Full Judgment Text
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CASE NO.:
Appeal (civil) 1444-1445 of 1999
PETITIONER:
GOVERNMENT OF TAMIL NADU AND ORS.
RESPONDENT:
M. ANANCHU ASARI AND ORS.
DATE OF JUDGMENT: 29/10/2003
BENCH:
S. RAJENDRA BABU & P. VENKATARAMA REDDI
JUDGMENT:
JUDGMENT
2003 Supp(4) SCR 1104
The Judgment of the Court was delivered by
P. VENKATARAMA REDDI, J. : Leave granted in S.L.P. (Civil) No. 870/2002.
1. Civil Appeal Nos. 1444-1445 of 1999 are preferred against the common
judgment of the Division Bench of the Madras High Court in W.A. Nos. 522 of
1992 and 962 of 1993 dismissing the writ appeals filed by the State of
Tamil Nadu. The Civil Appeal arising out of S.L.P. (Civil) No. 870 of 2002
is against the order of the division bench of the High Court in Writ
Petition No.11985 of 1992 which was allowed following the judgment in Writ
Appeal No. 522 of 1992 and 962 of 1993 referred to supra. Civil Appeal Nos.
1446-1452 of 1999 are those filed by the State of Tamil Nadu against the
common order passed in a batch of writ petitions disposing of the writ
petitions filed by the Transport Corporation employees in terms of the
judgment in Writ Appeal Nos. 522 of 1992 and 962 of 1993. The State has
directly approached this Court against the said order of the learned Single
Judge. Thus, the lead judgment is the one rendered by the High Court in
Writ Appeal Nos. 522 of 1992 and 962 of 1993.
2. Broadly, the issue in these appeals is whether the cutoff date fixed by
the Government for the purpose of entitlement to pension of the erstwhile
Transport Department employees who were later on absorbed in Transport
Corporations, is constitutionally valid? The High Court answered that issue
in the negative and directed the fixation of cutoff date afresh in the
light of the observations made.
3. The two writ petitioners in W.P. No. 6969 of 1990 with reference to
which Writ Appeal No. 522 of 1992 was filed by the State Government, were
the employees of Nessmony Transport Corporation which was carved out of
Kattabomman Transport Corporation Limited. The latter Corporation came into
existence from 1.1.1974. The writ petitioner in W.P. No. 7012 of 1988 out
of which writ appeal No. 962 of 1993 arose is the workers union of Pallavan
Transport Corporation Limited which was formed with effect from 1.1.1973.
The said writ petitioners including the concerned members of the workers
union were originally employed in the State Transport Department. Pursuant
to the decision taken by the Government to form separate transport
corporations to take over the operation and management of public transport
in the districts concerned, the two Corporations aforementioned came into
existence in 1973 and 1974. The assets and liabilities were transferred on
certain terms to the newly formed Government Companies which in effect have
the status of Public Sector Undertakings. The writ petitioners and other
similarly situated employees were deputed to work in the said transport
Corporations. For instance, in G.O.MS. No. 651 (Transport) dated 18.7.1973,
it was stipulated that all employees of the Tamilnadu State Transport
Department serving in the Kanyakumari District for the purpose of running,
maintenance and upkeep of the transport system in the District will be
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considered to be employees on deputation with the Kattabomman Corporation
with effect from 1.1.1974. It was further enjoined that "they will continue
to receive the same emoluments and enjoy the same conditions of service and
privileges till such time the Corporation frames its own rules and takes
those employees in its pay rolls". The G.O. further provided that the new
Corporation shall be responsible for meeting all the establishment charges
and making pension and leave salary contributions to Government in respect
of such of those deputed employees of the Transport Department who were in
pensionable services.
4. It is the stand of the State Government as seen from the only counter-
affidavit filed in W.P. No. 6969 of 1990 that all the employees absorbed
in Kattabomman Transpsort Corporation Limited were on deputation upto
30.4.1975 and from 1.5.1975 onwards, the Corporation had framed its own
rules and absorbed all of them as Corporation employees duly accepting the
options exercised by them. It is to be mentioned at this juncture that
options were called for finally only in the year 1982.
