Employees' entitlement to retain accommodation and the legality of charging penal rent without due process under the 2017 Rules.

JUDGMENT

Prathiba M. Singh, J. (Oral)--This hearing has been done through hybrid mode.

2. The Petitioners, who are employees of Respondent No. 2-Air India 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 subsidiary of AIAHL. This was clarified by a circular dated 15th 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."

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 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