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2010 DIGILAW 529 (DEL)

OM PRAKASH v. UNION OF INDIA

2010-04-09

RAJIV SAHAI ENDLAW

body2010
JUDGMENT 1. The three petitioners having taken voluntary retirement on 29th August, 1997, 31st July, 1997 & 11th July, 1997 respectively from the respondent no.3 National Project Construction Corporation (NPCC), a Government of India Enterprise, seek a writ of mandamus directing the respondent no.3 NPCC to grant to them the benefit of the increase in the maximum gratuity payable from Rs.1,00,000/- to Rs.2,50,000/-. Rule was issued in the petition on 16th August, 2000. The respondent no.3 NPCC has filed a counter affidavit and to which a rejoinder has been filed by the petitioners. The counsel for the respondents no.1 & 2 Union of India, without filing any counter affidavit has made submissions opposing the writ petition. 2. It is the case of the petitioners that the 5th Pay Commission in its interim report recommended inter alia the raising of ceiling on the amount of retirement / death gratuity from Rs.1,00,000/- to Rs.2,50,000/-; that the respondent Union of India issued an office memorandum dated 14th July, 1995 conveying its decision, to in accordance with the said recommendation, enhance the maximum amount of gratuity payable under the Central Civil Services (Pension) Rules 1972 in the case of Central government employees to Rs.2,50,000/- with effect from 1st April, 1995; however, the ordinance amending the provisions of the Gratuity Act to enhance the ceiling of gratuity therein from Rs.1,00,000/- to Rs.2,50,000/- was brought belatedly in the year 1997 only, with effect from 24th September, 1997; that the respondent no.3 NPCC on the basis of the said ordinance issued a circular dated 15th October, 1997 raising the ceiling of gratuity from Rs.1,00,000/- to Rs.2,50,000/- effective from 24th September, 1997. The petitioners, who as aforesaid took voluntary retirement before 24th September, 1997, thus did not get the benefit of the enhanced gratuity. 3. The petitioners, who as aforesaid took voluntary retirement before 24th September, 1997, thus did not get the benefit of the enhanced gratuity. 3. It is the case of the petitioners that pursuant to the recommendations of the 4th Pay Commission in the year 1984 also, though the pay scales of the central government employees were enhanced but the pay scales of the employees of the various public sector undertakings were not increased; the associations of employees of various public sector undertakings had filed writ petitions in the various High Courts and also in the Supreme Court in this regard; that ultimately the Government of India vide letter dated 7th April, 1986 informed the Supreme Court that the question with regard to the revision of pay structure and other emoluments and conditions of service in respect of public sector employees shall be referred to a high powered committee; the said high powered committee submitted its report to the Supreme Court and the Supreme Court vide its judgment dated 3rd May, 1990 in Writ Petition No.13044/1984 and other connected writ petitions inter alia directed that the pay revision in respect of the public sector employees in respect of whom the recommendations were then being directed to be implemented, shall thereafter take place as and when similar changes are effected for the Central government employees. The petitioners thus contend that in accordance with the said direction of the Supreme Court, the petitioners being the employees of a public sector undertaking as the respondent no.3 NPCC is, also became entitled to enhanced gratuity w. e. f. 1st April, 1995 in accordance with the office memorandum dated 14th July, 1995 (supra) of the Government of India. The petitioners on the said basis claim that on the date of their voluntary retirement in the year 1997, even though prior to the amendment in the Gratuity Act, they became entitled to payment of enhanced gratuity. 4. The petitioners on the said basis claim that on the date of their voluntary retirement in the year 1997, even though prior to the amendment in the Gratuity Act, they became entitled to payment of enhanced gratuity. 4. The petitioners in the writ petition have also averred that they cannot be discriminated against vis-à-vis the employees of the Government of India in the matter of payment of gratuity and claim that the ordinance amending the Gratuity Act w .e. f. 24th September, 1997 instead of w. e. f. 1st April, 1995 (w. e. f. which date enhanced gratuity became payable under the CCS (Pension) Rules to the Central government employees to be discriminatory and violative of Article 14 of the Constitution of India. It is pleaded that there is no reasonableness or justification in classifying the cut-off date as 1st April, 1995 in respect of Central government employees as against the cut-off date of 24th September, 1997 in respect of the other public sector employees. It is pleaded that the Gratuity Act being a social legislation, the two different dates for Central government employees and the public sector employees have no nexus with the object sought to be achieved. 