Delhi High Court
R.D. Gupta & Ors. vs Delhi Transport Corporation & Anr. on 20 September, 2011
Author: Dipak Misra
Bench: Chief Justice, Sanjiv Khanna, Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 5th August, 2011
% Judgment pronounced on: 20th September, 2011
+ LPA No.708/2002
R.D. Gupta & Ors. ..... Appellants
Through: Mr. Shankar Divate, Adv.
versus
Delhi Transport Corporation & Anr. ..... Respondents
Through: Mrs. Avnish Ahlawat with Mr. Nitesh
Kumar Singh and Ms. Latika
Chaudhary, Advs. for DTC.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of the local papers be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
DIPAK MISRA, CJ
Perceiving a manifest and irreconcilable conflict in the decisions
rendered in LPA No.1262/2007 dated 5th October, 2007, Delhi Transport
Corporation vs. Kishan Lal Sehgal and Ors. and DTC vs. Madhu Bhushan
LPA No.708/2002 Page 1 of 25
Anand, 2010 (172) DLT 668, the Division Bench framed the following
question and recommended for delineation by a larger Bench:-
"What is the effect of receipt of payment including
higher ex-gratia amount and employer‟s share of
provident fund to employees who had applied and
opted for voluntary retirement under the VRS 1993,
though the said employees were entitled to pension
as per officer order No.16 dated 27th November,
1992?"
2. Because of the aforesaid reference, the larger Bench has been
constituted and the matter has been placed before us.
3. The facts which are imperative to be exposited to answer the said
reference are that the Delhi Transport Corporation (DTC) employees were
governed by the Contributory Provident Fund Scheme. The employees of
the DTC preferred a writ petition under Article 32 of the Constitution before
the Supreme Court seeking a direction against the DTC for introduction of
the pension scheme. In pursuance of the assurance given by the DTC before
the Apex Court, the Office Order No.16 dated 27th November, 1992 was
issued. The said office order reads as under:
"DELHI TRANSPORT CORPORATION
LPA No.708/2002 Page 2 of 25
(A Government of India Undertaking)
I.P.Estate, New Delhi
No.Adm-I-S(4)/92 Dated 27.11.92
OFFICE ORDER NO.16
Sub : Introduction of Pension Scheme for the
employees of the DTC as applicable to the Central
Govt. Employees.
The introduction of Pension Scheme for the
employees of the DTC has been sanctioned by the
Central Government and conveyed by the M.O.S.T.
vide letter No.RT-12019/21/88-TAG dated 23.11.92 as
on the same pattern as for the Central Government
employees subject to the following conditions:
1. The pension scheme would be operated by the LIC
on behalf of DTC.
2. The date of effect of pension scheme would be 3.8.81.
3. All the existing employees including those retired
w.e.f. 3.8.81 onwards would have the option to opt
for the Pension Scheme or the Employees
Contributory Provident Fund as at present, within 30
days from the date of issue of this O.O. for the
implementation of the Pension Scheme as approved
by the Government of India.
4. The Pension Scheme would be compulsory for all
the new employees joining DTC w.e.f. 23.11.92 the
date of sanction of the scheme.
5. The Pension Scheme would be operated by the
LIC on behalf of DTC. The employees share in the
EPF A/C of the DTC employees, who opt for
LPA No.708/2002 Page 3 of 25
pension scheme would be transferred to the LIC, for
operating.
6. The employees who have retired on or after 3rd
August, 1981 and the existing employees, who have
drawn the employer‟s share, under the E.P.F. Act,
partly or wholly shall have to refund the same with
interest in the event of their opting for the Pension
Scheme. The total amount to be refunded by the retired
employees/existing employees would be the amount
that would have accrued, had they not withdrawn the
employer‟s share.
7. Excess amount of gratuity, if already paid to ex-
employees and which is not admissible under the
Pension Scheme, will have to refunded by them
before any benefit under the Scheme, is granted to
them.
8. A due and drawn statement would be prepared in
respect of retired employees opting for Pension
Scheme and the amount to the paid/refunded, would
be worked out by the concerned unit, wherefrom the
employee had retired from service.
9. If any of the employee of DTC, who does not
exercise any option within the prescribed period of 30
days or quit service or dies without exercising an option
or whose option is incomplete or conditional or
ambiguous, he shall be deemed to have opted the
Pension Scheme Benefits.
