Manoj Kumar S/o. Late Mahendra Prasad Singh v. Steel Authority of India Ltd.
2018-03-22
SHREE CHANDRASHEKHAR
body2018
DigiLaw.ai
JUDGMENT : After the death of the writ petitioner-Mahendra Prasad Singh during pendency of the writ petition, his son namely, Manoj Kumar filed an application for substitution vide I.A. No.3381 of 2012. This application was allowed by an order dated 26.11.2012, by virtue of which this writ petition is now prosecuted by son of the writ petitioner-Mahendra Prasad Singh. 2. The petitioner came to this Court with a prayer for a direction to the respondent-Steel Authority of India Limited to continue him in service till the age of 60 years, in terms of Gazette Notification dated 28.07.2009, and to pay him consequential service benefits with statutory penal interest. 3. An application for amendment was filed for challenging office order dated 21.11.2007 by which he was intimated his date of superannuation on 29.02.2008 and order dated 23.02.2008 which is also notice of superannuation. After recording a finding that challenge to these orders is only to avoid technical difficulty at the time of final hearing, I.A. No.9739 of 2017 was allowed. 4. Plea raised by the petitioner is that, by virtue of Gazette Notification dated 28.07.2009 under which “Appointed Date” has been fixed as on 01.04.2007 when merger of Bharat Refractories Limited and Steel Authority of India Limited deemed to have taken place, he is entitled to the benefits accrued, on enhancement of the age of superannuation by two years, with effect from 01.03.2008. 5. Briefly stated, the petitioner was appointed as Supervisor under the Bharat Refractories Limited (Transferor Company) on 01.05.1973 and in course of his service he was granted promotions to the post of Charge Man, Junior Executive Grade, Junior Manager, Assistant Manager and lastly to the post of Deputy Manager. While the process of amalgamation of the Transferor Company with Steel Authority of India Limited (Transferee Company) was under consideration of the Government of India, a notice of superannuation was issued to the petitioner on 21.11.2007. This notice was followed by another letter issued on 23.02.2008 by which the petitioner was informed that with effect from 29.02.2008 on attaining the age of 58 years, he would superannuate from service. After his superannuation from service on 29.02.2008, the petitioner was paid part of the post-retiral dues.
This notice was followed by another letter issued on 23.02.2008 by which the petitioner was informed that with effect from 29.02.2008 on attaining the age of 58 years, he would superannuate from service. After his superannuation from service on 29.02.2008, the petitioner was paid part of the post-retiral dues. Then, on 29.01.2009 a notice was published by the Transferee Company in the daily newspaper 'Hindustan Times” on the proposed amalgamation of the two companies, and Bharat Refractories Limited and the Steel Authority of India Limited Amalgamation Order, 2009 was issued on 28.07.2009 which was published in the Gazette of India. 6. Stating that on 01.04.2007 he was in the service of Transferor Company and thus he has become an employee of Transferee Company with effect from 01.04.2007, the petitioner made representations before the Director (Personnel), Steel Authority of India Limited for his continuance in service till 28.02.2010. In the meantime, on 29.12.2009 the respondent-Steel Authority of India Limited asked the petitioner for option with reference to order dated 28.07.2009 of the Ministry of Corporate Affairs and in terms of Clause 9 of the Gazette Notification dated 28.07.2009, either to continue in service till the age of 60 years on surrendering the post-retiral benefits or to accept the benefits of enhanced post-retiral benefits. The petitioner surrendered the post-retiral benefits received by him from Transferor Company and through application dated 31.12.2009 intended to submit his joining at his previous place of posting. Finally, by an order dated 26.02.2010 Transferee Company reappointed him on the post of Assistant Manager with effect from 28.07.2009; the petitioner gave his joining on 26.02.2010 and superannuated from service on 28.02.2010. 7. Clause 2(b) and Clause 9 of the Amalgamation Order, 2009 read as under : “Clause 2(b)-“Appointed Date” means April 1, 2007. The merger would be deemed to have taken place with effect from 1st April, 2007 and from that day onwards Trnasferor Company would become a part of Transferee Company, for all legal and accounting purposes including those of employees' benefits.
The merger would be deemed to have taken place with effect from 1st April, 2007 and from that day onwards Trnasferor Company would become a part of Transferee Company, for all legal and accounting purposes including those of employees' benefits. Clause 9-That all the staff, workmen or employees, in the service of the Transferor Company (BRL) on the date immediately preceding the Appointed Date (i.e. 01.04.2007) shall become the employees of the Transferee Company (SAIL) on the basis that :- (i) their service shall have been continuous and shall not have been interrupted by reason of the amalgamation of the Transferor Company (BRL); (ii) every whole time officer, including whole time Director (employee) or other employees of the Trnaferor Company immediately before the appointed date shall become an officer, employee, as the case may be, of the Transferee Company and upon implementation of the Scheme from the appointed date, all the conditions of service and employment of the Transferee Company would be applicable to the employees of the Transferor Company. In order to bring uniformity, the employees of the Transferor Company shall be absorbed on equivalent Scales of Pay, taking scales prior to salary/wage revision effective from January 01, 1997 in the Transferee Company with protection of pay (Basic + Dearness Allowance). While doing so, care would be taken not to disturb both the Transferee Company's and Transferor Company's internal seniority and to ensure that employees are not lowered by more than one grade and under no circumstances, E-0 scale would become non-executive scale; (iii) Section-396 of the Companies Act, 1956 casts an obligation on the Central Government to satisfy itself that the Scheme for amalgamation or merger is not contrary to public interest. The basic principle of such satisfaction is to observe that the interests of the employees of the Transferor Company are protected by the Scheme of amalgamation which should not be unfair to them; (iv) Powers under Section-396 [of the Companies Act, 1956] can be exercised only if amalgamation is in public interest. The word “public interest” assumes the interest of the employees also.
