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2014 DIGILAW 1241 (AP)

National Mineral Development Corporation Limited v. K. V. Subba Rao

2014-10-07

L.N.REDDY

body2014
JUDGMENT L. Narasimha Reddy, J. 1. These writ appeals are filed against the common order, dated 29.07.2013, passed by the learned Single Judge in W.P. Nos. 7979 and 8561 of 2004. 2. For the sake of convenience, the parties herein are referred to as arrayed in the writ petitions. 3. The petitioners were employees of the Sponge Iron India Limited (SIIL), a Public Sector Undertaking (PSU). As a measure of reduction of the work force, the Company introduced Voluntary Retirement Scheme (VRS), initially through circular, dated 28.04.1995, and the same was extended from time to time. The petitioners availed the benefit under VRS and they were retired from service, with effect from 15.10.1998. The scheme inter alia provided for payment of ex-gratia equivalent to 1 months emoluments and additional compensation equivalent to months pay, for every completed year of service. The amounts calculated on that basis have been paid to the petitioners and they ceased as employees. The pay scales in the PSUs were revised by the Government of India through proceedings, dated 25.06.1999, with effect from 01.01.1997. An option was given to the PSUs to adopt the revision of pay scales, depending upon their financial viability. SIIL has since been merged with the National Mineral Development Corporation (NMDC), the 4th respondent in both the writ petitions, with effect from 01.07.2010. 4. Even before SIIL was merged with the 4th respondent, the petitioners laid claim for re-calculation of their benefits under VRS on the basis of the Revised Pay Scales (RPS). According to them, once the pay scales became operative from 01.01.1997, the ex-gratia and additional compensation are to be calculated on the basis of the same. Their request was not acceded to either by the SIIL or by the 4th respondent. Hence, they filed the writ petitions. 5. The 4th respondent contested the writ petitions by filing a detailed counter-affidavit. According to it, the relationship between the petitioners and the very employer ceased with the acceptance of the benefits under VRS. It was also their contention that the RPS would apply only to such of the employees, who are on the rolls of the company, as on 16.08.2002, and since the petitioners ceased to be employees of the SIIL, in the year 1998 itself, they are not entitled for any benefit. The learned Single Judge allowed the writ petitions through common order under appeals. 6. The learned Single Judge allowed the writ petitions through common order under appeals. 6. Sri K. Raghavacharyulu, learned counsel for the appellant/the 4th respondent, submits that the relationship between the petitioners, on the one hand, and the SIIL, on the other hand, was purely contractual in nature and with their retirement on voluntary basis, that relation ceased to exist. He contends that after cessation of such relationship, the petitioners are not entitled to claim any benefit whatever. Placing reliance upon the judgments of the Supreme Court in A.K. Bindal v. Union of India, Officers & Supervisors of I.D.P.L. v. Chairman & M.D., I.D.P.L., and HEC Voluntary Retired Employees Welfare Society v. Heavy Engineering Corporation Limited, learned counsel further submits that the Supreme Court held that the employee, who retired on voluntary basis, cannot claim the benefit of RPS. 7. Sri P.S. Rajasekhar, learned counsel for the writ petitioners/1st respondent in both the appeals, on the other hand, submits that the very basis for extending the benefit under VRS is the scale of pay, which an employee is entitled to, and once the scale of pay of the petitioners was revised with effect from a date, anterior to the one, on which they have taken voluntary retirement, the benefits are to be calculated on the basis of the RPS. He contends that the precedents relied upon by the learned counsel for the 4th respondent are in relation to the claim of the employees of certain PSUs for adoption of the very RPS and not vis-a-vis the claims made by the employees of an organisation, which has already adopted the RPS. He submits that even on merits, the respective organisations, which were before the Hon'ble Supreme Court, stipulated a clause in the schemes to the effect that, an employee, who retires under VRS, is not entitled to claim RPS and such a situation does not exist in this case. Other contentions are also urged. 8. The petitioners availed the benefit under VRS in the year 1998, and they were extended the monthly benefit in terms thereof. The benefits provided under the scheme are as under: 1. The balance in the Provident Fund Account payable as per the CPF regulations. 2. Gratuity as per Gratuity Act and Rules as applicable to the employees. 3. 8. The petitioners availed the benefit under VRS in the year 1998, and they were extended the monthly benefit in terms thereof. The benefits provided under the scheme are as under: 1. The balance in the Provident Fund Account payable as per the CPF regulations. 2. Gratuity as per Gratuity Act and Rules as applicable to the employees. 