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J&K High Court · body

2009 DIGILAW 109 (JK)

J&K Industries Employees Association v. State

2009-03-12

MOHAMMAD YAQOOB MIR

body2009
1. The issue involved in all the petitions above numbered is almost identical. Benefit of Government Order No. 219-Ind of 2002 dated 8.8.2002 is claimed to be extendable directly/in directly to the petitioners of all the petitions. The said order reads as under: "1. Whereas Jammu and Kashmir Industries Limited was established in the year 1963 to run manage and administer the State Industrial Undertaking as may be notified. 2. Whereas the industrial undertaking run by the Director, Industries and Commerce were entrusted to J&K Industries Ltd. after its establishment in 1963 alongwith the employees. 3. Whereas the employees of erstwhile industrial units entrusted to JKI were treated as employees of the company by the management. 4. Whereas aggrieved by this action of the management the employees approached the Hon'ble High Court Jammu and Kashmir through SWP No. 236/82, 287/82 & 549/83 and, 5. Whereas in the SLP (Civil) No. 14235/98 titled J.L. Sazawal and others v. State and others, the Hon'ble Supreme Court set aside the decision of J&K High court and held the employees of erstwhile industrial undertaking entitled to all the benefits accrueable to employees of the Government. Now therefore, in pursuance of the orders of Hon'ble Supreme Court sanction is hereby accorded to the grant of pensionery and other benefits under Rules as may be applicable from time to time in favour of 169 employees as indicated in the annexure `A' hereto who were appointed prior to 3.10.1963 in the industrial units run by the Industries and Commerce Department and later transferred to JKI Ltd. after its establishment. The entitlement for these benefits shall be worked out after deducting the retirement benefits availed by beneficiary at the time of superannuation from JKI including gratuity, employer's share of CP Fund etc. Excess payment, if any, shall be recovered from the concerned. By order of the Government of Jammu & Kashmir. Sd/- Addl. Secretary Industries and Commerce Department dated 08.08.2002. " 2. For appreciating the controversy noticing of precise factual background is imperative. Various Industrial units were run by the Government and were under the direct control of Commerce and Industries department of the State. In the year 1963, State Government by its order No. 189/C of 1963 dated 10.8.1963 formed a Board of Directors for the administration of these Industrial units. For appreciating the controversy noticing of precise factual background is imperative. Various Industrial units were run by the Government and were under the direct control of Commerce and Industries department of the State. In the year 1963, State Government by its order No. 189/C of 1963 dated 10.8.1963 formed a Board of Directors for the administration of these Industrial units. On 3.10.1963 Jammu & Kashmir Limited (hereinafter referred to as JKI limited) was incorporated as Private Limited Company under the provisions of Companies Act 1977. In terms of Clause III (a) of its `Memorandum of Association' the object was "to run, manage, administer the State Industrial Undertakings as may be notified by the Governor in a manner as would ensure their economic working." 3. On 8.10.1963 Governor issued instructions whereunder some Industrial undertaking of the State Government were notified to be entrusted to the company in pursuance of Clause III (a) of the `Memorandum of Association' of the company. The company framed its own rules known as `Jammu & Kashmir Industries Employees Service Rules and Regulations'. Despite that the employees both appointed by the Government prior to 1963 i.e. prior to the date of incorporation of the Industrial units as company as well as the Corporation born employees, were continued to be given benefits of Revision of grade and dearness allowance at par with other Government Servants of the State. It continued till 1979. 4. In the year 1979 Committee was set up for examining the wage structure of employees of the Corporation. Committee known as `Rajan Committee' submitted its report in the year 1980, which was accepted by the Government on 22.4.1980. Thereafter Governor issued order dated 26.4.1980, pursuant to which company issued order dated 8.5.1980, relating to costs of living allowance and fixation of wages, an another order dated 10.11.1980 was issued seeking to lay down that the leave of Regular employees of the company shall be as per `Factory Act' and not as per Leave rules of the corporation. The employees were aggrieved of these orders, as these orders have the effect of denying the employees of the J&K Industries Limited parity of service conditions as of Government employees. 