Application forms for exercising option would
be available with the unit officers and all employees
including retired employees wishing to exercise
option, should do so with the unit of their present
LPA No.708/2002 Page 4 of 25
working/where from they retired, within a period of
30 days from the date of issue of this office order.
The unit officers, after receiving the option
from the ex-employees, will take further necessary
action for getting the necessary forms completed,
which will be supplied to them by the LIC for pension
etc. they will also ensure the recovery of E.P.F. and
the Gratuity from the Ex-employees before
forwarding their applications as mentioned above. The
cases of all officers will be dealt with at Headquarters.
The option received from the existing
employees for not opting Pension may be kept in their
personal file and entry made in their Service Book.
Sd/-
(L.C.Goyal)
DY. CHIEF GENERAL MANAGER (P)."
[Underlining is ours]
4. As the scheme would reflect, the pension scheme was to be operated
by the Life Insurance Corporation on behalf of the DTC. It is worth noting
that the said pension scheme could not be implemented for manifold reasons
with which we are not concerned. After series of deliberations, in the
ultimate eventuate, the pension scheme became operational only in 1995.
While the issue pertaining to the pension was pending and had not been
concretized to a ripened scheme, the DTC introduced the Voluntary
LPA No.708/2002 Page 5 of 25
Retirement Scheme (for short „the VRS‟) on 3rd March, 1993. The relevant
part of the said scheme reads as follows:
"Sub: Voluntary Retirement of Employees of Delhi
Transport Corporation.
The matter pertaining to the introduction of
voluntary Retirement Scheme for the employees has
been under the consideration of Delhi Transport
Corporation. Salient Features of the proposed
voluntary Retirement Scheme are as under:
1. Applicability:
The scheme will be applicable to all regular
employees of the corporation i.e. workers and
executives who are appointed against regular
vacancies in the corporation.
2. Eligibility:
An employee must have completed ten years of
service in this corporation or completed 40 years of
age to qualify for consideration under the Scheme.
For this purpose, period of deputation/retention of lien
in the parent office in lieu of deputation prior to
absorption in the regular service of the Corporation
will be excluded.
3. Conditions covering voluntary retirement.
(a) Voluntary retirement will be normally allowed only in
cases of incumbents of the posts which have been
declared surplus or redundant. However, voluntary
retirement Scheme could also be allowed in other
LPA No.708/2002 Page 6 of 25
cases depending on the merits of each case and in the
interest of the corporation.
(b) Voluntary retirement cannot be claimed by any
employee as a matter of right. The corporation will
have the right not to grant Voluntary Retirement for
reasons to be recorded in writing. Under no reasons
will the relief under this scheme be allowed from a
date earlier than the date of passing the orders.
(c) An employee in whose case any disciplinary case
is pending will not be considered under this scheme
until the disposal of the same.
4. An employee who had taken voluntary retirement
will be eligible to the following refunds/payments:
(a) Balance in his PF Account as per rules of
provident fund applicable to him.
(b) Encashment of refused leave and accumulated
earned leave as per rules of the corporation
applicable to him as if he retires under the normal
rules of retirement.
(c) Gratuity as per payment of gratuity act and
gratuity Rules of the corporation applicable to him.
(d) Three month notice pay as is applicable in the
individual case as per the terms of him/her
employment.
(e) An Ex-Gratia payment equivalent to 1-1/2
month's basic pay plus DA for such completed year
of service limited to one month pay multiplied by the
number of whose month of service left before normal
date of retirement.
LPA No.708/2002 Page 7 of 25
(f) Expenses for travelling for the entitled class for the
employee and his/her family comprising his/her
spouse and dependent members from the place of
his/her posting to the place where he/she intends to
settle down in India.
(g) Pensionary benefits as per office order No. 16
dt.27.11.92.
All amounts due to the Corporation will be
adjusted against the payments under (d) & (e) above and
the employee concerned should clear any outstanding
dues/advances taken before the date of effect of
voluntary retirement.
Employees working on the post of Conductor
in the Corporation are proposed to be covered under the
Voluntary Retirement Scheme in the first instance.
Such Conductors who are desirous of seeking
voluntary retirement in the proposed Scheme may
give their option in the prescribed Performa through
proper channel within 15 days to be concerned Unit
Officer who will forward the same to the Secretary,
DTC Board.
