Pranabesh Kumar Samanta v. S. A. I. L. — 1999 DIGILAW 666 (CAL)

Judgment Samaresh Banerjea, J. The common question of law and facts being involved in all the present writ petitions, the same have been heard analogously and will be governed by the same judgments. The petitioners in each of the writ petitions who were officers of Steel Authority of India Limited employed in Durgapur Steel Plant and all of whom have retired pursuant to a voluntary retirement scheme at 29th May, 1998, have challenged the action of the respondent in not extending the benefit of such voluntary retirement scheme modified with effect from May 29, 1998. 2. By Circular No. PL-CF/VR/98/1/66 dated February 16, 1998, the Deputy Chief Personnel Manager (CEF) Durgapur Steel Plant published a voluntary retirement scheme introduced by the Steel Authority of India Limited (hereinafter refer to as 'SAIL') for the Durgapur Steel Plant. The said scheme was introduced for the regular employees and it was specially indicated therein that such scheme will remain in effect from 1st of March, 1998 till 31st of March, 1998. As it will appear from the said scheme itself that the object of introduction of such voluntary retirement scheme was to achieve man power optimisation for effective utilization of human resources, improved productivity, cost reduction and quality of work-life. 3. The said scheme was applicable to regular/permanent employees of the said steel plant with minimum of 20 years of service in the respondent company or above 50 years of age. It was specifically indicated in the said scheme that the management has the full authority to accept or to reject an application for voluntary retirement and decision of the competent authority regarding rejection or acceptance of the request including date of effect of the voluntary retirement scheme, terms and conditions regarding permission for retention of company's accommodation beyond the date of voluntary retirement if any, shall be final and shall be communicated to the applicant in due course. It further appears from the said scheme that an employee whose offer for voluntary retirement is accepted will be entitled to the monthly benefit of an amount equivalent to a specified percentage indicated therein of basic pay + D.A. on the date of voluntary retirement for a period of 10 years or till 58 years of age whichever is earlier. 4. 4. It was also specifically laid down in the said scheme that another conditions of the said voluntary retirement would be that an employee whose offer for voluntary retirement is accepted will not be entitled to any future increase due to annual increments or Dearness Allowance etc. or prospective wage/salary revision, but wage revision implemented from a date prior to date of voluntary retirement will be considered for increase in monthly benefit. 5. Admittedly the petitioners in all the writ petitions applied pursuant to such voluntary retirement scheme and after acceptance of his offer for voluntary retirement by the respondent company each of them was allowed to retire voluntarily from service of the respondent company by different office order issued on different dates in the year 1998 before 29th May, 1998. 6. Subsequently, pursuant to the decision of the Government of India received by the respondent company vide OM No. 18(6)/98-GM-GL/002 dated 19.5.98, the age of retirement for employees in S.A.I.L. was raised to 60 years and the same was approved by the Board of Directors of S.A.I.L. in its 240th meeting held on 29th May, 1998. Consequent upon the aforesaid change in the age of superannuation, the aforesaid voluntary retirement scheme introduced by S.A.I.L. earlier was modified and the monthly benefit which an employee of the respondent company after his voluntary retirement under the aforesaid scheme as indicated in the said scheme which was available for a period of 10 years or 58 years of age whichever is earlier was modified to a period of 12 years or till 60 years of age whichever is earlier. As it will appear from the relevant Circular dated 29th May, 1998 by which the aforesaid voluntary retirement scheme was so modified that such modification although was directed to come into effect from 29th May, 1998, that is the date when the decision to enhance the retirement date was approved by the Board meeting, the same was also made available to such employees who already applied for voluntary retirement scheme, but were yet to be released. 7. 7. It is the aforesaid decision of the respondent company to make benefit of such modified scheme available only to such class of employees who applied under the original voluntary retirement scheme but yet to be released and yet to extend such benefit also to such class of employees who also applied for voluntary retirement under the original scheme and have been released, which is under challenge in the present writ petition on the ground that the aforesaid action of respondent is wholly discriminatory and is in violation of Articles 14 and 16 and 21 of the Constitution. 8. Mr. Partha Sarathi Sengupta, the learned Counsel appearing on behalf of the petitioner has submitted inter alia, that the aforesaid action of the respondent is wholly discriminatory and violative of Articles 14, 16 and 21 of the Constitution, inasmuch as, all employees who applied under the voluntary retirement scheme before 29th of May, 1998 whose applications also were accepted by the respondent company form a single class and consequently when such a scheme has subsequently been modified by the respondent company giving more benefit, no further classification is permissible within such a class by deciding to extend such benefit only to such applicants under the modified scheme who have not yet been released and denying the same to other applicants who have already been released. 