5. The employees were aggrieved of these orders, as these orders have the effect of denying the employees of the J&K Industries Limited parity of service conditions as of Government employees. 5. The two groups of employees of the Jammu & Kashmir Industries Limited, one group comprised of those who were appointed by the Government prior to 1963 i.e. prior to the date of incorporation of the Industrial units of the company and the second group comprise of corporation born employees. The two groups filed two writ petitions i.e. SWP No. 236/82 captioned Jawahir Lal Sazwal and others v. State and others and SWP No. 287/82 captioned Tej Krishen Kachroo and others v. State of J&K and others. Both the two petitions were dismissed by the Division bench of this court on 2.5.1998. In the petition No. 236/82 quashment of Clause-1 and 5 of the order No. 19-GR/1980 dated 26.4.1980 and order No. JKI/37/80 dated 8.5.1980 and order No. JKI/264/80 dated 10.11.1980 Clause- 17 was sought. 6. Further more mandamus was sought for declaring the petitioners and persons similarly situated with them to be the employees of the State Government and entitled to rights, privileges, benefits as available to the State Government Employees in their cadres which are equivalent to the petitioners cadres and be declared to be governed by Service Rules and Regulations, which are applicable to the State Government Employees. Petitioners be held entitled to the same salary, emoluments, DA's, Leave etc as will be available to the Government Servants under the State Government. 7. In the petition SWP No. 287/82 filed by the Corporation born employees quashment of order No. 19/GR/80 dated 26.4.1980, order No. HKI/37/80 dated 8.5.1980, order No. JKI 264/80 dated 10.11.1980 was sought. Further more petitioners and co-employees be declared entitled to the grant of DA on par with State Government employees. Further more petitioners be declared entitled to get equal pay for equal work and entitled to the same privileges benefits as are available to the State Government employees, in view of the identical discharge of the job by the petitioners and the State Government employees. 8. Further more petitioners be declared entitled to get equal pay for equal work and entitled to the same privileges benefits as are available to the State Government employees, in view of the identical discharge of the job by the petitioners and the State Government employees. 8. Since both the petitions were dismissed by the common Judgment, one group i.e. the petitioners of SWP No. 236/82 filed the SLP against the Judgment of the Division bench before the Hon'ble Apex court, whereas the other group (Corporation born employees) did not choose to file the SLP before the Apex court. 9. The SLP filed by Jawahir Lal Sazawal and others before the Apex court succeeded. Hon'ble Apex court by Judgment dated 27.2.2002 has set-aside the Judgment of the High court and allowed appeal by granting relief to the appellants as prayed for in their Writ petition. 10. The position of the appellants (writ petitioner of SWP No. 236/82) is that they were appointed in the Industrial units prior to incorporation as company i.e. prior to 1963 and were appointed by the Government, so were Government employees. The Industrial units were transferred to the Jammu & Kashmir Industries Limited but their position remained that of the Government employees. Hon'ble Apex Court taking the position of the petitioners as having been appointed prior to the incorporation i.e. prior to 1963 has held as under: "There is nothing in the instructions which could remotely be construed as an order abolishing the posts held by the appellants. Had the appellants been appointed as employees of the company, they should have been issued letters of appointment by the company. No appointment letter was issued to any of the appellants by the company." 11. It has been further held: "The irresistible conclusion is that the appellants were and continued to be servants of the State Government as the permanent residents of State of Jammu & Kashmir are entitled under Section-10 of the State Constitution to be treated on par with other Government Servants in keeping with Article 14 and 16 of the Constitution of India. By impugned orders the State Government has sought to deny the appellants such equality. The impugned orders cannot therefore be Constitutional sustained and must consequently be quashed." 12. By impugned orders the State Government has sought to deny the appellants such equality. The impugned orders cannot therefore be Constitutional sustained and must consequently be quashed." 12. It is no more res integra that the employees appointed prior to 1963 shall enjoy the status, like other Government servants, so shall be governed by the Service Rules and Regulations applicable to the State employees and also to the salary and other benefits available to the Government servants under the State Government. 