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2005 DIGILAW 121 (GUJ)

B. R. SHAH v. GUJ. IND. INVESTMENT CORPN. LTD.

2005-02-24

R.M.DOSHIT, S.R.BRAHMBHATT

body2005
R. M. DOSHIT, J. ( 1 ) THE appellants in these two appeals preferred under clause 15 of the Letters Patent are former employees of the Gujarat Industrial Investment corporation, the respondent no. 1 herein (hereinafter referred to as " the Corporation" ). The appellants challenge the judgment and order dated 17th March, 2001 passed by the learned Single Judge in Special Civil applications Nos. 5811 of 1994 and 5903 of 1994. ( 2 ) THE Government of Gujarat under its Circular dated 2nd September, 1993 framed a Voluntary Retirement scheme for the employees of public sector enterprises of the Gujarat State. The preamble of the said Circular provided that the said scheme was under consideration of the Government of Gujarat and that the Government had approved a Model Voluntary Retirement Scheme and decided that the Board of Directors be permitted to implement any suitable scheme taking into account its financial condition, ability to pay the benefits and other aspects provided that the benefits did not exceed those approved under the Model Scheme. Clause (i) thereof provided for the eligibility of the personnel to avail of the voluntary retirement under the said Scheme; Clause (ii) thereof reserved the right not to grant voluntary retirement for the reasons to be recorded in writing to the management of the enterprise; Clause (iii) provided for the monetary benefits payable to the personnel availing of the voluntary retirement under the said scheme. Clause-2 thereof provided, inter alia, that the scheme for voluntary retirement could be introduced by the public sector enterprises with the approval of the concerned administrative department. Clause-4 of the said scheme provided that the scheme shall remain in force for the period not exceeding 90 days from the date of its formal announcement by an enterprise. ( 3 ) IT appears that the said Scheme was adopted by the Corporation. The Corporation under Office Order No. 340 dated 2nd November, 1993 announced the voluntary retirement scheme in accordance with the said Circular dated 2nd September, 1993. The said Scheme was made operative for a period of 90 days with effect from 3rd november, 1993. The employees desirous of availing of the benefit under the said Scheme were invited to apply in the prescribed format. Pursuant to the said Office order the appellants filled in requisite form and opted for Voluntary Retirement under the said Scheme. The said Scheme was made operative for a period of 90 days with effect from 3rd november, 1993. The employees desirous of availing of the benefit under the said Scheme were invited to apply in the prescribed format. Pursuant to the said Office order the appellants filled in requisite form and opted for Voluntary Retirement under the said Scheme. The application of each appellant was accepted by the corporation. Each appellant was informed that the management had decided to accept the said request and relieve him or her from the services of the Corporation. The exact details pertaining to the date of relief from the Corporation and the compensation payable to the concerned applicant would be intimated separately. As no intimation was received from the Corporation some of the appellants made an inquiry with the Corporation and informed the Corporation that they would relieve themselves from the service of the Corporation. In answer to such communication, by communication dated 15th april, 1994 the Corporation informed the concerned applicant that the Voluntary Retirement Scheme had been taken under review by the State Government and that the scheme was kept under abeyance. The applicants were informed that it would not be possible for the corporation to relieve him or her as desired. Feeling aggrieved the appellants preferred above writ petitions. Pending the writ petitions by order dated 6th May, 1994 made by the learned Single Judge, without prejudice to the rights and contentions in the writ petitions, each appellant was permitted to resign from the service of the corporation. We are informed that pursuant to the said order each appellant had resigned form the service of the corporation. The said resignations had been accepted and the appellants were relieved from the service of the corporation. The question, therefore, that remained was that of the monetary benefits flowing from the Voluntary retirement Scheme. ( 4 ) THE learned Single Judge has considered the factum that the Corporation is a wholly Government owned organisation and the Articles of Association allows the state Government to issue instructions to the Corporation as it may consider necessary in regard to the finance and business affairs of the company. The Corporation and its directors are duty bound to comply with such instructions and to give immediate effect to the directions or instructions so issued. The Corporation and its directors are duty bound to comply with such instructions and to give immediate effect to the directions or instructions so issued. By the impugned judgment and order the learned Single Judge considered the plea of binding contract and the