This issue with the approval of competent
authority."
5. As the factual matrix would further undrape, the DTC introduced two
more VRSs in the years 1994 and 1995. In the VRS 1994, it was expressly
postulated as under:
LPA No.708/2002 Page 8 of 25
"It is also notified for information of all such employees
who opt for VRS that they would not be entitled to
join Pension Scheme if they are allowed retirement
under VRS. Other salient features of the proposed
VRS will remain the same as announced earlier vide
this officer circular dated 03.03.1993."
Be it noted, the VRS which was floated in the year 1995 did
incorporate a similar stipulation.
6. On a studied scrutiny of the aforesaid schemes, it is clear as noon day
that the clauses relating to the pension eligibility were different. The VRS
1993 had stipulated that the pensionary benefits would be payable as per the
office order No. 16 dated 27.11.1992. In the VRSs that were floated in 1994
and 1995, there was express stipulation that the employees who opt for
voluntary retirement would not be entitled to join the pension scheme.
7. The present intra-Court appeal is concerned with the VRS 1993 and
not with the VRSs 1994 and 1995 and, therefore, we shall restrict our
advertence to the VRS 1993. As noticed, Clause 4(g) of the VRS 1993 had
stipulated that the pensionary benefits as per the Office Order No.16 dated
27th November, 1992 would apply. There was a stipulation that all amounts
due to the Corporation would be adjusted against the payments under sub-
LPA No.708/2002 Page 9 of 25
clause (d) & (e) of the Clause 4 and the employee concerned should clear
any outstanding dues / advances taken before the date of effect of voluntary
retirement. If the said clause is appositely understood in the context of the
Office Order dated 27th November, 1992 which we have reproduced
hereinbefore, it would convey that the employees who had opted for VRS
under the 1993 scheme would be entitled to pension benefits except in cases
where an employee had specifically opted under the office order dated 27th
November, 1992 to remain outside the pension scheme. However, another
aspect which luminously arises to the forefront requiring consideration is
that the said scheme became operational only in 1995. The appellants in the
present appeal, as the factual matrix would reveal, were offered retirement
with effect from 31st May, 1993. They were not paid any pensionary
benefits as the pension scheme had not become operational till 1995 and
was in an inchoate stage. The appellants were paid retiral benefits under the
Contributory Provident Fund Scheme. It needs special emphasis to state
that the retirement benefits included higher amount of gratuity, payment
made ex-gratia and the employer‟s share of provident fund. Be it noted,
even after 1995, the appellants were not extended the benefit of pension.
LPA No.708/2002 Page 10 of 25
8. It has been propounded that as the appellants had opted for the
pension scheme, they are entitled to pension. The said contention has been
pyramided on the bedrock of Clause 9 of the Order dated 27th November,
1992 read with Clause 4(g) of the VRS 1993. It has been canvassed that
merely because they had been paid the retiral benefits because the pension
scheme had not become operational and could become effective in 1995
only, the same would not make an iota of difference. This is a factor in
favour of the appellants. The said submission is further edificed and
reinforced on the basis of the decision rendered in Kishan Lal Sehgal and
Ors. (supra).
9. To appreciate the controversy in totality, we think it apposite to
reproduce what exactly has been held in Kishan Lal Sehgal and Ors.
(supra):
"4. On 3rd March, 1993 the appellant notified a
voluntary retirement scheme and the respondents No. 1 to
3 applied for under the said scheme. They were relieved
from their duties on 31st May, 1993, 30th ....(sic)
had already opted for pension scheme, they were
entitled to pension on retirement and not covered by
the Provident Fund Scheme. However as they were not
paid pension, in April, 2005 the respondents filed the
LPA No.708/2002 Page 11 of 25
aforesaid writ petitions praying for grant of pension on
which the aforesaid order was passed by the learned
single judge.
5. The pension scheme was announced on 27th
November, 1992, prior to the retirement of the
respondents and they had opted for it. Though the
respondents availed the voluntary retirement scheme in
1993 and received the employee‟s share of the provident
fund in 1996, but later they approached the appellant for
making pension scheme operational in their favour as
they had opted for the said scheme and they were
ready to return the money received by them along with
interest. In the legal notice dated 15th February, 2005
issued by the respondents to the Chairman-cum-
Managing Director of the appellant it was stated that the
respondents had the apprehension that the appellant
may not have implemented the pension scheme and
therefore they had accepted the money.
