Santosh Kumar Sahu & Ors. vs. Union Of India & Ors.

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$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of decision: 27 March, 2023

2. The Petitioners, who are employees of Respondent No. 2-Air India
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Engineering Services Limited (hereinafter ‘AIESL’ ) have raised a challenge
to the communications dated 29th September, 2021 and 28th May, 2022
issued by the Respondents asking them to vacate the residential
accommodation allotted to them at Vasant Vihar, Delhi (also known as Air
India Colony) ( ‘the accommodation’ ), which is being occupied by them. At
the relevant point in time, when the Petitioners were allotted the
accommodation, AIESL was a fully owned subsidiary of the Respondent
No.4 - Air India Limited, which has since been privatized. AIESL was a
subsidiary of Respondent No. 4- Air India Ltd. ( ‘AIL’ ) till 12th January 2022.
On the said date, the entire shareholding of the AIL in AIESL was transferred
to the Respondent No. 3- AIAHL. Therefore, AIESL became a wholly owned
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subsidiary of AIAHL. This was clarified by a circular dated 15 February
2022 issued by AIESL.
3. Admittedly, the Petitioners are living in the accommodation allotted to
them under the Air India Housing Allotment Rules ( ‘the 2017 Rules’ ), dated
28th March, 2017. Clause 22 of the 2017 Rules reads as under:
“22. VACATION OF QUARTERS:
The allottee of the residence to the employee is
consistent with and is dependant solely on his
being in employment in the Company and
therefore the moment the allottee dies, retires,
resigns or is discharged from the services,
terminated for any reason whatsoever or
abandons the service or is otherwise made
ineligible for the allotment of a residence or
commits breach of the terms and conditions of
the Rules herein contained, the allotment shall
stand cancelled forthwith unless specifically
permitted to retain the residence. Requests for
retention shall be processed by respective
Personnel Department.”
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4. The case of the Petitioners is that the AIESL continues to remain a
government company and none of the circumstances, as contemplated in
Clause 22 of the 2017 Rules i.e. death, termination and abandonment etc., has
occurred qua the Petitioners. There is also a miscellaneous clause, which
contemplates that if any of the allottees, who are otherwise made ineligible,
the allotment shall stand cancelled and the Petitioners would have to vacate
the premises.
5. The matter has been heard by this Court from time to time. On 21st
July, 2022, the ld. Solicitor General had made submissions to the following
effect.
“Mr. Tushar Mehta, the learned Solicitor General
of India, states that in light of the issues which are
raised in this writ petition, the respondent may be
granted two weeks’ time to file a reply. He further
states that the respondents do not intend to initiate
any proceedings for the eviction of the petitioners
except in accordance with law. Learned Solicitor
General draws the attention of the Court to the
specific recital(s) as appearing in the impugned
notices in this respect and which record that in case
the petitioners fail to vacate the premises in
question, appropriate action under the Public
Premises (Eviction of Unauthorized Occupants)
Act, 1971 would be initiated.
Mr. Jayant Mehta, learned Senior Counsel
appearing for the petitioners, however contends
that since the petitioners were the employees of AI
Engineering Services Limited, the provisions of the
1971 Act would not apply.
In any case and bearing in mind the nature of
issues that stand raised and the request of the
learned Solicitor General, let the noticed
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respondents file their replies within a period of two
weeks from today. ”

6. The grievance of the Petitioners in the present petition is that they are
being charged the penal rent, which is being deducted from their salaries,
which amounts to coercive measures to be taken by the Respondents, without
following due process. It is further vehemently urged by Mr. Sinha, ld.
Counsel appearing for the Petitioners, that the employees of the Respondent
No. 4-AIL and Respondent No. 3-AIAHL cannot be equated to AIESL, as
AIESL continues to be a government company and the land continues to be
vested with the Ministry of Urban Development ( ‘MoUD’ ).
7. Vide order dated 27th February, 2023, this Court after hearing the
submissions of ld. Counsels for the parties, had directed as under:
“ 9. After some hearing, ld. Counsel for the
Petitioners, under instructions from the Petitioners,
submits that the Petitioners are willing to vacate
the premises by 31st December, 2023, subject to the
following conditions.
i. That the basic amenities i.e. water, electricity
etc. shall continue to be provided during the
period when the Petitioners occupy the
premises;
ii. The penal rent, which is being charged, shall
be stopped and the entire penal rent, which has
been charged, shall be repaid to the Petitioners
after deducting only the normal HRA.
iii. That the Petitioners shall make a
representation for alternate accommodation to
the MoUD/DGCA, which may be considered in
an expeditious manner.
The above shall be without prejudice to the rights
and contentions of the Petitioners. Ld. counsel for
the Respondents seeks time to take instructions in
the matter. ”
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8. On 6 March, 2023, further directions were issued to the following
effect.
“ 3. Today, further time is sought by the ld. Counsel
for the Union of India for reverting on the
proposals recorded in the previous order dated
27th February, 2023. The Petitioner expresses
urgency on the ground that even for the month of
February 2023, deductions have been made in the
salaries of the Petitioners, which is causing
enormous harassment and frustration to the
Petitioners. It is the submission on behalf of the
Petitioners, that only around 1/4th of the total
salary due to the Petitioners has been released for
the last two months, as penal HRA is being
deducted.
4. Considering these submissions, it is directed that
the decision of the Union of India shall be placed on
record, at least two days before the next date of
hearing. If the decision is not taken by the next date
of hearing, the Court would consider the
application for interim relief in respect of the
deductions from the salary of the Petitioners for the
next month, which would now be due only in the
first week of April. ”