plea of promissory estoppel raised by the appellants and rejected the same. The petitions are dismissed. Therefore, the present appeals. ( 5 ) MR. Nanavati has submitted that the above referred Office Order dated 2nd November, 1993 was an invitation to the employees of the Corporation to apply for voluntary retirement under the above referred Scheme dated 2nd November, 1993. In answer to the said invitation the appellants had made applications for voluntary retirement. The said applications were accepted by the management of the Corporation. Such acceptance was communicated to the appellants under communication dated 8th February, 1994. The said acceptance by the Corporation formed a completed contract binding to the parties. The Corporation was duty bound to relieve the appellants and to pay the monetary benefits flowing from the said Circular dated 2nd september, 1993. ( 6 ) MR. Nanavati has relied upon the judgment of the supreme Court in the matter of BANK OF INDIA and ORS Vs. O. P. SWARNAKAR ETC. [2002 (9) SCALE, pg. 519]. He has particularly relied upon paragraph 67 which reads as under. "67. THE proposal of the employee when accepted by the Bank would constitute a promise within the meaning of Section 2 (b) of the Act. Only then the promise becomes an enforceable contract. In the instant case the banks when floating the scheme did not signify that on the employees assenting thereto a concluded contract would come into being in terms whereof they would be permitted to retire voluntarily and get the benefits thereunder. "the said matter arose from a Voluntary Retirement scheme floated by the nationalised Banks viz; State Bank of India and the Bank of India. In the said scheme the concerned employees of the banks after having opted for voluntary retirement under the concerned scheme withdrew from the option at a later date. The said withdrawal was not accepted by the concerned bank. Such bank employees were compelled to take voluntary retirement as applied by them. Under the terms of the relevant Scheme the application for voluntary retirement once made was irrevocable and an employee was not entitled to withdraw from the Scheme. The said withdrawal was not accepted by the concerned bank. Such bank employees were compelled to take voluntary retirement as applied by them. Under the terms of the relevant Scheme the application for voluntary retirement once made was irrevocable and an employee was not entitled to withdraw from the Scheme. However the Bank had reserved a right to accept or to reject such application on its own. In the appeals preferred before the Honourable Supreme court, One of the questions that arose before the Court was:" Whether an application by an employee to secure voluntary retirement under the Voluntary Retirement Scheme (VRS) can be withdrawn by such an employee before the same is accepted by the Competent Authority though the scheme contained an express stipulation that an application made thereunder is irrevocable and the employee will have no right to withdraw the application once submitted ? "in answer to the said question the Honourable court held that " a contract of employment is also a subject matter of contract. Unless governed by a statute or statutory rules the provisions of the Indian Contract act would be only applicable at the formulation of the contract as also the determination thereof. " the Court has further held that "furthermore, in terms of the said scheme no consideration passed so as to constitute an agreement. Once it is found that by giving their option under the scheme, the employees did not derive an enforceable right, the same in absence of any consideration would be void in terms of Section 2 (g) of the Contract Act as opposed to Section 2 (h) thereof. " ( 7 ) IN view of the above and other observations made in the said judgment, we are of the opinion that, in the present case also by communication of acceptance of the applications for voluntary retirement made by the appellants to be made effective from a future uncertain date, without passing of any consideration under the scheme, no binding or enforceable contract came into existence. The claim of the appellants of a right to take voluntary retirement is wholly misconceived and has rightly been rejected by the learned Single Judge. ( 8 ) AS to the plea of promissory estoppel except some vague statements made in paragraph 2 in Special Civil application No. 5811 of 1994 and paragraph 7 of Special civil Application no. The claim of the appellants of a right to take voluntary retirement is wholly misconceived and has rightly been rejected by the learned Single Judge. ( 8 ) AS to the plea of promissory estoppel except some vague statements made in paragraph 2 in Special Civil application No. 5811 of 1994 and paragraph 7 of Special civil Application no. 5903 of 1994 the appellants have not established that acting upon the communication dated 8th February, 1994 the appellants had altered their position to their detriment. The plea of promissory estoppel, therefore, has rightly been rejected by the learned Single Judge. ( 9 ) FOR the aforesaid reasons both these appeals are dismissed. Parties shall bear their own cost. Registry shall maintain copy of this order in each appeal. .