Federal Mogul Bearing India Ltd. v. State of Himachal Pradesh
2011-09-22
KURIAN JOSEPH, RAJIV SHARMA
body2011
DigiLaw.ai
JUDGMENT : RAJIV SHARMA, J. 1. Since common questions of law and facts are involved in all these petitions, the same were taken up together for hearing and are being disposed of by a common judgment. However, in order to maintain the clarity, the facts of CWP No. 8023/2010 have been taken into consideration. The only distinguishable facts of this petition vis-a-vis other petitions are that therein the workmen had also entered into settlements with the Management. 2. The core issue involved in this petition is: whether the reference dated 13.10.2010 made by respondent No. 2 to the Labour Court-cum-Industrial Tribunal to the following effect is legal: Whether voluntary retirement taken as per 'Voluntary Retirement Scheme' dated 2.3.2009 by Sh. Ashok Kumar Sharma S/O Sh. Inder Sen Sharma, operator from the Management of M/s Federal Mogul Bearings India Ltd. Plot No. 5, Sector-2, Parwanoo, District Solan, H.P. is legally maintainable and justified? If not, to what back wages, service benefits and relief the above named worker is entitled to from the above Employer/Management? If not, what are its legal effects? 3. Petitioner-company is a public limited company duly registered under the Companies Act, 1956. Petitioner-company is having its registered office at Mumbai and having its production unit at plot No. 5, Parwanoo, District Solan, H.P. Petitioner- company is into manufacturing of Automobiles Engine Parts. The company due to Global Meltdown took a conscious decision to bring down the fixed cost and reduce its strength of employees. In order to restructure its man power by reducing the existing strength of employees, the petitioner-company framed a Voluntary Retirement Scheme (hereinafter referred to as 'scheme' for brevity sake), which came into force with effect from 2.3.2009. It had to remain in operation till 15.5.2009. The scheme was made applicable to all the permanent workmen/staff whose names were on the muster roll of the company as on 2.3.2009 and who had attained the age of 40 years or had put in a continuous service of 10 years or more in the permanent employment of the company.
It had to remain in operation till 15.5.2009. The scheme was made applicable to all the permanent workmen/staff whose names were on the muster roll of the company as on 2.3.2009 and who had attained the age of 40 years or had put in a continuous service of 10 years or more in the permanent employment of the company. According to the scheme, the workmen, who had attained the age of 40 years or had completed 10 years continuous service, were entitled to lump sum payment equivalent to last monthly basic + fixed dearness allowance + special allowance + house rent allowance + washing allowance + conveyance allowance + study allowance + medical allowance multiplied by number of remaining months of service subject to maximum of Rs.2,20,000/-. According to the scheme, no request for withdrawal was to be entertained from the employee who had once resigned under the scheme. Similarly, once the acceptance was given to the resignation by the management, and the workmen once retired under the scheme was ceased to have right to raise any kind of dispute in future either for his willingness to retire or for the benefits available under the scheme. 4. Respondent No. 4 who was engaged as Operator in the petitioner-company in the year 1986 submitted an application seeking voluntary retirement on 12.3.2009. The text of letter dated 12.3.2009 reads thus: Sub: Application for retirement from the services of the Company under Voluntary Retirement Scheme. Dear Sir, With reference to the Voluntary Retirement Scheme of the Company, I wish to give resignation of my services voluntarily on my own free will and accord. I hereby declare that the said Voluntary Retirement Scheme has been fully explained to me/read by me and that I fully understood the Scheme. I wish to voluntarily retire from the services of the Company. You are, therefore, requested to kindly accept my resignation and relieve me from the services of the Company at earliest. I also request you that the benefits under the VRS may please be granted to me. 5. The same was accepted by the company on 14.3.2009 with effect from 26.3.2009. The text of letter dated 14.3.2009 reads thus: Sub: Voluntary Retirement Scheme of the Company Ref: Your application dtd. 12.3.2009 for voluntary retirement from the services of the Company under Voluntary Retirement Scheme. Dear Sir, We are in receipt of your application dated.
5. The same was accepted by the company on 14.3.2009 with effect from 26.3.2009. The text of letter dated 14.3.2009 reads thus: Sub: Voluntary Retirement Scheme of the Company Ref: Your application dtd. 12.3.2009 for voluntary retirement from the services of the Company under Voluntary Retirement Scheme. Dear Sir, We are in receipt of your application dated. 12.3.2009 for voluntary retirement from the services of the Company under Voluntary Retirement Scheme of the Company. In this connection we wish to inform you that your application for Voluntary Retirement has been accepted by us and you will be relieved from the services of the Company with effect from 26.3.2009 after duty hours. Please note that the benefits under the scheme along with other legal dues will be paid on the same day. 6. Respondent No. 4 was paid a sum of Rs.3,96,830/- by way of cheque. He withdrew the same as is evident from Annexure P-6. He has also applied for the release of provident fund, fixation of family pension etc. He issued a demand notice to the petitioner-company on 4.12.2009. According to respondent No. 4, the management had forced him to seek voluntary retirement. According to him, his job has been wrongly terminated and he was entitled to be reinstated in job with back wages and other benefits with interest @ 12% per annum. In sequel to the demand notice, the Labour Officer-cum-Conciliation Officer sent a notice to the management on 14.12.2009 to settle the matter amicably. The management was directed to file reply to the demand notice within one week. Management filed reply to the same vide Annexure P-9 dated 11.1.2010. It was reiterated that respondent No. 4 has sought voluntary retirement vide application dated 12.3.2009 and the same was accepted by the management on 14.3.2009. According to the management, the petitioner has been paid all the wages, allowances, leave encashment, L.T.A. V.R.S. compensation, gratuity, welfare fund contribution bonus ex-gratia, ex-gratia under Voluntary Retirement Scheme through cheque dated 26.3.2009. He has also applied for the withdrawal of provident fund and accumulation and fixation of pension under family pension scheme. Respondent No. 4 filed rejoinder to the reply filed by the management on 21.1.2010. However, on the basis of the failure report, submitted by the Labour-cum-Conciliation Officer, respondent No. 2 referred the matter to the Labour Court-cum-Industrial Tribunal, Shimla on 13-10.2010. 7. Notices were issued to the respondents.