9. Today, the matter has been listed for further hearing. Ld. counsel for
the Petitioners have placed reliance on the decision of the Bombay High
Court in All India Service Engineers Association (AISEA) v. Union of
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India & Ors, [ W.P. (L) No. 34307/2022 , decision dated 13 March 2023 ],
where the Union of employees working in Air India Limited, AIESL and Air
India Airport Services Ltd. had preferred writ petitions in respect of similar
allotted residential accommodations in accordance with provisions of the
2017 Rules in Bombay and in respect of refusal to make reference to Central
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Government Industrial Tribunal (CGIT). The issues before the Bombay
High Court in AISEA supra were as follows:
“Though prayers made in the three petitions do not
exactly match, the broad grievance of Petitioner unions
are with regard to
(i) Order dated 12 October 2022 declining to make
reference to Central Government Industrial Tribunal
(CGIT)
(ii) changing of penal rent and damage rent
(iii) deduction/withholding of Performance Linked
Incentive (PLI) for non-vacation of accommodations.”

10. The ld. Counsel for the Petitioner submits that in AISEA supra , the
Bombay High Court has permitted the employees to agitate their grievances
under the Public Premises Act, 1971 and has also restrained the Respondents-
Union of India from recovering penal rent from employees for a period of two
weeks from the date of the decision.
11. On behalf of the Respondent No. 1 & 5- Union of India, Mr. Satya
Ranjan, ld. Counsel has relied upon a recent judgment of a ld. Single Judge of
this Court in W.P.(C) 10889/2022 titled ‘Capt. Amitabh Rajan v. Union of
India’ dated 24th March, 2023 wherein in respect of the same very Air India
colony in Vasant Vihar, the Court has given time to the employees to retain
their accommodation till 31st July, 2023 and has held that no penal rent shall
be deducted from the salaries of the Petitioners, after accepting the
undertaking of the employees.
12. Mr. Sanjiv Sen, Sr. Counsel appearing for the Respondent
No.3-AIAHL, submits that in the process of privatization of Air India, all the
assets have been transferred to this holding company i.e AIAHL, which is to
monetize the land, which was earlier vesting with AIL.
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13. Mr. Avishkar Singhvi, ld. Counsel appearing for the Respondent
No.4-AIL challenges the maintainability of this writ petition against the AIL.
14. A perusal of the two orders cited by ld. Counsel for the parties today
would show that insofar as the employees of these companies are concerned,
the matter has reached a conclusion. The relevant portions of the Bombay
High Court decision in AISEA supra is set out below:
“ 39. The provisions of Housing Rules, as quoted
above, would indicate that allotment of
accommodations is to be done in accordance with
Rule 5 by drawing of list of optees as and when the
accommodations become available. It is not that
every employee is granted accommodation as a
matter of right. The accommodation is to be
allotted as per availability and priorities specified
in Rule 5. Upon allotment of accommodation,
payment of House Rent Allowances (HRA) is to be
stopped. The Rules further make it apparent that
allottee of the accommodation would merely be a
licensee. Under Rule 22, though an employee is
permitted to retain the accommodation during the
tenure of his service, the Rules also make it clear
that housing is merely a welfare function.
Furthermore, the Housing Rules become
applicable only after an 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.

