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Madhya Pradesh High Court · body

2006 DIGILAW 1001 (MP)

Rajesh Sharma v. State of M. P.

2006-08-22

S.K.GANGELE

body2006
ORDER S.K. Gangele, J. 1. Shri R.D. Jain, Sr. Advocate with Pawan Dwivedi and Shri D.S. Tomar, Advocates for the Petitioners. Shri Vivek Khedkar, Government Advocate for State. Shri Prashant Sharma with Shri S.S. Rajput, Advocate for Respondent No. 3. The Petitioners, who are employees of the Madhya Pradesh State Road Transport Corporation have filed the petition with regard to providing them alternative employments in other Government Undertakings or their absorption in the service of State Government. The Petitioners further prayed that the Respondents be restrained from implementing the Voluntary Retirement Scheme, 2005. 2. The Madhya Pradesh State Road Transport Corporation was incorporated on 1-1-1962 under the provisions of Road Transport Corporation Act, 1950. The Corporation framed rules and regulations with regard to appointments of its employees. The regulations have been named as M.P. State Road Transport Corporation Employees Services Regulations, 1959. The State Road Transport Corporation has been running in heavy loss even though it was not able to pay the retiral dues of its employees within time. On 31st March, 2004, the total loss to the Corporation was Rs. 735 Crores and the liability was Rs. 1033.68 Crores. The Corporation had to pay the retiral dues including payment to L.I.C., which is near about Rs. 183.87 Crores. Besides this the Corporation had been running in continuous loss of Rs. 5 Crores per month. Looking to the above facts, the Corporation and the State Government have taken a decision to close the Corporation because it was not possible to restructure the Corporation and run it on profit basis. At that time, near about 10 thousands employees had been working in the Corporation. The Cabinet took a decision to close the Corporation and submitted its recommendation to the Central Government. The Central Government vide letter dated 23rd March, 2005 granted the permission to the State Government to close the State Road Transport Corporation in terms of Section 39(1) of the Road Transport Corporation Act, 1950. The Central Government also advised the State Government to safeguard the interest of employees of M.P. State Road Transport Corporation. 3. The Corporation introduced a scheme named as Voluntary Retirement Scheme, 2005 (V.R.S. 2005), copy of which has been filed by the Petitioners and also by the Respondents. As per the scheme, the employees would be entitled to get two months extra salary if they opt for V.R.S., except other emoluments. 3. The Corporation introduced a scheme named as Voluntary Retirement Scheme, 2005 (V.R.S. 2005), copy of which has been filed by the Petitioners and also by the Respondents. As per the scheme, the employees would be entitled to get two months extra salary if they opt for V.R.S., except other emoluments. It has also been mentioned in the V.R.S., that the employee would get the amount which would be equal to the amount payable after his retirement of normal age of 58 years. It has further been mentioned that no employee would get the amount above Rs. 5 Lacs under the aforesaid V.R.S. 2005. 4. 90% employees have opted the V.R.S., and in the present case some employees did not apply for V.R.S., and filed petitions before this Court. In Gwalior region near about 127 persons have not opted for V.R.S, and they filed petitions before this Court. In the present petition the number of Petitioners are 29. Some employees, who opted for V.R.S. also filed petitions. 5. The contention of learned Sr. Advocate Shri R.D. Jain, counsel for the Petitioners is that it is the duty of the Corporation to provide alternative employment to the Petitioners and it is also duty of the State Government to absorb the Petitioners in the Government service or any other alternative employment in other State owned Corporations. It has further been submitted that earlier also the employees of the Corporation have been absorbed in the Government Departments or other State owned Corporations. In support of his arguments he placed reliance on the decision in the case of Government of Tamil Nadu and another vs. G. Mohamed Ameenuddin and others, AIR 1999 SC 2202 , Andhra University through its Registrar vs. M. Sivaram and others, AIR 1994 SC 1668 , Kapila Hingorani vs. State of Bihar, (2005) 2 SCC 262 . 6. Contrary to this, Learned Counsel for Respondents No. 1 and 2 has submitted that it is not possible for the State Government to absorb the Petitioners because there are excess persons working in the State services. It has further been submitted that for proper rehabilitation, the scheme in the tune of V.R.S. 2005 has been framed and more than 90% employees have accepted V.R.S., which shows that the said scheme is effective in all manner. 7. It has further been submitted that for proper rehabilitation, the scheme in the tune of V.R.S. 2005 has been framed and more than 90% employees have accepted V.R.S., which shows that the said scheme is effective in all manner. 7. Learned Counsel for Respondent No. 3 State Road Transport Corporation has submitted that the Corporation was in heavy loss, hence, there was no alternative except close the Corporation and interest of the employees have been protected and the Corporation is following provisions of Labour Laws and the other laws on account of closure of the Corporation. In support of his argument he placed reliance on the decision of the Apex Court in the case of Secretary, State of Karnataka and others vs. Uma Devi (3) and others, (2006) 4 SCC 1 , Avas Vikas Sansthan and anothers vs. Avas Vikas Sansthan Engineers Assn., and others, (2006) 4 SCC 1 32 and HEC Voluntary Retd. Employees Welfare Society and another vs. Heavy Engineering Corpn. Ltd., and others, (2006) 3 SCC 708 . 