Respondent No. 4 filed rejoinder to the reply filed by the management on 21.1.2010. However, on the basis of the failure report, submitted by the Labour-cum-Conciliation Officer, respondent No. 2 referred the matter to the Labour Court-cum-Industrial Tribunal, Shimla on 13-10.2010. 7. Notices were issued to the respondents. Respondents No. 1 and 2 have filed detailed reply. Respondents No. 3 and 4 have not chosen to file any reply. Stand of respondents No. 1 and 2 is that all the facts and circumstances were taken into consideration while referring the matter to the Labour Officer-cum-Conciliation Officer on 13.10.2010. According to the reply, the management had resorted to illegal lock out. The lock out was lifted after the intervention of Labour Commissioner on 31.10.2008. The management had called respondent No. 4 in the Cabin and pressurized him to opt for voluntary retirement scheme. He was forced to sign many blank papers of the voluntary scheme. His services were illegally terminated. The management has filed rejoinder to the reply filed by respondents No. 1 and 2 and reiterated its stand taken in the main petition. 8. Mr. Rahul Mahan has strenuously argued that once respondent No. 4 had sought the voluntary retirement and the same has been accepted, master and servant relationship had come to an end. According to him, respondent No. 4 after seeking voluntary retirement ceased to be workman u/s 2(s) of the Industrial Disputes Act, 1947 (hereinafter referred to as the "Act" for short). He then argued that no industrial dispute was either apprehended or existed and thus the reference could not be made by the Labour Court. According to him, respondent No. 4 has encashed the cheque amounting to Rs.3,96,830/- and has also withdrawn the amount of his general provident fund. He then argued that application of respondent No. 4 was accepted on 14.3.2009 and he has served the demand notice on 14.12.2009, which according to Mr. Rahul Mahajan was after thought to pressurize the management. According to him, the issuance of demand notice was abuse of process of law. According to him, the action of respondent No. 4 seeking retirement was voluntary. He has further contended that respondents-workmen had also entered into settlement with the management and the same is binding between the parties as per section 18 of the Industrial Disputes Act, 1947 (hereinafter referred to as the "Act" for brevity sake).
According to him, the action of respondent No. 4 seeking retirement was voluntary. He has further contended that respondents-workmen had also entered into settlement with the management and the same is binding between the parties as per section 18 of the Industrial Disputes Act, 1947 (hereinafter referred to as the "Act" for brevity sake). He lastly contended that respondent No. 2 has not applied his mind to all the facts and circumstances of the case while referring the matter to the Labour Court-cum-Industrial Tribunal. 9. Mr. R.K. Bawa, learned Advocate General and Mr. V.D. Khidtta have supported the issuance of Annexure P-11 dated 13.10.2010 whereby the matter has been referred to Labour Court-cum-Industrial Tribunal. Mr. R.K. Bawa has also argued that respondent No. 2 has applied his mind after taking into consideration the failure report of the Labour-cum- Conciliation Officer while referring the matter to the Labour Court-cum-Industrial Tribunal. Mr. V.D. Khidtta has argued that the management had pressurized his client to seek voluntary retirement. He further argued that the master and servant relationship has not come to an end even if the offer of his client seeking voluntary retirement was accepted. 10. We have heard the learned Counsel for the parties and have perused the pleadings carefully. 11. Voluntary Retirement Scheme has come into force with effect from 2.3.2009. It was made applicable to all the workmen, who had completed 40 years of age and had put in ten years or more service. The benefits payable to the workmen have been duly enumerated in the scheme. The workmen had been put to caveat as per the recitals in the scheme that no request for withdrawal will be entertained from the employee who has once resigned under the scheme and the workman shall cease to be in the employment of the company. His name was to be deleted from the muster roll of the company. Petitioner has submitted application as per Annexure P-3 dated 12.3.2009 seeking voluntary retirement; it was duly accepted by the management on 14.3.2009. He has withdrawn a sum of Rs.3,96,830/- and has also withdrawn the retiral benefits, including general provident fund etc. Though respondent No. 4 has sought voluntary retirement on 12.3.2009, he has raised demand notice on 14.12.2009. The delay between 12.3.2009 to 14.12.2009 has not been explained.
