DTC
Retired Employees' Association & Ors Vs. Delhi Transport Corporation [2001]
Insc 280 (8 May 2001)
S. Rajendra
Babu & K.G. Balakrishnan K.G. Balakrishnan, J.
Appeal (civil) 3717 of 2001 Appeal (civil) 3718 of 2001 Writ
Petition (civil) 499 of 2000
Leave
granted.
L.I.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 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 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.
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 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-à-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 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 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.
The
appeals and the writ petition are without any merit and these are dismissed
without, however, any order as to costs.
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