8. From the facts as stated above, undisputedly all the Petitioners have been employed by the Respondent No. 3 Madhya Pradesh State Road Transport Corporation. The appointment orders of the Petitioners have been filed to this effect. The State Road Transport Corporation has framed Regulations named as M.P. State Road Transport Corporation Employees Services Regulation, 1959 and these regulations provides method of recruitment and other service conditions of the Petitioners. Although the State Government has some control about the working of the Corporation whereas as far as the method of Recruitment and Sanction of posts is concerned, it cannot be said that the Petitioners who are employees of the Corporation are the employees of the State Government as held by the Hon'ble Supreme Court as under in the case of Officers and Supervisors of I.D.P.L. vs. Chairman and M.D., I.D.P.L. and others, reported in (2003) 6 SCC 490 : Since the employees of government companies are not government servants, they have absolutely no legal right to claim that the Government should pay their salary or that the additional expenditure incurred on account of revision of their pay scales should be met by the Government. Being employees of the companies, it is the responsibility of the companies to pay them salary and if the company is sustaining losses continuously over a period and does not have the financial capacity to revise or enhance the pay scale, the Petitioners, cannot claim any legal right to ask for a direction to the Central Government to meet the additional expenditure which may be incurred on account of revision of pay scales. The economic viability or the financial capacity of the employer is an important factor which cannot be ignored while the wage structure and revision of pay scales of the employees. The Respondent Company had been suffering heavy losses for the last many years. The units of the Company have already suspended their operations and as of date no unit is functioning. In such a situation the Petitioners cannot legitimately claim that their pay scales should necessarily be revised and enhanced even though the organization in which they are working are making continuous losses and are deeply in the red. The Petitioners having applied for V.R.S., it is not open to them to contend that they are entitled to pay revision. 9. The next point raised by the learned Sr. Counsel for the Petitioners is with regard to issuance of direction for absorption of the Petitioners in the Government Departments or other State owned Corporations. In my opinion, this prayer cannot be accepted because as held earlier the Petitioners are not the employees of the State Government. From the facts and figure available with regard to loss incurred by the Corporation, it is clear that the Government had no alternative but to close the Corporation and that decision cannot be said to be arbitrary or illegal. The Government has also introduced the V.R.S. 2005 and the said scheme has not been challenged by the Petitioners. It has not been put forth by the Petitioners that the V.R.S. is arbitrary or illegal. In my opinion, the proper care has been taken by the State Government and the Corporation in formulation of V.R.S. with regard to interest of the employees. 10. The Hon'ble Supreme Court in the case of Avas Vikas Sansthan and another vs. Avas Vikas Sansthan Engineers Assn. In my opinion, the proper care has been taken by the State Government and the Corporation in formulation of V.R.S. with regard to interest of the employees. 10. The Hon'ble Supreme Court in the case of Avas Vikas Sansthan and another vs. Avas Vikas Sansthan Engineers Assn. and others, (2006) 4 SCC 1 32 has held as under with regard to power of the employer to abolish the post: The power to abolish any civil post is inherent in every sovereign Government and such abolition will not entail any right on the person holding the abolished post the right to re-employment or to hold the same post, (para 50). The power to abolish a post which may result in the holder thereof ceasing to be a government servant has got to be recognized. The measure of economy and the need for streamlining the administration to make it more efficient may induce any State Government to make alterations in the staffing pattern of the civil services necessitating either the increase or the decrease in the number of posts or abolition of posts. In such an event, a department which was abolished or abandoned wholly or partially for want of funds, the Court cannot, by a writ of mandamus, direct the employer to continue employing such employees as have been dislodged. After the liquidation of AVS, due to any reason unless such liquidation was mala fide, there existed no right in the employees of such liquidated society for re-employment. (para 59 and 48). Therefore, the decision of the High Court granting relief of re-employment to the employees of AVS, after its dissolution with pay protection, seniority and pension is erroneous. The finding of the High Court is not fair to common conscience and the same will act as a disincentive to the State to float schemes for temporary employment in future, thereby reducing the employment opportunities of many. 11. The Constitution Bench of the Hon'ble Supreme Court in the case of Secretary, State of Karnataka vs. Uma Devi, (2006) 4 SCC 1 has held with regard to power of the Court regarding