5. The writ petitioners and other similarly situated employees who moved
the High Court under Article 226 for appropriate reliefs were not eligible
to pension while in Government service in view of non-fulfillment of the
criterion of ten years of qualifying service. It is not in dispute that the
service in the Corporation is non-pensionable.
6. In order to extend the benefit of pension to the Government servants
permanently absorbed in the Public Sector Undertakings on the basis of
options, the State Government issued certain orders from time to time. In
order to appreciate the controversy in proper perspective, a brief
reference to these G.Os. is necessary. The first one is G.O.MS. No. 378 (FR
II) dated 18.4.1975. The said G.O. made the following provision for pension
and gratuity.
"In addition to pay in the public undertaking an optee will be entitled to
pension/gratuity earned by him in Government service prior to such
absorption. If the qualifying service under Government is less than ten
years, gratuity and Death-cum-Retirement gratuity alone will be payable.
They are permitted to draw their pension/ gratuity immediately on
absorption in the Corporation."
This G.O. was kept in abeyance till further orders were issued in regard to
the terminal benefits to be given to the Government servants who opted for
service in Public Sector undertakings. This was done in G.O.MS No. 1197
dated 22.8.1978. Then, came G.O.MS. No. 284, Finance (CFC) Department,
dated 31.3.1980 in supersession of the earlier orders issued on the subject
including G.O.MS No. 378. According to para 2(iii) of the said G.O.
"Pension, in respect of industrial and non industrial workers who get
themselves absorbed in State owned Corporations/Boards will be calculated
at the time of transfer; it is payable by the State Government only on
retirement of the employee from the public sector corporation ....
Xxx xxx xxx
The pension if any will be paid by the Government direct to the absorbed
employee after his retirement from the Corporation/ Board."
Para 3 of the G.O. is the crucial provision. It says-
"3. The crucial date for calculating the terminal benefits in respect of
all the State Public Sector Corporations except the Transport Corporations,
will be the date from which the employee is continuously working in
Corporation or the date of incorporation of the Corporation, whichever is
later. In respect of Transport Corporations, the crucial date will be 1st
May, 1975 or the date from which the employee is continuously working in
the Corporation, whichever is later."
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(Emphasis supplied)
7. Thus, as far as the Transport Corporations are concerned, the relevant
date for the purpose of judging the entitlement of the employees who were
earlier in Government service was fixed as 1st May, 1975. The same G.O.
also stipulated that fresh options will be obtained from Government
servants working in various Corporations/Boards "on the basis of this
G.O.". The Corporations/Boards were requested to decide absorption of
Government servants on the basis of the terminal benefits indicated in the
G.O. Pursuant to this G.O. a letter was addressed by the Commissioner and
Secretary to Government, Transport Department on 5.1.1982 to all State
Transport Undertakings to get fresh options from the employees of the
erstwhile Tamilnadu State Transport Department employees absorbed in the
Corporation. The pro-forma of option form was enclosed therewith. The last
date for exercise of options was fixed as 28.2.1982. As a consequence
thereof, the Transport Corporations called for options to be submitted by
28.2.1982. It appears that G.O.MS NO. 284, dated 31.3.1980 was quashed by
the High Court by its judgment dated 18.1.1983 insofar as it took away the
benefits conferred by G.O. No. 378 dated 18.4.1975. Subsequently, G.O.MS.
No. 1028 came to be issued on 23.9.1975. It is this G.O. read with the
earlier G.O. 284 that has given rise to the grievance of the petitioners -
respondents. The relevant portion of the G.O. is extracted hereunder :
"...Eventhough the erstwhile Tamilnadu State Transport Department employees
have exercised option for their permanent absorption in the Transport
Corporations on different dates and were working continuously in the
various Transport Corporations with effect from different dates from
1.1.72, the crucial date for their permanent absorption in the Transport
Corporations was fixed as 1.5.75 or the date from which the employees were
continuously working in the Corporation whichever was later as per orders
issued in the Government order second read above. The crucial date already
fixed in the G.O. second read above holds good without any change in this
regard."