He has withdrawn a sum of Rs.3,96,830/- and has also withdrawn the retiral benefits, including general provident fund etc. Though respondent No. 4 has sought voluntary retirement on 12.3.2009, he has raised demand notice on 14.12.2009. The delay between 12.3.2009 to 14.12.2009 has not been explained. The stand of the management before the Labour Court-cum-Industrial Tribunal was that respondent No. 4 has sought voluntary retirement and the same was accepted by the management on 14.12.2009 and his dues have been paid. 12. Mr. V.D. Khidtta has argued that his client has been forced to sign the documents. In case respondent No. 4 had been forced to sign the documents after pressurizing him in the Cabin, it was always open to him to take recourse to law. His normal reaction would have been to file an application against the management before the Labour-cum-Conciliation Officer or it was open to him to raise issue through the Union. He has remained silent with effect from 12.3.2009 to 14.12.2009. He was estopped from raising the demand after accepting the compensation and other retiral benefits. His conduct does not inspire confidence. 13. As far as the powers of the Labour Court-cum-Industrial Tribunal u/s 10 of the Act are concerned, these are administrative in nature. However, it is well settled law by now that the Labour Commissioner has to apply his mind after taking into consideration all the facts and circumstances of the case. He has to ensure that the person, who is seeking reference, is workman within section 2(s) of the Act. In the case in hand, once respondent No. 4 has accepted his dues after the acceptance of voluntary retirement, he is ceased to be workman within the meaning of section 2(s) of the Act. The relationship of master and servant has been severed and neither any actual industrial dispute existed nor apprehended at the time when the Labour Commissioner has decided to refer the reference to Labour Court-cum-Industrial Tribunal. 14. Their Lordships of the Hon'ble Supreme Court in National Engineering Industries Ltd. Vs. State of Rajasthan and Others, AIR 2000 SC 469 have held that existence or apprehension of an industrial dispute is a condition precedent for making a reference. Their Lordships have further held that High Court can entertain a writ petition impugning a reference on the ground of non-existence of an actual or apprehended industrial dispute.
State of Rajasthan and Others, AIR 2000 SC 469 have held that existence or apprehension of an industrial dispute is a condition precedent for making a reference. Their Lordships have further held that High Court can entertain a writ petition impugning a reference on the ground of non-existence of an actual or apprehended industrial dispute. Their Lordships have held as under: 24. In Workmen Employed by Hindustan Lever Ltd. Vs. Hindustan Lever Limited, AIR 1984 SC 1683 this Court said as under (para 4): Section 10(1) confers power on the appropriate Government to refer an existing or apprehended industrial dispute, amongst others, to the Industrial Tribunal for adjudication. The dispute therefore, which can be referred for adjudication of necessity, has to be an industrial dispute which would clothe the appropriate Government with power to make the reference, and the Industrial Tribunal to adjudicate it. 25. It will be thus seen that High Court has jurisdiction to entertain a writ petition when there is allegation that there is no industrial dispute and none apprehended which could be subject matter of reference for adjudication to the Industrial Tribunal u/s 10 of the Act. Here it is a question of jurisdiction of the Industrial Tribunal, which could be examined by the High Court in its writ jurisdiction. It is the existence of the industrial tribunal which would clothe the appropriate Government with power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended appropriate Government lacks power to make any reference. A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud misrepresentation or concealment of facts or even corruption and other inducements it could be subject matter of yet another industrial dispute which an appropriate Government may refer for adjudication after examining the allegations as there is an underlying assumption that the settlement reached with the help of the Conciliation Officer must be fair and reasonable.
A settlement which is sought to be impugned has to be scanned and scrutinized. Sub-sections (1) and (3) of section 18 divide settlements into two categories, namely, (1) those arrived at outside the conciliation proceedings and (2) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all the parties to the industrial disputes, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter. A settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which has objected to the same. Recognised union having majority of members is expected to protect the legitimate interest of labour and enter into a settlement in the best interest of labour. This is with the object to uphold the sanctity of settlement reached with the active assistance of the Conciliation Officer and to discourage an individual employee or minority union from scuttling the settlement. When a settlement is arrived at during the conciliation proceedings it is binding on the members of the Workers' Union as laid down by section 18(3)(d) of the Act. It would ipso facto bind all the existing workmen who are all parties to the industrial dispute and who may not be members of unions that are signatories to such settlement u/s 12(3) of the Act. Act is based on the principle of collective bargaining for resolving industrial disputes and for maintaining industrial peace. "This principle of industrial democracy is the bedrock of the Act", as pointed out in the case of P. Virudhachalam v. Management of Lotus Milts 1998 (78) FLR 107 (SC). In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out. 15. Their Lordships of the Hon'ble Supreme Court in The Nedungadi Bank Ltd. Vs.
In all these negotiations based on collective bargaining individual workman necessarily recedes to the background. Settlements will encompass all the disputes existing at the time of the settlement except those specifically left out. 15. Their Lordships of the Hon'ble Supreme Court in The Nedungadi Bank Ltd. Vs. K.P. Madhavankutty and Others, AIR 2000 SC 839 have held that the power of reference should be exercised reasonably and in a rational manner and not in a mechanical fashion. Their Lordships have held as under: 6. Law does not prescribe any time limit for the appropriate Government to exercise its powers u/s 10 of the Act. It is not that this power can be exercised at any point of time and to revive matters which had since been settled. Power is to be exercised reasonably and in a rational manner. There appears to us to be no rational basis on which the Central Government has exercised powers in this case after lapse of about seven years of order dismissing the respondent from service. At the time reference was made no industrial dispute existed or could be even said to have been apprehended. A dispute which is stale could not be the subject-matter of reference u/s 10 of the Act. As to when a dispute can be said to be stale would depend on the facts and circumstances of each case. When the matter has become final, it appears to us to be rather incongruous that the reference be made u/s 10 of the Act in the circumstances like the present one. In fact it could be said that there was no dispute pending at the time when the reference in question was made. The only ground advanced by the respondent was that two other employees who were dismissed from service were reinstated. Under what circumstances they were dismissed and subsequently reinstated is nowhere mentioned. Demand raised by the respondent for raising industrial dispute was ex facie bad and incompetent. 16. Their Lordships of the Hon'ble Supreme Court in ANZ Grindlays Bank Ltd (now known as Standard Chartered Grindlays Bank Ltd.) Vs.
