be accepted.

The Court noted that in the wake of disinvestment of Air India Ltd., the non-core assets including land and building, had been transferred to Air India Assets Holding Company (AIAHL), which was a subsidiary of the Government of India. Thus, the accommodation provided to the petitioners at the colony along with other residential colonies, had been transferred to AIAHL.

The Court opined that the employees of Air India Ltd. were no longer government employees after its privatisation and the colony in question was under the ownership of the Government, while the occupants were employees of a private company after privatisation of Air India Ltd. Thus, the employees of Air India Ltd. occupying the colony in question, did not have any legal or vested right to continue with the occupation of the premises in question. The Court further opined that the facility of accommodation could not be claimed as a vested right and was only provided to the employees/workmen depending upon availability of such facility in their respective location. Thus, it could not be contended that accommodation provided should be enjoyed by the said occupants perpetually and as an essential condition of service.

The Court further noted that at the time of allotting the housing accommodation to its employees, a standard Leave and License Agreement was signed between the erstwhile company and the allottee, which stated that the company or the competent authority should have right to terminate the allotment of housing accommodation, without assigning any reasons whatsoever. Thus, the Court opined that the allotment and possession of the housing accommodation was governed by the terms of Leave and License Agreement, and the same was not a vested right of the employee of the erstwhile company.

The Court noted that AIAHL submitted that nearly 72% of the occupants of the colony in question had given their undertaking and had already vacated the flats occupied by them in the Air India Colony, therefore, the Court opined that all employees of Air India Ltd. who had been occupying the Air India Colony had to be treated at par with each other. Therefore, no special equity flowed in favour of the 38 occupants, who had prayed that they would vacate the premises within one month of monetisation of the land in question. The said occupants could not claim any vested or legal right to continue to occupy the premises in question.

The Court accepted the undertaking given on behalf of 66 occupants of the Air India Colony that they were willing to vacate the flats in question on or before 31-7-2023. Thus, the Court directed all the employees of Air India Ltd. who were currently occupying the flats in Air India Colony were directed to vacate the flats on or before 31-7-2023. The Court noted that penal rent had been deducted from the employees who had been occupying the Air India Colony and thus, the Court opined that the deduction of penal rent by the respondents could not be held to be justified.

The Court opined that on one hand, the respondents had appointed an Estate Officer for carrying out proceedings under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (“PP Act”) for eviction from the colony in respect of vacation of Air India Colony by way of Office Memorandum as issued by the Ministry of Housing and Urban Affairs, Land and Development Office, Government of India and on the another hand, without following the due process of law as envisaged under the PP Act, penal rent had been deducted from the Air India Employees occupying the Air India Colony. The Court noted that recovery of rent or damages in respect of public premises was dealt with under Section 7 of the PP Act. Thus, the Court held that no penal rent could have been deducted by the respondents randomly and in such arbitrary manner, without following the due process of law, especially when Estate Officer under the PP Act had already been appointed by the Government. The Court declared the recovery of penal rent by the respondents from the various employees of Air India Ltd. occupying the Air India Colony as, unlawful.

The Court further directed that the respondents should make no further deductions from the salary of the employees towards any penal rent, except after following due process of law. The Court further held as regards the contention of the petitioners regarding their claim for purchase of part of the property in Air India Colony as and when the respondents intend to monetise it, the petitioners/employees of Air India Ltd. who had been allotted accommodation in the said colony, were at liberty to make a representation to the respondents in this regard.

[Capt. Amitabh Rajan v. Union of India, 2023 SCC OnLine Del 1782, decided on 24-3-2023]


Advocates who appeared in this case :

For the Petitioners: Advocate Shree Prakash Sinha, Advocate Rakesh Mishra, Advocate Mohua Sinha, Advocate Nawalendra Kumar;

For the Respondents: Senior Advocate Rajiv Nayar, Senior Advocate Sanjiv Sen, Senior Panel Counsel, Siddharth Khatana, Advocate Avishkar Singhvi, Advocate Manjira Dasgupta, Advocate Vivek Kumar, Advocate Anindita Burman, Advocate Shivam Chanana, Advocate Siddhant Bajaj, Advocate A. Hari Singh, Advocate Azeem Sanwal, Advocate A.P. Singh, Advocate Akanksha Das, Advocate Mridul Suri, Advocate Vedansh Anand.

*Judgment authored by: Justice Mini Pushkarna

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