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2006 DIGILAW 713 (GAU)

T. K. Chakraborty v. State of Arunachal Pradesh

2006-08-04

AMITAVA ROY

body2006
JUDGMENT Amitava Roy, J. 1. The Petitioners have impugned the decision of the Arunachal Pradesh Forest Corporation Ltd. (hereinafter referred to as the 'Corporation') to compulsorily retire them from service and prayed for an appropriate writ directing the Respondents to continue with them in its rolls. 2. I have heard Mr. C. Baruah, Senior Advocate assisted by Mr. R.K. Dutta, Advocate for the Petitioners, Mr. A. Apang, Senior Govt. Advocate, Arunachal Pradesh for the Respondent Nos. 1 and 2 and Mr. S.N. Sarma, Senior Advocate assisted by Mr. K. Jini, Advocate for the Respondent Nos. 3 and 4. 3. A brief introduction of the Corporation before adverting to the rival pleadings would be essential keeping the controversy in mind. The Corporation being registered under the Companies Act, 1956 was set up in the year 1977 for efficient utilization of forest resources in the State with an eye to the welfare of the Scheduled Tribe people thereof. The Memorandum of Association of the Corporation outlined the various activities contemplated to achieve such objectives. It is a wholly owned Govt. of Arunachal Pradesh undertaking. Initially, the Corporation dealt in timbers and later established its saw mills along with a small plywood factory. It thereafter started small tea estates on experimental basis and also raised coffee and rubber plantations. Though it established five tea estates, it could not set up any factory for production of tea. The green tea leaves produced in its tea estates were sold to the neighbouring tea estates in the State of Assam. The Corporation however, was earning profit from wood based industries. Due to the ban imposed by the Apex Court in the year 1996 on the felling of trees in the State, the Corporation had to stop extraction and marking of timbers for which its financial condition started dwindling. Situated thus, the Corporation in 2003 had to introduce a Voluntary Retirement Scheme (VRS) for reducing its employees and downsizing its business activities. In the said year 334 regular employees of the Corporation opted for VRS and were accordingly retired after obtaining a loan of Rs. 12 crores from the UTI Bank because of the severe resource crunch. Following the closure of the wood based industries the financial condition of the Corporation worsened. Neither the tea estates nor the coffee and rubber plantations yielded any profit. 12 crores from the UTI Bank because of the severe resource crunch. Following the closure of the wood based industries the financial condition of the Corporation worsened. Neither the tea estates nor the coffee and rubber plantations yielded any profit. For the acute shortage of funds, the Corporation could not regularly pay the salary of its employees which was to the tune of Rs. 15.85 lakhs per month. Its loss started mounting as well which for the financial year 2003-2004 exceeded Rs. 10 crores and consequently it could not pay the salary and wages to its employees from April, 2005. Though the Corporation initially requisitioned the services of the Government officials from various departments of the State on deputation, it eventually recruited its staff and officers in terms of the Arunachal Pradesh Forest Corporation Service Rules, 1977 (hereinafter as the 'Rules') defining and governing the terms and conditions of appointment and services of its employees. These are recorded facts and the parties are ad idem on these. 4. The Petitioners version is that the Board of Directors of the Corporation in its 126th meeting held on 29.7.2004 in the background of the plummeting financial capability decided inter alia to restructure the set up and resolved that 24 permanent employees should be retained and the rest be offered VRs. It was decided to request the Govt. of India to provided funds to the tune of Rs. 3.50 crores. Noticing the prospects of receipt of funds from the Govt. of India for recognizing Public Sector Undertakings, it was further decided to forward a detailed proposal to the Central Government. In its 127th meeting held on 20.9.2005 the Board of Directors of the Corporation while reiterating its decision on the issue expressed its view that in absence of timber operation and poor performance of the cash crops, the only alternative was to further downsize the staff by second phase of VRS by obtaining financial support from the State Govt. It was proposed to maintain a residual organization to maintain which an annual expenditure of Rs. 40 lakhs was assessed. The Board of Directors decided to retain only the key employees in the residual structure as per the terms and conditions to be decided by the management. It was however decided that the management would pursue the proposal of redeployment of the officials of the Corporation in other departments of the Government. 40 lakhs was assessed. The Board of Directors decided to retain only the key employees in the residual structure as per the terms and conditions to be decided by the management. It was however decided that the management would pursue the proposal of redeployment of the officials of the Corporation in other departments of the Government. Thereafter on 5.11.2005 the Arunachal Pradesh Forest Corporation Ltd. Voluntary Retirement (Modified) Scheme, 2005 (hereinafter referred to as the 'VRS-2005') was notified presenting it to be a scheme with the objective of providing an attractive exit route to the employees of the Corporation before they superannuated in the normal course, to obviate the risk of the Corporation becoming bankrupt. The scheme mentioned that the State Government had provided an one time financial assistance for VRS of surplus employees and all employees (both regular and ad hoc) were requested to avail the opportunity. The scheme declared that the Corporation would not guarantee payment of VRS compensation and running salary to those employees who would not opt therefore and that their fate would be decided as per the orders of the Board and the State Government. The employees were required to submit their option within one month from the date of issue of the notification i.e. on or before 5.12.2005. By a communication of the same date from the Deputy Conservator of Forests (S&P), Govt. of Arunachal Pradesh, the Managing Director of the Corporation was conveyed the decision of the Government to provide one time grant of Rs. 5 crores from the State Plan allocation made under the Forestry & Wildlife sector for the year 2005-06 to meet up the requirement of salary, wages of the Corporation against VRS and running expenses of Rs. 40 lakhs for one year for the skeletal structure of the Corporation. It was thereafter that the Board of Directors of the Corporation in its 128th meeting held on 27.12.2005 decided that the employees not opting for the VRS 2005 would be compulsorily retired with the same package of benefit as extendable to the VRS optees. It