Under what circumstances they were dismissed and subsequently reinstated is nowhere mentioned. Demand raised by the respondent for raising industrial dispute was ex facie bad and incompetent. 16. Their Lordships of the Hon'ble Supreme Court in ANZ Grindlays Bank Ltd (now known as Standard Chartered Grindlays Bank Ltd.) Vs. Union of India (UOI) and Others, AIR 2006 SC 296 have held that interference though normally not proper while exercising powers under Article 226 of the Constitution of India, but in case of infirmity in/and where futility of reference can be demonstrated from bare reading of its terms and admitted facts, validity of the reference can be examined under Article 226 of the Constitution of India, as no evidence is required to be considered for examining such issue raised. 17. Their Lordships of the Hon'ble Supreme Court in Moolchand Kharati Ram Hospital K. Union v. Labour Commissioner and Others 2001 LLR 1185 SC, has held that though reference for adjudication is "administrative order", however, if the authority has not taken into consideration all the relevant consideration, High Court can interfere u/s 226 of the Constitution of India. Their Lordships have held as under: 4. In these appeals the contention put forth before us is that the order made by the Government, making reference to the Tribunal, is administrative in character and therefore, the High Court should not have interfered with the same. Even if, we proceed on the basis that the nature of the order, making a reference, is administrative in character, it is certainly open to the High Court to examine whether relevant considerations in making the reference had been taken note of or not. In the view of the High Court relevant considerations have not been taken note of by the Government and that finding cannot be seriously disputed. 18. Now, the Court will advert to the general principles of Voluntary Retirement Scheme and the effect of acceptance of application for voluntary retirement and to see whether the master and servant relationship comes to an end after the acceptance of offer. 19. Their Lordships of the Hon'ble Supreme Court in Bank of India and Others Vs. O.P. Swaranakar etc., AIR 2003 SC 858 have held that a person who has accepted part of benefits under the Voluntary Retirement Scheme could not be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand.
19. Their Lordships of the Hon'ble Supreme Court in Bank of India and Others Vs. O.P. Swaranakar etc., AIR 2003 SC 858 have held that a person who has accepted part of benefits under the Voluntary Retirement Scheme could not be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand. Their Lordships have held as under: 115. The scheme is contractual in nature. The contractual right derived by the concerned employees, therefore, could be waived. The employees concerned having accepted a part of the benefit could not be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand. 116. In Lachoo Mai's (supra) the law is stated in following terms : The general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with or without infringing any public right or public policy. Thus the maxim which sanctions the non-observance of the statutory provision is cuilibet licet renuntiare juri pro se introducto. (See Maxwell on Interpretation of Statutes. Eleventh Edition, pages 375 and 376). If there is any express prohibition against contracting out of a statute in it then no question can arise of any one entering into a contract which is so prohibited but where there is no such prohibition it will have to be seen whether an Act is intended to have a more extensive operation as a matter of public policy. In Halsbury's Laws of England, Volume 8, Third Edition it is stated in Paragraph 248 at page 1432 : As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it is said, can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may, SC 479 however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void. 20. Their Lordships of the Hon'ble Supreme Court in P. Lal Vs.
Statutory conditions may, SC 479 however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the legislature has expressly provided that any such agreement shall be void. 20. Their Lordships of the Hon'ble Supreme Court in P. Lal Vs. Union of India (UOI) and Others, AIR 2003 SC 1499 ) have held that the moment the Government accepted the notice of voluntary retirement, the retirement became effective and relationship of master and servant stood severed. Their Lordships have held as under: 27. We have considered the submissions of both the parties. As has been set out, in Shambhu Murari's case and Bank of India's case, an employee can withdraw his application for voluntary retirement before the effective date. The effective date would necessarily be the date on which the retirement takes effect. The request, which Respondent No. 3 had made by his letter dated 5th May, 1993, was to be allowed to retire voluntarily with immediate effect He had also deposited Rs. 30,870/- in lieu of three months' notice. Thus so far as Respondent No. 3 was concerned the effective date was 5th May, 1993. Of course Rule 16 (2-A) of the All India Services (Death-cum-Retirement) Rules, 1958 provides that a notice of retirement had to be accepted by the Government of India. In this case, the Government of India accepted the request on 2nd March, 1995 and permitted Respondent No. 3 to retire with effect from May 1993. The moment Government of India accepted the notice the retirement became effective. The relationship of master and servant came to an end. We are unable to accept the submission that the relationship of master and servant did not terminate till the acceptance was communicated to Respondent No. 3. It must be remembered that Rules 16(2) and 16(2A) enable a member to retire from service on giving the required notice. Once such a notice is given it merely has to be accepted by the Government of India. The moment it is accepted the retirement would become effective. If any other view is taken it would lead to absurd results.