9. It has been submitted that the employees who applied under the said voluntary retirement scheme which was effective till August, 1998 and whose application has also been accepted by the respondent company form a single class of such employees which is separate from the employees who will retire in normal course of event after reducing the age of superannuation and as it will appear from the scheme that for the aforesaid object such a scheme was introduced by which persons who accepted such scheme and applied thereunder and whose applications are accepted are certainly classified into a different class who will be eligible to certain benefit granted by the company foregoing their right to continue in employment till they reach the age of superannuation. Therefore, for the purpose of extending the benefit of the modified scheme, a further mini classification cannot be made amongst the applicants under the scheme who have also been released and the applicants who have not yet been released. 10. Therefore, for the purpose of extending the benefit of the modified scheme, a further mini classification cannot be made amongst the applicants under the scheme who have also been released and the applicants who have not yet been released. 10. It has been further submitted that the aforesaid action of the respondent is also wholly arbitrary apart from discriminatory since because of certain fortuitous circumstances viz., they opted for retirement before 29th May, 1998 and the enhancement of retirement date having been approved in the Board meeting on 29th May, 1998, they are deprived of the benefit of modified scheme and also the benefit extending of retirement age, inasmuch as, had it been known to the petitioners earlier that such retirement age was going to be enhanced, they might not have even applied for such voluntary retirement scheme. 11. Mr. Arijit Chawdhury, the learned Counsel appearing on behalf of the respondent on the other hand had submitted inter alia, that the employees after applying under the scheme who have retired also and those who have not yet retired clearly form two different classes and the question therefore of making any discrimination against the petitioners, cannot arise. It has been further submitted that the impugned decision of the respondent to extend the benefit of the modified voluntary retirement scheme only to such class of employees who have not yet been released is fully justified and certainly cannot be said to be arbitrary inasmuch as, the decision of enhancing the superannuation age having been taken by the Central Government in May, 1998, and such decision also having been implemented only from 29th of May, 1998, there is no scope of extending such benefit to the petitioners, who admittedly have been retired voluntarily prior thereto and therefore they no longer being employees of the company. 12. Reliance has been placed in this connection by Mr. Chawdhury in the decision of the Supreme Court in the case of Chaudhary Kesava Rao and Ors. vs. State of Andhra Pradesh, reported in AIR 1990 SC 2043 and also in the decision of Retired Insurance Employees' Association and Ors. vs. Union of India, reported in 1997 Lab. I.C. 2393; wherein it was held by the Court that retired employees form a separate class from the regular employees who were in service. 13. vs. State of Andhra Pradesh, reported in AIR 1990 SC 2043 and also in the decision of Retired Insurance Employees' Association and Ors. vs. Union of India, reported in 1997 Lab. I.C. 2393; wherein it was held by the Court that retired employees form a separate class from the regular employees who were in service. 13. After considering the respective submissions of the parties I am of the view whether the impugned action of the respondent is discriminatory and violative of Articles 14 and 16 of the Constitution will depend on question whether the applicants under the said voluntary retirement scheme and whose applications were also accepted by the respondent company can be said to be a single class and whether further classification is permissible under such a class namely such applicants who have already released and the applicants who have not been so released. If, however, such applicants who have already retired and the applicants who have not yet been retired can be said to form to separate class, there cannot be any doubt whatsoever that in view of the aforesaid decision relied upon by the respondent there cannot be said to be any discrimination as the retired employees form a separate class of employees who are in service. 14. After considering all aspects of the matter, I am, however, of the view that the aforesaid decision who have been relied upon by the learned Counsel appearing for the petitioners are not really applicable to the instant case. In each of the said cases the distinction was made between the retired employees and the employees who were in service, which were held to be legal and valid under the facts and circumstances of each of such cases notwithstanding the decision of the Supreme Court in the case of D.S. Nakara vs. Union of India, reported in AIR 1983 SC 130 . In the case of D.S. Nakara (supra) the Supreme Court was concerned with the constitutional validity of a memorandum issued by the Government of India on 25th of May, 1979 whereby the formula for computation of pension was liberalised but was made applicable to such Government servants who were in service on March 31, 1979 and thereby excluded such benefit to employees who retired prior to 31st March, 1979. It was held by the Supreme Court that the same was not permissible because the pensioners of the Central Government form a class for the purpose of pensionary benefit and there could not be any mini classification within the class discriminated as pensioner. 