however decided to review the situation after one year i.e. December, 2006 when its recommendations for revival or winding up would be considered. It however decided to review the situation after one year i.e. December, 2006 when its recommendations for revival or winding up would be considered. The management was authorized to engage some key employees on contract basis for completing the residual works of the Corporation like regularization of old and current outstanding dues, finalization of various court cases, completion of the. VRS/CRS process, compilation of up to date accounts of the Corporation etc. The monthly emoluments for the different categories of employees to be appointed on contract basis were also fixed. Non optees were decided to be compulsorily retired with effect from 31.12.2005 clarifying that their salary etc. would not be the liability of the Corporation/State Government thereafter. As a follow up of the above resolution, the Managing Director of the Corporation on 28.12.2005 passed an order compulsorily retiring the Petitioners with effect from 31.12.2005, they being the non optees of VRS 2005. In fact, 39 regular and 6 ad hoc employees had responded to the said scheme and were accordingly released on voluntary retirement. By notification dated 29.12.2005 the Managing Director of the Corporation declared all the regular posts of the Corporation to be surplus and abolished the same reiterating that the Management/Board/State Govt. would not be responsible for the salary of such compulsorily retired employees beyond 31.12.2005. 5. The Petitioners have complained that after the removal of the regular employees of the Corporation, it appointed 30 employees of different categories on contract/deputation basis by hand picking them. The Petitioner No. 1, a Deputy Manager was replaced by officials of the same grade on deputation from the Department of Environment and Forest, Government of Arunachal Pradesh, one of them being Shri Keshav Kumar, IFS, ACF designated as Divisional Manager vide order dated 26-30.12.2005. The Petitioners have maintained that most of the contract employees have been selected from the VRS optees, though the said scheme prohibits their reappointment under the Corporation or its Unit/Undertaking/subsidiaries. According to them, the list also contained the names of some of them from whom no consent was obtained. The Petitioners have maintained that most of the contract employees have been selected from the VRS optees, though the said scheme prohibits their reappointment under the Corporation or its Unit/Undertaking/subsidiaries. According to them, the list also contained the names of some of them from whom no consent was obtained. Being aggrieved, the Arunachal Pradesh Forest Corporation Limited Employees Union (hereinafter referred to as the 'Union') on 3.1.2006 submitted a representation before the Managing Director of the Corporation requesting him inter alia to withdraw the order of compulsory retirement and to entrust/allocate the works to the non VRS optees, submit proposal to the Government for revival of the Corporation and release pending salary and wages from April, 2005. A copy of the said representation was also forwarded to the Principal Secretary (Env. & Forests) & Principal Chief Conservator of Forests State of Arunachal Pradesh. The Managing Director of the Corporation by his reply dated 4.1.2006 clarified that the order of compulsory retirement cannot be withdrawn and that the contract employees had been engaged to complete the residual works of the Corporation. It was intimated that the proposal for releasing funds for the pending salary and wages had been submitted to the Govt. The Petitioners were directed to approach the Government for their engagement in other departments. 6. In its affidavit in opposition, the Corporation has pleaded that on the closure of its wood based industries its financial condition became alarming and due to acute shortage of funds and escalating losses it became impracticable to pay the salary of its employees. Situated thus, its Board of Directors in its meeting held on 20.9.2005 decided to introduce the second phase of VRS authorizing the Managing Director of the Corporation to approach the State Government for funds. It was decided to retain some key employees for completion of some essential balance works. Accordingly the VRS was circulated on 5.11.2005 as all the employees of the Corporation had become surplus. Because of the prevailing exceptional circumstances, no eligibility criteria was prescribed in the scheme and all employees were offered VRS except the Government officials who were on deputation and those on contract basis including contingency workers. According to the Corporation, the VRS was floated after the receipt of government approval to provide one time grant of Rs. 5 crores. Because of the prevailing exceptional circumstances, no eligibility criteria was prescribed in the scheme and all employees were offered VRS except the Government officials who were on deputation and those on contract basis including contingency workers. According to the Corporation, the VRS was floated after the receipt of government approval to provide one time grant of Rs. 5 crores. The Board in its meeting held on 27.12.2005 decided that after providing VRS to the employees, some accounts personnel be engaged on contract basis for the purpose of completing the arrear accounts and authorized the management to make such engagement. The Board was of the view that as all the employees had become surplus, those who did not opt for VRS be compulsorily retired with identical benefits. Pursuant thereto, the office order dated 28.12.2005 compulsorily retiring the non optees was issued. While denying the allegation of appointment on contract basis by adopting a pick and choose method, the Corporation has asserted that it had engaged 29 ex-employees in consideration of their earlier performance, particularly for completion of its remaining works. The allegation that after retirement of the Petitioner No. 1, three officials on deputation had been placed in his post was denied. The Corporation asserted that the Petitioner No. 1 in the meantime, had approached this Court with WP (C) 420(AP)/2002 with a prayer for permitting him to go to voluntary retirement which was disposed of with the observation that he was entitled there for provided that such scheme was adopted and implemented by the Corporation. According to it, Sri Keshav Kumar, IFS, ACF has been deputed only for the purpose of completion of residual works as has been noted by the Board in its 128th meeting held on 27.12.2005. The Corporation has affirmed in unambiguous terms that the order of compulsory retirement cannot be withdrawn as the management has no resources to pay the salary of 49 non optees Petitioners. It reiterated that the contract appointments have been provided only to complete the accounts, residual works and for protection of the properties of the Corporation which are purely need based. As