Research › Search › Judgment

Calcutta High Court · body

2019 DIGILAW 68 (CAL)

Sudhin Chakrabarti v. State Of West Bengal

2019-01-15

RAJASEKHAR MANTHA

body2019
JUDGMENT : RAJASEKHAR MANTHA, J. 1. There are as many as twenty-five petitioners in this application under Article 226 of the Constitution of India who are all employees of one Tamralipta Cooperative Spinning Mills Limited. They had applied for conversion of their terminal benefits in the nature of Contributory Provident Fund (CPF) to that of General Provident Fund (GPF). 2. Upon refusal and/or failure of the State Government to consider the petitioners’ prayer, despite the fact that the mill itself had in writing communicated to the State that they will be no additional financial burden on the State, WP No.15458(W) of 2015 was filed by the petitioners. By an order dated July 17, 2018 passed by a single Bench of this court, the State was directed to consider the petitioners’ prayer for conversion from CPF to GPF facilities. The State in compliance with the aforesaid order took up the case and rejected the claim of such conversion by its order dated September 4, 2018. Aggrieved, the petitioners have filed this instant writ petition. 3. The petitioners would contend before me that 99.99% of the shareholding of the mill-society is held by the State Government. The managing director is a nominee of the State Government and he is appointed by State itself, although the State submits that the managing director is an employee of the MS&MET department and is sent on deputation. 4. The petitioners would further contend that employees of the Khadi & Village Industries Board and the employees of Cottage & Small Scale Industries have been given the benefits of conversion from CPF to GPF, and that all State Government employees also have the benefit of such conversion. According to them, the rejection of their prayer by the Additional Secretary, albeit awaiting formal policy decision from the State Government for the purpose of such conversion, is untenable, unfair and discriminatory apart from being a dilatory tactic. 5. Per contra, learned Additional Advocate-General refuting the submission of the petitioners would submit that the West Bengal Khadi & Village Industries Board is an authority constituted under a special statute and hence its employees are differently circumstanced. 5. Per contra, learned Additional Advocate-General refuting the submission of the petitioners would submit that the West Bengal Khadi & Village Industries Board is an authority constituted under a special statute and hence its employees are differently circumstanced. The next submission is that the employees of the Khadi Board, under the Directorate of Cottage & Small Scale Industries, and the employees of the Cottage & Small Scale Industries department are holding civil posts within the meaning of Article 309 of the Constitution of India. Hence, according to him, the West Bengal Khadi & Village Board employees and the employees of the Directorate of Cottage & Small Scale Industries Department do not come within the same category of employees as that of the petitioners. 6. This court is of the view that this is a fit case for applying the classical principle of lifting of corporate veil settled and accepted in Company Law to find that if the State Government holds 99.99% of the shareholding of the society and its managing director is appointed by the State Government. The State thus has full and complete control over the employer, the Tamralipta Cooperative and Spinning Mills Ltd., albeit a cooperative society and body corporate within the meaning of the provisions of the West Bengal Co-operative Societies Act, 2006. The society is entitled to receive funds and grants from the State. Every aspect of the administrative control and management must be deemed to be under the State through the managing director. 7. The benefit of conversion from CPF to GPF, which is available to other employees both statutory and the direct employees of the State Government therefore cannot be denied to the petitioners. The petitioners by reason of a legal fiction of a cooperative society, albeit under full control of the State, cannot be treated differently from a regular State Government employees. The umbrella of protection under which, the State Government seeks to deny the right of conversion from CPF to GPF already available to statutory bodies and direct employees of the State Government is, in fact, a mirage and a lame excuse by the State to refuse lawful benefits to the petitioners. 8. The next submission of learned Additional Advocate-General is that under section 83 of the West Bengal Co-operative Societies Act, 2006 the employees of a cooperative society in the State are entitled to provident fund. 8. The next submission of learned Additional Advocate-General is that under section 83 of the West Bengal Co-operative Societies Act, 2006 the employees of a cooperative society in the State are entitled to provident fund. Reference is also made in this regard to sub-rule (10) of rule 106 of the West Bengal Co-operative Rules, 2011 where under clause (e) the employees of co-operative societies are restricted to enjoy CPF. Further reference is made to rule 122 of the 2011 Rules which reiterates the benefit of the employees’ provident fund only to the employees of the co-operative societies. He has also referred to the bye-laws of the society which stipulated that only benefit is available to them is CPF. According to him, employees’ provident fund and its conversion to GPF cannot be done unless there is an amendment of the statute and the rules there under. 9. The argument of Mr. Additional Advocate-General is, indeed enticing. One must however bear in mind that after lifting of the corporate veil that, there is in fact, no difference between the employees of the society and any other employee of the State Government and/or other statutory bodies. Hence, in so far as the retirement benefits are concerned, it would be extremely unfair, illegal and arbitrary to deny the conversion from CPF to GPF to the writ petitioners who are the employees of the Tamralipta Co-operative Spinning Mills Limited and wholly and/or substantially and similarly circumstanced as the regular employees of the State. 10. It is now well-settled principle of law and particularly in service jurisprudence that persons similarly placed/circumstanced must be afforded the similar benefits. The benefits cannot be denied under the garb of a corporate structure if lifting the veil would show in reality that such employees of the cooperative society are intact under the complete control of the State Government, albeit through a managing director directly appointed by the State Government. The bye laws of the Society also require the approval of the state. 11. It further appears to this court that the State has, as in the instant case, chosen to form a Cooperative Society for the purpose of conducting of any particular business using the benefit of the WBCS Act 2006 to facilitate a particular mode of management and running of the spinning mill in question. The same is an enabling procedure. 11. It further appears to this court that the State has, as in the instant case, chosen to form a Cooperative Society for the purpose of conducting of any particular business using the benefit of the WBCS Act 2006 to facilitate a particular mode of management and running of the spinning mill in question. The same is an enabling procedure. Such enabling procedure cannot be used as a weapon and/or an excuse on the State to deny equality before law and consequently benefits of the GPF scheme. 12. It is interesting to note that the society and its management have in no uncertain terms communicated on writing to State Government and its Finance Department, that there will not be any additional burden, present or future, on the State, if the employees are allowed to convert their terminal benefits from CPF to GPF. This, in my opinion, should straightway address the point raised of mala fide on the part of the State that despite the fact that there is no additional financial burden on the State, the State has chosen to arrogate to itself a right to take a policy decision on its own convenient and sweet time for the purpose of allowing such conversion. This court has no doubt in its mind that refusal of the petitioners’ prayer despite absence of financial burden on the State is extremely unfortunate and unacceptable. 13. For the reasons stated hereinabove, the impugned order dated September 4, 2018 is hereby quashed and/or set aside. The writ petitioners shall be afforded the benefit of conversion from CPF to GPF. They submit that they are ready and willing to surrender the amounts drawn by them towards the provident fund already together with the commonly applied rate of interest. 14. The management of the Tamralipta Co-operative Spinning Mills Limited shall proceed to allow conversion from CPF to GPF to its employees on the same terms and conditions as available to the employees of the West Bengal Khadi Board. Let the process as directed hereinabove commence within a period of one month from the date of communication of this order. 15. The writ petition is thus allowed. No order as to costs. 16. Certified website copy of this order, if applied for, shall be given to the parties.