Telangana High Court
Narendra Agrawal, vs Indian Immunologicals Limited, on 31 January, 2025
HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
WRIT PETITION No.40011 of 2017
ORDER:
The present Writ Petition is originally filed to issue a Writ of Mandamus declaring the action of the respondents in denying the petitioner the benefits, viz., (i) Compensation Revision of 2014 in accordance with Circular, dated 04.09.2014, and Corrigendum, dated 08.09.2014, (ii) Annual Increment from the year 2014 onwards (iii) Retention bonus (iv) Excess rental paid on account of being forced out of company residence due to illegal termination and (v) Interest on the dues and other consequential benefits, as improper, illegal and unconstitutional.
2. Subsequently, the petitioner filed I.A.No.1 of 2023 seeking to amend the prayer in the original writ petition by substituting with the following prayer:-
"to direct the respondents to extend the following benefits:-
(i) Pay revision: Highest revision given to any other employee for the year 2014 onwards
(ii) Performance pay: 30% of basic pay LNA,J WPNo.40011 of 2017 2
(iii) Annual increment: Maximum annual increment given to any other employee from 2014 onwards
(iv) Retention bonus and
(v) Grade promotion: Equal to maximum number of promotions given to any other employee of the company since 2007."
3. Heard Sri Narendra Agrawal, the petitioner, as party-in- person, and Sri Avinash Desai, learned senior counsel representing Sri M.Pranav, learned counsel on record for the respondents.
4. This case has got a chequered history. The facts of the case, in nut-shell, are that the petitioner was initially appointed as Grade M-III Manager in marketing department of the respondent company in the year 2007 for a period of three years and subsequently, his appointment was renewed through renewal letters till the year 2012; that he was promoted as Grade M-II Manager in the same department in the year 2013; that subsequently, he was terminated by the respondents in the year 2015 without assigning any reason; that challenging the same, the petitioner filed W.P.No.4159 of 2015 and this Court vide order LNA,J WPNo.40011 of 2017 3 dated 24.11.2016 pleased to set aside the termination order and pursuant the said orders, he was reinstated into service, vide proceedings dated 09.02.2017; and that simultaneously, the respondents challenged the order dated 24.11.2016 passed in W.P.No.4159 of 2015 by way of filing Writ Appeal, vide W.A.No.143 of 2017 and the said Writ Appeal was dismissed by a Division Bench of this Court, vide judgment dated 04.01.2021.
5. During the pendency of W.A.No.143 of 2017, the respondents, as per Rule-31 of the Conduct, Discipline and Appeal Rules, 1999, have once again terminated the services of the petitioner on the ground that the company had lost confidence upon him, vide order dated 11.10.2018. The petitioner challenged the said termination order by filing W.P.No.38211 of 2018 and in the said Writ Petition, this Court passed interim order, dated 25.10.2018, in I.A.No.1 of 2018 suspending the order of termination. Against the said order, the respondents filed W.A.No.1540 of 2018 and the said Writ Appeal was dismissed vide order dated 14.12.2018. Subsequently, WP.No.38211 of 2018 LNA,J WPNo.40011 of 2017 4 was allowed setting aside the termination order, vide order dated 17.09.2019.
6. Aggrieved by the said order, the respondents filed W.A.No.763 of 2019, however, the said Writ Appeal was dismissed, vide orders dated 25.02.2022. Challenging the order passed in W.A.No.763 of 2019, the respondents approached Hon'ble Supreme Court vide SLP (C) Nos.8633-8635 of 2021 and 4919 of 2022 respectively, but eventually, the same were dismissed vide order dated 19.09.2022. Consequently, the petitioner was reinstated into service by the respondent company, vide order dated 03.10.2022. However, alleging that the respondents have denied him the benefits which he is entitled to, the petitioner filed the present Writ Petition seeking direction to the respondents to extend the said benefits to him.
7. The petitioner, who appeared as party-in-person, contended that initially at the time of his appointment in the year 2007, he was given basic pay of Rs.35,000/- along with performance incentives @ 25% per annum and as per Cost to Company (CIC) working, he was entitled to minimum of 80% LNA,J WPNo.40011 of 2017 5 performance incentive. Subsequently, after promotion as Manager Grade M-II, he was given basic salary of Rs.77,621/-. 7.1. The petitioner further contended that he has fulfilled all the eligibility criteria laid down for compensation revision as per Circular dated 04.09.2014 and Corrigendum dated 08.09.2014; that consequent to the compensation revision and annual increment of 2014-15, he was entitled to basic pay of Rs.95,474/- from 01.04.2014; that after his reinstatement into service, vide order dated 09.02.2017, the respondents refused to pay legitimate dues including the benefits of the compensation revision along with annual increments; that consequent to the order of this Court in C.C.No.1168 of 2017, he is entitled to performance pay at 30% of the basic pay; that the order of this Court in C.C.No.1168 of 2017, if jointly read with the performance management policy of the respondent company, he was also entitled to annual increment at 15% every year from the financial year 2015-16 onwards till the performance pay was revised; and that he is entitled to Rs.6,54,000/- for the rental difference till December 2017.