the Cash Crops and Saw Mills have run into losses for many years the Board had decided to lease out the same. It reiterated that the contract appointments have been provided only to complete the accounts, residual works and for protection of the properties of the Corporation which are purely need based. As the Cash Crops and Saw Mills have run into losses for many years the Board had decided to lease out the same. It has maintained that the funds for the Medicinal Plants and Bamboo Project obtained from the State Government have in the meantime been seized by the Income Tax Department. According to the Corporation in the present circumstances, there is no possibility of its revival and that the Board has decided that it would finally determine after one year as to whether it could be revived or should be wound up. Justifying the action of compulsorily retiring the non optees, the Corporation has pleaded that the action was warranted in the unusual and unprecedented state of affairs so much so that in VRS 2005 itself it was mentioned that if the employees did not opt there for, the Corporation due to its financial stringency would not be able to pay their salary from January, 2006. To avoid any inconvenience and prejudice to the non optees, they were offered the same package of benefit as extended to those agreeable to take the scheme. The Corporation asserted that the VRS 2005 was floated after obtaining State Government's approval to the proposal therefore for which it provided one time grant of Rs. 5 crores for VRS, arrear salary and maintenance cost of the skeletal structure of the Corporation. As the employees were required to retire due to the situation beyond the control of the Corporation, no condition of eligibility was prescribed such as age or length of service therefor. According to the Corporation the compulsory retirement of 49 Petitioners had been with the approval of the competent authority and that it is not possible to allow them to continue in service as it is not in a position to pay their salary. Not only the Corporation was unable to generate its own funds due to the staggering losses, there was no possibility of its revival in the near future. It pleaded that it could not expect continuous financial support from the Government either also for its financial constraints. Not only the Corporation was unable to generate its own funds due to the staggering losses, there was no possibility of its revival in the near future. It pleaded that it could not expect continuous financial support from the Government either also for its financial constraints. It has been asserted that the Petitioners have riot been deprived of their due benefits in law and have not suffered any stigma by their retirement from service. According to the Corporation, the majority of those retired compulsorily belong to Grade C and D and cannot be engaged to execute the remaining residual works which have legal, strategic and financial dimensions. Nevertheless, out of the 29 employees engaged on contract basis 10 belong to the compulsorily retired category. It has been clarified that the contract employees would be released on completion of the works assigned to them and that they have no manner of lien in the Corporation. While reiterating that the Corporation has ho regular employee as on date, it has been pleaded that it being served presently by the State Government officials on deputation/additional assignment and contract appointees. 7. The State Respondents while generally endorsing the Corporation's stand have pleaded that Sri Keshav Kumar, IFS had been deputed to the Corporation for one year and Shri Kamal Dutta, IFS and B. Banerjee, DCF (SFS) have been allowed to hold the additional charge of the office of the Divisional Manager, HQ and Divisional Manager, Deomali of the Corporation in addition to their duties in the Department of Environment and Forests. The answering, Respondents have clarified that their salary etc. is borne by the Department of Environment and Forests. The averment that the funds relating to Bamboo/Cane and other Medical Plan projects released to the Corporation had been attached by the Income Tax Department has been corroborated. Stating that even if the same are released, those cannot be utilized for disbursement of salary and other routine activities of the Corporation, the State Respondents confirmed that an amount of Rs. 5 crores had been released for payment of VRS/CRS to the employees of the Corporation and also for payment of salary and wages to the employees for the period April, 2005 to December, 2005. 5 crores had been released for payment of VRS/CRS to the employees of the Corporation and also for payment of salary and wages to the employees for the period April, 2005 to December, 2005. According to them, redeployment of the surplus employees of the Corporation in the Department of Environment and Forests and other departments cannot be envisaged and it was therefore that the State Government had sanctioned an amount of Rs. 5 crores for implementation of second phase of VRS as a special case and to disburse the arrear salary and wages to its employees as a one time measure. According to them as well, the Corporation's offer to extend the same package of benefits to the employees who did not opt for VRS 2005 being welfare oriented, the impugned action cannot be impeached as discriminatory. The State Respondents have reaffirmed the pleaded stand of the Corporation by asserting that it had no other option but to take this course of action due to continuous losses and non viability to generate necessary funds. The State Respondents also highlighted its financial constraints disabling it to bear the recurring liabilities of the salary of the Corporation's employees. 8. In their reply affidavit, the Petitioners while reiterating their assertions have contended that the Corporation being a wholly owned State Government undertaking it could not have taken an unilateral decision to compulsorily retire them in absence of any approval of the State Government finally close down the Corporation's activities or wind up the same. This, they have contended is evident from the order of the Chief Minister of the State on 26.1.2006, on their representation advising review of the decision of compulsory retirement. 