6. On going through the records we find that the
facts of this case are identical with the case DTC v. Vir
Bhan decided by this Bench on 24th May, 2007. In the
said clause also the employee had availed of the
voluntary retirement scheme and was allowed to
retire on 31st May, 1993. He had also taken the
........(sic). In the said case we have held that though the
employee had no opted for the pension scheme
within the prescribed period of thirty days, but
Clause-9 of the office Order dated 27th November,
1992 was applicable to the employee and the
subsequent option exercised by the employee for
getting provident fund and gratuity instead of pension
scheme should not have been accepted by the DTC.
We upheld the order of the learned Single judge in
LPA No.708/2002 Page 12 of 25
that case holding that the employee was entitled to
pension.
7. We may also refer to the judgment of a Division
Bench of this Court in DTC v. Baijnath Bhargava
and others - LPA No. 33/1998 decided on 16th March,
200 wherein on the question of entitlement to ex
gratia amount, the Court recorded the statement of
the counsel for the DTC that DTC had decided to not
to contest the said issue as it had already started paying
pension to all eligible employees having 20 years of
service even when they had not refunded the ex gratia
amount taken at the time of the voluntary retirement
scheme. The learned Single judge has also referred to the
same in the impugned judgment in the present case.
8. In view of the delay by the respondents No. 1 to 3 in
approaching the Court, learned Single judge has directed
that pension shall be payable to them w.e.f. 1st April,
2005 only and the respondents have been directed to
also refund the employer‟s share/contribution to CPF
received with interest at the rates as applicable"
[Emphasis added]
10. The learned counsel for the DTC has drawn inspiration from the
decision in Madhu Bhushan Anand (supra) and has assiduously urged that
the said decision lays down the law correctly and the same is applicable to
the facts of the case. It is apt to note that in the case of Madhu Bhushan
Anand (supra), the employees who had opted for voluntary retirement under
VRS 1993 had written letters that they had opted out of the pension scheme
LPA No.708/2002 Page 13 of 25
and be retained as members under the Contributory Provident Fund Scheme.
The Division Bench, while dealing with the controversy, has held thus:
"35. The claim of the respondents in category 1 and
category 2 may be taken up together for the reason
whether they exercised a positive option to be
brought under the pension scheme or having
exercised no option whatsoever and hence as deemed
optees being brought under the pension scheme, their
status would be the same as entitled to be brought
under the pension scheme under the notification dated
27.11.1992. Since all these respondents applied for being
voluntarily retired when the scheme notified on
3.3.1993 was extended from time to time in the year
1993, they certainly would be entitled to pension for the
reason clause 4(g) of the scheme notified on 3.3.1993
clearly stated that such persons would be entitled to
pensionary benefits. But, there are certain further
facts which need to be noted qua them. The case of
the Corporation is that having opted under the
pension scheme or deemed to have opted under the
pension scheme, the said respondents specifically
opted out from the pension scheme and by the time
they retired under the Voluntary Retirement Scheme,
the pension scheme had not been formally brought
into effect (as noted above it was formally brought
into effect for the retirees who retired post
1.11.1995), they filed applications specifically stating
that they intend to opt out of the pension scheme
and be retained as members under the Contributory
Provident Fund Scheme and thus on accepting their
offers to be voluntarily retired the Corporation paid over
to them not only their share in the Contributory
Provident Fund Account but even the management‟s
LPA No.708/2002 Page 14 of 25
share, which they accepted without demur and hence
could not rake up the issue after 12 to 15 years i.e.
when they filed either writ petitions in this Court
which were transferred to the Central Administrative
Tribunal or filed Original Applications before the
Central Administrative Tribunal.
36. Qua these respondents, it may be noted that the
respondent of W.P.(C) No.14027/2009 submitted a
letter dated 2.3.1995 specifically stating that he does not
want to opt for the pension scheme and desires his
dues to be paid as per his CPF Account. The
respondent of W.P.(C) No.565/2010 likewise
submitted a letter on 12.7.1995. The respondent of
W.P.(C) No.598/2010 likewise submitted a letter in
the year 1994 and reaffirmed the said fact in the
letter dated 5.11.1998. The respondent of W.P.(C)
No.754/2010 likewise submitted a letter on 20.4.1995.