It must be remembered that Rules 16(2) and 16(2A) enable a member to retire from service on giving the required notice. Once such a notice is given it merely has to be accepted by the Government of India. The moment it is accepted the retirement would become effective. If any other view is taken it would lead to absurd results. Such a view would mean that even though a member had given a notice for voluntary retirement stopped attending office and/or gone away abroad and/or taken up some other employment after a number of years of absence the member could claim to come back into service because the Government, for some unforeseen reasons, had not communicated its acceptance. Taken to its absurd length such a member could after superannuation claim that, as the services were not terminated, he was entitled to pension and gratuity on the basis that he had continued in service. The requirement of communication of acceptance would only arise in cases where, even after giving of a notice of voluntary retirement the member continues to work/perform his duties. In such cases the member would need to know from what date he can stop attending office. In cases where the member has by his own conduct abandoned service the severance of the relationship of master and servant takes place immediately on acceptance of notice. We are unable to accept the submission that the severance of relationship of master and servant cannot take effect until there is an Order by the President of India and the same is duly notified in the Gazette. Rules 16(2) and 16(2A) have been set out hereinabove. All that it requires is acceptance by the Government of India and not by the President of India. Admittedly the request for voluntary retirement has been accepted by the Government of India on 2nd March, 1995. No provision or rule could be shown which requires such acceptance to be gazetted. On the contrary, as has been set out hereinabove, in its affidavit before the Punjab & Haryana High Court, the Government of Punjab had categorically stated that there was no provision for gazetting such an order. 30. In view of the above it is held that the High Court erred in coming to the conclusion that the relationship of master and servant had not been terminated.
30. In view of the above it is held that the High Court erred in coming to the conclusion that the relationship of master and servant had not been terminated. As has been set out hereinabove, the relationship of master and servant had been terminated before Respondent No. 3 sought to withdraw his request for voluntary retirement on 18th April, 1995. Once relationship of master and servant had been severed and/or terminated, by this back door method. Respondent No. 3 could not get back to service. The Order of the Government of India dated 14th August, 1997 cannot be sustained and was correctly quashed by the Central Administrative Tribunal. In this view of the matter the impugned Judgment requires to be and is hereby set aside. The Order of the Central Administrative Tribunal dated 3rd February, 1998 is restored. 33. In view of what has happened in the past it needs to be clarified that Respondent No. 3 has ceased to be in Government service with effect from May 1993 in the rank/position that he then held. There is now no necessity of issuing an order terminating his service. All that is required is correction of official record if they purport to show that Respondent No. 3 has continued in service. So far as Respondent No. 3 is concerned, this Judgment and Order of Central Administrative Tribunal are notice to him that his request for voluntary retirement dated 5th May, 1993 has taken effect from May, 1993. It goes without saying that with effect from May 1993 Respondent No. 3 would not be entitled to any pay or any other consequential benefits. It is expected that if any pay and/or benefits have been given to him the same would be returned/ reimbursed by him so that the concerned Government is not forced to recover the same. Appeals allowed with costs. 21. Their Lordships of the Hon'ble Supreme Court in A.K. Bindal and Another Vs. Union of India (UOI) and Others, AIR 2003 SC 2189 have held that once employees opt to retire under V.R.S. and accept the benefits thereunder their rights as employees come to an end and thereafter they cannot again assert their rights and re-agitate their claim for pay revision for pre-retirement period. Their Lordships have held as under: 27.
Union of India (UOI) and Others, AIR 2003 SC 2189 have held that once employees opt to retire under V.R.S. and accept the benefits thereunder their rights as employees come to an end and thereafter they cannot again assert their rights and re-agitate their claim for pay revision for pre-retirement period. Their Lordships have held as under: 27. Apart from what we have discussed earlier, it is necessary to take note of a subsequent development which has a serious impact on the relief claimed by the petitioners. The respondents have filed an affidavit on 15.2.2003 sworn by Shri Pawan Wadhwa, Deputy Secretary, Department of Fertilizers, Ministry of Chemicals and Fertilizers. It is averred in the said affidavit that the accumulated losses as on 31.1.2003 of HFC have been Rs.7421.52 crores and that of FCI have been Rs.8874.00 crores. To meet the expenditure towards salary, wages as well as other administrative expenses in these units including preservation cost of the plants, total plan and non- plan budgetary assistance to the tune of Rs.2,227.00 crores has been extended by the Government of India till 31.1.2003. The commercial production in some of the units of both the companies never commenced and the remaining units suspended operations one by one as viability/economics of production of urea in these plants had become extremely unfavourable. The revival packages of these companies could not be taken up for want of funding tie up with the Financial Institutions on account of their reservation about the techno-economic viability of the proposals. The revival package based on unit-wise techno-economic viability were considered by the competent authority in the Government from time to time culminating in Government's decision on 18.7.2002 and 5.9.2002 for closure of majority of the units of both FCI and HFC along with supporting establishments. The Government had incurred an expenditure for Rs.72.96 lakhs per month in respect of HFC and Rs.69 lakhs per month in respect of FCI in implementing the orders of this Court dated 19.4.2000 and 18.8.2000. The accumulated expenditure which had been borne by the Government of India through non-plan budgetary support till date on this account adds up to Rs.16.56 crores in respect of FCI and Rs.21.56 crores in respect of HFC. It is further averred that in October 1998 the Government announced a scheme for Voluntary Retirement for the employees of the Central Public Sector Undertakings.