9. This Court while dealing with the prayer for interim relief and noticing that out of 29 employees engaged on contract basis, 19 were amongst those who had opted for voluntary retirement, directed the Corporation to conduct a review so as to identify the contract employees whose duties can be performed by the Petitioners and that if as a result thereof any of the contract employees was required to be displaced, an opportunity of hearing to such affected employee be afforded before replacing him. To the above effect, the Respondent Corporation in its affidavit has placed on record that on review, some jobs had been identified as performable by the compulsorily retired employees. To the above effect, the Respondent Corporation in its affidavit has placed on record that on review, some jobs had been identified as performable by the compulsorily retired employees. Therefore, it issued a fresh contract appointment in respect of 4 Ex-employees from the compulsorily retired category after rescinding the contract with the 3 ex-employees of VRS category and one ex-employee from the CRS category. The Corporation reiterated that the rest of the ex-employees of the compulsorily retired grade cannot be engaged on contract basis for non availability of works. This action has also met with the criticism of the Petitioners as detailed in their rejoinder affidavit. According to them, the Respondent Corporation has approached the issue, inspite of the order of the Court, casually and had engaged 4 of them by removing the Petitioner No. 6. They have also referred to the orders dated 23.11.2001 passed by this Court in WP (C) No. 7953/2001 and dated 10.12.2002 passed in WP (C) No. 7804/2002 restraining the Respondent Corporation from ordering compulsory retirement or retrenchment of the Petitioners therein. 10. Mr. Baruah in the above state of pleadings has argued that the Corporation being a wholly State owned undertaking, had no competence or authority to unilaterally decide on the compulsory retirement of its employees without the approval of the State Government and therefore the impugned decision is per se illegal, arbitrary null and void in absence of any decision of the Government to the said effect. Referring to clause 92 of the Memorandum of Articles of Association of the Corporation requiring the prior decision of the Government on the issue amongst others pertaining to the Rules governing the conditions of services of the Corporation's employees and winding up thereof, the learned Senior counsel has argued that in absence of any such decision, compulsory retirement of the Petitioners is patently impermissible in law. Further, in view of the embargo laid down by the Apex Court in T.N. Godavarman Thirumulkpad, Petitioner v. Union of India and Ors. Respondents (1997) 2 SCC 267 , on retrenchment of workers employed in Saw Mills and other wood based industries pursuant to the ban imposed by it, the impugned decision is per se unsustainable in law. 11. Further, in view of the embargo laid down by the Apex Court in T.N. Godavarman Thirumulkpad, Petitioner v. Union of India and Ors. Respondents (1997) 2 SCC 267 , on retrenchment of workers employed in Saw Mills and other wood based industries pursuant to the ban imposed by it, the impugned decision is per se unsustainable in law. 11. The ban having been relaxed by the Apex Court in (1998) 2 SCC 59 , the plea of financial stringency as a justification for the order of compulsory retirement is irrelevant, he urged. The decision to compulsorily retire the non optees of VRS 2005 having been taken in the Board's meeting held on 27.12.2005, it is apparent that the same was not backed by any approval of the Government and is therefore non est in law. By the same analogy, the decision to abolish all regular posts also lacks authority and is therefore invalid. Mr Baruah urged that the employees of the Corporation being a homogeneous class, the decision to compulsorily retire the non optees of VRS 2005 is arbitrary and discriminatory, there being no intelligible differentia for the purpose to distinguish between the optees and non optees of the scheme. Besides, no prior notice having been served on the Petitioners of the impugned decision, their compulsory retirement from service is ex-facie null and void. According to Mr. Baruah, had such notice been served on them, they would have taken up the matter with the Government which is constitutionally obliged to protect its working force. The learned Counsel has argued that the nature and extent of the activities of the Corporation now pursued are not suggestive of the impending closure thereof and therefore the impugned decision besides being illegal lacks in bonafide as well. There being a ban in the VRS 2005 on re-induction of the optees thereof, the action of the Corporation in engaging ex-employees from the CRS category in manifestly arbitrary. Referring to the letter dated 4.1.2006 addressed by the Managing Director of the Corporation to the Petitioner No. 2 (produced in course of the arguments) and note of the Chief Minister of the State on the Petitioners' representation on the topic, learned Senior counsel has stressed that it is apparent there from that no permission or approval of the State Government had been obtained before implementing the decision of compulsorily retiring the Petitioners. Further, in the face of the two orders dated 23.11.2001 and 10.12.2002 passed by this Court in WP (C) No. 7953/2001 and 7804/2002, the impugned decision could not have been taken in law. Mr. Baruah in support of his submissions has pressed in to service the following decisions of the Apex Court: (1) (1997) 2 SCC 267 : T.N. Godavarman Thirumulkpad Petitioner v. Union of India and Ors. Respondents; (2) (1998) 2 SCC 59 : T.N. Godavarman Thirumulkpad, Petitioner v. Union of India and Ors. Respondents; (3) (2003) 2 SCC 721 : Bank of India and Ors. Appellants v. O.P. Swarnakar and Ors. Respondents. 12. Mr. Sarma as against this has argued that the Government had accorded approval for compulsory retirement or retrenchment of VRS non optees as is evident from the communication dated 1.12.2001 containing the extract of the Cabinet decision pertaining to the Re-structing all Public Sector Undertakings. He therefore, contended that the plea of absence of approval of the State Government, qua, compulsory retirement of the Petitioners is misplaced. The learned Senior counsel has also invited the attention of this Court to the minutes of the meeting of the Board of Directors of the Corporation held on 20.9.2005 resolving to introduce the second phase of VRS and for the purpose to seek financial assistance from the Government to meet the liabilities of salary and wages of its employees/workers and to meet the expenses for maintaining a residual structure of the Corporation. Contending that the Petitioner No. 2 was also a participant therein, the learned Counsel highlighting the various topics discussed in the said meeting argued that it is apparent therefrom that the Corporation was placed in a dismal financial condition justifying introduction of the Compulsory Retirement Scheme (VRS) and retention of its key employees to maintain the skeletal structure temporarily. Mr. Sarma argued on instructions that WP (C) No. 7953/2001 had been dismissed for default on 9.1.2003, but though restored by order dated 24.2.2003 passed in Misc. Case No. 31 (AP) 03, the interim order passed therein restraining compulsory retirement was not revived. Similarly, WP (C) No. 7804/2002 had been dismissed on 23.6.2003. Therefore, on the date of the impugned decision none of the interim order was in force. The learned Senior counsel has maintained that VRS 2005 was floated by extending the same benefit to all the employees