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1993 DIGILAW 90 (GAU)

G. Elsan and Ors. v. State of Nagaland and Ors.

1993-04-07

H.K.SEMA, W.A.SHISHAK

body1993
H. K. Sema, J.— This writ petition is preferred by writ petitioners, 97 in numbers. 2. We have heard Mr. P. Prasad assisted by Miss C. Jajo, learned counsel for the petitioners. We have also heard Mr. EY Renthungo, learned Junior Govt. Advocate for the respondents. 3. The petitioners are at present employed under the Nagaland Hand-loom and Handicrafts Development Corporation (in short NHHDC» under various capacities as Weaving Superintendent, Weaving Inspector, Accountant Craftsman, Craft Inspector, Marketing Assistant, Manager Peon, Chowkidar, Sweeper, Typist etc. Most of the petitioners are the holders of non-Gazetted posts accept few. The NHHDC was established for the first time on 1st May, 1979. 4. Prior to the establishment of NHHDC, the petitioners were the employees under the Directorate of Industries. Their appointments were made some times in between the years 1967 and 1978. Appointment of the petitioners to various posts are available at Annexures A to E in this writ petition. All the appointments of the petitioners were made to various p ists under the Directorate of Industries and as would appear from Annexures A to E, that the initial appointment of the petitioners were made by the Directorate of Industries. 5. On 2.4.79, the Government of Nagaland ordered the merger of the establishment of Intensive Handloom Development Project Production Centres of both Handloom and Handicraft Marketing cum Weaving Centres and Emporium with the newly formed Nagaland Handloom and Handicraft Development Corporation Ltd. Consequent upon the order of merger, the Directorate of Industries by its order dated 23rd April ordered transfer of ministerial staffs attached in the Directorate to the OflBce of NHHDC. Dimapur on deputation with immediate effect (emphasis supplied). In the said order, 13 staffs were asked to join in the office of NHHDC immediately. 6. By another order dated 14th May, 1979, the services of all the petitioners were transferred on deputation to the NHHDC with immediate effect. The aforesaid order further stated that transfer of the petitioners on deputation were effected immediataly pending the finalisation of the terms and conditions of the deputation. 7. On 8th July, 1982, the Joint Director of Industries issued a memorandum stating that, consequent upon the formation of the Corporation, the schemes and the staffs under Directorate of Industries were transferred to the Corporation. 7. On 8th July, 1982, the Joint Director of Industries issued a memorandum stating that, consequent upon the formation of the Corporation, the schemes and the staffs under Directorate of Industries were transferred to the Corporation. It further stated that the post of Special Officer/Manager, Nagaland Sales Emporium, New Delhi and all the non-Gazetted Staff under the said scheme were also transferred to the NHHDC since there was no activities in the Department due ta the transfer of all the schemes to the Corporation. The terms and conditions of transfer of the staffs were also stipulated in the said memorandum, inter alia, it is stipulated that the pension contribution, will be borne by the Corporation. Further it is stated in the memorandum that the officers/staff already transferred to the NHRDC were requested to furnish the option in an enclosed form for final absorption under the NHHDC wef 14.8.82, failing which it would be presumed that they have accepted the appointment under NHHDC and finally will be absorbed under the Corporation (emphasis supplied). 8. Last paragraph of the impugned memorandum which has been vehemently attacked by the petitioners runs as under : "In this connection, it mentioned here that since there is no post under the Directorate of Industries as all the Schemes against which they were appointed have already been transferred to the Corporation,they may not be taken back in the Department even if they seek reversion to the Department." (emphasis supplied) This paragraph has been assailed on the ground that the so called option given to the petitioners is no option at all in the eyes of law as it was stipulated that the officers and staffs cannot be taken back in the Department even if they seek reversion to the Department. 9. By another memorandum dated 12.12.83 issued by the General Manager, NHHDC purportedl in pursuance of Directorate of Industries memorandum dated 8.7.82, the staffs-of the Directorate of Industries sent to NHHDC on deputation for a period of 3 and half years wef 1.5.79 to 31.8.92 were declared to have been finally absorbed under NHHDC Ltd. as Corporation staff in their respective posts after expiry of 3 and half years deputation period wef 1.9.82. In the said memorandum, 147 names of staffs including the names of the petitioners were shown. In the said memorandum, 147 names of staffs including the names of the petitioners were shown. Last paragraph of the memorandum which has been aggrieved by the petitioners runs as under : "Any staff whose name is indicated above, if refused to accept the corporation service, his/her services will be automatically terminated." It is stated by the petitioiiers that the petitioners were coerced to accept the Corporation service as the other option was automatic termination from their services. It is therefore, stated that the so called option was no option at all in the eyes of law. 10. From Annexure K, it appears the grievance of the petitioners was submitted to the competent authority in the form of representation by the Association of the petitioners demanding inter alia the conversion of the NHHDC into a separate Directorate. In the said representation, it is also stated inter alia that the deputatiomsts were all duly recruited and appointed by the appointment authorities of the Department of the Industries in regular posts and that, prior to the absorption they were entitled pension benefits in their parent department, but the mass transfer of all the staff and absorption to NHHDC deprived them of their pensionable service. In short, the petitioners were appointed to pensionable posts initially but were transferred and absorbed to non-pensionable Department, Corporation against their will under coercion. 