The Delhi High Court has held that an employee in unauthorized occupation of the premises of the employer is not entitled to house rent allowance(HRA). “If the employees inspite of unauthorisedly occupying the accommodation of the employer are also held entitled to HRA, it would tantamount to allowing them to profiteer from the same which is not permissible,” Justice Rajiv Sahai Endlaw said.
The Court passed the order on a petition filed by Municipal Corporation of Delhi (MCD) challenging the order of the Industrial Tribunal directing it to pay arrears of HRA to the employees from the date of their employment even though they were living unauthorisedly within the premises owned by the civic body.
While declining the plea of the employees, the court said HRA is not a part of salary but is a compensatory allowance paid in lieu of accommodation and is not to be used as a source of profit.
Interpreting the law applicable to government servants with respect to HRA, the court said, “HRA is not payable…if the government servant shares government accommodation allotted rent-free to another government servant or if the government servant resides in accommodation allotted to his/her parents/son/daughter by the central government, state government or if the spouse has been allotted accommodation at the same station.”
It also allowed the MCD to evict the erring employees from the premises or recover rent or damages for use of accommodation if found out to be in excess of the HRA entitlement under the law