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1991 DIGILAW 1343 (ALL)

AYODHYA PRASAD PANDEY v. CHAIRMAN-CUM-MANAGING DIRECTOR, NATIONAL TEXTILE CORPORATION (U. P) LTD.

1991-10-29

M.L.BHAT

body1991
JUDGMENT : M.L. Bhat. J. 1. The Petitioner is a member of supervisory staff of a Company known as M/s. Athorton west and Company Ltd He is working as a Printing Supervisor in the said Company. It is stated that the management of the said Company was taken over by the Union of India by an Act of Parliament known as the Laxmi Ratan and Atherton West Cotton Mills (taking over of management) Act 1976, for short called as the Act of 1976. In pursuance of Section 3 of the Act of 1976, the management of the said Mil' was vested in the Central Government and the Central Government was empowered to appoint custodian for the administrative convenience and the custodian has been empowered to appoint additional custodian to look after the management of the undertaking. 2. The Central Government is said to have appointed M/s. National Textile Corporation Ltd. New Delhi as custodian for the said Mill which in term appointed Respondent No. 1 as additional custodian for the management of the Mill. 3. It is averred by the Petitioner that prior to 1962 there was no age of retirement in the textile mills of Kanpur. However, Dr. Sampurnanand award provided 60 years as the age of retirement. A copy of the extract of the award is filed as Annexure-1 to the writ petition. The age of retirement for the workers (Shramik) is fixed as 60 years. The Petitioner challenges the two orders of the Respondents whereby they are said to have fixed the age of retirement of their supervisory staff at 58 years. It is stated that in other taxtile mills in Kanpur the age of retirement is 60 years. Prior to taking over of the management of the Mill under the Act of 1976, the age of retirement of the supervisory staff of the company was 60 years. Respondent No. 2 is said to have, vide its order dated 31-5-90, informed that the supervisory staff of M/s. Athorton Mill and Laxmi Ratan Mills would be retired at the age of 58 years. In pursuance of the said order, the Petitioner was served with another order dated 8-6-90 by which he was asked that he would be relieved with effect from 7-7-90 on completion of his 58 years of age, copies of both these orders are annexed to this writ petition. In pursuance of the said order, the Petitioner was served with another order dated 8-6-90 by which he was asked that he would be relieved with effect from 7-7-90 on completion of his 58 years of age, copies of both these orders are annexed to this writ petition. It is contended that previous management has entered the date of birth of the Petitioner as 9-3-1932 whereas the Petitioner's date of birth in the employees state Insurance Record is shown as year of birth of the Petitioner as 1936. Before passing the order dated 31-5-90 the Petitioner and the other members of the supervisory staff were not heard. It is contended that the Act of 1976 does not empower the Respondent to change the existing terms and conditions of employment of the employees. The Petitioner is said to have made a representation also protesting against the fixation of the age of retirement as 58 years. The impugned order dated 31-5-90 is said to be misconceived. It has the effect of changing the conditions of service of the Petitioner unilaterally. The relief of certiorari for quashing the orders dated 31-5-90 and 8-6-90 and the relief of mandamus not to interfere with the working or the Petitioner are claimed on number of grounds. It is contended that the Act of 1976 has not empowered the Respondents to alter the terms and conditions of the service of the employees of the taken over mills. The Respondents' action is without any authority of law. The Petitioner has not opted for terms and conditions of the service of the Respondents. The impugned orders are without complying with the principles of natural justice. The impugned orders are arbitrary, discriminatory and violative of Article 14 of the Constitution of India. 4. The Petitioner has moved an application for amendment also. He wants to add para 10-A in the writ petition and ground No. 'G' also It is contended in the amended plea that the Petitioner's date of birth is not 1932 He wants to show that his date of birth is 21-7-1935 and on the basis of said date of birth he is to be retired in July, 1993. 5. In their counter, the Respondents have given the background in which the Mill in question was taken over and stated some facts which are relevant for the consideration of the controversy raised in this petition. 6. 5. In their counter, the Respondents have given the background in which the Mill in question was taken over and stated some facts which are relevant for the consideration of the controversy raised in this petition. 