and therefore the allegation of discrimination is misconceived. Similarly, WP (C) No. 7804/2002 had been dismissed on 23.6.2003. Therefore, on the date of the impugned decision none of the interim order was in force. The learned Senior counsel has maintained that VRS 2005 was floated by extending the same benefit to all the employees and therefore the allegation of discrimination is misconceived. The Petitioners not having approached the State Government though aware of the adverse consequences of non acceptance of VRS 2005, they cannot be heard to complain in this regard. Referring to Article 9 of the Memorandum of Article of Association of the Corporation, Mr. Sarma urged that in view of the decision of the Government permitting compulsory retirement or retrenchment of employees unwilling to opt for the VRS the same is inconsequential. The Corporation being a Government company, it is an entity distinct from the Government and legally competent to take any decision on its own, he urged. The activities of the Corporation presently being undertaken mostly pertain to accounts and the Petitioners being not experienced in that discipline, their claim to be engaged therefore or to continue in service is wholly untenable. Further, the Government having provided funds as a one time measure to meet the expenses of VRS, arrear pay and the maintenance expenditure of the skeletal structure of the Corporation, it has no source to sustain them even on re-induction. The decision to compulsorily retire the non-optees having been taken in extremely pressing and unavoidable circumstances, insistence on the requirement of notice and other formalities is legally untenable and any omission to the said effect would not vitiate the impugned decision, he contended. As the Petitioners have not suffered monetarily in any manner, no cause of action for the instant proceeding has arisen in the prevailing facts and circumstances and the petition is thus liable to be dismissed. Mr. Sarma to reinforce his arguments relied on the following decisions of the Apex Court: (1) AIR 1954 SC 369 : Shyamlal, Appellant v. State of Uttar Pradesh and Anr. Respondents; (2) (1992) 2 SCC 299 : Baikuntha Nath Das and Anr. Appellants v. Chief District Medical Officer, Baripada and Anr. Respondents; (3) (2003) 5 SCC 163 : A.K. Bindal and Anr. Petitioners v. Union of India and Ors. Respondents; (4) (2004) 13 SCC 29 State of Orissa, Appellant v. Orissa State Handloom Development Corporation, Respondents. 13. Mr. Respondents; (2) (1992) 2 SCC 299 : Baikuntha Nath Das and Anr. Appellants v. Chief District Medical Officer, Baripada and Anr. Respondents; (3) (2003) 5 SCC 163 : A.K. Bindal and Anr. Petitioners v. Union of India and Ors. Respondents; (4) (2004) 13 SCC 29 State of Orissa, Appellant v. Orissa State Handloom Development Corporation, Respondents. 13. Mr. Apang while endorsing the above, has added that the officials of the Government presently on deputation to the Corporation are drawing their pay and allowances from their parent departments. 14. The rival submissions have received due consideration of this Court. The debate as is apparent centers around the issue of compulsory retirement of the Petitioners following the publication of VRS 2005. That the financial condition of the Corporation is abysmally poor consequent upon considerable reduction of its functional activities and mounting losses is not in serious dispute. On an assessment of the economic viability of the Corporation and its alarming financial position coupled with its resultant inability to disburse the salary and wages of its employees for long, its Board of Directors in the meeting dated 29.7.2004 dwelt on the suggestion of restructuring the organizational set up by retaining a minimum number of employees while offering VRS to the others. It was proposed that the VRS scheme to be drawn up be sent to the government for providing funds to the Corporation. The aspect of down sizing the staff, having regard to the work load of the Corporation was also discussed so as to declare the employees beyond the minimum to be retained as surplus. The minutes of the meeting of the Board of Directors held on 20.9.2005 disclose that the proposal had been duly submitted to the government of Arunachal Pradesh in the month of October, 2004 and a special emphasis was laid to pursue the process for obtaining necessary financial assistance from the government so that the second phase of VRS be undertaken. It was inter alia noted that the employees and workers of the Corporation had not been paid their salary and wages from April, 2005 to August, 2005 due to resource constraints. The Board for the purpose authorized the Managing Director of the Corporation to take appropriate steps. It assessed the annual expenditure for running the residual structure of key employees at Rs. 40 lakhs. 15. The Board for the purpose authorized the Managing Director of the Corporation to take appropriate steps. It assessed the annual expenditure for running the residual structure of key employees at Rs. 40 lakhs. 15. The notification circulating the VRS 2005 clearly refers to the decision of the government sanctioning necessary budgetary provisions in the account of the department of Environment and Forests under the State plan as an one time grant during 2005-2006 for implementation of the VRS of the surplus employees. The notification declared that the VRS was a measure for implementation of the decision of the Board of Directors and the State Government to the above effect. The objectives of the VRS underlined that it was with the purpose of providing an attractive exit route to the employees of the Corporation before they were superannuated in normal course to obviate the prospect of the Corporation becoming bankrupt. The scheme mentioned that the State Government had provided one time financial assistance for VRS of the surplus employees by effecting reduction in the outlay of the department of Environment and Forests. Thereby the employees were informed that the State Government may not provide funds for VRS in future due to severe financial crunch faced by it and that the Corporation was also unable to generate any surplus funds for VRS as it had also become economically unviable. All the employees were thus requested to avail the last chance of VRS with the support from the State Government. It was clarified that the Corporation would not guarantee payment of VRS compensation and running salary of the employees who do not opt for the scheme and that their fate thereafter would be decided as per the orders of the Board of Directors. It was inter alia stipulated that the employees retired under the scheme would not be eligible for re-employment in the Corporation or in any of its unit/undertaking and that the vacancies caused as a result of voluntary retirement of the employees under the scheme would stand abolished. The employees were required to submit their options within a period of one month from the date of issue of the notification. The