13. While complying the Judgment the Government Order No. 219/Ind of 2002 dated 8.8.2002 referred in detail hereinabove was issued. 14. Now the bunch of writ petitions above numbered have been filed by the employees both who have retired and who are continuing in the service of the company. They claim the same benefit. The moot question for consideration is as to whether such benefit is available to them or not. As detailed hereinabove the Hon'ble Apex court in the background of the position of the appellants therein being the Government servants having been appointed in the year 1963, so their status of Government servants has been maintained. As a necessary corollary have been held entitled to be treated at par with other Government servants. 15. The corporation born employees claim, that even though they had not challenged the Judgment of the Division Bench, but still they are entitled to the benefit, as the law laid down by the Apex court is law of the land, so will govern all the employees irrespective of being corporation born employees but same is not correct as there is distinction in between their appointment and the appointment of the appellants of SLP. 16. Afore-stated position apart, it is contended that until 1979 the Corporation born employees as well as the employees of the erstwhile Government Industrial units were getting pay/allowance/leave on par with the employees of other Government departments and have also been given the benefit of pay Revision in the year 1973. The position was altered pursuant to order of Governor dated 26.4.1980, followed by orders of the company dated 8.5.1980 and 10.11.1980. The position of both the groups of employees until 1979 i.e. until acceptance of `Rajan Committee report' was that they were getting all service benefits on par with the employees of the other Government departments. The position was altered pursuant to order of Governor dated 26.4.1980, followed by orders of the company dated 8.5.1980 and 10.11.1980. The position of both the groups of employees until 1979 i.e. until acceptance of `Rajan Committee report' was that they were getting all service benefits on par with the employees of the other Government departments. The fact of the matter is that the three orders i.e. 19/GR/80 dated 26.4.1980, 8.5.1980 and JKI/264/80 dated 10.11.1980, which were impugned have been quashed by the Hon'ble Apex court vide Judgment dated 27.2.2002. So these three orders are non existent, therefore, position relegates back to the year 1979, so the Corporation born employees are entitled to be treated the way they were treated until year 1979. 17. This contention raised has a substantial force, because the three orders which altered the position prevalent up to year 1979 viz-a-viz pay/allowance/leave and other benefits on par with other employees of the Government, stand quashed. When it is so, admittedly the position relegates to the position prevalent up to 1979, so this group of the employees in that background is entitled to be given all service benefits as were available to them in accordance with the position prevalent up to year 1979. 18. The cumulative effect of aforesaid position is that Corporation born employees both retired and continuing shall be entitled to the service and other benefits in accordance with the system as was prevalent in the year 1979, as the orders No. 19/GR/80 dated 26.4.1980, JKI/37/80 8.5.1980 and JKI/264/80 dated 10.11.1980, which had altered the position are no more in existence having been quashed by Apex court. 19. The another situation as emerge from the facts and circumstances is as to whether any retirement scheme is framed so as to govern the corporation born employees in this connection position has to be ascertained from the Articles of Association, Memorandum of Association and J&K Industries Employees Service Rules and Regulations. Board of Directors possess the specific powers as is clear from Article 73(33) of the Articles of Association, same is quoted hereunder: "73. Board of Directors possess the specific powers as is clear from Article 73(33) of the Articles of Association, same is quoted hereunder: "73. Specific powers to Directors.- Without prejudice to the general powers conferred by the last preceding Articles, and the other powers conferred by these Articles, the Directors shall exercise the following powers with the sanction of the Governor that is to say, powers.- (33) to grant benefits, concessions and other facilities admissible under statutes and rules governing service in the State." 20. Plain reading reveals that the benefits available to the services in the State are extendable to the employees of the J&K Industries Limited. 