The respondent of W.P.(C) No.1902/2010 likewise
submitted a letter on 14.7.1995. The 3 respondents of
W.P.(C) No.2274/2010 likewise submitted letters on
11.3.1994, 15.3.1994 and 9.6.1995 respectively. The
respondent of W.P.(C) No.3919/2010 likewise
submitted a letter on 22.7.1996. The respondent of
W.P.(C) No.423/2010 likewise submitted a letter on
5.10.1994. The respondent of W.P.(C) No.756/2010
likewise submitted a letter on 15.3.1994 as claimed
by the DTC but denied by said respondent. We note
that DTC has produced said letter and additionally
has relied upon a list prepared on 12.4.1994 where
the name of said respondent is at serial No.113 and notes
his opting out for pension. The respondent of
W.P.(C) No.832/2010 likewise submitted a letter on
5.9.1995. The respondent of W.P.(C) No.752/2010
likewise submitted a letter on 7.12.1993. The
respondent of W.P.(C) No.401/2010 also opted out of
LPA No.708/2002 Page 15 of 25
the pension scheme, though the date when he did so is
not on record."
11. In the said case, the Division Bench adverted to the cases of the
employees who were granted voluntary retirement under 1993 VRS but not
paid pension benefits and who were covered by Clause 9 of the Office Order
dated 27th November, 1992 or had opted for the pension scheme despite that
they had not been paid pensionary benefits but only paid higher ex-gratia
amount and the employer‟s share of provident fund. The Division Bench
expressed the view that they were not entitled to pension by ascribing the
following reasons:
"30. Pertaining to the remaining 18 writ petitions, we
may divide the same into 3 further categories which
emerge from the facts noted by us in para 6 and 8
above. The said 18 writ petitions are divided:
Category 1- Respondents of W.P.(C) Nos.14027/2009,
401/2010, 565/2010, 598/2010, 754/2010, 1902/2010,
2274/2010 and 3919/2010 who specifically opted for the
pension schemes when they submitted their offer for
being voluntarily retired as per the terms and
conditions notified in the VRS Scheme notified on
3.3.1993 which was made applicable by reference to
the subsequent schemes notified in the year 1993.
Category 2- Respondents of W.P.(C) Nos.423/2010,
756/2010, 832/2010, 752/2010, 793/2010, 1384/2010,
1386/2010 and 2051/2010 who having not submitted
any options have to be treated as deemed optees for
LPA No.708/2002 Page 16 of 25
the pension scheme when they submitted their offer
for being voluntarily retired as per the terms and
conditions notified in the VRS Scheme notified on
3.3.1993 which was made applicable by reference to
the subsequent schemes notified in the year 1993.
Category 3- Respondents of W.P.(C) No.4906/2010
and the writ petitioner of W.P.(C) No.4689/2010 who
specifically opted to be retained in the Contributory
Provident Fund Scheme.
31. We take category 3 first. Surprisingly, one
claimant being the respondent of W.P.(C)
No.4906/2010 has succeeded before the Tribunal and the
other i.e. the petitioner of W.P.(C) No.4689/2010 has
lost, notwithstanding their cases being identical."
[Emphasis added]
12. In the said case, a contention was propounded to the effect that those
who had opted under the VRS 1993 was due to compulsion and coercion as
it was uncertain when the pension scheme would come into effect. The
Division Bench, repelling the said contention, stated as follows:
"43. The compulsion alleged by them is the
uncertainty of pension being released. As noted
hereinabove the pension scheme notified on
27.11.1992 could not take off because LIC did not
fund the scheme as envisaged and later on the Central
Government agreed to fund the scheme on
31.10.1995 and indisputably those who retired after
1.11.1995 were paid pension. Thus, the compulsion
LPA No.708/2002 Page 17 of 25
resulting as the consequence of the uncertainty of
pension being released, which may have been
uncertain when the said respondents opted out to
receive pension and reverted to receive benefit under
CPF, came to an end on 1.11.1995. The silence of
these respondents for periods ranging from 12 to 15
years when they took recourse to legal action is
clearly indicative of there being no compulsion. The
silence of these respondents speaks for itself. It is
apparent that with the passage of time these
respondents became clever by a dozen and thought
why not take the benefit of a few who likewise went to
Court and obtained relief, by pulling wool over the eyes
of the Court by pleading that their act of
subsequently opting out of the pension scheme was
meaningless because the contract stood concluded, a
submission which was accepted by the Courts
without considering the further issue of contract
being novated.