notification reiterated that the VRS was with the approval of the Directors of the Board and the State Government. The employees were required to submit their options within a period of one month from the date of issue of the notification. The notification reiterated that the VRS was with the approval of the Directors of the Board and the State Government. By communication dated 5.11.2005 the Deputy Conservator of Forests (S&P), Arunachal Pradesh informed the Managing Director of the Corporation that the government had sanctioned one time grant of Rs. 5 crores from the State plan allocation made for the Forestry and Wild Life sector during the year 2005-2006 to meet the requirement of salary and wages of the Corporation against VRS and running expenditure of Rs 40 lakhs for one year for its skeletal structure. Thereby the Corporation was required to submit its estimate on the item wise requirement for facilitating concurrence of the Finance Department. In its meeting held on 27.12.2005 the Board of Directors of the Corporation on an over all assessment of the fact situation concluded that the revival of the Corporation did not appear to be feasible and that therefore the management should concentrate on completing the process of VRS failing which all remaining employees be accorded compulsory retirement with the same package as extendable to the VRS optees. It was, however, decided to review the situation after one year to decide finally on the question of revival or winding up of the Corporation. The management however was authorized to engage some key employees on contract basis for completing the balance works of the Corporation like release of old and current outstanding dues, finalisation of various court cases, completion of VRS/CRS process, compilation of up to date account of the Corporation etc. The initial term of such contract appointment was recommended to be three months to be reviewed depending on the need therefor. It was recorded that all employees of the Corporation except the Board of Directors had become surplus. It was explicitly resolved that the non optees be compulsorily retired with effect from 31.12.2005 where after their salary and wages would not be the liability of the management/Board of Directors or the State Government. 16. It was thereafter by order dated 28.12.2005 by reciting the above factual background that the VRS non optees were compulsorily retired in view of the financial constraints of the Corporation. The same benefit as granted to the VRS optees was however, extended to those compulsorily retired. 16. It was thereafter by order dated 28.12.2005 by reciting the above factual background that the VRS non optees were compulsorily retired in view of the financial constraints of the Corporation. The same benefit as granted to the VRS optees was however, extended to those compulsorily retired. It was made clear that the employees concerned would not entitled to any salary with effect from 1.1.2006. All regular posts in the Corporation in terms of the decision of the Board of Directors taken in its meeting held on 27.12.2005 were abolished declaring the same to be surplus by notification dated 29.12.2005. 17. From the above narrative, it is not possible to hold that VRS 2005 had been floated and enforced without the approval of the State Government. Not only did the government approve the move, viewing the Corporation's acute financial indigence, it sanctioned an amount of Rs. 5 crores as one time measure to meet the expenditure of salary and wages of its Corporation due under the VRS and infrastructural essentials for one year. The minutes of the meeting of the Board of Directors referred to above clearly depict that the proposal for VRS and down sizing of the organizational structure had been duly submitted before the government in time and that the process was taken to its logical end after being cleared by it. Noticeably, the pleaded stand of the Corporation that VRS 2005 was notified with the due approval of the government has been endorsed by the official Respondents. The communication, D.O. CAB/MISC/2001/3 dated 1.12.2001 addressed to the Principal Chief Conservator of Forests, Govt. of Arunachal Pradesh forwarding the cabinet decision on the issue of restructuring of all public sector undertakings discloses that the government had approved the formulation of a voluntary Retirement Scheme for each Corporation simultaneously with another scheme for compulsory retirement or retrenchment of employees who would not avail the VRS. It thus can be deduced in view of the above, that the Board of Directors had acted within its authority on an analytical review of the Corporation's performance and financial capability to offer VRS 2005 to its employees and to shed its excess staff by resorting to compulsory retirement to tide over the immediate crisis. It thus can be deduced in view of the above, that the Board of Directors had acted within its authority on an analytical review of the Corporation's performance and financial capability to offer VRS 2005 to its employees and to shed its excess staff by resorting to compulsory retirement to tide over the immediate crisis. The materials on record as available taken as a whole therefore would not warrant a conclusion that VRS 2005 had been notified either without any justifiable cause or dehors the approval of the State Government. 18. Clause 92 of the Memorandum and Articles of Association of the Corporation deserves a reference at this stage. It provides that the Board of Directors would refer for the decision of the government of Arunachal Pradesh amongst others on an issue pertaining to the winding up of the Corporation. According to the Petitioners, the decision of the Board of Directors of the Corporation to consider the VRS non optees to be surplus and to compulsorily retire them is wholly unauthorized in absence of any decision of the State Government to wind up the organization. Trully, the recorded facts and the documents appended in the proceeding do not reveal or demonstrate any decision of the government to the said effect. The government had countenanced the Corporation's plea of floating the Voluntary Retirement Scheme in view of its incapability to pay the salary and wages of its employees and had sanctioned an amount of Rs. 5 crores. A decision either for winding up the Corporation or to declare the VRS non optees as surplus on abolition of all posts is thus wanting. 