3. Notice Pay will be regulated in terms of the service conditions of the employee with reference to the date of relief. 4. Cash equivalent of accumulated earned leave and half-pay leave (Commuted to full pay) subject to a maximum of 240 days (both put together). 5. ex-gratia payment equivalent to 1 months emoluments (Pay & DA) for each completed year of service. 6. Additional compensation equivalent to months pay as Additional Ad hoc Payment for every completed year of service. 7. of pay as Ad hoc Allowance for every completed year of service. 8. Gift amounting to Rs. 20,000/- duly supported by Bills in proof of purchase. 9. Train tickets to employee and his/her family including transportation charges by the entitled class as may be admissible in the case of superannuation/retirement. 10. Any other dues and payments as per the rules of the Company. 9. The petitioners did not have any grievance about the extension of the benefit under the circular. It is on account of a development that has taken place after the petitioners retired, that the claim was made. 10. It has already been mentioned that the Central Government revised the pay scales for the employees of PSUs. However, the adoption thereof was left to the respective organisations, depending upon their financial viability. 11. Admittedly, the SIIL, from which the petitioners retired, adopted the RPS. Had the RPS come into force, with effect from any date subsequent to the date on which the petitioners retired, there would not have been any possibility to consider their plea at all. However, the RPS came into force with effect from 01.01.1997. It is a different matter that the actual emoluments would be paid with effect from 01.04.2001 and the employees shall not be entitled to claim any arrears for the period between 01.01.1997 and 01.04.2001. The entire controversy revolves around the question as to whether the emoluments of the petitioners herein, as on the date of retirement, must be treated as those on the basis of un-revised pay scales or RPS. 12. The entire controversy revolves around the question as to whether the emoluments of the petitioners herein, as on the date of retirement, must be treated as those on the basis of un-revised pay scales or RPS. 12. The record discloses that based upon the circulars issued by the Central Government from time to time, the SIIL itself extended the benefit of RPS to the employees, who retired subsequent to 01.01.1997, but before the date on which the circular revising the pay scales, was issued. Such benefit, however, is denied to the employees, who retired on VRS, on the ground that they stand on a different footing. 13. There hardly exists any doubt that the employees, who retired on VRS, constitute a class by themselves, in comparison to those who retired on attaining the age of superannuation. However, the classification has no relevance at all, in the context of extending the benefit of RPS. Once it is evident that the employees of both the categories were on the rolls of the same organisation and they ceased to be in service, not on the basis of any disciplinary proceedings, there is no way, any distinction can be maintained in the context of extending the benefit of RPS. 14. The judgment of the Supreme Court in A.K. Bindals case (1 supra) has no application to the facts of the case. That was a case in which the employees of Food Corporation of India and Hindustan Fertilisers Corporation wanted their employers to adopt the RPS. The Hon'ble Supreme Court held that the adoption of RPS by PSUs would depend upon the financial viability of the organisation and no employee can claim RPS as of right. The fact that some of the employees retired under VRS during the pendency of the writ petitions, was taken note of and a pausing observation was made. It is difficult to equate such an observation to an authoritative ratio. In HEC Voluntary Retired Employees Welfare Societies case (3 supra), the Hon'ble Supreme Court took note of a specific clause in the scheme providing for voluntary retirement, which reads: 3.3 Benefits of revision of scales of pay shall not be applicable to those executives, non-unionized supervisors and employees in equivalent salary grades of the Corporation who were on the rolls of the Corporation as on 01.01.1992 but have subsequently left the services of the Corporation for the following reasons: 3.3.1. dismissal; 3.3.2. discharge; 3.3.3. resignation without permission; 3.3.4. resignation in cases where disciplinary action for misconduct involving moral turpitude had been initiated or contemplated. 15. No such clause was incorporated in the circular under which the petitioners retired from service. Other precedents relied upon by the learned counsel for the 4th respondent, have just applied the ratio in A.K. Bindals case (1 supra). 16. The learned Single Judge has undertaken detailed discussion with reference to the relevant circulars and took the view that the writ petitioners are entitled for the benefit of RPS. We do not find any basis to interfere with the common order passed by the learned Single Judge. 17. The writ appeals are accordingly dismissed. There shall be no order as to costs. 18. The miscellaneous petitions filed in these appeals shall also stand disposed of. Appeal dismissed