5. The respondent no.3 NPCC in its counter affidavit has inter alia pleaded that the petitioners as public sector employees were governed by the provisions of the Gratuity Act and in accordance therewith gratuity was released to them; per contra the central government employees are governed by their own rules and regulations and the gratuity paid by Union of India to its employees is governed by the CCS (Pension) Rules and the central government employees are not covered by the Gratuity Act. It is thus averred that no case for discrimination is made out. With respect to the directions in the judgment dated 3rd May, 1990 (supra) of the Supreme Court, it is stated that the same is not applicable to payment of gratuity which is payable to the employees of the respondent no.3 NPCC under the Gratuity Act. 6. The counsel for the respondents Union of India has urged that the Supreme Court in A.K. Bindal Vs. 6. The counsel for the respondents Union of India has urged that the Supreme Court in A.K. Bindal Vs. Union of India 2003 (5) SCC 163 , in para 34, has held that under the voluntary retirement schemes (VRS) a considerable amount is paid to an employee ex-gratia besides the terminal benefits and what is known in the business world as Golden Handshake; that after the amount is paid and the employee ceases to be under the employment, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights with his erstwhile employer, including making any claim with regard to enhancement of pay scale for an earlier period. It was held that if the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for the VRS and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated. The counsel for the respondents Union of India contends that the petitioners are not entitled to any relief on this ground alone. It is contended that the office memorandum dated 14th July, 1995 was in existence at the time when the petitioners took voluntary retirement and if they intended to make a claim for enhanced gratuity on the basis thereof, they should have made the claim then and cannot be permitted to raise it after having availed of the benefit of VRS. 7. The counsel for the respondents Union of India also contends that there always has to be a cut-off date and no argument of discrimination on the basis thereof can be raised. Reliance in this regard is placed on State of Bihar Vs. Bihar Pensioners Samaj 2006 (5) SCC 65 reiterating that fixing of a cut-off date for granting of benefits is well within the powers of the government as long as the reasons there for are not arbitrary and are based on some rational consideration. It is contended that the cut-off date of 24th September, 1997 of amendment of the provisions of the Gratuity Act cannot be challenged. The counsel for the petitioner has only responded by urging that the judgment in A.K. Bindal (supra) is being re-considered by the Supreme Court. It is contended that the cut-off date of 24th September, 1997 of amendment of the provisions of the Gratuity Act cannot be challenged. The counsel for the petitioner has only responded by urging that the judgment in A.K. Bindal (supra) is being re-considered by the Supreme Court. It is also contended that the petitioners are not asking for any revision and claiming only the enhanced gratuity to which they were entitled as aforesaid on taking VRS. 8. Though neither counsel has cited but I find that recently another Single Judge of this Court in SAIL Ex-Employees Association Vs. Steel Authority of India Ltd. MANU/DE/1649/2009 dismissed the identical claim as made in the present petition. However, I choose not to dispose of this petition merely on this basis for the reason that the petitioners in SAIL Ex-Employees Association (supra) were unrepresented and also because it is observed in the said judgment that the petitioners therein had not placed before the Court any basis for their claim. In the present case as aforesaid, the petitioners have relied upon the direction in the earlier judgment dated 3rd May, 1990 of the Supreme Court and have also urged the plea of discrimination. 