DIRECT TAXES
| HRA not a right but a compensatory allowance: HC Thu, 17 Jun 2010 10:25:39 GMT |
| The Economic Times HRA not a right but a compensatory allowance: HC NEW DELHI: A government employee is not entitled to claim house rent allowance (HRA) as a matter of right, the Delhi High Court has held, saying that it is compensatory allowance paid in exchange of accommodation facilities. "HRA is not a part of pay but is a compensatory allowance in lieu of accommodation... and is not to be used as a source of profit. The moment the amenity is provided or offered, the employees should cease to be in receipt of the compensation which is given for want of it," Justice Rajiv Sahai Endlaw said in a recent judgement. The High Court passed the order on a petition of MCD challenging the order of an Industrial Tribunal to pay HRA to its employees even though they were residing illegally in the premises owned by the civic body. Justice Endlaw said that HRA is not a part of salary but is a compensatory allowance which is paid in lieu of accommodation and is not to be used as a source of profit. He also said that earlier the apex court had also set aside the Central Administrative Tribunal's order which had held that HRA is a part of wages. Highlighting the challenges faced by the government in providing accommodation facilities to its employees in view of acute shortages of such facilities, the court said that the employer should not be overburdened. "Whenever accommodation is offered to the employees, the employees have either to accept it or to forfeit the HRA and the management cannot be saddled with double liability viz to construct and maintain the quarters as well as to pay the HRA," it said. It also allowed the civic body to evict the erring employees from the premises or recover rent or damages for use of accommodation if it was found to be in excess of the HRA entitlement under the law. |
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