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66. It is also required to be noted that the land and
buildings in which the residential accommodations
are located have now become properties of
AIAHCL (Respondent No. 5). Thus, the
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accommodations are no longer held by the three
Respondent-Companies in which members of
Petitioner-Unions were/are employed. Admittedly
they are not employees of AIAHCL. Therefore,
whether members of Petitioner-Unions can
continue to occupy properties of AIAHCL is
another debatable issue, on which we do not wish to
record any finding at this stage.

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69. Now we deal with the issue of levy of penal rent
and damage charges in pursuance of the decision
taken by AISAM as conveyed vide letter dated 29
September 2021. It is contended on behalf of
Petitioner-Unions that levy of damage charges of
Rs. 15,00,000/- in Mumbai is in violation of the
provisions of Housing Rules. However, prayers
made in the Petitions do not indicate that there is
any specific prayer for setting aside the decision of
levy of penal rent or damage rent. The issue
involved in the present Petitions is essentially about
refusal to make an order of reference. Also an
objection is raised on behalf of the
Respondent-Companies that the issue with regard
to challenge to the letter dated 29 September 2021
has attained finality by way of judgment and order
dated 25 August 2022 passed in Writ Petition (L)
No. 19001 of 2022, 19171 of 2022 and 20338 of
2022 wherein specific challenge was raised to
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letters dated 29 September 2021, 7/8 October
2021 and 26 May 2022. We however do not propose
to decide the issue with regard to levy of penal rent
and/or damages. The aspect of recovery of rent or
damages in respect of public premises is dealt with
under section 7 of the PP Act which provides as
under:
“7 . Power to require payment of rent or
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damages in respect of public premises. — (1)
Where any person, is in arrears of rent payable
in respect of any public premises, the estate
officer may, by order, require that person to pay
the same within such time and in such
instalments as may be specified in the order.
(2) Where any person is, or has at any time
been, in unauthorised occupation of any public
premises, the estate officer may, having regard to
such principles of assessment of damages as may
be prescribed, assess the damages on account of
the use and occupation of such premises and
may, by order, require that person to pay the
damages within such time and in such
instalments as may be specified in the order.
(2-A) While making an order under
sub-section (1) or sub-section (2), the estate
officer may direct that the arrears of rent or, as
the case may be, damages shall be payable
together with compound interest at such rate as
may be prescribed, not being a rate exceeding the
current rate of interest within the meaning of the
Interest Act, 1978 (14 of 1978).
(3) No order under sub-section (1) or sub-section
(2) shall be made against any person until after
the issue of a notice in writing to the person
calling upon him to show cause within seven days
from the date of issue thereof, why such order
should not be made, and until his objections, if
any, and any evidence he may produce in support
of the same, have been considered by the estate
officer.
(3-A) If the person in unauthorised
occupation of residential accommodation
challenges the eviction order passed by the estate
officer under sub-section 2 of section 3-B in any
Court, he shall pay damages for every month for
the residential accommodation held by him.
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(4) Every order under this section shall be made
by the estate officer as expeditiously as possible
and all endeavour shall be made by him to issue
the order within fifteen days of the date specified
in the notice.”

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71. Also of relevance is the fact that only miniscule
number of flats now remain to be occupied by some
of the employees. As per the figures placed before
us, the total number of flats is over 3000. Only 410
employees continue to be in occupation of
accommodations, out of whom 238 employees have
already submitted undertakings to vacate the same.
Thus the petitions seem to be pressed to protect
interest of only 142 employees who are yet to show
willingness to vacate the accommodations. It is
contended on behalf of the Petitioner-Unions that
the undertakings given by employees are on
account of threats of recovery of penal and damage
rents and such undertakings should be ignored by
this court. However, none of the Petitioner-Unions
have given any details of the exact employees on
whose behalf the petitions are filed. In absence of
any details and any challenge in pleadings to the
figures put forth by Respondents, we are left with no
option but to accept those figures. Monitisation of
lands and properties of AIL is one of the essential
terms of disinvestment process. If such small
number of employees continue to hold on to the
accommodations, the AIAHCL will not be able to
monitise the land to reduce the burden of debt of
AIL put on it. Ofcourse the right, if any, of
employees to occupy the accommodations will be
dependent on the terms and conditions of leave and
licence agreements and we have left this issue open
to be decided in appropriate proceedings. Those
employees who wish to agitate their grievance with
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regard to alleged right to occupy the premises can
do so in proceedings initiated under the PP Act.

72. Resultantly, we do not find any error in the
Order dated 12 October 2022 declining to make an
order of reference. Petitions are devoid of merits
and deserve to be dismissed. All issues on merits of
contentions with regard to alleged rights of
employees to retain their accommodations are
however left open to be decided in appropriate
proceedings, uninfluenced by observations made in
the present judgment. Petitions are accordingly
dismissed. There shall be no orders
as to costs. Rule is discharged.”