9. As far as the argument of discrimination is concerned, I find that a five judge bench of the Supreme Court in Hindustan Antibiotics Ltd. Vs. The Workmen AIR 1967 SC 948 had held that though in fixing the pay structure of the public corporations, due regard should be had to the pay structure in the civil services, the same was only advisory in nature and did not mean that the wage structure of the public corporations should be of the same pattern obtaining in departments of the Government. It was further held that the service conditions of employees in public sector undertakings are not analogous to those of the Government employees; there is no security of service; the fundamental rules do not apply to them; there is no constitutional protection; there is no pension; they are covered by service standing orders; their service conditions are more similar to those of employees in the private sector than those in Government departments. The said judgment of the five judge bench of the Supreme Court was recently discussed by another five judge bench of the Supreme Court in Kishan Prakash Sharma Vs. Union of India AIR 2001 SC 1493 and was not dissented from. The said judgment of the five judge bench of the Supreme Court was recently discussed by another five judge bench of the Supreme Court in Kishan Prakash Sharma Vs. Union of India AIR 2001 SC 1493 and was not dissented from. 10. That being the position, the question of violation of Article 14 of the Constitution of India does not arise. That arises only if the persons are similarly placed. Article 14 does not apply in a vacuum. The equality clause contained in Article 14 will have no application where the persons are not similarly situated or when there is a valid classification based on a reasonable differentia. Reference in this regard may be made to Government of West Bengal Vs. Tarun K. Roy 2004 (1) SCC 347 . 11. The Supreme Court having held that the employees of Central government and of the public sector enterprises are not equally placed, the argument of discrimination cannot be accepted. 12. As far as the claim of the petitioners on the basis of the order dated 3rd May, 1990 (supra) of the Supreme Court is concerned, it merely provides that the pay revision for those employees of public sector undertakings, in respect of whom the recommendations were being directed therein to be implemented, will thereafter also take place as and when similar changes are effected for the central government employees. The revision in gratuity cannot be said to be a pay revision. Gratuity is admittedly payable to the employees of the respondent no.3 NPCC under the provisions of the Gratuity Act and enhancement in gratuity would become payable only on an amendment to the Gratuity Act and not by virtue of the office memorandum pertaining to the central government employees. Thus the petitioners have no claim on the basis of the said direction in the order dated 3rd May, 1990 of the Supreme Court, either. The Supreme Court then was not concerned with the date from which the employees of the public sector would become entitled to the benefits of revisions effected by the Central Government. If some step is required to be taken, as of amendment of the Gratuity Act, then the said judgment of the Supreme Court cannot be read as laying down that the public sector employees will become entitled to such benefit even without such step being taken. If some step is required to be taken, as of amendment of the Gratuity Act, then the said judgment of the Supreme Court cannot be read as laying down that the public sector employees will become entitled to such benefit even without such step being taken. In fact there is no mention of gratuity in the said judgment. 13. There is merit also in the contention of the counsel for the Union of India that the petitioners having settled their claims under the VRS, and after having received benefits therein, are now not entitled to make the present claim. The counsel for the petitioners has been unable to show anything contrary to the judgment in A.K. Bindal. 14. The counsel for the petitioner has post hearing filed written submissions in which mention is made of office order dated 29th May, 1998 of ONGC, another public sector undertaking enhancing the ceiling of gratuity to Rs.2.5 lacs retrospectively w. e. f. 1st April, 1995 and typed copy of which office order was filed by the petitioners with their rejoinder. Firstly, the respondents have had no occasion to meet the said plea, neither in pleadings nor during the arguments. Secondly merely because another public sector undertaking chose to, even without amendment to the Gratuity Act, enhance the ceiling on gratuity, cannot compel the respondent No.2 to follow suit. Section 4(5) of the payment of Gratuity Act, 1972 itself provides for rights of employee to receive better terms of gratuity under any award or contract with the employer. Though the Supreme Court in Kishan Prakash Sharma (supra) directed parity in nationalized insurance companies, but for the reason of being in the same sector ONGC and NPCC are not in the same sector and no foundation has been laid by the petitioners for parity in gratuity in the said two public sector undertakings. 15. The petition thus fails and is dismissed. However, no order as to costs