The Delhi High Court has held that no house rent allowance (HRA) will be given to an employee if he has occupied the premises illegally.
“If the employees in spite 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 in an order.
The court passed the order on a petition filed by the 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 in the premises owned by the civic body.
“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,” the court said.
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.