It is further averred that in October 1998 the Government announced a scheme for Voluntary Retirement for the employees of the Central Public Sector Undertakings. This scheme was liberalised and another scheme was announced on 5.5.2000 in order to give benefit to the employees of the Enterprises in which pay revision with effect from 1.1.1992 and 1.1.1997 had not been affected. The Government announced further liberalised scheme on 6.11.2001 under which the Voluntary Retirement compensation on the basis of their existing pay (Basic + DA) was increased by 100 per cent and 50 per cent respectively. According to the respondents almost 99 per cent of employees of FCI and HFC had opted for the Voluntary Retirement Scheme (for short VRS). The exact figures regarding implementation of the Scheme as on 24.3.2003 is given below : PSU-WISE DETAILS OF IMPLEMENTATION OF VRS Sl. No. Item HFC FCI 1. Total employees as on 20.9.2002 4881 5712 2. Employees opted for VRS 4781 5675 3. Employees released 4325 5097 4. Funds released by DOF (Rs. in crores) 174.50 253.50 5. Funds actually utilized by the company 154.10 237.30 6. Balance funds with the company 20.50 16.20 34. This shows that a considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and forgoing all his claims or rights in the same. It is a package deal of give and take. That is why in business world it is known as "Golden Handshake'. The main purpose of paying this amount is to bring about a complete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, 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.
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 Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated. 35. The contention that the employees opted for VRS under any kind of compulsion is not worthy of acceptance. The petitioners are officers of the two companies and are mature enough to weigh the pros and cons of the options which were available to them. They could have waited and pursued their claim for revision of pay scale without opting for VRS. However they, in their wisdom thought that in the fact situation VRS was a better option available and chose the same. After having applied for VRS and taken the money it is not open to them to contend that they exercised the option under any kind of compulsion. In view of the fact that nearly ninety nine per cent of employees have availed of the VRS Scheme and have left the companies (FCI & HFC), the writ petition no longer survives and has become infructuous. 22. Their Lordships of the Hon'ble Supreme Court in Bank of India and Others v. K.V. Vivek Ayer and Another (2006) 9 SCC 177 have held that withdrawal of the amount and making of fixed deposit thereof by the employee amounted to utilization and acceptance of the benefits by him under voluntary retirement scheme. Their Lordships have further held that the employee having accepted the benefits cannot be allowed to resile therefrom. Their Lordships have held as under: 9. The crucial question is whether the employee concerned had utilised the amount deposited. It was clarified in Punjab National Bank case 3 that the deposit of a part of the benefit unilaterally would not amount to acceptance of the benefit under the Scheme. However, when there is utilisation of the amount so deposited that would be covered by the ratio in Bank of India case. The mere fact that the application for not giving effect to the question for being covered by the Scheme was made after a few days cannot change the position in law. Moreover, the making of fixed deposits by the respondent employee is a clear case of utilisation.
The mere fact that the application for not giving effect to the question for being covered by the Scheme was made after a few days cannot change the position in law. Moreover, the making of fixed deposits by the respondent employee is a clear case of utilisation. Merely because the fixed deposits were made in Appellant 1 Bank, that does not take away the effect of the fact that it was utilised by the respondent employee. 23. Their Lordships of the Hon'ble Supreme Court in CEAT Ltd. Vs. Anand Abasaheb Hawaldar and Others, AIR 2006 SC 1172 have held that the workman who had sought voluntary retirement ceased to be workman within the meaning of section 2(s) of the Act. 24. Their Lordships of the Hon'ble Supreme Court in HEC Voluntary Retd. Employees Welfare Society and another v. Heavy Engineering Corpn. Ltd. and Others 2006 (109) FLR 355 (SC) have held that once an employee opts to retire voluntarily, in terms of the contract, he cannot raise a claim for higher salary, unless a statute or policy formulated in that behalf by the employer provides otherwise. 25. In Gyanendra Sahay Vs. Tata Iron and Steel Co. Ltd., AIR 2006 SC 2795 their Lordships of the Hon'ble Supreme Court had occasion to go into the question whether undue pressure was exerted on the workman to accept the voluntary retirement. Case of the appellant was that he was forced to seek voluntary retirement. However, their Lordships have observed that the appellant has written in his own handwriting the letter seeking his voluntary/premature retirement and personally submitted the same to the authority concerned, which was accepted with immediate effect and he was relieved on the same day by the management. He was allowed all the retiral benefits which would have otherwise been available to him at his superannuation. In addition, his request for ex gratia payment was also accepted. In these circumstances, his plea that he was forced was not accepted. Their Lordships have held as under: 10. We have carefully read the judgment passed by the learned Judges of the Division Bench of the High Court. The learned Judges while rejecting the contention of the appellant herein have given cogent and convincing reasons in arriving at the conclusion in the appeal.