44. In our opinion these respondents have no claim
whatsoever to receive pension. They novated the
contract by volition when they subsequently opted
out of the pension scheme and DTC accepted the
same and paid to them even the management‟s share in
the CPF account. Their claims are hit by delay,
laches and limitation. They are not entitled to plead
that right to receive pension is a continuous cause of
action, for the reason, in law either pension can be
received or benefit under the CPF account. If the
management forces down the gullet of an employee
payment under the CPF Scheme and the employee
desires pension he has to approach the Court or the
Tribunal within a maximum period of 3 years being
the limitation prescribed to file a suit.
LPA No.708/2002 Page 18 of 25
45. That apart, if it was the case of the respondents
that they were compelled to opt out of pension
scheme on account of the uncertainty in the
implementation of the pension scheme, they ought to
have sought a declaration that their act of opting out of
the pension scheme be declared null and void, being
out of compulsion and for said prayer they ought to
have made the requisite pleadings entitling them for
such a declaration. Needless to state an act out of
compulsion is a voidable act and not a void act. The
respondents have admittedly not done so. It is only in
the rejoinder filed by them to the reply to their
respective OA that a bald plea has been set forth that
they acted out of compulsion when they opted out of
the pension scheme."
[Emphasis added]
13. It is worth noting the decision rendered in Madhu Bhushan Anand
(supra) and other connected matters were assailed in SLP(C)
No.31241/2010 by one of the employees and their Lordships on 3.12.2010
have passed the following order:
"No ground is made out for our interference with the
impugned judgment. The special leave petitions are
dismissed."
14. The question that emanates for consideration is when an employee
receives payments including higher ex-gratia amount and the employer‟s
LPA No.708/2002 Page 19 of 25
share of provident fund and had applied and opted for a voluntary retirement
under VRS 1993, whether he would be entitled to get pension as per the
Office Order dated 27th November, 1992, when he had "opted" for pension
specifically or by default. As has been held in the case of Kishan Lal
Sehgal and Ors. (supra), the Division Bench had placed reliance on the
decision in DTC v. Vir Bhan decided on 24th May, 2007 in LPA
No.359/2007 wherein it had been held that the employee was entitled to
pension. Thus, the decision rendered in Kishan Lal Sehgal and Ors.
(supra) is based on Vir Bhan (supra). In the case of Vir Bhan (supra), the
Division Bench referred to the Voluntary Retirement Scheme specially
Clause 3 and Clause 9 and thereafter proceeded to state as follows:
"3. The learned Single Judge held that clause 9 of the
aforesaid pension scheme is applicable to the respondent.
Therefore the respondent had opted for pension shcme
when he retired on 31.5.93. Even the appellant vide
letter dated 15.10.93 had informed the respondent that he
would be paid in terms of the pension scheme. The
respondent then submitted an application on 28.3.1994
for payment of provident fund and gratuity. The request
was made after the respondent had already retired on
31.5.1993. Thus the same should not have been acted
upon and was not available as the respondent was
governed by the pension scheme. At a later stage the
respondent again stated that he was not interested to have
LPA No.708/2002 Page 20 of 25
provident fund and should be paid benefits under the
pension scheme and consequent upon which the aforesaid
writ petition was filed in 1994 itself which stood allowed
by the learned Single Judge. Learned Single Judge also
noticed that the respondent was paid only the employee
share towards CPF in July, 1994 and the employer‟s
share was released during the pendency of the petition."
15. In this regard, reference to the decision in LPA No.330/2002 decided
on 17.4.2002, DTC Retired Employees Association v. DTC, is worth
noting:
"It is not disputed that the members of the first petitioner
association and second and third petitioners had
exercised their option to withdraw from the pension
scheme pursuant to the Circular of the Delhi Transport
Corporation dated 10th February, 1994 and the same was
accepted by the respondent. Once the members of the
petitioner association and second and third petitioners
opted for Contributory Fund Scheme, they have no right
to switch back to the pension scheme, especially when
the petitioners have availed of the benefits under the
Contributory Provident Fund Scheme after opting out of
the pension scheme."