LNA,J WPNo.40011 of 2017 6 7.2. The petitioner further contended that though he was reinstated again in 2022, his basic pay remained fixed at the level of year 2013 and the gross pay was less than that of the year 2013; that the respondents continued to deny the petitioner the benefits of pay revision, annual increment and performance pay equal to 30% from 2014 onwards and further, he was also denied the retention bonus equal to six months' basic pay for every six years as per the policy existing at the time of joining of the petitioner along with promotion in the grade and designation of Senior Vice-President in view of promotion for every three years. Hence, he prayed this Court to grant the reliefs sought for in this Writ Petition.
8. Per contra, the learned senior counsel appearing for the respondents contended that the reliefs sought in the present writ petition ought to have been claimed by the petitioner in the earlier Writ Petition, viz., W.P.No.4159 of 2015 and having not claimed the same, he cannot maintain a second writ petition seeking the benefits arising out of setting aside of the order of removal. He further contended that payment of performance LNA,J WPNo.40011 of 2017 7 incentive is linked to the appraisal of the performance, but it is not a guaranteed one; that denial of general compensation revision to the petitioner prior to his termination was based on his poor record in the company; that the annual increment for the year 2014-15 will not be automatic, but subject to the performance evaluation process; that since petitioner was terminated from service in January 2015, there was no evaluation done and hence, performance allowance was not paid and therefore, the claim for increase of 23% from April, 2014 is baseless and imaginative. 8.1. Learned senior counsel for the respondents further contended that the petitioner is not entitled for the retention bonus under the performance management policy of the company as he failed to achieve the required annual ratings for the financial years 2007-08 to 2012-13 which were to be considered as the actual period for evaluation; that the petitioner is hiding the fact about his eligibility by projecting the period of '2011-2016' instead of '2008-2013' which amounts to misguiding this Court; that regarding the performance incentive, it is only on KRA (Key Result Area) rating of the performance of an employee LNA,J WPNo.40011 of 2017 8 during the relevant period, the performance incentive will be paid to him and since there is no method of rating the performance of the petitioner during the years 2015 and 2016, he is not entitled to the same.
8.2. Learned senior counsel for the respondents further contended that the petitioner was already provided with all the consequential benefits that he was entitled to after his reinstatement in tune with the orders of this Court; that the increment which would be given at the end of three years was not given to any employee of the respondents-company for the year 2020; that for the remaining years i.e., 2014 and 2017, the amounts could be payable; and that the increment towards the year 2023 has been paid to the petitioner.
8.3. Learned senior counsel for the respondents further contended that this Court in C.A.No.1060 of 2017 in C.C.No.1168 of 2017, after considering the fact that the performance of the petitioner cannot be evaluated, held that if the rules do not permit the same, the performance pay cannot be considered; that performance incentive is evaluated on the basis of candidate's LNA,J WPNo.40011 of 2017 9 performance in accordance with Performance Management System. He further contended that in the present case, since the petitioner did not perform the duties from 24.01.2015 to 09.02.017 and from 11.10.2018 to 03.10.2022, the performance of the petitioner cannot be assessed.
8.4. Learned senior counsel for the respondents also contended that an employee is eligible for retention bonus when he secures a performance record, however, the petitioner has not met with the requirements to be eligible for the retention bonus; that grade promotion is not a monetary claim and there is no policy in the company, which mandates that a promotion would be given as a matter of right; that with regard to the compensation revision for the year 2014, the petitioner is not entitled to the same in view of his disobedience and non-assessment of his performance, which was already communicated to the petitioner. 8.5. The learned senior counsel also contended that annual increment is based on the assessment of performance of the employee; that in the present case, since the petitioner has not performed his duties, no such assessment could be done; and that LNA,J WPNo.40011 of 2017 10 with regard to the consequential benefits and excess rental amount, the petitioner is not entitled to the same as House Rent Allowance has already been paid to him.
9. In the above factual backdrop of the case and the rival contentions of both the parties, the issue that arises for consideration is whether the petitioner is entitled to the benefits as sought for by him.
10. On perusal of the material placed on record, it is imperative to note that a division bench of this Court while adjudicating the issue of termination of services of petitioner has held that the petitioner has to be treated as a permanent employee in W.A.No.143 of 2017, vide judgment dated 04.01.2021, wherein the Court observed that as under:
"32... The nature of employment of the petitioner has all attributes of permanent employment. Hence, the petitioner is held to be a permanent employee of the respondent No.2, company."