19. Be that as it may, the pleaded stand of the State Government on this aspect is significant. It while acknowledging the separate and independent entity of the Corporation has contended that the recruitment Rules of the Department of Environment and Forests do not permit induction of the employees of the Corporation or for that matter of any State owned public sector undertaking in the State service. Moreover, the government is also not in a position to bear the recurring liabilities of salary of the Corporation's employees because of its resource crunch. An amount of Rs. Moreover, the government is also not in a position to bear the recurring liabilities of salary of the Corporation's employees because of its resource crunch. An amount of Rs. 5 crores had therefore been sanctioned for implementation of the second phase of VRS as a special case and disbursement of the pending salary and wages of the Corporation's employees as a one time measure. The State Government has endorsed the action of the Corporation of extending identical benefits to the non VRS optees as fair and non discriminatory. Though, an explicit decision of the government to compulsorily retire the non VRS optees by abolishing all the posts of the Corporation is not discernible on the face of the records, there is an obvious approval of the government of the course of action adopted by the Corporation. The letter dated 4.1.2006 of the Managing Director of the Corporation and the note dated 26.1.2006 of the Chief Minister of the State relied upon on behalf of the Petitioners do not detract from the above determination. 20. Evidently, the final decision either to revive the Corporation or to wind it up has been postponed by one year and would be contingent on the state of affairs existing then. That the Corporation at the time of the impugned decision had been reeling under severe financial penury is not disputed. As a matter of fact, the State Respondents have confirmed the above. The Corporation being a government company cannot be identified wholly with the State. Though it is state owned public sector undertaking, in law, its identity is distinguishable from that of the State. Its employees are also not civil servants under the Constitution. As has been held by the Apex Court in A.K. Bindal and Anr. Petitioners v. Union of India and Ors. Respondents (2003) 5 SCC 163 the employees of government companies have no absolute right to claim that the government should pay their salary and it is the responsibility of such companies to pay the same. It ruled that if the company is sustaining losses and therefore did not have the financial capacity to revise or enhance the pay scale, the employees could not claim any legal right to ask for any direction to the government (Central Government in the reported decision) to make additional expenditure incurrable on account of revision of pay scales. 21. It ruled that if the company is sustaining losses and therefore did not have the financial capacity to revise or enhance the pay scale, the employees could not claim any legal right to ask for any direction to the government (Central Government in the reported decision) to make additional expenditure incurrable on account of revision of pay scales. 21. In the face of the unprecedented economic aridity staring on the face of the Corporation, its escalating losses and growing liabilities towards wages and other dues of its employees, its decision to compulsorily retire the non VRS optees cannot be repudiated to be autocratic, illogical or highhanded. Noticeably, the government while sanctioning Rs. 5 crores had earmarked the same for meeting the expenditures towards the dues under the VRS, arrear salary and wages of the Corporation's employees and maintenance of the skeletal structure for a period of one year. Thereby it approved the proposed action of compulsorily retiring the VRS non optees and maintaining a workable frame of the Corporation for a year. It is not an instance where the VRS non optees have been left high and dry without making any provision for their livelihood. 22. The decision of the Apex Court in Bank of India and Ors. Appellants v. O.P. Swarnakar and Ors. Respondents, (2003) 2 SCC 721 pressed into service by the learned Senior counsel for the Petitioners to drive home the point that VRS 2005 could not have been thrust upon the non willing employees, in my estimate is not of any determinative significance in the facts of the present case. In the said case, the Apex Court was seized with the question of permissibility of withdrawal of an offer made by an employee in response to a Voluntary Retirement Scheme floated by the Nationalized Banks and the State Bank of India. While holding that the Voluntary Retirement Scheme constituted only an invitation and that the applications filed by the employees responding thereto constituted an offer, the Apex Court ruled that the same (offer) was withdrawable unless some benefits under the scheme had been received in the interregnum. Apart from the fact that the compelling circumstances threating to jeopardize the Corporation's existence as in the instant case were absent therein the ratio of the decision does not reinforce the Petitioners' contentions. The contextual facts are totally different. Apart from the fact that the compelling circumstances threating to jeopardize the Corporation's existence as in the instant case were absent therein the ratio of the decision does not reinforce the Petitioners' contentions. The contextual facts are totally different. The VRS in the case in hand was drawn up in the extra ordinary facts and circumstances typical to the Corporation wherein it had no alternative but to reduce its organizational structure to the bare minimum dominantly to oversee the preliminary steps leading to its impending closure in near future. 23. The decision of the Apex Court in T.N. Godavarman Thirumulkpad Petitioner v. Union of India and Ors. Respondents (1997) 2 SCC 267 restraining retrenchment and/or removal of the working employees of saw mills or other wood based industries following the order of closure thereof to ensure protection and conservation of forests is also of no assistance to the Petitioners inasmuch as the injunction is not extendable to the present situation warranting termination of the service of the Petitioners. In other words, the direction of the Apex Court that notwithstanding the closure of saw mills and other wood based industries to curb the activities resulting in destruction and denudation of forests, workers of such units would be paid their wages and cannot be retrenched or removed, cannot be construed to prohibit termination of their services under other appropriate and unavoidable eventualities. In the above premise, reliance on the decision of the Apex Court in T.N. Godavarman Thirumulkpad, Petitioner v. Union of India and Ors. Respondents (1998)2 SCC 59 whereby the rigor of the restrictions on the felling transportation and utilization of timbers was relaxed does not further the case of the Petitioner in absence of any material on record that thereby the Corporation's financial viability had appreciably improved so much so that the Corporation's action was illogical, unwarranted and uncalled for. 24. The allegation of discrimination is also not borne out by records in asmuch as the VRS non optees had been extended the same package of benefits as accorded to the optees. As the impugned action was unavoidably essential in the face of prevailing unusual situation besieging the Corporation, the action impugned cannot be denounced as arbitrary or discriminatory. The