IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 26TH DAY OF APRIL, 2019 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE S. G. PANDIT WRIT APPEAL NO.3476 OF 2016 (S-R) AND WRIT APPEAL Nos.4645-4651 OF 2016 (S-R) BETWEEN:
1. THE WORKMAN OF MANDYA NATIONAL PAPER MILLS REPRESENTED BY THE SECRETARY OF NATIONAL PAPER MILLS, WORKMEN UNION, ASHOKPURAM, MYSURU-570008.
2. M/S MANDYA NATIONAL PAPER MILLS OFFICERS GUILD REPRESENTED BY ITS SECRETARY, NO.22, 3RD MAIN, YADAVAGIRI, MYSURU-570020.
3. M/S MANDYA NATIONAL PAPER MILLS STAFF UNION REPRESENTED BY ITS SECRETARY, NO.576, MIG-I, HUDCO, HEBBAL III STAGE, METAGALLI POST, MYSURU-570016 4. MR. PRAKASH SON OF N K HANUMANTHEGOWDA, AGED ABOUT 57 YEARS, NO.22, 3RD MAIN, YADAVAGIRI, MYSURU-570020.
5. M R P K KYATHAIAH SON OF KYATHAIAH, AGED ABOUT 64 YEARS, RESIDING AT KONNANAHALLI POST, PANAKANAHALLI, MANDYA TALUK, MANDYA DISTRICT-571403 6. MR. P RAJASHEKAR SON OF PAPAIAH, AGED ABOUT 56 YEARS, SHARADA NILAYA, NO.202, 9TH CROSS, GOKULAM 3RD STAGE, MYSURU-570002.
7. MR. M LOKESH SON OF LATE. A M MALLAIAH, DOOR NO.169, PETE VOKKALIGARA STREET, MALAVALLI-571430, MANDYA DISTRICT.
8. MR. JOBA SALDANA AGED ABOUT 60 YEARS, SON OF CAHRLES SALDHANA DOOR NO.576, MIG-1, HEBBAL 3RD STAGE, METAGALLI, MYSURU-570016 ... APPELLANTS (BY SRI. M NARAYANA BHAT, ADVOCATE) AND:
1. THE UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF HEAVY INDUSTRIES, NEW DELHI-110001.
2. HINDUSTAN PAPER CORPORATION LIMITED (GOVERNMENT OF INDIA ENTERPRISES) REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, NO.5 RUBY BUILDING, PARK STREET, KOLKATA-700016.
3. MANDYA NATIONAL PAPER MILLS LIMITED (IN LIQUIDATION), REPRESENTED BY ITS OFFICIAL LIQUIDATION, 17TH FLOOR, RAHEJA TOWERS, M.G. ROAD, BENGALURU-560001.
... RESPONDENTS (BY SMT. REVATHY ADINATH NARDE, ADVOCATE FOR RESPONDENT No.3 SRI. KUMAR M, CGC FOR RESPONDENT No.1 RESPONDENT No.2 - SERVED) THESE WRIT APPEALS ARE FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION No. 15448/2008 AND WRIT PETITION No.16153-59/2008 DATED 27/07/2016.
THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR PRONOUNCEMENT THIS DAY, S.G. PANDIT J., DELIVERED THE FOLLOWING:
JUDGMENT Aggrieved by the order dated 27.07.2016 passed by the learned Single Judge in Writ Petition No.15448 of 2008 and Writ petition Nos.16153-59 of 2008, by which the petitions were dismissed, the writ petitioners are in appeal.
2. The petitioners filed writ petitions under Articles 226 and 227 of the Constitution of India praying for the following reliefs:
a) ISSUE a writ of Certiorari or any other appropriate writ, order or direction quashing the reply dated 5.2.2007 marked at Annexure-D as the same is arbitrary, illegal and violative of Article 14, 16 and 21 of the constitution.
b) ISSUE a writ of Mandamus or any other appropriate writ/order or direction holding that fixing of the cut off date as 6-11-2001 in Office Memorandum bearing No.2 (32)/97 DFC (WC)/GL-LVI dated 6-11-2001 marked at Annexure–C and confining the benefit only to those who were relieved after 6-11-2001 is arbitrary, illegal and violative of Article 14, 16 and 21 of the constitution.
c) ISSUE writ of Mandamus or any other appropriate writ order/direction directing the Respondents to pay 100% additional ex-gratia to these Petitioner along with interest @ 12% p.a from 6-11-2000 till the date of payment of the above benefit to meet the ends of justice.
d) Grant the Petitioner the costs of this Writ Petition and grant such other relief or reliefs as this Hon’ble Court deem fit to grant in the circumstances of the case to meet the ends of justice.