It is also imperative to note that this Court in W.A.No.763 of 2019, vide judgment dated 25.02.2022, observed the same as in W.A.No.143 of 2017 as under:
LNA,J WPNo.40011 of 2017 11 "35. In view of the finding recorded by the Division Bench in W.A.No.140 of 2017, there is no more a doubt on the status of the first respondent as a permanent employee of the IIL and is governed by the Rules. Further, as power under Rule 31 is invoked it is obvious that the first appellant treated the first respondent as a permanent employee."
In light of the observations made by this Court in aforesaid cases, the petitioner is treated as a permanent employee and is entitled to all the consequential benefits subject to any such policy/circular of the company, and such benefits shall be calculated from the date of his first termination order dated 24.01.2015. However, since the employee is treated as permanent employee, he shall be governed by the terms of employment as well as Conduct, Discipline, and Appeal rules of the company. Therefore, the respondent company shall follow due process as per the employment contract terms and CDA rules while terminating the employee.
11. It is relevant to note that a company under the name and style of M/s. Chemcare Life Sciences Private Limited was incorporated vide dated 20.05.2015 and the petitioner was appointed as Managing Director under the category of promoter LNA,J WPNo.40011 of 2017 12 having DIN No. 07548500 dated 01.06.2016. It is specifically submitted by the counsel for the respondent company, that the objects of M/s. Chemcare Life Sciences Private Limited is similar to that of the respondent company. Subsequently, the petitioner resigned from the position of Managing Director of M/s. Chemcare Life Sciences Private Limited with effect from 03.10.2019. It can be observed from the material placed on record that when the petitioner was terminated for the first time in the year 2015, he was appointed as the Managing Director in the same year right after termination and continued to be in same position till 2019 even after reinstatement in the year 2017.
12. It is also relevant to note that the second termination order dated 11.10.2018 was set aside by this Court in W.P.No.38211 of 2018 and this Court directed the respondents to reinstate the petitioner with continuity of service and with all consequential benefits. The petitioner was reinstated into service vide order dated 03.10.2022, wherein it was stated that his employment stood renewed from 01.04.2021 to 31.03.2024.
LNA,J WPNo.40011 of 2017 13
13. It is appropriate to look into the appointment letter of the petitioner, dated 02.03.2007, as per which, he is eligible for performance incentive @ 25% of basic salary per annum based on his performance, as per the Performance Management System of the company. It can also be observed that the petitioner is eligible for the House Rent Allowance @ 30% of basic salary per month. Further, at the time of joining, the petitioner was required to submit a performance plan after consulting his Head of the department, which will be the criteria to evaluate his performance periodically. Apart from the terms and conditions specified in the appointment letter, the employment and performance of the petitioner are governed by the administrative rules of the respondent company.
14. A copy of Performance Management Policy is placed on record which shows that performance is measured against target set called 'Key Result Areas' and the second measure of evaluation is 'Development Role Effectiveness'. It is also imperative to note that quantum of increment is decided every year basing on the business performance of an employee, as LNA,J WPNo.40011 of 2017 14 mentioned in the Performance Management Policy. The evaluation is made based on the marks obtained by the employee on 'Key Result Areas' and 'Development Role Effectiveness'. There is another policy linked to the Performance Management Policy which is termed as 'Variable Pay Policy'.
15. The respondent company has also placed on record the Variable Pay Policy, as per which, the variable pay component of the pay known as 'Performance Incentive' in CTC and the same is calculated and delivered based on performance of the employee. The respondent company also placed on record e-mail communication between the company and the petitioner regarding his performance ratings, wherein it was communicated to the petitioner that he holds the following levels of performance (ratings) from the date of his first appointment till the first termination order:-
a) 2007-08 : NSP
b) 2008-09 : BAP
c) 2009-10 : CGP
d) 2010-11 : BAP
e) 2011-12 : CGP
LNA,J
WPNo.40011 of 2017
15
f) 2012-13 : CGP
g) 2013-14 : NSP
16. All the above ratings show that the petitioner was rated with the score ranging from 51 to 80 based on his business performance, which is evaluated as per the Performance Management Policy. It can also be observed from the said policy that promotions are strictly merit based and not time bound.
17. As seen from the terms of employment dated 14.11.2022 of the petitioner followed by his third reinstatement order dated 03.10.2022, he is entitled for HRA @ 30% of basic salary per month and performance incentive @ 25% of basic salary per annum based on his performance, along with other consequential benefits, as mentioned in the terms of employment.
