Full Judgment Text
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PETITIONER:
HINDUSTAN MACHINES TOOLS LTD. & ANR.
Vs.
RESPONDENT:
M.S. KANG/P.N. KASHYAP
DATE OF JUDGMENT: 27/01/1997
BENCH:
K. RAMASWAMY, G.T. NANAVATI
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL NO. 627 OF 1997
(Arising out of SLP (C) No. 20470 of 1996)
O R D E R
Leave granted.
These appeals by special leave arise from the judgment
of the High court of Punjab & Haryana, made on 19.4.1996 in
LPA Nos.2 and 3 of 1996.
The admitted facts are that the appellants have
formulated a Scheme for voluntary retirement of the
employees who have completed 45 years of age, effective from
April 1, 1989 for a period of three months subject to the
conditions specified in the scheme. The respondents had
accepted the scheme and retired thereunder. Thereafter by
Office Order No.45/90 dated March 1, 1991 pay scales were
revised in respect of existing employees and those who
retired from time to time. In furtherance thereof, the
respondents claimed and revision of the scale of pay was
sought to be given effect by the office but the audit
objection to the payment thereof was raised. Consequently,
the respondents filed the writ petitions in the High Court
and the learned single Judge allowed the writ petition and
appeals were dismissed. Thus, these appeals by special
leave.
Shri V. Reddy, learned Additional Solicitor General,
contends that the Scheme is a special scheme containing the
mode of payment of compensation as calculated in terms of
the Scheme. There is a distinction between those employees
who retired voluntarily under the Conduct discipline and
Appeal Rules and those who retired under the Scheme. The
revised scales of pay are applicable to those persons who
are enumerated in Clause 2.2.2 of the office orders
providing for Revision of Pay Scales. Proceedings dated
march 1, 1991 refers to the candidates who retired
voluntarily. Under Rule 24.2. of the Conduct, Discipline and
Appeal Rules, the revision of the Provident Fund would be
effected only in respect of those employees who retired
under the special scheme; the scale and gratuity have to be
revised in terms of the revised scales of pay but not the
payment of the difference of pay. On the other hand, Shri
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Manoj Swarup, learned counsel for the respondents, contends
that no distinction has been drawn in the proceedings dated
March 1, 1991 between the employees who retired under the
Conduct, Discipline and Appeal Rules or under the Special
Scheme and those who retired voluntarily under the Scheme
and are entitled to the same benefit of the revision of the
pay scales as contemplated under the Officer Order dated
March 1, 1991. He also contends that even clause 2.3
negatively puts that they are disentitled to the payment.
The word ‘salary’ is linked to the other components, namely,
additional dearness allowance, ad hoc pay, additional pay
etc. Therefore, the word ‘pay’ would include revised pay.
Thereby the respondents are entitled to the benefit of the
revised pay scales.
In support thereof, he placed reliance on the judgment
of this Court in Prantiya Vidhyut Mandal Mazdoor Federation
& Ors. vs. Rajasthan State Electricity Board & Ors. [(1992)
2 SCC 723]. Therein the dispute relating to the revision of
the pay was pending before the Industrial Tribunal. Pending
dispute, the wages were revised. Consequently, after the
award was made, the revision of the wages was effected. The
question was: whether the P.F. was required to be re-
calculated on the basis of the revised scales? This Court
had held that in view of the revision of the pay scales, the
P.F. requires to be decided on the basis of the revised
wages payable to the employees as was recalculated. The
ratio therein has no application to the facts in these
cases.
The question, therefore, is: whether the respondents
are entitled to the benefit of the revised scales of pay
under the Office Order No.45/90 dated march 1, 1991? It is
not in dispute that the respondents have not completed 50
years of age for voluntary retirement under clause (b) or
clause (c) of Rule 24.2 on attaining the age of
superannuation. They contemplate thus:
"(b) An employee may at any time
after completing the age of 50
years voluntarily retire by giving
one month’s notice in writing."
(c) The Competent Authority may
also retire an employee at any time
after he completes 50 years by
giving one month’s notice or one
month’s salary/wages in lieu of the
notice, if it is considered in the
interest of the Company."
Thus, an employee who is normally entitled to remain in
service until he reaches the age of superannuation of 58
years, is entitled to retire either voluntarily by giving
one month’s notice on attaining the age of 50 years and the
Company may, if it considers it necessary, in the interest
of the Company, retire an employee by giving one month’s
notice or one month’s salary/wages in lieu thereof. Thus,
those who retired under the above Rule would be construed to
have voluntarily retired from service. It is seen that a
special voluntary retirement scheme had been introduced by
the Company. The objective of the Voluntary Retirement
Scheme is to achieve the optimum level of manpower with the
desirable average age-mix as par the changing needs of the
Company. In regard to the respondents, they come under the
Scheme ‘B’ which contains that the scheme is applicable to
all regular/permanent employees of the Company as notified
from time to time who have put in 15 years of service or
more in the Company and who are of the age of 45 years and
above as on the date of the submission of the application
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for voluntary retirement.
