Full Judgment Text
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CASE NO.:
Appeal (civil) 3715-3716 of 2001
Appeal (civil) 3717 of 2001
Appeal (civil) 3718 of 2001
Writ Petition (civil) 499 of 2000
PETITIONER:
DTC RETIRED EMPLOYEES’ ASSOCIATION & ORS., ETC.ETC. ..
Vs.
RESPONDENT:
DELHI TRANSPORT CORPORATION, ETC .. RESPONDENTS
DATE OF JUDGMENT: 08/05/2001
BENCH:
S. Rajendra Babu & K.G. Balakrishnan
JUDGMENT:
K.G. BALAKRISHNAN, J.
Leave granted.
L...I...T.......T.......T.......T.......T.......T.......T..J
In all these appeals, the judgment of the Division Bench
of the Delhi High Court passed on 16.3.2000 in L.P.A. Nos.
294/97, 297/97 and 13/99, is challenged by DTC Retired
Employees’ Association and others. Writ petition No.499 of
2000 is filed by a separate group of retired employees of
the Delhi Transport Corporation.
The Delhi Transport Corporation (for short, "DTC")
introduced a Pension Scheme on 27.11.1992 for its retired
employees. The Central Govt. sanctioned this scheme and it
was to be operated by the Life Insurance Corporation of
India on behalf of DTC. As per the scheme, all employees of
DTC retiring on or after 3.8.1981 were to be covered for the
purpose of pension benefit. The existing employees and
those who retired on or after 3.8.1981 had to exercise their
option for the Pension scheme. The retired employees opting
for the Pension Scheme had to refund the employer’s share of
provident fund received by them under the Employees
Provident Fund Act with interest thereon. Those employees,
who joined the service of DTC with effect from 27.11.1992
and thereafter, had no option but to be compulsorily covered
under the Pension Scheme.
It seems that because of certain financial difficulties,
the Pension Scheme could not be implemented in time. The
various employees associations filed writ petitions before
the Delhi High Court seeking implementation of the Pension
scheme. In addition, some retired employees of the DTC also
filed writ petitions before the Delhi High Court praying
that the Pension Scheme should be made applicable to those
employees also who had retired under the Voluntary
Retirement Sheme. The High Court accepted that plea and
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held that the Pension Scheme be extended to them also
provided they refund the employer’s share of provident fund
received by them under the E.P.F. Act at the time of
retirement, with interest thereon. A yet another set of
employees also filed a writ petition contending that while
exercising their option, they were not liable to pay
interest on the employer’s share of provident fund. This
writ peition was dismissed by the High Court.
L.P.A. No. 33 of 1998 was an appeal filed before the
Delhi High Court by DTC. Along with all other connected
matters, the said L.P.A. was heard and a common judgment
was passed on 16.3.2000 in all the matters, including those
giving rise to the present appeals. Before the Division
Bench of the High Court, various questions were raised by
the parties. The DTC Retired Employees Association
contended that DTC was not entitled to charge interest on
the amount of employer’s share of provident fund which is
required to be refunded by the retired employees while
exercising option to avail the Pension Scheme. The
Employees Association also conteded that the excess amount
of gratuity received by them was not liable to be returned
and even if it is to be returned, they were not liable to
pay interest on such gratuity. Some of the retired DTC
employees had not exercised their option within the
stipulated period. They contended that in view of Clause 9
of the Scheme even if they had not exercised their option,
they would be deemed to have exercised their option in
favour of the Scheme and thus they are entitled to get
pension.
In the writ petition filed by the retired employees
under Article 32 of the Constitution, it is alleged that
even though the Central Govt. had approved the Pension
Scheme, no steps were taken by DTC to implement the same and
the DTC Workers Union had to file a writ petition before
this Court seeking implementation of the Scheme and pursuant
to the orders passed by this Court, the scheme was
initiated, but the DTC later failed to implement the Scheme
and the Life Insurance Corporation also withdrew its
co-operation in implementing the Scheme. The employees who
had retired and opted for pension had not collected their
share of employer’s provident fund and other benefits and
were forced to back out and change their options for pension
and later took their share of provident fund and gratuity
because of the financial difficulties faced by them. It is
alleged by them that though they had opted out of the
Pension Scheme, they are also entitled to Pension. In the
writ petition, it is prayed that the respondents may be
directed to extend the benefit of Pension to the writ
petitioners and other emplyees irrespective of the fact
whether they had opted for or opted out of the Pension
Scheme, on the same terms and conditions as contained
therein and to direct the respondents to pay arrears of
pension.