("The G.O. 2nd read" is G.O. 284 dated 31.3.1980)
8. It was further laid down that the terminal benefits of all the
erstwhile Tamilnadu State Transport Department employees working in the
various Transport Corporations should be settled as per the orders issued
in G.O. No. 378 dated 18.4.1975 subject to certain procedural modifications
set out in the G.O. The pension/gratuity earned by an employee while in
Government service prior to such absorption was protected as was done by
G.O. No. 378.
9. If the cutoff date stipulated in G.O. 1028 dated 23.9.1985 is applied to
the case of the writ petitioners, they will not be eligible to get
pensionary benefits. This led to the filing of the writ petitions in the
High Court.
10. It may be mentioned that during the pendency of the writ appeals, the
Government issued G.O. MS. No. 250 (Transport Department) Dated 18.11.1996
further modifying the cutoff date in order to benefit the erstwhile State
Transport Department employees. The Government while fixing the crucial
date as 15.9.1975 for the permanent absorption in the respective Transport
Corporations, directed that pensionary benefits should be granted to those
who have completed ten years of qualifying Government service as on
15.9.1975 subject to the condition that no arrears of pension shall be
given to the employees benefited by the revised date for the period prior
to 1.1.1986. It does not appear that any of the respondents will be
eligible to get pension even if the revised date is taken into account.
11. In writ petition No. 6969 of 1990, the learned single Judge held that
the cutoff date fixed by the Government in G.O.MS. No. 1028 was illegal and
left it to the Government to fix a fresh cutoff date taking into
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consideration the services of the writ petitioners. In the second writ
petition also another learned Single Judge of the High Court declared the
fixation of cutoff date as 1.5.1975/14.9.1975 as illegal and arbitrary and
directed the Government to fix the cutoff date afresh within the stipulated
time. At the same time it was indicated in the judgment that date on which
the options were finally called for i.e., 20.6.1982 would be the
appropriate date for determining the eligibility to pension. On appeal, the
Division Bench of the High Court while affirming the judgments in the two
writ petitions, concurred with the view expressed by the learned Judge in
the latter case as regards the fixation of cutoff date with reference to
the exercise of options in the year 1982. The Division Bench observed thus
:
"...we are of the view that the cut-off date fixed as 1.5.1975 for the
purpose of computing the terminal benefits of the erstwhile Government
servants, who came to be subsequently permanently absorbed in the various
Government Undertakings, particularly State Transport Undertakings,
proceeded on an artificial basis.
Xxx xxx xxx
... It is only subsequently, in the year 1982, that such employees were
asked to finally exercise their option, either way, and various employees
exercised their option also. For instance, in respect of Pallavan Transport
Corporation, the said date within which such options have to be exercised
appears to have been fixed finally by a letter dated 20.6.1982 and in
respect of other Corporations, it would depend upon the option called for
before they were finally absorbed as employees of the Corporations, which
have come into existence. Till the respective employees have exercised
their options on their volition, they must be considered to continue in
service as Government employees only, in view of the fact that the actual
exercise of option by different employees may be on different dates and to
have a uniformity among group or category of workers pertaining to a
particular Corporation, the date on which the options were called for
finally, or the last date within which the options were to be exercised,
once and for all finally, may be taken up as the relevant criteria in
fixing the cut-off or crucial date for determination of the terminal
benefits......"
12. The learned senior counsel for the appellants has urged that for all
practical purposes, the process of absorption of deputed employees was
completed by 1.5.1975 by which date even the State Transport Department got
disbanded. Our attention was drawn to the fact that pursuant to the
promulgation of the rules known as The Pallavan Transport Corporation
Longevity Pay Scheme and Conditions of Service Rules’ which came into force
on 1st May, 1975, options were called for from the employees on deputation
from Government Departments. The option form enclosed to the Memorandum
dated 29.5.1975 issued by the Managing Diector of PTC Ltd. required the
employees to declare that they voluntarily opted to serve in the PTC Ltd.