21. Appearing counsel for the petitioners would contend that the retirement scheme has not been framed. Rules and Regulations are silent, when it is so J&K CSR will govern the retiral position of the employees. There is no denying the fact that both groups of employees were getting the service benefits on par with Government employees. Applicability of J&K CSR has been adopted by the Jammu & Kashmir Industries Limited in the cases where rules are silent, same is substantiated by approved proposal by the Board of Directors on 6.12.2004. The proposal and approval is reproduced hereunder: "The J&K Industries Employees Rules and regulations have not been updated, modified or amended since its application to the employees of the corporation during 1968. The corporation is applying different provisions of J&K CSR where ever and when ever the Rules of the company are found silent on the subject under process at administration level, The adoption of J&K CSR by the corporation is necessary as the company has been already adopting/applying different SRO's vis. Maternity benefits and special investments for family planning etc. issued by the Government from time to time. The company has recently applied the Article 226(2 & 3) of J&K CSR for premature retirement of the officers involved in multi-lakh criminal misappropriation/embezzlement in Government Silk weaving Factory, Rajbagh, by retiring two of its officers have challenged the action of the management in the High court of J&K at Srinagar under a service writ petition No. 434-501/2004. Although the objections were filed in both the cases through Government Advocate, it was advised by the concerned Advocate that before applying the provision of J&K CSR, the same should be got adopted in the corporation. 22. Although the objections were filed in both the cases through Government Advocate, it was advised by the concerned Advocate that before applying the provision of J&K CSR, the same should be got adopted in the corporation. 22. The Board of Director are requested to approve adoption of J&K CSR's by the J&K Industries Limited in the cases where ever rules are silent. Minutes/Item No. 9 23. The proposal put forth was approved by the board on 6.12.2004. Article 89 of the Articles of Association reads as under: Notwithstanding anything contained in any of these Articles the Governor may from time to time issue such directives or instructions as he may think fit in regard to the finances and the conduct of the business and affairs of the Company, and the Directors shall duly comply with and give effect to such directives or instructions." 24. Under Article 89 the instructions have been issued by the Governor on 8.10.1963 circulated by Industries and Commerce department under No. 135-S/66 dated 11.8.1970. Instruction No.4 deals with specific responsibilities of the Board of Directors, which inter alia include the personal responsibilities head-(C) of instruction No. 4, reads as under: "C. Personal Responsibilities: In accordance with the provisions of Jammu & Kashmir Civil Service Regulations, Jammu and Kashmir Government Service (Classification, Control and Appeal) Rules, Government Servants Conduct Rules, Recruitment Rules and other Service Rules and Regulations in force from time to time." 25. Clause (vii) is quite relevant to be reproduce, which reads as under: "To approve managerial and employment benefit and retirement schemes subject to the approval of the Governor." 26. So in terms of Instruction No. 4-C(Vii) Board of Directors were required to frame the `retirement scheme', which till date has not been framed nor it is shown as to what type of retiral benefits shall be available to the employees of the J&K Industries Limited. When the rule position is silent, about the retiral benefits, then the employees are to be governed by the J&K CSR, which as per approval of the Board of Directors has been adopted, as is quite evident from the approved proposal, quoted above. 27. When the rule position is silent, about the retiral benefits, then the employees are to be governed by the J&K CSR, which as per approval of the Board of Directors has been adopted, as is quite evident from the approved proposal, quoted above. 27. Though the writ petitioners in all the above numbered writ petitions had claimed pensionary benefits directly or indirectly on the basis of Government Order No. 219 dated 8.8.2002 but while considering their cases in the backdrop of the Rule position stated hereinabove they are to be extended the benefits permissible under Jammu & Kashmir CSR, only when the Rule position is silent about the retiral and pensionary benefits. As already concluded that retirement scheme as was required to be framed has not been framed, in absence thereof the petitioners are entitled to be and shall be extended the retiral and pensionary benefits by adopting the J&K CSR, however, only to the extent Jammu & Kashmir Industries Employees Service Rules and Regulations are silent in this behalf. All the writ petitions on aforesaid terms are allowed. 28. Disposed of as above alongwith the connected CMP(s).