policy decision taken by the Government looking to the economic condition: When the Court is approached for relief by way of a writ, the Court has necessarily to ask itself whether the person before it had any legal right to be enforced. Considered in the light of the very clear constitutional scheme, it cannot be said that the temporary, contractual, casual or daily-wage employees have been able to establish a legal right to be made permanent even though they have never been appointed in terms of the relevant rules or in adherence of Articles 14 and 16 of the Constitution. It is therefore, not possible to accept the argument that the State action in not regularizing the employees was not fair within the framework of the rule of law. 12. Hence on the basis of above judgments and law laid down by the Hon'ble Supreme Court, in my opinion, the Court has limited power with regard to interfere with the policy decision taken by the Government with regard to closure of the State Road Transport Corporation. It is also clear from the facts that out of 9 thousand employees near about 400 employees did not opt for V.R.S., it shows that the majority of the employees have accepted the V.R.S. 13. Apart from this the matter is looked into an another angle also, the employer has absolute right to choose the method of recruitment and appointment to its employees looking to its need and by way of open recruitment the employer would get efficient and intelligent persons but if the Court forced the employer to absorb or appoint the persons against its wishes then certainly, functioning of the Government Department or the Corporation would be affected. 14. The Constitution Bench of the Supreme Court in the case of Secretary, State of Karnataka (supra) has held: The High Court's acting under Article 226 should not, therefore, ordinarily issue directions for absorption, regularization, or permanent continuance unless the recruitment itself was made regularly and in terms of the constitutional scheme. Merely, because an employee had continued under cover of an order of the Court, under "litigious employment" he would not be entitled to any right to be absorbed or made permanent in the service. Merely, because an employee had continued under cover of an order of the Court, under "litigious employment" he would not be entitled to any right to be absorbed or made permanent in the service. In fact, in such cases, the High Court may not be justified in issuing interim directions, since, after all, if ultimately the employee approaching it is found entitled to relief, it may be possible for it to mould the relief in such a manner that ultimately no prejudice will be caused to him, whereas an interim direction to continue his employment would hold up the regular procedure for selection or impose on the State the burden on paying an employee who is really not required. The Courts must be careful in ensuring that they do not interfere unduly with the economic arrangement of its affairs by the State or its instrumentalities or lend themselves the instruments to facilitate the by passing of the constitutional and statutory mandates. 15. Besides this, the State Government has also enacted the Act named as Madhya Pradesh Sarvjanik Upakaramom Ke Karmchariyon Ka Lok Seva Me Samviliyan Pratishedh (Sansodhan) Adhiniyam, 2003 and as per proviso Section 3(2) as per the aforesaid Act under the exceptional circumstances, the State Government has power to absorb the employee of public sector in public service. It clearly shows that ordinarily, the State Government has not provided the right of absorption to the employees of the public sector undertakings. 16. The learned Sr. Counsel for the Petitioners has argued that some employees of the M.P.R.T.C., have been absorbed in the State Government or other State owned Corporation. As stated earlier certainly the State Government has discretion to look extra ordinary qualification of employees working in public sector undertakings to absorb in Government service, but in my opinion, this Court cannot issue general direction in favour of the Petitioners with regard to absorption in the service of the State Government. Petitioners have submitted their applications for this purpose and it is the discretion of the State Government to consider the same as per the requirement and the qualifications. 17. In my opinion, the proper care has been taken by the Government and M.P.R.T.C., with regard to interest of the employees of the M.P.R.T.C., after closure. Hence, I do not find any merit in this petition, it is hereby dismissed. 18. 17. In my opinion, the proper care has been taken by the Government and M.P.R.T.C., with regard to interest of the employees of the M.P.R.T.C., after closure. Hence, I do not find any merit in this petition, it is hereby dismissed. 18. It is made clear that the Petitioners may file application for obtaining V.R.S., and the Corporation Respondent No. 3 would take independent decision without any prejudice on the aforesaid application within a period of two months from the date of receipt of certified copy of this order. 19. Some of the Petitioners have already submitted applications for withdrawal of V.R.S. applications. In my opinion, if the Petitioners want to withdraw their applications for V.R.S. they can do so and they can approach under the provisions of M.P.I.R. Act, Petitioners have alternative efficacious remedy under the aforesaid Act. Hence, the petition of the Petitioners who filed applications for withdrawal from V.R.S. is hereby dismissed on the ground of availability of alternative remedy. 20. Hence, petition is dismissed with the aforesaid directions.