and accordingly relinquished all their rights vis-a-vis Tamilnadu State
Transport Department and that they were willing to get absorbed permanently
in the said Corporation subject to the service put in the State Transport
Department being carried over to PTC Ltd. with pay scales, accumulated
rights for gratuity, provident fund, pension etc. Accordingly, the
respondents exercised their options in 1975 itself and the process of
absorption had thus completed during that year. Having regard to this
background, there is nothing arbitrary in the policy decision fixing the
cutoff date for eligibility to pension as 1.5.1975. The learned senior
counsel then contended that the relevance and the rationality of fixation
of the crucial date as 1.5.1975 cannot be faulted merely because on more
opportunity was given to exercise options in the year 1982. The premise on
which the impugned judgment proceeded, namely, that the respondents
continued to be Government employees till final options were exercised in
February, 1982, according to the learned counsel for the appellants is
based on incorrect appreciation of facts. The financial repercussions have
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also been stressed by the learned senior counsel.
13. We find it difficult to accept the contentions advanced by the
appellants’ counsel. The learned counsel has not disputed the proposition
that the cutoff date fixed by the Government for the purpose of conferring
the pensionary benefits cannot be arbitrary or whimsical. Even according to
the appellants, the date of permanent absorption in the service of the
Corporation is a material date and it is in the light of that factor that
the cutoff date was fixed as 1.5.1975. The stand taken in the counter
affidavit filed on bahalf of the Government of Tamilnadu in writ petition
No. 6969 of 1990 is that the writ petitioners were absorbed in the
Kattabomman Transport Corporation with effect from 1.5.1975 on the basis of
the options exercised by them and that their deputation ended on 30.4.1975.
That is how the choice of the date 1.5.1975 is sought to be justified. In
other words, the fixation of cutoff date is sought to be linked up with the
completion of the process of absorption. A perusal of G.Os. 1028 and 250
would also make it clear that the Government wanted to fix the date for
pensionary entitlement to coincide with the date of permanent absorption.
The criterion cannot be said to be irrational or irrelevant. But, the
question is whether this factual premises that the process of absorption
took place in the year 1975 is correct. Viewed in the light of G.O.MS. No.
284 dated 30.1.1980 and the subsequent action taken by the Management of
the State Transport Undertakings, it cannot be said with certitude that the
process of absorption was completed even in the year 1975. If in fact the
process was completed by April, 1975, the pertinent question would be why
fresh options were directed to be called for in the year 1980 and actually
called for in January. 1982 and thereafter? G.O.MS. No. 284 dated 30.1.1980
clearly stipulates that fresh options shall be obtained from the Government
servants working in various Corporations/Boards. The Corporations/Boards
were requested to decide the question of absorption of Government servants
"on the basis of the terminal benefits indicated in the G.O." The sanction
of pension and other terminal benefits was made dependent upon the
acceptance of options. Specific reference has been made in G.O. to the
Transport Department employees. This G.O. gives an unequivocal indication
that the Government itself regarded that the process of absorption was not
complete and that a final exercise of calling for and accepting the offers
should be gone through, may be, in view of the change of criteria in regard
to the terminal benefits. As already noticed, G.O. No. 378 was issued on
18.4.1975, it was kept in abeyance on 22.8.1978 and thereafter G.O. No. 284
was issued on 31.3.1980. Thus, the terms and conditions of absorption did
not take final shape till then. Moreover, even if the respondents had
submitted the option forms in the year 1975 for the purpose of availling
the Longevity Pay Scheme or otherwise, there is nothing on record to show
that the said options were treated as final for all purposes. No material
has been placed either before the High Court or before this Court to
establish that the respondents’ deputation came to an end by 1.5.1975 and
that they were absorbed into Corporations’ service from that date. Above
all, the more important point is that nothing has been said in the counter-
affidavit filed by the State Government before the High Court as to why
fresh options were provided for by G.O. No. 284 and called for by the
Corporation in the year 1982, if the entire process was concluded in the
year 1975 itself. The counter-affidavit merely contains as assertion that
State Transport Department employees were absorbed into the Transport
Corporation with effect from 1.5.1975 by accepting the options. In the
counter, not even a reference has been made to G.O. No. 284 and the options
exercised pursuant thereto. There reason for calling for fresh options has
not been spelt out even in the S.L.P. The factual assertion in the counter-
affidavit therefore remains unsubstantiated.
