Air India employees win case against penal rent deduction from salaries in Delhi High Court

Air India employees win case against penal rent deduction from salaries in Delhi High Court

The Delhi High Court recently made significant observations regarding the issue of penal rent being deducted from the salaries of Air India employees for failing to vacate their accommodations after the airline's privatisation.

The case, titled Capt. Amitabh Rajan vs. Union of India, concerned the accommodation provided to Air India employees as per the Air India Housing Allotment Rules. However, after the disinvestment, the employees were asked to vacate these accommodations.

The bench of Justice Mini Pushkarna held that no penal rent can be deducted from the salaries of Air India employees for the period in which they occupied the accommodations in an unauthorised manner.

According to the facts, the employees were issued a notice to vacate the premises within six months of the disinvestment. Subsequently, further notice was sent to the occupants warning them that failure to vacate the premises would result in the imposition of penal rent and damage charges amounting to ₹10,00,000. In response, the employees filed a petition requesting permission to continue occupying the premises for the time being.

The Court in the present matter noted that during the course of the proceedings, some of the occupants had already vacated the premises while others had requested for more time to vacate, stating that they would leave within one month of the monetisation of the land. However, the court observed that this request could not be accepted.

The Court further elaborated that after the privatisation of Air India, the land on which the accommodations were situated had been transferred to Air India Assets Holding Company (AIAHL), and the occupants were no longer government employees. Therefore, the Court observed that the occupants do not have any legal right to continue staying in the said accommodations.

The Delhi High Court has ruled that the remaining occupants must vacate the premises by August 31, 2023, in light of the aforementioned circumstances. The Court also found that the deduction of penal rent from the salaries of the occupants was unlawful and should not have been done.

The bench directed that no further deductions in the form of penal rent shall be made from the salaries of the Air India employees. Additionally, in response to the representation made by the occupants seeking to purchase the accommodation in Air India Colony, the Court has instructed that the same may be presented to the respondents.