[Emphasis supplied]
16. The aforesaid order was assailed before the Apex Court in SLP(C)
No.16135/2002 and their Lordships declined to interfere and dismissed the
special leave petition
LPA No.708/2002 Page 21 of 25
17. In Delhi Transport Corporation v. Mool Chand, (2009) 1 SCC 255,
it has been held thus:
"It appears that there was a voluntary retirement scheme
(for short "VRS") in Delhi Transport Corporation,
hereinafter referred to as "the Corporation, in 1993 which
contained a provision for pension. The respondent herein
did not apply under that VRS scheme. Subsequently, the
Corporation framed a new scheme dated 13.12.1995 in
which it was specifically stated that those employees who
opt for VRS under the new scheme will not get pension.
The respondent, admittedly, applied under this scheme.
2. Since there was a specific provision in VRS
scheme dated 13.12.1995, we fail to see how the High
Court has held that the respondent will get pension in
addition to VRS benefits. In view of above, we find that
the impugned judgment of the High Court is erroneous
and it is hereby set aside. The appeal is allowed
accordingly. No order as to costs."
18. From the aforesaid pronouncement of law in the field by various
Division Benches, it is noticed that the decision rendered in Kishan Lal
Sehgal and Ors. (supra) did not take note of the earlier decision rendered in
DTC Retired Employees Association (supra). The said decision was
rendered prior in point of time. It is well settled principle of law that earlier
Division Bench decision is a binding precedent on the later Division Bench.
LPA No.708/2002 Page 22 of 25
As is evincible, the decisions rendered in Kishan Lal Sehgal and Ors.
(supra) and Vir Bhan (supra) have laid emphasis on Clause 9 of the Office
Order dated 27th November, 1992. The concept of „deemed to have opted
the pension scheme benefits‟ has been accepted on the foundation that the
same is binding on the DTC. If the language of Clause 9 is appositely
understood, it would convey that if an employee does not exercise any
option 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
the pension scheme benefits. It does not lay down that if an employee
deliberately applies for getting the benefit under the Contributory Provident
Fund scheme and avails the benefits, then it would come under the realm of
opting out of the pension scheme. It is an affirmative act to opt for the
Contributory Provident Fund Scheme and to avail other benefits attached to
it. The said benefits are higher ex gratia amount and the employer‟s
provident fund contribution. There is subtle distinction between deemed
inclusion to be under the pension benefit scheme but it would be an
anathema to hold that even if an employee has voluntarily opted out and
availed the benefits still he can take a somersault and claim to be brought
LPA No.708/2002 Page 23 of 25
within the pension scheme. As has been in the case of Madhu Bhushan
Anand (supra) the same amounts to novation of contract of volition. To
hold that who had applied and opted for the voluntary retirement under VRS
1993 and received all payments would still be entitled to pension regard
being had to Clause 9 of the Office Order dated 27.11.1992 would result in
placing a farfetched interpretation on Clause 9. In the case of DTC Retired
Employees Association (supra) the Division Bench has clearly opined that
such employees have no right to switch back to the pension scheme after
they have opted out of the pension scheme. As we have indicated earlier,
the decision in Madhu Bhushan Anand (supra) and DTC Retired
Employees Association (supra) have not been interfered with by their
Lordships of the Apex Court. In our considered opinion, Clause 9 of the
scheme cannot be carried so far as to have an absurd impact on the scheme.
Once the said benefits are availed of, the principle of opting out has to be
made applicable. The concept of switch on and switch off has to be
ostracized. When an employee accepts the benefits out of his own volition
without any coercion, he cannot take a somersault and claim to have the
benefits taking recourse to Clause 9 that he is deemed to be within the
LPA No.708/2002 Page 24 of 25
pension scheme. Thus analyzed, we are of the considered opinion that the
decision in Madhu Bhushan Anand (supra) lays down the law correctly.
The law laid down in Kishan Lal Sehgal and Ors. (supra) and Vir Bhan
(supra) is not correct and, accordingly, the said decisions and the decisions
on the said lines are overruled.
17. The reference is answered accordingly. The matter be placed before
the appropriate Division Bench.
CHIEF JUSTICE
SANJIV KHANNA, J.
SEPTEMBER 20, 2011 RAJIV SAHAI ENDLAW, J. dk/pk LPA No.708/2002 Page 25 of 25