In the counter affidavit filed on behalf of DTC, it is
alleged that the employees of DTC who were originally
governed by the Contributory Provident Fund scheme, filed a
writ petition before this Court seeking directions for
introduction of Pension Scheme for its employees and an
assurance was given to this Court for introduction of a
scheme. It is stated that pursuant to the said assurance,
the Pension Scheme was introduced on 27.11.1992, and an
option was given to the employees to switch over to the
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Pension Scheme. The Scheme was approved by the Central
Govt. but as the same could not be implemented, the
employees initiated proceedings under the Contempt of Courts
Act. It is stated that meanwhile on 3.3.1993, a Voluntary
Retirement Scheme was also notified. Certain writ petitions
were filed by the employees before the Delhi High Court. In
some of the writ petitions, the question was whether the
employees having less than 20 years of service but more than
10 years of service were entitled to Pension. The High
Court held that those who had less than 20 years of service
but more than 10 years of service would be enitled to get
pro rata pension. In another writ petition, it was held by
the High Court that those employees, who opted to retire
under the Voluntary Retirement Scheme would be entitled to
get pension, provided they refund the employer’s share of
provident fund and gratuity with interest thereon. In writ
petition No. 1469 of 1996, the Delhi High Court held that
DTC was not entitled to charge interest on the excess amount
of gratuity to be refunded by the employees, but the DTC
would be entitled to charge interest on the amount of
employer’s share of provident fund. In another writ
petition, a learned Single Judge of the High Court directed
DTC to pay pension not only to those who had exercised their
option within the stipulated period or within the extended
period, but also to all other employees who would come
forward to claim pension on the basis of their service with
DTC. In writ petition No. 1292 of 1990, the High Court
directed the DTC to pay pension to the writ petitioners who
had not exercised their option within the prescribed period.
It is further stated that DTC filed a writ appeal against
these judgments and the Division Bench held that the
employees who retired between 3.8.1981 and 27.11.1992 and
had not exercised their option were not entitled to pension.
However, it was held that the retired employees having less
than 20 years qualifying service but more than 10 years were
entitled to pension, even if they had opted for voluntary
retirement. It was held that DTC was not entitled to charge
interest on the excess amount of gratuity, though interest
could be charged on the amount of employer’s share of
provident fund received by the retired employees. Those
employees who resigned from service after completing the
qualifying period of service would also be entitled to get
pension. It was held that those who had retired after
3.8.1981 but before 27.11.1992, and had not exercised their
option were not entitled to get pension. Therefore, it is
contended that the prayer in the writ petition to extend the
benefit of pension to the petitioners therein and other
employees irrespective of the fact whether they had
exercised their option initially on the terms and conditions
as contained therein, is without any basis.
We heard the learned counsel for the appellants and the
writ petitioners as also learned counsel for the
respondents. Mainly two contentions have been raised by the
counsel for the appellants. The first contention of the
counsel for the appellants is that the employees of DTC who
retired on or after 3.8.1981 are entitled to get pension
under the Scheme irrespective of the fact whether they had
exercised their option or not. It was argued by senior
counsel, Shri P.P. Rao that by virtue of Clause 9 of the
Pension Scheme notified on 27.11.1992, those who have not
exercised their option in favour of the Scheme would be
deemed to have opted for the Pension Scheme benefits and
therefore they are entitled to get pension.
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The main features of the Pension Scheme as is evident
from the office order No. 16 dated 27.11.1992 are as
follows.
Even though the Scheme itself was launched on
27.11.1992, it would take effect from 3.8.1981. By Clause 3
of the Scheme all existing employees as on 27.11.1992 and
the employees who retired with effect from 3.8.1981 onwards
have to exercise option for the Pension Scheme or the
Employees Contributory Provident Fund within 30 days of the
date of issue of G.O. By Clause 4, the Pension Scheme would
be compulsory for all the new employees joining DTC with
effect from 23.11.1992. Clause 5 says that the Scheme would
be operated by LIC on behalf of DTC.
Clause 6 says that the employees who have retired on or
after 3.8.1981 and the existing employees who have drawn the
employer’s share under E.P.F. Act partly or wholly shall
refund the same with interest in case they opt for Pension
Scheme.
Clause 8 says that a statement would be prepared in
respect of retired employees opting for Pension Scheme and
the amount to be paid/refunded would be worked out by the
concerned unit wherefrom the employees retired from service.
Clause 9 on which the appellants rely reads as follows :
"If any of the employee of DTC who does not exercise any
option within the prescribed period of 30 days or quits
service or dies without exercising an option or whose option
is incomplete or conditional or ambiguous, he shall be
deemed to have opted for the Pension Scheme benefits."