The word “public interest” assumes the interest of the employees also. To take into account only the interest of the shareholders and not to consider the interest of employees is to completely go against the mandate of Section-396 of the Companies Act; (v) the amalgamation arrangement should take care of the interest of the employees of the Transferor Company and the service conditions of employees of the Transferor Company should not be worse than the existing service conditions by implementing the scheme of amalgamation. From the various judgments of the Supreme Court and various High Courts, it can be concluded that in scheme of amalgamation, the interest of employees of the Transferor Company has to be protected. All benefits which are available to the employees of the Transferee Company shall be available to the employees of the Transferor Company from the appointed date including those of medical benefits. In the larger interest of the employees, ten thousand rupees which has been given as an advance to the employees of the Transferor Company in anticipation of (revision of) scales shall not be recovered from them by the Transferee Company as a measure of good will gesture. The grievances in respect of Voluntary Retirement Scheme (VRS) and medical benefits of ex-employees of the Transferor Company may be suitably addressed by the Ministry of Steel.” 8. Prayer in the writ petition for grant of consequential service benefits by continuing the writ petitioner till he attained the age of 60 years breaks into two parts. Admittedly, on 29.01.2009 when a notice was published in the newspaper on deemed transfer and vesting of Transferor Company in Transferee Company, the petitioner had already superannuated from service on 29.02.2008; Amalgamation Order, 2009 was issued on 28.07.2009, with effect from this date the petitioner has been reinstated in service by the respondent-SAIL. The expression “Appointed Date” has been defined under Clause 2(b) of the Amalgamation Order, 2009. It is provided thereunder that the merger would be deemed to have taken place with effect from 01.04.2007. In my opinion, this would cover only those employees of the Transferor Company who were in service as on 28.07.2009, insofar as payment of salary to such employees is concerned.
It is provided thereunder that the merger would be deemed to have taken place with effect from 01.04.2007. In my opinion, this would cover only those employees of the Transferor Company who were in service as on 28.07.2009, insofar as payment of salary to such employees is concerned. Of course, other benefits such as arrears of salary on account of difference in salary and enhanced post-retiral benefits would be admissible to those employees who have attained the age of 60 years after 28.07.2009 and, in fact, such benefits have been paid to the employees including the petitioner. On a plea that by operation of the legal fiction created under Clause 2(b) of the Amalgamation Order, 2009 the employees like the petitioner who were in service on the “Appointed Date” are entitled for salary till they attained the age of 60 years, salary to this category of employees cannot be paid. Operation of a legal fiction cannot be extended to confer unjust benefits upon such employees who had superannuated from service prior to 28.07.2009 by granting salary to them for the period after their superannuation till 28.07.2009. 9. Second part on the prayer of the writ petitioner covers the period between 28.07.2009 to 28.02.2010. It is pleaded that in response to letter dated 29.12.2009 the writ petitioner submitted his joining on 31.12.2009 and he has refunded the post-retiral benefits received from the Transferor Company on 16.01.2010, however, he has been reappointed on the post of Assistant Manager with effect from 28.07.2009 by letter dated 26.02.2010. Evidently, delay in issuing notice dated 29.12.2009 or letter dated 26.02.2010 is not attributable to the petitioner. Once it is admitted by the respondent-SAIL that the petitioner is entitled for reappointment from 28.07.2009 and it is found that he could not tender his joining on 28.07.2009 on account of some act or omission on the part of the respondents, the petitioner cannot be denied salary for the period after 28.07.2009. It must be construed in law that the petitioner was prevented from discharging his duty on the reappointed post due to reasons attributable to the respondents and while so, he is entitled for payment of salary and other allowances for the period between 28.07.2009 to 28.02.2010.
It must be construed in law that the petitioner was prevented from discharging his duty on the reappointed post due to reasons attributable to the respondents and while so, he is entitled for payment of salary and other allowances for the period between 28.07.2009 to 28.02.2010. Such an inference is drawn in law, for a notice on the dissolution and deemed transfer and vesting of the Transferor Company in the Transferee Company was already published in the newspaper on 29.01.2009; by the said notice it was also informed that the proposed amalgamation shall be effected with effect from 01.04.2007. The petitioner has pleaded that he has submitted several representations, and this fact has not been denied by the respondents in any of their affidavits filed in the present proceeding. There is no reason disclosed by the respondents why the petitioner inspite of representations was not permitted to join the Transferee Company on 28.07.2009, though he has been reappointed from such date. 10. In the above facts, the writ petition stands allowed to the extent that the petitioner is also held entitled for salary and other allowances for the period between 28.07.2009 to 28.02.2010. Consequently, challenge to orders dated 21.11.2007 and 23.02.2008 has been rendered inconsequential.