11. There is yet another representation by the Association by its representation dated 19.1.92 addressed to- the Secretary, Department of Industries and Commerce for redressing their grievances but Without any result. Hence this petition. 12. It is submitted by Mr. Prasad that the so called option offered to the petitioners at Annexures H and I of the writ petition are unconscionable, unfair, unreasonable and opposed to public policy and void inasmuch as the option offered to the petitioners vide Annexures H and I, are in the form of 'take it or leave it' as the other options are termination from services. 13. The further submissions of learned counsel for the petitioners is that, thf petitioners has been discriminated inasmuch ^ as the authority failed to provide equal protection and equal treatment to the petitioners as the employees who were similarly circumstanced with the petitioners have been reverted to the parent Department which is of pensionable post causing hostile discrimination against the petitioners. The further submissions of learned counsel for the petitioners is that, thf petitioners has been discriminated inasmuch ^ as the authority failed to provide equal protection and equal treatment to the petitioners as the employees who were similarly circumstanced with the petitioners have been reverted to the parent Department which is of pensionable post causing hostile discrimination against the petitioners. The instances of such hostile discrimination have been cited in paragraph 13 of the writ petition. It is further averred in para 14 that, one Shri Yanpothung Lotha whose name figures at serial No. 110 of the order dated 12th December, 1983 (Annexure I) and have been absorbed into the Corporation service was allowed to be reverted to the Directorate of Industries in 1990. 14. The respondents have filed counter. The case of respondents is that, 80% of tiie employees in the NHHDC were deputationists serving in various capacity under the Department of Industries initially fora period of three and half years and finally they were absorbed under the Corporation after the expiry of three and half years deputation period wef 1.9.82. 15. The further case of the respondents is that, the employees subsequent to their transfer and absorbed to NHHDC Ltd. were requested to give their option, whether they want to be absorbed permanently in the Corporation or want to go back to parent Department, vide circular No. NHHDC/Estt-20/80 dated 25.5.84 (Annexure A) to the Affidavit-in-opposition. It is therefore, argued that in spite of option offered, none of the present petitioners submitted any option for going back to their parent Department and as such they have willingly accepted the Corporation service and they cannot now claim that they were compelled to accept the Corporation service. At this stage, it may be convenient to dispose of this particular argument of the respondents. 16. We have carefully gone through circular dated 25.5.84 issued by the Corporation. The .circular runs as under : "No. NHHDC/Estt-20/80 Dimapur the 25th May 1984. At this stage, it may be convenient to dispose of this particular argument of the respondents. 16. We have carefully gone through circular dated 25.5.84 issued by the Corporation. The .circular runs as under : "No. NHHDC/Estt-20/80 Dimapur the 25th May 1984. CIRCULAR This is for general information to all permanent staff (Class III and IV) of Directorate of Industries working under NHHDC Ltd Dimapur and all Class I and II (Gazetted Cadre) Officers of Directorate of Industries and" from other department working under NHHDC Ltd on deputation that they are requested to give their option whether they want to be absorbed permanently in the Corporation service or want to go back to parent department. The option in written should be submitted to the undersigned latest by 15th June 484 without fail. Sd/-D. Chakraborty, General Managar." 17. A bare reading of the circular, it consists of two parts. First part of the circular deals with all permanent staff (Class III and IV) of Directorate of Industries working under NHHDC. The second part deals with (Class I and II) Gazetted Cadre Officers pf Directorate of Industries and from other Department working under NHHDC Ltd. on deputation. Both the classes of the staffs were requested to give their option whether they want to absorb permanently in the Corporation service or want to go back to parent Department. None of the petitioners'case is covered by the aforesaid circular because of simple reason that at the relevant time the petitioners were not permanent staff of Directorate of Industries working under NHHDC as their services were transferred and absorbed in the Corporation under the order at Anaexures H and I Secondly, the petitioners were not working at the relevant time on deputation under the Corporation. In this view of the matter, the submission of learned Junior Govt. Advocate has no substance and is not acceptable. 18. The next question remains to be determined is, whether the option offered to the petitioners can be accepted as option in the eyes of law. As quoted above, the relevant paragraphs at Annexures H and I shows that the petitioners are left with no option. The options offered to the petitioners are in the form of, take it or leave it. The option offered by Annexure H, stipulates that they may not be taken back in the Department even if they seek reversion to the Department. The options offered to the petitioners are in the form of, take it or leave it. The option offered by Annexure H, stipulates that they may not be taken back in the Department even if they seek reversion to the Department. The option offered to the petitioners at Annexure I; order, stipulates that, if they refuse to accept the Corporation service, their ^ervices will be automatically terminated. It is therefore, argued by Mr. Prasad that the so call offer of option are no offer at all in tfce eyes of law as they are unconscionable, unfair, unreasonable and opposed to public policy and therefore, they are void and inoperative. 