Their Lordships have held as under: 10. We have carefully read the judgment passed by the learned Judges of the Division Bench of the High Court. The learned Judges while rejecting the contention of the appellant herein have given cogent and convincing reasons in arriving at the conclusion in the appeal. This apart, the appellant in his own handwriting submitted the letter dated 1.4.1995 for premature/voluntary retirement which was accepted on the same day. When the letter was written in the handwriting of the appellant and presented the same in-person to the authority concerned, it cannot be said that the service of the respondent was dispensed with by the respondent-employer unauthorisedly. 12. It is seen from the said letter that the request for premature/voluntary retirement was accepted by the management on 1.4.1995 with immediate effect. The letter also clearly states that the appellant will be entitled to all the retiral benefits of the Company which would have otherwise been available to him at his superannuation. The management has also stated that the appellant's request for ex-gratia is being considered separately. By the said letter, the appellant was directed to get in touch with the General Manager (Finance & Accounts) for his full and final settlement. 13. In this context, it is useful to refer page 96 of the appeal paper book which was marked as Annexure P-5 which is a letter dt. 12.4.1995 addressed to the appellant. It is stated in the letter that the management has decided to extend the following facilities to the appellant on his premature retirement:- 1. Retiring Gratuity as per rules for the actual service rendered by you. 2. Provident Fund, including Co.'s contribution in full. 3. Superannuation Fund, as per rules. 4. Payment of cash, equivalent to the privilege and furlough leave including proportionate leave due to you. 5. Free medical facilities as applicable to the retiring officers in the respective divisions. In addition to the above, you will be eligible for an ex-grade payment, details of which will be available with DM (Accounts), Mines Division. You may kindly contact him on any working day during office hours. 14. We have also perused the Memo of Appeal and other representation made by the appellant. The appellant has made a vague allegation that he was forced to take retirement.
You may kindly contact him on any working day during office hours. 14. We have also perused the Memo of Appeal and other representation made by the appellant. The appellant has made a vague allegation that he was forced to take retirement. Neither he has made it specific nor had given the name of any officer who compelled him to write the letter dt. 1st April, 1995 or exercised undue and excessive pressure to sign the letter of premature/voluntary retirement. Though the Labour Court has come to the conclusion that the appellant was compelled to submit the letter of resignation, the same is not supported by any acceptable evidence. It is settled law that suspicion and doubt cannot take the place of evidence. No finding of fact can be given on mere doubt and suspicion or on the basis of baseless allegations. The appellant having written letter of voluntary retirement and after having accepted the retiral benefits without any protest cannot now turn round and say that he was compelled to submit his premature/voluntary retirement. The appeal has absolutely no merits and we, therefore, have no hesitation to dismiss the same and to affirm the order passed by the learned Judges of the Division Bench of the High Court. No order as to costs. 26. In the instant case also respondent No. 4 has not given the name of the officer/official, who had forced him to sign the documents. He submitted the application voluntarily. He remained silent for a period of ten months. In these circumstances, he cannot be permitted to seek his reinstatement. 27. Their Lordships of the Hon'ble Supreme Court in Vijay Kumar and Others v. Whirlpool of India Limited and Others' have held that the employees who had already opted for voluntary retirement scheme and had received the amounts payable thereunder, were not entitled to the benefits under such settlement u/s 33-C(2) of the CEAT Ltd. Vs. Anand Abasaheb Hawaldar and Others, AIR 2006 SC 1172 . 28. The learned Single Judge of Bombay High Court in Premier Automobiles Limited v. PAL VRS Employees Welfare Association and Another 2008 (116) FLR 370 (SC) has held that a person who had voluntarily retired and received all benefits under Voluntary Retirement Scheme arising out of such resignation could not be treated as a 'workman' within the meaning of section 2(s) of the Industrial Disputes Act, 1947. 29.
29. The Division Bench of Punjab and Haryana High Court in Maruti Udyog Limited Vs. State of Haryana and Another, (2008) 3 LLJ 549 has held that there was complete severance of employer-employee relationship after the employee has opted for voluntary retirement and the same was accepted. In this case, the workman had opted for voluntary retirement and had raised industrial dispute after 2% years with a plea that acceptance of voluntary retirement scheme by him, was not made due to perfect mental state. The reference was made by the appropriate Government over termination of his service, which was assailed by the management. The Division Bench quashed the order whereby reference was made to the Labour Court. 30. Learned Single Judge of Bombay High Court in Balasaheb Rangnath Navale Vs. Bharat Forge Limited, (2008) 3 LLJ 280 , 589 (Bom.) has rejected the appeal of the workmen. The facts of this case were that the workmen had received a sum of Rs.1,75,000/- each under the Voluntary Retirement Scheme and thereafter challenged this action on the ground of unfair labour practice. This contention was rejected by the Industrial Tribunal and the same was upheld by the High Court. 31. The Division Bench of Madras High Court in EID Parry (India) Ltd. Vs. M.N. Padmanabhan and Another, (2008) 3 LLJ 687 ) has held that respondent ceased to be workman having accepted amount under voluntary retirement scheme and there could not be any scope to construe that there was dispute existing to raise claim u/s 2-A of the Industrial Dispute Act. 32. What emerges from the discussion made hereinabove above is that workmen have sought voluntary retirement and the same was accepted by the management. They have been paid lump sum amount and have also withdrawn other retiral benefits. They have remained silent for a period of ten months. They have not given the details and the name of the officer/officer, who had forced them to sign the documents. They have not led any tangible evidence to prove that the management had pressurized them to seek voluntary retirement. They have ceased to be workmen in the employment of petitioner-company. There was no actual or apprehended industrial dispute enforceable u/s 2(k) of the Act. The competent authority has not applied its mind after taking into consideration all the facts and circumstances of the case while making reference to the Labour Court-cum-Industrial Tribunal. 33.
