Hindustan
Machines Tools Ltd. & ANR Vs. M.S. Kang/P.N. Kashyap [1997] INSC 84 (27
January 1997)
K.
RAMASWAMY, G.T. NANAVATI
ACT:
HEAD NOTE:
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 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
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 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 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.
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