6. It is stated that the age of retirement of supervisory staff who were not workmen within the meaning of Section 2-Z of the U.P. Industrial Dispute Act, is 58 years in all the Cotton mills of the National Textile Corporation Ltd., situate throughout the state of U.P. The age of retirement of the supervisory staff is 58 years and the age of retirement of the workmen is 60 years. Under National Textile Corporation Recruitment and Promotion Rules Clause 33 provides the age of superannuation as 58 years which reads as under- (i) All employees shall superannuate from services on attaining the age of 58 years. Grant of extansion/reemployment will be governed strictly as per B.P.E. Instructions. (ii) Date of superannuation of an employee will be last date of the month in which he is born. However, where an employee is born on Ist of the month, his date of superannuation will be last date of preceding month. 7. The age of retirement of the supervisory staff was made known to the employees through various orders. One such order was issued on 27-8-1975. Another order was issued on 10-8-88 and the last order is 28-5-90. Based on Dr. Sampurnanand award the age of retirement of workmen was fixed 60 years and the age of retirement of the supervisory staff is fixed as 58 years. The Petitioner being member of supervisory staff was liable to be retired after the completion of the age of 58 years. The Petitioner at the time of his retirement was getting Rs. 3185/- salary per month. (However, the Petitioner is continuing in service under the interim order of this Court dated 5-7-90). 8. In the past also some members of the supervisory staff had raised a dispute of similar nature as is involved in this writ petition through the medium of writ petitions which were dismissed by this Court. The details of these writ petitions are given in paras 11, 12, 13, and 14 of the counter-affidavit. It is contended that the Petitioner has alternative remedy under the Industrial Disputes Act and he cannot be granted any relief in this writ petition. 9. The details of these writ petitions are given in paras 11, 12, 13, and 14 of the counter-affidavit. It is contended that the Petitioner has alternative remedy under the Industrial Disputes Act and he cannot be granted any relief in this writ petition. 9. In parawise reply it is stated that in all the mills nationalised by the Central Government or taken over by the Central Government which are being managed by the N.T.C. there is uniformity in the age of retirement of the workmen and supervisory staff. Some of the members of the supervisory staff are said to have been retired at the completion of the age of 58 years. Dr. Sampurnanand award is said to be applicable only to the workmen and rot to the members of the supervisory staff. It is stated that custodian under the Act of 1976 is managing the mill on behalf of the Central Government. The custodian is empowered to exercise all the powers like Board of Directors. Reliance is placed on Clause 4(7) of the Act which reads as under- 4. (7) Subject to the other provisions of this Act and the control of the Central Government, the Custodian shall be entitled notwithstanding anything contained in the Companies Act, 1956, to exercise all the powers of the Board of directors of the two companies (including the power to dispose of any properties or assets of the two companies) whether such powers are deprived from the Companies Act, 1956, or from the memorandum and articles of association of the concerned company or from any other source. The N.T.C. (U.P. Ltd.) which is functioning as Board has wide powers to frame internal rules and regulations. It can also fix the age of superannuation of the supervisory staff Copy of the office order dated 17-8-75 is placed on the record. Copy of the office order dated 10-8 -88 is also placed on the record. These orders pertain to the supervisory staff whose age of retirement is said to have been fixed as 58 years. Office order dated 28-5-90 is also placed on the record. It also envisages the age of retirement as 58 years. Copies of the decisions of this Court in some of the writ petitions arc also placed on the record. These orders pertain to the supervisory staff whose age of retirement is said to have been fixed as 58 years. Office order dated 28-5-90 is also placed on the record. It also envisages the age of retirement as 58 years. Copies of the decisions of this Court in some of the writ petitions arc also placed on the record. Copies of the orders regarding the employees who have been retired at the age of 58 years belonging to the supervisory staff are also placed on the record. 10. From the reading of the Act of 1976 it appears that Laxmiratan and Atherton West Cotton Mills, on account of mismanagement had suffered losses exceeding the value of its available assets and had been closed down and in view of the adverse financial position of the Company some members of the Board of Directors had absconded. Therefore in the interest of general public the undertakings of the two companies were to be restarted so that the production of the needed varieties of cotton could be continued and the management of the company was taken over by the Central Government, u/s 3 of the Act. The Central Government was empowered to appoint a custodian of the undertakings for the purposes of carrying on management of such undertakings. The Central Government also could authorise the