They have ceased to be workmen in the employment of petitioner-company. There was no actual or apprehended industrial dispute enforceable u/s 2(k) of the Act. The competent authority has not applied its mind after taking into consideration all the facts and circumstances of the case while making reference to the Labour Court-cum-Industrial Tribunal. 33. The workmen in all the writ petitions had sought voluntary retirement. They have got their cheques encashed and have also withdrawn other retiral benefits. 34. Mr. Rahul Mahajan has also drawn the attention of the Court to settlement, which has arrived at between the workmen and management. It is evident from the phraseology of memorandum of settlement that the management has accepted the request of the workman for voluntary retirement and they were to be relieved from the duties and the management has agreed to make total payment of V.R.S. compensation and has also agreed to pay gratuity, annual bonus, un-availed earned leave, legal/statutory dues and wages earned etc. It was postulated in the memorandum of settlement that the workmen would submit claim for payment of provident fund dues in the prescribed forms and the management would forward the claims for withdrawal to the appropriate authorities. The parties have also mutually agreed to forward the copy of this settlement to the Labour Department for registration as required under the law. The settlement has been signed on behalf of the management and also by the workmen in the presence of witnesses. Once the settlement has been arrived at, the workmen are precluded from challenging the same. The parties are bound by the terms and conditions of the settlement as per section 18 of the Act. What is settlement has been succinctly explained by their Lordships of the Hon'ble Supreme Court in Barauni Refinery Pragatisheel Shramik Parishad Vs. Indian Oil Corporation Ltd., AIR 1990 SC 1801 as under: 8. Since the High Court has answered the first point in the affirmative i.e. in favour of the workmen, we do not consider it necessary to deal with that aspect of the matter and would confine ourselves to the second aspect which concerns the binding character of the settlement.
Indian Oil Corporation Ltd., AIR 1990 SC 1801 as under: 8. Since the High Court has answered the first point in the affirmative i.e. in favour of the workmen, we do not consider it necessary to deal with that aspect of the matter and would confine ourselves to the second aspect which concerns the binding character of the settlement. Section 2(p) of the Industrial Disputes Act, 1947 defines a settlement as a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliating proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to the officer authorised in this behalf by the appropriate Government and the Conciliation Officer. Section 4 provides for the appointment of Conciliation Officers by the appropriate Government. Section 12(1) says that where any industrial dispute exists or is apprehended the Conciliation Officer may, or where the dispute relates to a public utility service and a notice u/s 22 has been given, shall, hold conciliation proceedings in the prescribed manner. Sub-section (2) of section 2 casts a duty on the Conciliation Officer to investigate the dispute and all matters connected therewith with a view to inducing the parties to arrive at a fair and amicable settlement of the dispute. If such a settlement is arrived at in the course of conciliation proceedings, sub-section (3) requires the Conciliation Officer to send a report thereof to the appropriate Government together with the memorandum of settlement signed by the parties to the dispute. Section 18(1) says that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of the conciliation proceedings shall be binding on the parties to the agreement.
Section 18(1) says that a settlement arrived at by agreement between the employer and the workmen otherwise than in the course of the conciliation proceedings shall be binding on the parties to the agreement. Sub-section (3) of section 18 next provides as under: A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-section (3-A) of section 10-A or award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on- (a) all parties to the industrial dispute; (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, Arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause; (c) where a party referred to in Clause (a) or Clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates; (d) where a party referred to in Clause (a) or Clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. It may be seen on a plain reading of sub-sections (1) and (3) of section 18 that settlements are divided into two categories, namely, (i) those arrived at outside the conciliation proceedings and (ii) those arrived at in the course of conciliation proceedings. A settlement which belongs to the first category has limited application in that it merely binds the parties to the agreement but the settlement belonging to the second category has extended application since it is binding on all parties to the industrial dispute, to all others who were summoned to appear in the conciliation proceedings and to all persons employed in the establishment or part of the establishment, as the case may be, to which the dispute related on the date of the dispute and to all others who joined the establishment thereafter.
Therefore, a settlement arrived at in the course of conciliation proceedings with a recognised majority union will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. To that extent it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the Conciliation Officer and to discourage an individual employee or a minority union from scuttling the settlement. There is an underlying assumption that a settlement reached with the help of the Conciliation Officer must be fair and reasonable and can, therefore, safely be made binding not only on the workmen belonging to the union signing the settlement but also on others. That is why a settlement arrived at in the course of conciliation proceedings is put on par with an award made by an adjudicatory authority. The High Court was, therefore, right in coming to the conclusion that the settlement dated 4th August, 1983 was binding on all the workmen of the Barauni Refinery including the members of Petroleum and Chemical Mazdoor Union. 35. Accordingly, in view of the observations and discussions made hereinabove and the definitive law laid down by their Lordships of the Hon'ble Supreme Court and High Courts, all the writ petition are allowed. Orders whereby reference has been made by respondent No. 2 to the Labour Court-cum-Industrial Tribunal are quashed and set aside. Pending application(s), if any, also stands disposed of. There shall, however, no order as to costs.