grievance bearing on the absence of prior notice also does not appeal to this Court. As the impugned action was unavoidably essential in the face of prevailing unusual situation besieging the Corporation, the action impugned cannot be denounced as arbitrary or discriminatory. The grievance bearing on the absence of prior notice also does not appeal to this Court. No condition of eligibility was prescribed by VRS 2005 for the employees of the Government to be entitled to the benefits thereof. No distinction or classification whatsoever was made between them and scheme was available for all without any reservation. It mentioned in details the circumstances necessaciating the same. The Corporation's inability to pay the wages and salary of its employees was highlighted and the employees were implored to accept the scheme in their interest. It was further clarified that from 1.1.2006 the Corporation would not take any responsibility to pay the wages and salary of the non optee employees as it was beyond its financial capability. As noticed hereinabove, engagement of minimal staff has been to attend to the unavoidable infrastructural exigencies and therefore cannot be equated with regular employment. The Corporation in its affidavit has disclosed that the persons so engaged have no lien in service and the arrangement is temporary. Appointment of staff on contract basis therefore cannot be construed to be reemployment as barred by VRS 2005. On a consideration of the materials on record in their entirety, the decision to compulsorily retire the VRS non optees cannot be impeached to be illegal, arbitrary and unconstitutional. The above, notwithstanding the assertion that in face of the orders dated 23.11.2001 and 10.12.2002 of this Court passed in WP (C) No. 7953/2001 and WP (C) No. 7804/2002 the impugned action is an anathema to the rule of law, needs attention. 25. This Court in WP (C) No. 7953/2001 (wherein the present Petitioner No. 4 was arrayed as Petitioner No. 1) registered a grievance that though the Petitioners therein had opted for the Voluntary Retirement Scheme in March, 2001, the Respondents had not taken any decision thereon and that they apprehended their compulsory retirement. This Court while issuing notice on 23.11.2001 making it returnable by three weeks permitted the Respondents (State of Arunachal Pradesh and Corporation amongst others) in the meantime to take action as per the Voluntary Retirement Scheme but restrained them from passing any order of compulsory retirement without its leave. This Court while issuing notice on 23.11.2001 making it returnable by three weeks permitted the Respondents (State of Arunachal Pradesh and Corporation amongst others) in the meantime to take action as per the Voluntary Retirement Scheme but restrained them from passing any order of compulsory retirement without its leave. The writ petition on being transferred to Itanagar bench was registered as WP (C) 81 (AP) of 2002 and was dismissed for non prosecution on 9.1.2003. On an application for restoration thereof registered as M.C. 31(AP) 03, this Court by order dated 24.2.2003 recalled the order of dismissal. Consequently the writ petition stood restored to file. Though in the mean-time three weeks from the date of notice had expired, the interim protection of restoration of the petition was not revived. Having regard to the nature of the interim direction issued which was limited by time, restoration of the writ petition in my view, did not per se reanimate the interdiction on compulsory retirement. 26. In WP (C) No. 7804/2002 on an identical issue referable to the Voluntary Retirement Scheme of the Corporation then in circulation this Court by noticing the order dated 23.11.2001 passed in WP(C) No. 8703/2001 while issuing Rule making it returnable on 17.1.2003 permitted the Respondents (State of Arunachal Pradesh and Corporation amongst others) by its order dated 10.12.2002 to proceed with the said scheme, but restrained them from passing any final order retrenching the Petitioners from service. This writ petition was dismissed for non prosecution on 23.6.2003 and the interim direction was vacated. This proceeding was not restored to file thereafter. Apart from the fact that the above writ proceedings obviously do not relate to VRS 2005 and therefore the interim restraints cannot be logically extended to the impugned action taken in a different fact situation, on the dates of the orders assailed in the present writ petition there was no order of this Court restraining the Respondents from either notifying a fresh Voluntary Retirement Scheme or compulsory retiring the non optees if the attending facts and circumstances justified the same. 27. 27. The Apex Court in State of Orissa, Appellant v. Orissa State Handloom Development Corporation Employees Union, Respondent (2004) 13 SCC 29 while upholding the decision of the High Court refusing to interfere with the decision of the government to close down the Orissa State Haldloom Development Corporation disapproved its (High Court) direction to the government of Orissa to provide alternative employment to those employees of the Corporation who did not opt for Voluntary Retirement. In the case in hand, the State Respondents have averred that the recruitment rules of the concerned department do not permit direct induction of the compulsorily retired employees. Besides, in face of its cash strapped condition, it is impracticable to sustain them. 28. Having regard to the chequered factual background and the compelling circumstances under which the Corporation had to broach the idea of reducing its organizational structure, this Court is disinclined to issue a mandamus to re induct the Petitioners thus in a way thrusting them on the Corporation and the State inspite of their clear, unambiguous categorical and persistent assertion of financial inability to sustain them. The decision taken by the Corporation is a plausible one and this Court in exercise of its powers of judicial review would not substitute its views therefor. The materials on record do not suggest any malafide or extraneous consideration on the part of the Respondents in resorting to this course of action. In administering their affairs the Respondents in law have to be conceded some elbow room and in the above conspectus of facts, the impugned action cannot be denunciated to have breached the permissible bounds of their authority. The above determination, however, would not come in the way of reconsideration of the decision and rehabilitation of the Petitioners either in the Corporation or the State service at the time of final decision on the issue of revival or winding up of the Corporation. 29. The upshot of the above narrative is therefore that the impugned orders dated 28.12.2005 and 29.12.2005 are sustainable in law and on facts. The Petitioners have failed to make out a case warranting interference of this Court in exercise of its power of judicial review. The petition fails and is dismissed. No costs. Petition dismissed