custodian to appoint Additional Custodian of the undertakings who was to assist the Custodian in exercise of its powers and duties under this Act and was to function under the direction, supervision and control fo the custodian. The Custodian could 'delegate to the Additional Custodian all or such of its powers as it would think fit. 11. Learned Counsel for the Petitioner argued that the Central Government has given no authority to the custodian to alter the terms and conditions of the services of the employees of the taken over Mills. This argument is based on the assumption that conditions of the services of the employees have been changed by the Respondents. It was stated that before taking over of the mill the age of retirement of the supervisory staff of the mill was 60 years. In this regard reliance is placed on Dr. Sampurnanand award. Copy of which has been supplied by the Petitioner. It appears that the age of retirement of the workmen was fixed by the said award and not of the supervisory staff. In this regard reliance is placed on Dr. Sampurnanand award. Copy of which has been supplied by the Petitioner. It appears that the age of retirement of the workmen was fixed by the said award and not of the supervisory staff. Therefore, for the determination of the age of superannuation of the members of the supervisory staff, it is not safe to rely on Dr. Sampurnanand award which has taken care of the workmen (Sramik) alone. The retirement age of the supervisory staff who are not workmen within the meaning of Section 2-Z of the Industrial Disputes Act is 58 years in all cotton mills of National Textile Corporation situate within the limit of the Slate of Uttar Pradesh. This is stated on oath by the Respondents. The Respondents have also relied on their Recruitment and Promotion Rules which show that age of superannuation of the services of the employees of the Respondents is 58 years. However, the Petitioner's contention that his age of retirement was not fixed before the Mill was takenover, does not seem to have any credence. The Petitioner seems to be labouring under the impression that Dr. Sampurnanand award has determined his age of retirement as 60 years. This argument also is misplaced because as already indicated that the award has not fixed the age of retirement of the members of supervisory staff of the Mill. There is distinction between the two categories, the workmen and the members of the supervisory staff belong to two different categories. In respect of workmen the age of superannuation is fixed as 60 years by the said award and which is being followed by the Mills throughout the State of U.P. but in respect of members of supervisory staff. Dr. Sampurnanand award, in so far as it fixed the age of retirement of the workmen, cannot be a guideline for fixation of the age of retirement of the members of supervisory staff who belong to a different category. Therefore, it is not correct to say that the age of retirement of the Petitioner or of the members of the supervisory staff was changed from 60 to 58 years to his/their detriment. 12. It was contended by the learned Advocate General appearing for the Petitioner that the conditions of service of the Petitioner can not be unilaterally changed as that would be violative of Principles of natural justice. 12. It was contended by the learned Advocate General appearing for the Petitioner that the conditions of service of the Petitioner can not be unilaterally changed as that would be violative of Principles of natural justice. He has relied on some authorities which now require brief discussion. 13. In Kanpur Sahkari Milk Board v. Industrial Tribunal (III) U.P. Kanpur 1982 Lab IC NOC 98 (Alld.), a Division Bench of this Court was pleased to hold that when leave and holidays etc. in accordance with U.P. Government rules are granted to the workmen for a long number of years they had certainly become a condition of service. Curtailment of any facilities could not be effected without complying with the provisions of Section 4-1 of the U.P. Industrial Disputes Act. The Tribunal's finding that such a curtailment, without notice was illegal, was upheld by the Court. 14. It is true that the condition of service of an employee cannot be changed all of a sudden to the detriment of the employee but framing a condition of service which was required to be framed for the proper management of the unit is permissible because every employer is entitled to regulate the services of his employees. The regulation of service of the employees of a company taken over by the Central Government are to be framed by rules or by contract but the terms of the regulation or the contract governing the condition of service should not be opposed to public policy or opposed to the provisions of Section 23 of the Contract Act. Fixation of age of retirement is one of the conditions of service. So it must appear to be reasonable not unconsensus, opposed to public policy or any other law for the time being in force. 