15. In Capt. Amitabh Rajan (supra) , the ld. Single Bench of the Court held
as follows:
“15. Submissions made on behalf of the employees
of Air India occupying the aforesaid colony that
they shall vacate their flats within one month of
monetisation of the land in question, cannot be
accepted. As manifest from the record, in the wake
of disinvestment of Air India Limited, the non-core
assets including land and building, have been
transferred to Air India Assets Holding Company
(AIAHL), which is a subsidiary of the Government
of India. Thus, the accommodation provided to the
petitioners at the colony along with other
residential colonies, have been transferred to
AIAHL.
16. The employees of Air India Limited are no
longer government employees after its
privatisation. The colony in question is under the
ownership of the Government, while the occupants
are now employees of a private company after
privatisation of Air India Limited. Thus, the
employees of Air India Limited occupying the
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colony in question, do not have any legal or vested
right to continue with the occupation of the
premises in question. Even otherwise, the facility of
accommodation cannot be claimed as a vested right
and is only provided to the employees/workmen
depending upon availability of such facility in their
respective location. Thus, it cannot be contended
that accommodation provided should be enjoyed by
the said occupants perpetually and as an essential
condition of service.
17. Even otherwise, as pointed out, the facility of
accommodation was optional and majority of the
employees of the erstwhile Air India and its
subsidiaries chose not to avail this facility. The Air
India Limited which is now a private entity owned
by M/s Talace India Private Limited, does not have
any right, title or interest over the property on
which the accommodation has been provided to the
various occupants at Air India Colony, Vasant
Vihar, New Delhi. Consequent upon the transfer of
shares held by Government of India in Air India
Limited to M/s Talace India Private Limited, Air
India Limited has ceased to be a government entity.
Thus, the employees of Air India Limited are now
employees of a non-government company.
18. The vacation of residential colonies occupied
by employees of Air India Limited after its
privatisation, is part of the policy decision taken by
the Government of India in the wake of
disinvestment of Air India Limited. The various
occupants of Air India Colony, Vasant Vihar, thus,
cannot be said to have any vested right to continue
their occupation. The quarters at Air India Colony,
Vasant Vihar, New Delhi, as noted above, is
situated on land belonging to the Ministry of
Housing and Urban Affairs.
19. Further, attention of this Court has been
drawn to the Leave and License Agreement, as filed
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before this Court. Thus, as per the facts as
brought forth on record, 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 shall have right to terminate the allotment
of housing accommodation, without assigning any
reasons whatsoever. Thus, it transpires that the
allotment and possession of the housing
accommodation is governed by the terms of Leave
and License Agreement, and the same is not a
vested right of the employee of the erstwhile
company.
20. AIAHL in its short counter affidavit has clearly
brought forth that nearly 72% of the occupants of
the colony in question have given their undertaking
and have already vacated the flats occupied by
them in the Air India Colony, Vasant Vihar.
Therefore, it is clear that all employees of Air India
Limited who have been occupying the Air India
Colony, Vasant Vihar, have to be treated at par
with each other Therefore, no special equity flows
in favour of the 38 occupants, who have prayed that
they will vacate the premises within one month of
monetisation of the land in question. The decision
as regards monetisation of the land in question is a
separate proceedings altogether and the said
occupants cannot claim any vested or legal right to
continue to occupy the premises in question.
21. As regards the undertaking given on behalf of
66 occupants of the Air India Colony, Vasant Vihar
that they are willing to vacate the flats in question
on or before 31.07.2023, this Court accepts the said
undertaking.
22. In view of the aforesaid, all the employees of
Air India Limited who are currently occupying the
flats in Air India Colony, Vasant Vihar, New Delhi
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are directed to vacate the flats on or before
31.07.2023.
23. This Court notes that penal rent has been
deducted from the employees who have been
occupying the Air India Colony, Vasant Vihar.
However, deduction of penal rent by the
respondents cannot be held to be justified. On the
one hand, the respondents have appointed an
Estate Officer in respect of vacation of Air India
Colony, Vasant Vihar, by way of Office
Memorandum dated 28.09.2022 as issued by the
Ministry of Housing and Urban Affairs, Land and
Development Office, Government of India. On the
other hand, without following the due process of
law as envisaged under the PP Act, penal rent has
been deducted from the Air India Employees
occupying the Air India Colony, Vasant Vihar, New
Delhi. Recovery of rent or damages in respect of
public premises is dealt with under Section 7 of the
PP Act. Therefore, 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 has already come to be appointed
by the Government. Thus, the recovery of penal rent
by the respondents from the various employees of
Air India Limited occupying the Air India Colony,
Vasant Vihar, New Delhi, is declared to be
unlawful. Consequently, the respondents are
directed to refund forthwith to the employees of Air
India Limited, the amounts as deducted towards
penal rent from their salaries. It is further directed
that the respondents shall make no further
deductions from the salary of the employees
towards any penal rent, except after following due
process of law.
24. The said issue regarding levy and recovery of
penal rent is left open to be decided in appropriate
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proceedings.
25. As regards the contention of the petitioners
regarding their claim for purchase of part of the
property in Air India Colony, Vasant Vihar, New
Delhi, as and when the respondents intend to
monetise it, the petitioners/employees of Air India
Limited who had been allotted accommodation in
the said colony, are at liberty to make a
representation to the respondents in this regard. ”


