Employees cannot claim VRS recalculation under ROP 1998 absent its formal adoption by the undertaking.

The petitioner was an employee of Assam Co-operative Sugar Mills Ltd. (“the Mill”), whose production ceased on 31.05.1996 and which was subsequently taken over by the State Government. The Mill was later closed and its registration cancelled pursuant to a Cabinet decision. The State Government introduced a revised Voluntary Retirement Scheme (“VRS”) for State Level Public Enterprises on 15.02.2006, under which benefits were extended to the Mill’s employees.

In earlier proceedings, the High Court directed the State to settle the employees’ dues by treating them similarly to employees of other closed public-sector undertakings. Following the revival of those proceedings, employees were permitted to submit individual claims before the Official Liquidator for verification and disposal.

The petitioner claimed recalculation of his unpaid wages and VRS benefits under the Assam Government Revision of Pay (“ROP”) Rules, 1998, including House Rent Allowance (“HRA”) and Medical Allowance, and also sought extension of benefits granted in All Assam Statefed Karmachari Aikya Manch v. State of Assam & Ors., WP(C) No. 4355/2010.

The Official Liquidator rejected the claim on 22.09.2016, holding that the petitioner had drawn salary under Central Sugar Wage Board-III and that his VRS benefits had correctly been calculated on that basis. The petitioner had received Rs.15,08,905/- towards gratuity, leave salary, ex-gratia, unpaid salary/arrears and CPF, and had allegedly accepted the amount as full and final settlement.

Whether the petitioner was legally entitled to have his VRS benefits and unpaid wages recalculated under the Assam Government ROP Rules, 1998, despite having drawn salary under Central Sugar Wage Board-III?

Whether the petitioner was entitled to claim HRA and Medical Allowance on the strength of the judgment in WP(C) No. 4355/2010 concerning employees of STATFED?

Whether the earlier direction to treat the Mill’s employees similarly to employees of other closed PSUs conferred a substantive right to adoption of the ROP Rules, 1998 or to further recalculation of VRS benefits?

The Court applied the revised VRS policy dated 15.02.2006, under which VRS benefits comprised ex-gratia, leave salary, CPF dues, gratuity, unpaid wages and other specified components, with calculations to be based on the basic pay and dearness allowance applicable on the relevant date and with no subsequent revision ordinarily entertainable.

The Court held that entitlement to a revised pay structure depends upon a specific governmental decision, notification or Cabinet approval extending that structure to the concerned undertaking; ROP Rules, 1998 could not be applied automatically where the employees had not been brought under them.

The earlier judgment in WP(C) No. 1930/2008 required similar treatment only for settlement of dues consequent upon closure and did not itself grant a substantive right to ROP-based pay revision.

The judgment in WP(C) No. 4355/2010 was confined to STATFED employees who were governed by ROP, 1998 and covered by a Cabinet decision specifically identifying four PSUs, which did not include the Mill.

The Court also relied on the principle that acceptance of VRS compensation as full and final settlement is relevant, although such acceptance cannot independently defeat a legally established entitlement.

The Court found that the petitioner had failed to establish that the Mill had ever adopted ROP, 1998 or that the State Government had subsequently approved its application to the Mill’s employees.

The undisputed material showed that the petitioner had drawn salary under Central Sugar Wage Board-III, and the Liquidator had calculated and verified his VRS benefits on that basis.

The general direction to treat the Mill’s employees similarly to employees of other closed PSUs was implemented through extension of the VRS and did not authorise the Court or the Liquidator to substitute ROP, 1998 for the applicable wage structure.

The Court distinguished the STATFED judgment because STATFED employees were expressly governed by ROP, 1998 and were covered by a specific Cabinet approval. Since the Mill was not among the four identified PSUs, that judgment could not create an entitlement to HRA, Medical Allowance or CCA in favour of the petitioner.

The petitioner also produced no material demonstrating that HRA or Medical Allowance formed part of the wage structure applicable to him. His acceptance of Rs.15,08,905/- further supported the respondents’ position, though the Court treated the absence of a substantive entitlement as the decisive ground.

Accordingly, the Liquidator’s rejection of the claim was neither contrary to the earlier court directions nor unsupported by the applicable policy.

He was also not entitled to HRA or Medical Allowance merely because those benefits had been granted to STATFED employees under a distinct pay structure and specific Cabinet approval.

The order dated 22.09.2016 passed by the Official Liquidator was upheld, and the writ petition was dismissed without costs.