15. Similarly in the instant case, in my view, persons who applied for voluntary retirement scheme and whose applications were also accepted certainly form one class by itself distinct and separate from the other class of the employees who will retire at their normal age of superannuation. All employees have the right to continue in service till the age of superannuation and therefore normally would have continued in service till attainment of the age of superannuation. But the company introduced the voluntary retirement scheme with the aforesaid object of achieving manpower optimisation for effective utilisation of human resources, improved productivity, cost reduction and quality of work-life with promise to give certain benefit to the employees who agree to retire before their normal age of superannuation. The employee therefore who opted under such voluntary retirement scheme and whose applications also were accepted by the company really gave up their right to continue upto their normal age of superannuation in lieu of certain benefit promised by the company. Such class of employees therefore who opted under such scheme and whose applications also were accepted really formed a separate class from the employees who have not opted for the scheme and all such applicants under the scheme whose applications have been accepted form a single class. The fact that they have opted to retire on different dates is wholly immaterial. What is material is that each of them opted under such scheme and his application for voluntary retirement for grant of such benefit under the scheme was also accepted. All such applicants, in my view, therefore will form a single class like the pensioners in the aforesaid D.S. Nakara's case (supra). That being the position when because subsequent enhancement of retirement age from 58 to 60, the respondent had modified such scheme extending further benefit to the applicants under the voluntary retirement scheme, they certainly cannot make mini classification amongst the said class and grant such benefit only to such applicants under the scheme who have not yet been released and declining to give the same to such applicants who have been released already. 16. 16. It is true that the decision to enhance the age of superannuation was taken by the Central Government subsequent to the voluntary retirement of the petitioner and approved by the Board of Directors of the respondent company consequent upon which such voluntary retirement scheme was so modified. Since such retirement age was enhanced subsequently in the manner aforesaid, it was open to the respondents not to give such benefit to any of the applicants under the scheme whose applications have been accepted by the company before 29th of May, 1998 whether he has retired or not. In fact, a reading of the original voluntary retirement scheme also indicates that after acceptance of the application for voluntary retirement no further benefit can be made available to an applicant because of subsequent change of the dearness allowance etc. 17. Clause 4.1(iv) of the said voluntary retirement scheme provides specifically that an employee whose offer for voluntary retirement is accepted will not be entitled to any future increase due to annual increments of dearness allowances etc. or prospective wage/salary revision, but wage revision implemented from a date prior to the date of voluntary retirement will be considered for increase in monthly benefit. 18. The aforesaid clause of the voluntary retirement thus indicate that the date when an application for voluntary retirement of an employee is accepted is indeed important for the calculating his benefit under the said scheme and he will not entitled to any benefit subsequent to such date which might accrue to an employee of the company. 19. In view of such provision in the voluntary retirement scheme it was therefore open to the respondent to extend the benefit of the modified scheme only to such person whose applications for voluntary retirement are accepted on or after 29th May, 1998 and such action certainly would not have been discriminatory but quite reasonable as an employee whose application for voluntary retirement under the scheme accepted before 29th May, 1998 and after 29th May, 1998 can certainly form two different classes. It is rightly contended by the learned Counsel appearing for the petitioner that when an application is made under such voluntary scheme and the same is accepted, a contract between the employer and the employee is completed, although it may take effect for a subsequent dates. 20. It is rightly contended by the learned Counsel appearing for the petitioner that when an application is made under such voluntary scheme and the same is accepted, a contract between the employer and the employee is completed, although it may take effect for a subsequent dates. 20. Under such circumstances the present petitioner could not have made any complaint about such classification. Such classification also would have been reasonable as admittedly the age of superannuation is enhanced subsequently with effect from 29th of May, 1998. 21. But notwithstanding such position when the respondents choose to extend such benefit even to class of employees whose applications for voluntary retirement has been accepted but his date of retirement is subsequent to 29th May, 1998, the same amounts to a mini classification having no reasonable nexus with the object which is sought to be achieved with such classification. 22. Having taken such decision therefore to extend such benefit of modified scheme even to the applicants whose applications for voluntary retirement has been accepted before 29th May, 1998, the respondent cannot make such further classification and withhold such benefit from such employees like the present petitioners who have been released in the meantime. Because of the aforesaid action of the respondent therefore, in my view, hostile discrimination has been made against the petitioners and the impugned action of the respondent is in-gross violation of Articles 14 and 16 of the Constitution. 23. Such action of the respondent, in my view, is also arbitrary inasmuch as, the petitioners after giving up the right to continue till the age of superannuation, because of such fortuitous circumstances are not only deprived of such benefit of enhanced age of superannuation but also the modified benefit of the voluntary scheme under which they applied giving up their right to continue till the attainment of age of superannuation. 24. I am not oblivious of the fact that the decision of the Supreme Court in the case of D.C. Nakara (supra) was distinguished by the Supreme Court in the case of Krishna Kumar vs. Union of India, reported in 1990(4) SCC 207 and in the case of All India Reserve Bank Retired Officers' Association vs. Union of India, reported in AIR 1992 SC 767 . But it will appear from both the subsequent cases, the case of D.S. Nakara (supra) was distinguished on facts and the issue involved in the said two subsequent cases were different from that of D.S. Nakara's case (supra). 