It is, thus, seen that there is a distinction between
the employees who retire under the Conduct, Discipline and
Appeal Rules on attaining the age of 50 years and the
employees who accept voluntary retirement on completion of
15 years of service or more in the Company and who are of
the age of 45 years and above. In other words, before
attaining the age of 50 years as contemplated under the
Conduct, Discipline and Appeal Rules, the benefits
enumerated for such of the employees who opt for and where
option is accepted by the Company, are postulated in Clause
(b) of Scheme ‘B’ which says that the eligible employees
requesting for voluntary retirement, subject to acceptance
of their requests by the Company/Competent Authority, shall
be entitled to receive benefits at the following rates for
the remaining period of service prior to the date of
retirement on superannuation from the service of the
Company. The computation thereof has been anumerated in the
scheme which reads as under:
"It has been decided to introduce a
Voluntary Retirement Scheme for the
employees of the Company as per the
enclosed copy of comprising of two
parts viz., Scheme ‘A’ and Scheme
‘B’. The scheme will be in
operation from 1.4.1989 for a
period of three months, subject to
the following further conditions:-
i) Scheme A shall be applicable
only to the employees of Lamp Unit,
Hyderabad in WG Cadre with the
terms and Conditions specified in
Scheme A for a period of three
months from 1.4.1989.
ii) Scheme B shall be applicable
to all the Units/Divisions
(including Lamp), Business Group
Directorates, other offices and
Corporate Office with the terms and
conditions specified in the
enclosed scheme, for a period of
three months from 1.8.1989.
iii) The scheme does not confer any
right or any employees to have his
request for voluntary retirement
accepted by the competent authority
right to accept or reject the
application for voluntary
retirement shall entirely vest with
the Company.
iv) Acceptance of application for
voluntary Retirement shall depend
inter alia availability of funds in
the respective
Units/Divisions/Business Group
Directorates, other Offices and
Corporate Officer.
v) The eligible employees
requesting for voluntary
retirement, subject to acceptance
of their requests by the competent
authority shall be entitled to such
benefits as are specified in the
scheme.
Such employees may be persuaded to
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deposit the benefits received, in
the Company’s Fixed Deposit Scheme.
2. The existing medical
retirement Scheme and Voluntary
Retirement Scheme introduced for
Hyderabad based Units of the
Company shall stand discontinued
with the introduction of the above
Voluntary Retirement Scheme.
3. The Units and areas within the
Units, where the Scheme could be
implemented will separately be
intimated by the DPS.
4. The progress of implementation
of the Scheme with regard to the
number of employees in each cadre
and the total amount paid on
account of compensation shall be
reported to DPS every month."
For the computation of the payment of the compensation
in terms of the calculation, the ‘Note’ postulates that the
salary mentioned under Scheme A and B shall mean basic pay,
Dearness Allowance, Interim Relief/ad hoc Relief and
Personal Pay, if any, and shall be calculated on the basis
of a calendar month. In other words, this contract has
expressly omitted to mention the revised scale of pay from
time to time. The reason would be obvious. An employee who
retires on completing the age of 50 years but before the age
of 58 years, is not entitled to the payment of any special
component of the salary as indicated hereinbefore. on the
other hand, he will be entitled only to the retrial benefits
as are available under the normal Rules. If the company, in
public interest, instead of giving one month’s notice makes
payment of salary in lieu thereof then employee would be
entitled to nothing more except other retrial benefit like
pension, gratuity etc. The procedure in regard to the
calculation of the payment of the compensation and method of
computing the compensation has been provided in Para VI; the
details whereof are not material for the purpose of these
cases. Para IX of the Special Scheme postulates that
retirement on medical grounds in terms of clause 24.1 and
voluntary retirement in terms of clause 24.2(b) and (c) of
the Conduct, Discipline and Appeal Rules of the Company
shall fall outside the purview of the scheme. In other
words, the special scheme excluded such of the employees who
voluntary retired under Rule 24.1 or 24.2(b) and (c) of the
Conduct, Discipline and Appeal Rules of the Company. Para
XII in this behalf is more relevant wherein it says that the
chairman and managing director shall have power to amend,
modify, alter or withdraw the above Scheme either in whole
or in part, at his directions, if the circumstances so
warrant. In other words, whatever components are enumerated
thereunder would be binding on the parties until the
Chairman and the Managing Director before acceptance amends,
modified, alters or withdraws the above scheme.
It is seen that the Office Order No.45 dated March 1,
1991 provides that the revised pay scales shall be effective
from 1.1.1987 and will remain in force for the period of
five years upto 31.12.1991. Clause 2.2. provides that the
revised pay scales shall also be applicable on a pro-rata
basis to those categories of employees who were on the rolls
of the company as on 31.12.1986 but have subsequently
separated due to superannuation and voluntary retirement
etc. Those who retired on attaining the age of 58 years or
voluntarily retired under Rule 24.2. (b) or (c), as the case
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may be, under the Conduct, Discipline and Appeal Rules
referred to hereinbefore. The benefits of the revision of
pay scales shall not be applicable to those persons who were
on the rolls of the Company as on 31.12.1986 but
subsequently left the service of the company before the date
of issue of Office Order No.45/90 for any reason,
whatsoever, including resignation except the category
mentioned in clause 2.2 above. Thereby, the necessary
implication is that all those who are covered and stand on
the same footing are excluded except to the extent of
gratuity, revision of the terminal benefits as mentioned in
para 6.13 which postulates that gratuity paid or payable to
employees covered under Clause 2.2 will be recalculated on
the revised pay subject to the prescribed ceiling. Thus, it
could be seen that the distinction has been drawn between
employees who retired voluntarily under Rule 24.2 of the
Conduct, Discipline and Appeal Rules or the employees who
retired under the Special Scheme operating from time to
time. The respondents having retired under the Special
Scheme are not employees covered under the voluntary
retirement under Rule 24.2 of the Conduct, Discipline and
Appeal Rules referred to hereinbefore. Accordingly, the High
Court was not right in directing recomputation of the
compensation under Office Order No.45 dated March 1, 1991.
The appeals are accordingly allowed. Consequently, the
writ petitions stand dismissed. No costs.