3. The petitioner Nos.1, 2 and 3 are the Union of Workmen and the petitioner Nos.4 to 8 are its workers. The petitioners are before this Court in respect of their grievance of not extending the benefit of official memorandum dated 06.11.2001 by the respondents. The 3rd respondent is under orders of liquidation. The Central Government had introduced Voluntary Retirement Scheme (for short ‘VRS’) under official memorandum dated 05.05.2000. The VRS which was already in existence under official memorandum dated 05.10.1988 was revised under official memorandum dated 05.05.2000, which was applicable to all sick units. The scheme was modeled as existed in the State of Gujarat. The Voluntary Retirement Scheme introduced under official memorandum dated 05.05.2000 was made applicable to the 3rd respondent- M/s.Mandya National Paper Mills also. The employees were given three months time to opt for the Voluntary Retirement Scheme, failing which, they would be entitled only for retirement benefits. Accordingly, the petitioners opted for the VRS within the time stipulated. The employees received the benefit under official memorandum dated 05.05.2000. Subsequently, the Central Government issued official memorandum dated 06.11.2001 further modifying the Voluntary Retirement Scheme. Under the modified Voluntary Retirement Scheme ex-gratia payments were to be computed on their existing pay scale and shall be increased by 100% and 50% respectively. The petitioners made representations to the respondents that they may also be extended the benefit of modified/revised Voluntary Retirement Scheme notified under official memorandum dated 06.11.2001. The 2nd respondent–M/s. Hindustan Paper Corporation Ltd., by its letter dated 05.02.2007 informed the petitioners that their plea that ‘they are entitled to the benefit of ex-gratia as per official memorandum dated 06.11.2001 is not sustainable’. Therefore, they filed the instant writ petitions contending that official memorandum dated 06.11.2001 is in continuation of official memorandum dated 05.05.2000, hence, they are entitled for the benefit of official memorandum dated 06.11.2001. Further it is contended that non grant of ex-gratia having regard to non revision of pay scale is wholly illegal and violative of Article 14 of the Constitution of India. The respondents in their statement of objections contended that the official memorandum dated 06.11.2001 is not applicable to the petitioners and clause (4) of the said official memorandum makes it clear that the employees who have been released by the PSUs before the date of issue of official memorandum shall not be covered under the modified scheme. The learned Single Judge taking note of both the official memorandums dated 05.05.2000, 06.11.2001 and the submissions of the learned counsel for the parties, dismissed the writ petitions, holding that official memorandum dated 06.11.2001 is not made applicable to the employees, who have already been released. Aggrieved by the same the petitioners are in appeal.
4. Heard the learned counsel for the appellants and learned counsel for the respondents. Perused the appeal papers.
5. The learned counsel for the appellants submits that the benefit of ex-gratia under official memorandum dated 06.11.2001 is available to the petitioners and denial of the same is wholly arbitrary and illegal. It is submitted that official memorandum dated 06.11.2001 is in continuation of official memorandum dated 05.05.2000. The further submission is that the learned Single Judge without considering the object of Annexure–C dismissed the writ petitions. The cut off date stated in the official memorandum dated 06.11.2001 is opposed to Article 14 of the Constitution of India, since the employees of PSUs had not got the benefit of revision of pay of ex-gratia granted under the official memorandum dated 06.11.2001. Learned counsel relies upon the decision of A.K. BINDAL AND ANOTHER Vs. UNION OF INDIA AND OTHERS reported in (2003) 5 SCC 163 in support of his contention.
6. Per contra, learned counsel for the respondents submits that the petitioners are not entitled for the benefit of official memorandum dated 06.11.2001, since they opted for VRS under official memorandum dated 05.05.2000 and received benefit under official memorandum dated 05.05.2000 and they were relieved from the services of the 3rd respondent-MNPM.
7. Having heard learned counsels for the parties and having gone through the appeal papers, we are of the view, that the petitioners have not made out any ground to interfere with the order passed by the learned Single Judge. It is an admitted fact that the 3rd respondent- MNPM is under liquidation. The employees of the 3rd respondent were offered VRS at the relevant time under official memorandum dated 05.05.2000 which was in existence. The said scheme was modeled as it existed in the State of Gujarat. The details of the scheme under the said official memorandum reads as under:
“i) The compensation will consist of salary of 35 days for every completed year of service and 25 days for the balance of service lift until superannuation. The compensation will be subject to a minimum of Rs.25,000/- or 250 days salary whichever is higher. However, this compensation shall not exceed the sum of the salary that the employee would draw at the prevailing level for the balance of the period left before superannuation.
ii) Salary for purpose of VRS will consist of basic pay and DA only.
iii) Arrears of wages due to revision etc. will not be included in computing the eligible amount.
iv) Payment of bonus should conform to the provisions in the Bonus Act, Casual Leave may be encashed in proportionate measure upto the date of VRS.