25. The decision of the Supreme Court in the case of Chaudhary Kesava Rao and Ors. vs. State of A.P. (supra) upon which reliance has been placed by the learned Counsel appearing on behalf of the respondent is clearly distinguishable. In the said case the petitioners were in service of Andhra Pradesh State Government and retired normally between 1st April, 1978 and 28th October, 1979. The Government appointed Pay Commission for revision of pay and also for reviewing existing retirement benefit inter alia, to all employees of the State Government. Benefit of increased pay scale as recommended by the Commission was implemented by the State Government with effect from April 1, 1978, so far as the recommendation relating to enhancement of retirement age from 55 years to 58 years the same was implemented only with effect from October 29, 1979. The rules thus divide the Government servants for the purpose of pension into two parts Part-I applying to all Government servants who were in service on 29th October, 1979 and Part II applying to all Government servants who retired/died in between 1st April, 1978 and 28th October, 1979. The Supreme Court rejected the contention of the petitioners in the said case that by the said rules such action of creating of two categories of pensioners for different rates of pension were arbitrary. The State Government in the said case contended that the age of superannuation as recommended by the Pay Commission could not be implemented retrospectively as the same would have led to lot of difficulty but the employees those who retired after April 1, 1978 but before 29th October, 1979, the Government gave them number of benefits, namely pension formula was increased from 33/80 to 30/60, formula for inclusion of gratuity was increased of 1/3rd of emoluments of each completed 6 months period of qualifying service subject to a maximum of 20 months emoluments and limited to Rs.30,000/-. Earlier the formula was 1/4th of pay for every six months service subject to a maximum of 16½ times and emoluments limited to Rs.30,000/-. The family pension was increased to 30% of the last drawn pay without any maximum limit. Earlier the formula was 1/4th of pay for every six months service subject to a maximum of 16½ times and emoluments limited to Rs.30,000/-. The family pension was increased to 30% of the last drawn pay without any maximum limit. Earlier the rates of Family pension were different for different ranges of pay and the minimum was Rs.60/- and maximum Rs.250/-. It is because of the said fact the Supreme Court in the said case holds such distinction to be reasonable as the petitioners in the said case, were given such other benefit of increase pension, gratuity and family pension. 26. In the case of Retired Insurance Employees' Association vs. Union of India (supra), Justice V.K. Gupta of our High Court upon which also reliance has been placed by the learned Counsel appearing for respondent, was considering a question whether the cut off date of 1st January, 1986 in the Life Insurance Corporation of India (Employees) Pension Rules, 1995 is reasonable or not. The petitioners in the said case claimed that by prescribing such cut off dates the respondents discriminate against them in the matter of determining the eligibility in the grant of pension of superannuation and if such discrimination is removed they also become eligible for the benefit. Admittedly all the petitioners in the said case retired prior to 1st January, 1986. Long after their retirement the Central Government promulgamated the aforesaid 1995 Pension Rules under which the employees working in the L.I.C. were granted the benefit of pension after retirement instead of the then prevailing Provident Fund Scheme. His Lordship after relying upon the decision of the Supreme Court in the aforesaid case of Krishna Kumar (supra) and All India Reserve Bank Retired Officer' Association (supra) held that in the D.S. Nakara's case (supra) the Supreme Court while dwelling upon the concept of class legislation had clearly in mind the fact that the pensioners as a whole constitute one class whereas the aforesaid two subsequent judgments the Supreme Court held that the serving employees and retired employees were on two different classes. 27. But in the instant case as stated hereinafter all the applicants including the present petitioners who applied under the aforesaid voluntary retirement scheme and whose applications were also accepted before 29th May, 1998 constitute a single homogenous class. Further distinction in such class cannot be permissible on such fortuitous circumstances. 27. But in the instant case as stated hereinafter all the applicants including the present petitioners who applied under the aforesaid voluntary retirement scheme and whose applications were also accepted before 29th May, 1998 constitute a single homogenous class. Further distinction in such class cannot be permissible on such fortuitous circumstances. The ratio of the aforesaid decision therefore would not be applicable in the instant case. 28. For the reasons stated above the writ application succeeds and the same is hereby allowed. Let a writ in the nature of Mandamus be issued directing the respondent to extend the benefit of the aforesaid modified voluntary retirement scheme as contained in Circular No. PRS (CF)NR-98/I/MODI/262 dated 29th of May, 1998 to the writ petitioners and to take all appropriate steps in respect thereof within two months from the communication of the order. There will be no order as to costs. Let W.P. No. 20623(W) of 1998 and W.P. No. 18819(W) of 1998 be treated as on day's list and be governed by the same order. Learned Advocate for the respondents prays for stay of operation of the order; there shall be stay of operation of the order till three weeks after reopening of the court after X'mas Vacation. Urgent xerox certified copy, if applied for, be supplied expeditiously. Writ applications are allowed.