19. It is further submitted by Mr. Prasad that the option of the petitio* ners opting Corporation service was caused by coercion. From a bare reading of offering of option,particu!arly the last para of the order at Annexures H and I, it clearly appears that the option of the petitioners were caused by coercion. 20 Section 19 cf the I idian Contract Act, says that, when consent to an agreement is caused by coercion, fraud or misrepresentation* the agreement is a contract voidable at the option of the party whose consent was so caused by coercion. Section 19 A, speaks that wlien consent to an agreement is caused by under influence, the agreement is a contract voidabb at the option of the party whose consent was so caused and die Court may set aside. Any such contract either absolutely or, if the party who was entitled to avoid it has receive,! any benefit thereunder, upon such terms and conditions as to the Court may seem just. 21. Sub-section (1) of section 16 of Indian Contract Act, defines undue influence as under : "16. Undue influence defined : (!) A contract is said to be induced by 'undue influence' where the relations subsisting between the parties are such that one of the parties is in a position to obtain an unfair advantage over the other." 22. From the appointment order at Annexure A to 'E of the petition, it clearly appears that the petitioners were initially appointed in the service of the Directorate of Industries. From the orders at Annexures H and I, it also clearly appears that they were on deputation to NHHDC wef 1.5.79 upto 31.8.82. From the appointment order at Annexure A to 'E of the petition, it clearly appears that the petitioners were initially appointed in the service of the Directorate of Industries. From the orders at Annexures H and I, it also clearly appears that they were on deputation to NHHDC wef 1.5.79 upto 31.8.82. The petitioners were sought to be absorbed in the Corporation by the aforesaid orders wef 1.9.82. In both the orders, a threatening conditions were imposed that they may not be taken back in the Department even if they seek reversion to the Department and that, if they refuse to accept the Corporation service, their services Will be automatically terminated. These are the conditions in our view imposed upon the petitioners theieby dominated the will of the petitioners to accept the Corporation service which clearly falls under the definition of undue influence. 23. We therefore, hold that the respondents used their position to dominate the will of the petitioners and uses that position to obtain an unfair advantage over the petitioners, thereby converting the service of the petitioners from pensionable post to non-pensionable post which is unconscionable, unfair, unreasonable and opposed t public policy and r.rc liable to be quashed. 24. In this connection, Mr. Prasad referred to us to a decision of the Apex Court rendered in Central Inland Water Transport Corporation Ltd. & another vs. Brojo Nath Ganguly & another, (1986) 3 SCC 156 , where Apex Court held that, the contracts"which are unconscionable, unfair, unreasonable and opposed to public policy are Void. It was further held that, the contractual terms and employment in stereo typed form on take it or leave it basis detrimental to the employees even if accepted by the employees, liable to be declared void and inoperative if it is unconscionable, unfair unreasonable and opposed to public policy. 25. The very words, option suggest that the other party must have an alternative. In the instant case, the offer of option the petitioners vide order at Annexure H and I, shows there was no room for the petitioners to have an alternative option but to accept the offer. The so called option is not option at all in the eyes of law. On the other hand, it can be at best termed as coercion or undue influence as the other option are dismissal from seVvice. The so called option is not option at all in the eyes of law. On the other hand, it can be at best termed as coercion or undue influence as the other option are dismissal from seVvice. In such circumstances, the petitioners have opted Corporation service detrimental to the petitioners interest. 26. In this view of the matter, we have no hesitation to hold that the option obtained by the respondents in respect of the services of the petitioners under the Corporation is caused by coercion and or undue influence and arbitrary. 27. As this petition is likely to be succeeded on this score alone, it may not be necessary for us to go into the other points urged before us. 28. In view of what has been stated above, the order at Annexures H and I, are set aside and quashed in so far with regard to the petitioners. This petition is accordingly allowed. No order as to costs. 29. This left us now to consider as to what reliefs the petitioners are entitled to. It is submitted at the bar by Mr.Prasad that the petitioners would be satisfied if the petitioners are allowed to get pensionary benefit after their retirement on superannuation. In this view or the matter, although we quashed the absorption order, the petitioners are allowed to continue serving in the Corporation in the facts and circumstances of this case and in the interest of public. Pension is a hard earning benefits by hard labour and toil put up by the Government servant after a long spell of service. It would be too cruel to deprive the petitioners of their hard earned benefit. Pensionary benefits are no mere a bounty, it has become a right in the hands of incumbent. 30. Considering the facts and circumstances of this case, we now direct the respondents to pay the pensionary benefit to the petitioners on their retirement on superannuation. It is made clear that this order covers only to the petitioners, 97 in numbers in this writ petition. With the above direction, this petition is allowed.