14. Having regard to these facts and circumstances, we cannot accept the
plea of the appellants that the absorption did in fact take place in the
year 1975. In this situation, the justification sought to be made out for
fixing the cutoff date as 1.5.1975 loses its ground in which case the
finding of the High Court that the date was arbitrarily fixed cannot be
assailed.
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15. There is one more point which needs to be considered. In order to
explain away the effect and efficacy of the options called for in the year
1982, a contention has been raised that G.O. No. 284 pursuant to which the
options were called for was struck down by the High Court in a writ
petition disposed of in the year 1983 and therefore such options must be
regarded as non est in the eye of law. We find no merit in this contention.
It is true that G.O. No. 284 was struck down at the instance of some of the
employees who were benefited by the earlier G.O. which it superseded. But,
that is besides the point. What is material is the factual inference that
is to be drawn from the fact that fresh options were called for by virtue
of and pursuant to G.O. No. 284. The inference should be that the process
of absorption was not regarded as complete by the Government as well as the
Corporation. The Invalidation of that G.O. by the High Court does not in
any way displace this factual inference. In fact the validity of cutoff
date was apparently not adjudicated in the said writ petition. The options
exercised purusuant to G.O. No. 284 have for all practical purposes
regained their efficacy with the reiteration of the same cutoff date by the
subsequent G.O. dated 23.9.1985.
16. For the reasons aforesaid we find no merit in these appeals. The
judgment of the High Court is upheld. However, the High Court while
indicating that the last date for submitting the options finally should
have been taken as the basis for fixation of date, gave a direction to the
Government to fix the relevant date in the light of the observations made
in the judgment. The High Court proceeded on the basis that it was only on
20.6.1982 and thereafter that the options were called for. We are of the
view that in view of the long lapse of time and in order to avoid further
delay and the scope for possible controversies, instead of leaving it to
the Government to fix a fresh cutoff date as per the directions of the High
Court, in exercise of our powers under Article 142 of the Constitution, we
direct that the date 1.4.1982 shall be adopted as cutoff date in
modification of what was prescribed in G.O. No. 1028 dated 23.9.1985 and
G.O. No. 250 dated 18.11.1996. The reason for selecting the said date is
that the Commissioner and Secretary to Government, Transport Department by
his letter dated 5.1.1982 addressed to the Managing Directors of all State
Transport Undertakings requested them to obtain fresh options by 28.2.1982.
The memo issued by the Managing Director of KTC Ltd. dated 11.1.1982 makes
it clear that the last date for exercise of options was fixed as 28.2.1982
in conformity with the Government’s directive. The respective Corporations
were supposed to finalise the options sometime thereafter. It is reasonable
to presume that PTC Ltd. and other Corporations would have also adhered to
the same date. The High Court has referred to the Note dated 20.6.1982
issued by the Managing Director of PTC (Metro) Ltd. But, it does not fix
the last date for submitting the options. It purports to give certain
instructions as to the follow up action to be taken with reference to the
options received. Hence, the fixation of cutoff date as 1.4.1982 would, in
our view, be appropriate. Taking into account the aforementioned date for
the purpose of assessing the requisite length of service, we direct the
appellants to take steps to extend the pensionary benefits to the eligible
employees. Having regard to the conduct of the respondents in seeking the
remedy long after the options were exercised, we consider it just and
proper to direct that the respondent-employees whoever have retired should
get the arrears of pension only from 1.1.1988 which date is fixed with
reference to the year of filing the first writ petition namely W.P. No.
7012 of 1988. The fixation of pension and payment of arrears should be done
accordingly within a period of four months from today. The appellants are
entitled to adjust the monetary benefits which the employees would not have
received if they were to receives the pention.
17. The civil appeals are disposed for accordingly without costs.