Based on the above clause, it is contended by
appellants’ counsel that those employees who retired after
3.8.1981 shall be deemed to have exercised their option for
the Scheme and the DTC should direct these retired employees
to return the employer’s share of provident fund with
interest and that they should be brought on the roll of
pensioners. Counsel for DTC, on the other hand, contended
that Clause 9 has no application to the employees who had
retired on or after 3.8.1981, but it is intended for
employees who were on the rolls as on 27.11.1992 and were
later retired or who quit the service without exercising an
option.
It is to be noted that those who had retired by the time
the Pension Scheme was introduced must have definitely
availed of the benefit under the Provident Fund Scheme and
as per the Pension Scheme they were liable to refund the
employer’s share of provident fund with interest thereon, if
they wanted to opt for the Pension Scheme. On the contrary,
some such retired employees might not have been interested
in refunding the money received by them and having utilised
such amount would also find it difficult to raise the funds
for repayment. It cannot be assumed that they are bound by
the Scheme and would automatically come under its purview.
The Pension Scheme cannot be thrust upon such employees even
if it may, prima facie, be beneficial to them. As regards
the existing employees as on 27.11.1992, the employer could
always ask them to exercise their option within a stipulated
period and if they failed to exercise their option, the
deeming provision can be invoked and it could be said that
they are covered by the Scheme. It is also important to
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note that as per Clause 4 of the Scheme, those employees who
joined DTC with effect from 23.11.1992 are compulsorily
covered by the Scheme. Therefore, the Division Bench is
perfectly justified in holding that the employees who
retired on or after 3.8.1981 but before 27.11.1992 and had
not exercised their option within the stipulated period or
within the extended period, are not entilted to pension
under the Scheme.
The next contention urged by the appellants’ counsel is
that DTC was not entitled to charge interest on employer’s
share of provident fund received by the employees on
retirement. Prior to the Pension Scheme, the employees were
entitled to get benefit of the Contributory Provident Fund.
These employees on retirement accepted the employer’s share
of provident fund. The Scheme specifically provided that
those who wanted to opt for Pension should return the
employer’s share of provident fund with interest. However,
the retired employees had utilised the money received to
their advantage. Therefore, they are bound to return the
same along with interest; otherwise, a section of the
employees would be unduly benefited vis-Ã -vis other
employees. Therefore, we do not think that such a clause in
the Scheme is irrational or illegal. We do not find any
infirmity in the findings recorded by the High Court.
The learned counsel for the appellants further contended
that the direction to refund the gratuity paid to the
employees who had opted for Pension Scheme is illegal and
even if they had opted for Pension they are not liable to
refund the gratuity already received by them. Reliance was
placed on Section 4 of the Payment of Gratuity Act, 1972,
relevant portion of which is to the following effect :
"4. Payment of gratuity - (1) Gratuity shall be payable
to an employee on the termination of his employment after he
has rendered continuous service for not less than five
years.
(a) on his superannuation, or
.........
.........
(5) Nothing in this section shall affect the right of an
employee to receive better terms of gratuity under any award
or agreement or contract with the employer.
..........."
It was argued that in view of sub-clause (5) of Section
4, the employees can receive better terms of gratuity under
any award or agreement or contract with the employer and as
the provisions contained in the Payment of Gratuity Act
itself contemplate better terms of gratuity or other payment
than what is permissible under the Act, the present Pension
Scheme could only be construed as an award or agreement for
better terms. It was argued that in view of that
circumstance, the appellants are not liable to refund the
gratuity.
The argument advanced on behalf of the appellants is
without any merit. Sub-clause (5) of Section 4 is an
exception to the main section under which gratuity is payble
to the employee. In all welfare legislations, the amount
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payable to the employees or labourers is fixed at the
minimum rate and there will not be any prohibition for the
employer to give better perquisites or amounts than what is
fixed under law. The employer, who is more concerned with
industrial peace and better employer-employee relations, can
always give benefit to the employees irrespective of any
statutory minimum prescribed under law in respect of such
reliefs. Therefore, the provision contained in Sub-clause
(5) of Section 4 is of no assistance to the appellants.
The appellants contended that gratuity is an amount
earned by the employee after long service. Therefore, the
direction to refund the same is illegal.
A gratuity is essentially a retiring benefit payable to
a workman which as per the Statute has been made payable on
voluntary resignation as well. Gratuity is a reward for
good, efficient and faithful service rendered for a
considerable period. A workman gains experience during his
tenure of employment. An experienced workman is capable of
securing another employment with better emoluments. He can
also be tempted by other employers with more lucrative
salary. The exit of an experienced workman would surely be
a loss for his employer. In British Paints (India) Ltd.
vs. Workmen AIR 1966 SC 732, it was held that "a longer
minimum in the case of voluntary retirement or resignation
makes it probable that the workmen would stick to the
company where they are working. That is why gratuity
schemes usually provide for a longer minimum in the case of
voluntary retirement or resignation."