15. In the present case it is not shown from the record that age of retirement of the supervisory staff of the taken over mill was not at all fixed but it was fixed as 60 years as contended by the Petitioner. There is no dispute in respect of the fixation of the age of retirement of the workmen which on the basis of Dr. Sampurnanand award is 60 years. The Respondents have accepted this position in unambiguous terms. That benefit cannot be given to the Petitioner as he belongs to supervisory staff. 16. In Banchhanidhi Rath Vs. There is no dispute in respect of the fixation of the age of retirement of the workmen which on the basis of Dr. Sampurnanand award is 60 years. The Respondents have accepted this position in unambiguous terms. That benefit cannot be given to the Petitioner as he belongs to supervisory staff. 16. In Banchhanidhi Rath Vs. The State of Orissa and Others, AIR 1972 SC 843 , it was held that where the Government took over management of a private school and declaration of uniform policy for retirement of teachers on attaining age of 58 years the teachers have no right to remain in service after attaining the age even on alleged custom regarding retention of teachers so long as they are physically fit and mentally alert. Custom of such a nature of contract of employment was refused to be enforced in an application under Article 226 of the Constitution of India. 17. In K. Nagaraj and Others Vs. State of Andhra Pradesh and Another, AIR 1985 SC 551 , it was held that reducing the age of retirement from 58 to 55 years by the State Government or the Legislature is not arbitrary or irrational. In this case Andhra Pradash Government has reduced the age of retirement of its employees from 58 years to 55 years. A bunch of writ petitions came to be filed in the Supreme Court. The Supreme Court held that termination of the service of an employee on his reaching age of superan-nualion could not amount to removal from service within the meaning of Article 311(2). It was also observed that there are precedents within India itself for fixing the age of retirement at 55 or for reducing the age from 58 to 55 years. Either the one or the other of these two stages is regarded generally as acceptable, depending upon the employment policy of the Government of the day. 18. In respect of standing orders passed by the Respondents about the age of superannuation of its employees, suffice it to say that these will bind on the Petitioner also even if he has entered the service before framing of those standing orders. Reliance is placed on Dunlop India Limited Vs. Their Workmen, (1972) 3 SCC 616 . 19. In Central Inland Water Transport Corporation Limited and Another Vs. Reliance is placed on Dunlop India Limited Vs. Their Workmen, (1972) 3 SCC 616 . 19. In Central Inland Water Transport Corporation Limited and Another Vs. Brojo Nath Ganguly and Another, (1986) 3 SCC 156 , the Supreme Court made it clear that unconscionable terms in contract of employment are void. Term in contract of employment as also service rules of the company providing for termination of services of permanent employees without assigning reasons or three months' notice of pay in lieu thereof on either side, such. term is unconscionable, arbitrary and opposed to public policy. Hence void u/s 23 of Contract Act as also violative of Article 14 of the Constitution. The Company called Rivers Steam Navigation Co. Ltd. had framed rules for its employees. Rule 9 would empower the management to terminate on three months' notice the services of a permanent employee. The services could be terminated without assigning any reason and so on. Dealing with such a rule the Supreme Court termed the said Rule as "Henry VIII clause". It confers absolute and arbitrary power upon the Corporation. However this authority would not apply where the age of retirement is fixed and the employees are superannuated on attaining that age because there is nothing which is arbitrary or unguided in retiring the employees at the age of 58 years. 20. In State of Bihar Vs. Dr. Yogendra Singh Col (Retired) and Others, AIR 1982 SC 882 , it was held that when a member of the teaching staff becomes an employee of the State Government, he would be governed by the same age of superannuation which is applicable to other government servants, namely, 58 years and it was for this reason that the State Government redetermined the age of superannuation of the teaching staff of the Medical Colleges taken over by it at 58 years. At that time some of the employees had reached the age of superannuation They were discharged from service after giving one month's notice to them in terms of circular issued by the State Government. Before taking over the private institution the age of retirement of the teaching staff was 62 but when the college was taken over the age of superannuation was reduced to 58 years. The termination of those members of the teaching staff at the age of 58 years was held to be valid. 21. Before taking over the private institution the age of retirement of the teaching staff was 62 but when the college was taken over the age of superannuation was reduced to 58 years. The termination of those members of the teaching staff at the age of 58 years was held to be valid. 