8. The employees were given three months time to opt for VRS, failing which, they were entitled only for retrenchment compensation. The compensation under VRS was in addition to terminal benefits. The employees i.e., petitioners opted for the scheme and received the benefit under the official memorandum dated 05.05.2000. Subsequently, on 06.11.2001, the Central Government issued official memorandum modifying Voluntary Retirement Scheme, wherein, ex-gratia payment was made available. Clause (a) of the official memorandum dated 06.11.2001 reads as follows:
“a) Ex-gratia payment in respect of employees on pay scales at 1.1.87 and 1.1.92 levels, computed on their existing pay scales in accordance with the extant scheme, shall be increased by 100% and 50% respectively.”
9. The learned counsel for the appellants contend that since long time revision of pay has not taken place and as such, they would be entitled for ex-gratia payment as per official memorandum dated 06.11.2001. But clause (4) of the said official memorandum reads as follows:
“4. The employees, who have already been released by the PSUs before the date of issue of this official memorandum shall not be covered under the modified scheme.”
10. The above clause would make it clear that employees those who have already released from the PSUs are not covered under the modified scheme. The contention of the petitioners is that the said clause itself is violative of Article 14 of the Constitution of India. There is no merit in the said contention, since it is for the Central Government to issue VRS and to modify suitably keeping in mind the interest of the employer and employees. Further the scheme under the official memorandum dated 05.05.2000 is also in modification of earlier VRS notified under official memorandum dated 05.10.1988. Therefore, the petitioners having taken the benefit under the official memorandum dated 05.05.2000 and having severed their relationship of master servant with the 3rd respondent, subsequently, cannot seek any benefit, which has been granted to the employees who are in service. The decision relied upon by the learned counsel for the appellants i.e., in the case of A.K. BINDAL AND ANOTHER vs. UNION OF INDIA AND OTHERS reported in (2003) 5 SCC 163, would not assist the case of the petitioners. Paragraph Nos. 31 to 34 of the said judgment reads as follows:
“31. In the year 1996-97 FCI and HFC projected net losses of Rs 562.51 crores and Rs 438.99 crores respectively. The total loss suffered by these Companies as on 31-1-2003 was Rs 8874.00 crores and Rs 7421.52 crores respectively. The Government extended non- plan budgetary assistance of Rs 2369.00 crores to FCI and Rs 2227.00 crores to HFC up to 31- 1-2003.
32. The units of the Companies have already suspended their operations quite some time back and as on date no unit is functioning nor is any production being made. There is also no denial of the fact that the Companies have suffered huge losses and salaries of the employees who were practically doing no work have been paid by the Government for a considerably long period. The employees accepted VRS with their eyes open without making any kind of protest regarding their past rights based upon revision of pay scale from 1- 1-1992.
33. The Voluntary Retirement Scheme (VRS) which is sometimes called Voluntary Separation Scheme (VSS) is introduced by companies and industrial establishments in order to reduce the surplus staff and to bring in financial efficiency. The office memorandum dated 5-5-2000 issued by the Government of India provided that for sick and unviable units, the VRS package of the Department of Heavy Industry will be adopted. Under this Scheme an employee is entitled to an ex gratia payment equivalent to 45 days’ emoluments (pay + DA) for each completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before the normal date of retirement, whichever is less. This is in addition to terminal benefits. The Government was conscious about the fact that the pay scales of some of the PSUs had not been revised with effect from 1-1-1992 and therefore it has provided adequate compensation in that regard in the second VRS which was announced for all Central public sector undertakings on 6-11-2001. Clause (a) of the Scheme reads as under:
(a) Ex gratia payment in respect of employees on pay scales at 1-1-1987 and 1-1- 1993 levels, computed on their existing pay scales in accordance with the extant scheme, shall be increased by 100% and 50% respectively.
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 foregoing all his claims or rights in the same. It is a package deal of give and take. That is why in the 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.”
11. The above decision would make it clear that when once the employee receives the amount under Voluntary Retirement Scheme, he ceases to be under the employment and the question of again agitating for any benefit would not arise. Since the official memorandum dated 06.11.2001 was issued for the employees, who were in service in the PSUs, the same would not be violative of Article 14 of the Constitution of India. As contended by the petitioners since they are ceased to be the employees of PSU, the order of the learned Single Judge is neither erroneous nor perverse. Learned Single Judge has passed a well reasoned order, which requires no interference.
Accordingly, the writ appeals are dismissed.
Sd/- Sd/-
JUDGE JUDGE SMJ CT:bms