16. In the present petition, there is no doubt that all the Petitioners are
employees of AIESL and not of AIL. They continue to be government
employees. Clause 22 of the 2017 Rules, extracted above, clearly records
that if the employees are made otherwise ineligible for allotment of a
residence, the employees would have to vacate their respective quarters. The
AIESL, admittedly, was earlier a fully owned subsidiary of the AIL till 12th
January 2022. Therefore, according to Mr. Sinha, AIESL continued to
remain a subsidiary till 2022.
17. The land- which houses the said accommodation, now no longer
belongs either to AIL or AIESL and now vests with the Respondent No.
1-MoUD and the Respondent No.3-AIAHL has now been nominated as the
company to monetize the assets. Thus, the lands and buildings in which the
residential accommodations are situated are, post the privatisation of AIL
vesting with AIAHL.
18. In view thereof, the land now being no longer available with AIESL,
the Petitioners cannot claim as a matter of right that they are entitled to retain
the allotment of the residential accommodation, which was allotted to them at
the time when the AIESL was a subsidiary of AIL.
19. In the decision in Captain Amitabh Ranjan (supra) , the ld. Single
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Judge has categorically held that the facility for accommodation cannot be
claimed as a vested right and can only be provided depending upon the
availability of such a facility. In the present petition, all the Petitioners are
the engineers with AIESL. They have enjoyed their government
accommodation for several years during their employment with AIESL/AIL.
There are events, which have transpired including the privatization of AIL
and the creation of AIAHL, which are supervening circumstances, which
render the Petitioners otherwise ineligible for continuing to retain the
premises, which does not belong to the AIESL any more. Further, the
Respondents have deducted penal rent from the Petitioners.
20. In the overall circumstances, even the employees of the AIL can no
longer occupy the said accommodation. Hence, the employees of AIESL
entity, also cannot claim a better right to occupy the
premises/accommodation. However, this Court is also of the view that since
they continue to be employees of AIESL which is a government company, the
Petitioners ought not be charged penal rent, without any prior adjudication of
the same either by the Estate Officer or some other competent forum.
21. In order to ensure that sufficient opportunity is granted to the Petitioner
for vacating the accomodation, which they have been occupying for several
years, the following directions are issued:
(1) All the Petitioners, as agreed before the Court, shall vacate the
premises by 31st July, 2023. They shall hand over vacant and
peaceful possession of the residential accommodation without
causing any damage to the property.
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(2) All the charges payable such as electricity, water, gas and other
municipal charges for consumption, shall also be cleared till 31st
July 2023 without any dues by the Petitioners.
(3) Subject to the above, the penal rents, which have been charged
by Respondent No.1- Union of India and deductions, which have
been made, shall be refunded to the Petitioners by 15th August,
2023.
(4) In view of the fact that the Petitioners are given undertaking to
vacate, which has been accepted by the Court, no proceedings
under the Public Premises Act, 1971 for penalty, damages or
other proceedings shall be initiated by or on behalf of the
Petitioners.
(5) The Petitioners are stated to have already made a representation
dated 2nd March, 2023 before the Respondent No.1-Union of
India for alternate accommodation. Considering the fact that
Respondent No.2-AIESL continues to be a government
company, let a decision be taken by the concerned authorities
including the Ministry of Housing and Urban Affairs (MoHUA)
and Ministry of Civil Aviation (‘MCA’) in respect of alternate
accommodation within a period of 4 months.
22. With these observations, the petition along with all pending
applications, is disposed of.


PRATHIBA M. SINGH
JUDGE
MARCH 27, 2023/ dk/dn
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