21. In Miss Raj Soni v. Air Officer Incharge Administration 1990 Lab. IC 1161, the age for retirement was fixed as 60 years under Rule 110 of the Delhi Education Code, framed under Delhi Education Act 1973. The order of management retiring its teachers at the age of 58 years was quashed because such a retirement was held against the statutory rule framed under that Act. 22. It was contended by learned Counsel for the Petitioner that the Petitioner was doing supervisory work not over the machine but over man, therefore, he may also be treated as skilled workman. He relied on Bobay Dyeing Manufacturing Co. v. R.A. Bidoo 1990 Lab. IC 116. This authority will not help the Petitioner in view of the provisions of U.P. Industrial Disputes Act. 23. In Hindustan Petroleum Corporation Ltd. v. H.L. Trehan 1989 (1) SCC 65, the Supreme Court held that there can be no deprivation or curtailment of any existing right advantage or benefit enjoyed by a government servant without complying with the rules of natural justice without giving the Government servant concerned an opportunity of being heard. Any arbitrary or whimsical exercise of power prejudicially affecting the existing conditions of service of a government servant will offend against the provision of Article 14. In this case the Caltex Oil Refinery (India) Ltd. was taken over by the Central Government under the Act of Parliament. The services of the employees were protected in acquisition of shares of Caltex undertakings of Caltex India Ltd. Act of 1977. A circular was issued under the cover of rationalisation of the perquisites and allowances admissible to Management staff which was detrimental to the interest of the employees and the Supreme Court held that the circular could not be issued without affording opportunity to the employees, a post decisional hearing would not validate the action taken. A circular was issued under the cover of rationalisation of the perquisites and allowances admissible to Management staff which was detrimental to the interest of the employees and the Supreme Court held that the circular could not be issued without affording opportunity to the employees, a post decisional hearing would not validate the action taken. The circular would affect the rights of the employees involving civil consequences and the statute under which Caltex was taken over has provided that every employee of the taken over Company would be employee of the CORIL on the same terms and conditions and with the same rights to pension, gratuity and other matters as are admissible to him immediately before that day and shall continue to hold such office unless and until his employment under CORIL is duly terminated or until his remuneration and conditions of service are duly altered by that Company. The circular was held to have duly altered the conditions of service. Had the circular altered the services duly it would be saved by the Supreme Court. The emphasis was on the expression 'duly'. Therefore, the Supreme Court was of the opinion that the principles of natural justice was violated and service conditions of the employee were altered to their detriment which was held bad. This authority also will not help the Petitioner. In as much as in the present case no service condition is altered. A Rule regarding age of retirement is framed which is uniformally followed in every government departments. That cannot be said to be violative of principles of natural justice. In the facts of the case before the Supreme Court the circular which was held to be bad was issued against express provision of the Statute contained in Section 23 of the Caltex (Acquisition of Shares of Caltex Refining (India) Ltd.) and the undertakings in India of Caltex India Ltd. Act, 1977. The circular was held to be violative of the provisions of the Act because it has not taken note of the expression 'duly' in the context. 24. The Petitioner has submitted that he would like to amend the writ petition in order to show that he has not reached the age of superannuation. That cannot be allowed in writ proceedings. The circular was held to be violative of the provisions of the Act because it has not taken note of the expression 'duly' in the context. 24. The Petitioner has submitted that he would like to amend the writ petition in order to show that he has not reached the age of superannuation. That cannot be allowed in writ proceedings. If he is aggrieved, in this regard, he can choose a proper forum for getting his age determined, but in the writ petition, after having retired, he will not be permitted to dispute his age. However, this Court leaves this question open to be determined by any appropriate forum of the Petitioner's choice. The application for amendment is therefore disallowed. 25. For the reasons stated above I do not find any merit in this writ petition. The writ petition is accordingly, dismissed. However, there will be no orders as to costs. The interim order dated 5-7-90 is also vacated. 26. It may be noted that the pleadings in this case are complete. Therefore, at the joint request of learned Counsel for the parties this writ petition is decided finally in accordance with the rules of the Court.