In Ahmedabad Municipal Corporation Workmen vs.
Ahmedabad Municipal Corporation, 1955 LAC 155, it was held
as under :
"The fundamental principle in allowing gratuity is that
it is a retirement benefit for long services, a provision
for old age and the trend of the recent authorities as borne
out from various awards as well as the decisions of this
Tribunal is in favour of double benefit.....We are,
therefore, of the considered opinion that Provident Fund
provides a certain measure of relief only and a portion of
that consists of the employee’s wages, that he or his family
would ultimately receive, and that this provision in the
present day conditions is wholly insufficient relief and two
retirement benefits when the finances of the concern permit
ought to be allowed."
The appellants were paid gratuity for their long
service, but at the time of receipt of this amount, they
were not entitled to get Pension. Now the appellants have
opted for Pension. That is a similar relief given to them
for the longer service rendered by them. The appellants
cannot have the benefit of both the Pension and Gratuity.
The appellants relied on a decision reported in State Govt.
Pensioners’ Association & Ors. vs. State of Andhra Pradesh
1986 (3) SCR 383 and contended for the position that the
gratuity is a one-time payment and once it has been paid the
transaction is completed and closed and the same cannot be
reopened at a later date. It was argued that in view of
that decision, the appellants cannot be asked to refund the
same. That is a case where the appellants therein were
Govt. employees who retired before April 1, 1978. They
contended that Gratuity is a part and parcel of the pension
and the same cannot be looked separately from other
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pensionary reliefs and therefore they are entitled to the
benefit of Gratuity "retrospectively" at the enhanced rate,
as they had been paid Gratuity at the time of retirement at
the then prevailing rate. This plea was not accepted and it
was held that upward revision of Gratuity takes effect from
the specified date with "prospective" effect only. This
decision also is of no assistance to the appellants.
Yet another decision relied on by the appellants is
Janpad Panchayat & Zila Panchayat Karamchari Sangh & Ors.
vs. State of M.P. & Ors. 1998(8) SCC 568. This decision,
though apparently seems to support the appellants’ case,
does not really do so. In this case, the question arose
whether the employees of Panchayat and Zila Parishad were
entitled to pension and gratuity. While interpreting the
Madhya Pradesh Panchayat Act, 1962, it was observed that
Section 75, 147 and 189 of that Act enabled the employees to
get gratuity and pension subject to the previous approval of
the competent authority. These observations were made in
view of the specific provisions contained in the relevant
Statutes. Whereas in the present case the appellants
received gratuity at the time of their exit from the
service, subsequently they opted for pension which had never
been a part of their service conditions. It is a condition
precedent that in order to get the benefit of the Pension
Scheme, they have to refund the gratuity received by them.
It is neither illegal nor unjust.
Learned counsel for the petitioners in the writ petition
No. 499 of 2000 contended that the petitioners had
initially opted for the Pension Scheme in 1992, but as they
were apprehensive regarding DTC’s abilitiy to implement the
Pension Scheme, they were compelled to opt out of the
Pension Scheme. It is submitted that in 1995 only under the
threat of contempt notice from this Court, the DTC came
forward to implement the Pension Sheme, but no fresh option
was given to the employees. It is also argued that DTC had
not communicated to all its employees that they were going
to implement the Scheme. It is also submitted that Pension
is neither a bounty nor a charity. Therefore, all the
retired employees should have been given the benefit of the
Pension Scheme.
It is true that there was some delay in implementing the
Scheme, but all the retired employees were given sufficient
opporrtunity to exercise their option. In paragraph 9 of
the counter affidavit filed on behalf of DTC it is stated
that as far as the time to fill up pension option form is
concerned, the letter dated 23.11.1992 conveyed by the Govt.
of India, Ministry of Surface Transport, contained that the
DTC shall obtain option from its employees within 30 days
from the date of issue of circular. However, the DTC, in
fact, extended the time twice, namely, firstly upto 15th
January, 1993, and secondly upto 1st Feburary, 1993.
Therefore, the retired employees had, in fact, more than one
month’s time to exercise their option. We do not think that
sufficient time was not given to the employees to exercise
their option for the Pension Scheme. Those employees who
had received the benefit of employer’s provident fund scheme
failed to exercise their option and thus disentitled
themselves from getting the Pension benefit. The Pension
Scheme was implemented on the basis of certain guidelines;
it is not for the Court to interfere with the same. The
Division Bench has rightly taken the view that those who had
not exercised their option are not entitled to get Pension.
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The appeals and the writ petition are without any merit and
these are dismissed without, however, any order as to costs.