18. With regards to the compensation revision, the respondent company has notified all its employees through Circular dated 04.09.2014 and a Corrigendum to the circular, dated 08.09.2014, stating that the employees having a rating of Barely Adequate Performance (BAP) and below in the years 2012-13 and 2013-14 are not eligible for compensation revision. Hence, the employees LNA,J WPNo.40011 of 2017 16 with at least one NSP and above rating during the financial years 2012-13 and 2013-14 are only eligible for the compensation revision as per the Corrigendum. In the present case, the petitioner was rated CGP in 2012-13 and NSP in 2013-14. Therefore, in view of the Corrigendum to Circular, the petitioner shall be eligible for the compensation revision and since, the petitioner joined the respondent company before 31.03.2013, he shall be eligible for full revision as noted in the circular dated 04.09.2014.
19. With regard to the retention bonus, the respondent company has notified all its employees with a total of 4 circulars which are summarized as follows:
a) Circular dated 12.06.2006:
• Minimum 3 NSP and 3 FEP in 6 consecutive years: 6 months' basic.
• Minimum 6 NSP in 6 consecutive years: 3 months' basic.
b) Circular dated 01.09.2008 (addition to circular dated 12.06.2006):
• FEP/COP in 3 consecutive years from FY 2005-06: 3 months' basic.
LNA,J WPNo.40011 of 2017 17
c) Circular dated 08.08.2012:
• Policy in circular dated 12.06.2006 will prevail. • Employees will be eligible for retention bonus once in a block of 6 years. For the employees who have joined after 31.12.2005, the block of 6 years will start from the FY in which his/her performance was first assessed.
d) Circular dated 29.03.2014:
• Retention bonus is called as additional performance incentive.
• Minimum 3 NSP and 3 CGP in 6 consecutive years:
6 months' basic.
• Additional performance incentive will be paid on the basis of performance over a period of 6 years i.e., on the basis of 6 annual performance assessments. • This circular supersedes all the circulars issued with respect of retention bonus.
e) Circular dated 20.10.2017:
• Minimum 3 NSP and 3 CGP in 6 consecutive years:
6 months' basic.
• This policy is only applicable only to the first 6 assessment years of an employee's tenure.
• The employees who already stepped into second block of 6 years shall be paid as per the circular.
LNA,J WPNo.40011 of 2017 18
20. It can be noted from the above summary that retention bonus is calculated based on the performance assessment of an employee. Since the petitioner does not hold any of the above mentioned requirements, he is not eligible for the retention bonus for the financial years 2006-07 to 2013-14. With regards to the financial years from 2014-15 and onwards, since the petitioner was terminated twice and reinstated twice by virtue of judgments of this Court, his annual performance assessment cannot be made as he did not perform his duties during the financial year 2014-15. Therefore, the petitioner is not entitled to retention bonus as per the Circulars of the respondent company.
21. With regard to the pay revision, the petitioner has not placed any supporting document on record to show that he is eligible for the pay revision of Rs.95,474/-. Further, it is to be noted that after promotion as Manager Grade M-II, he was given basic salary of Rs.77,621/-. As such, the pay was revised in view of his promotion only. Learned counsel for respondent company, while advancing the argument submitted that the respondent company has provided 5% pay revision in the year 2015, 2017 and LNA,J WPNo.40011 of 2017 19 9% in the year 2023 on the basic salary and failed a memo along with calculation in tabulated manner. As per table, Column-A denotes the amounts that are actually paid to the petitioner. The Column-B is the amount that is to be paid to the petitioner if the aforesaid pay revisions are affected at the appropriate times. The balance payable amount is being shown in Column-C which is as under:
Calculation by considering pay revision Amount Paid per month of 2015, 2017 & 2023 -
Year (All inclusive) Difference Amount
(Increment on basic
[Column A] [Column C]
salary)
[Column B]
2015-17 Rs. 1,20,266/- Rs. 1,26,217/- Rs. 1,42,484/-
2017-23 Rs. 1,20,266/- Rs. 1,32,465/- Rs. 3,80,077/-
2023-24 Rs. 1,30,978/- Rs.1,39,650/- Rs. 1,04,064/-
Total : Rs. 6,26,625/-
22. While advancing the arguments in this regard, petitioner raised an objection stating that the calculation made by the respondent company is incorrect. However, the petitioner neither explained nor placed any material as to how the calculation is incorrect.
LNA,J WPNo.40011 of 2017 20
22. With regard to the annual increment, it can be observed that increment shall be given at the end of three years and the same was not given to any employee in the company for the year 2020. It is also relevant to note that increment for the remaining years i.e., 2014 and 2017 shall be payable to the petitioner as contended by the learned senior counsel for the respondents and with regard to the increment towards the year 2023, the same was said to have already been paid to the petitioner.
23. As regards the Performance pay of the petitioner, as per the Performance Management System Policy of the respondents- company, it can be evaluated only on the basis of performance of the petitioner during his employment in the company. Since, the petitioner has not rendered his services during termination period, his performance cannot be evaluated and therefore, the petitioner is not entitled to any performance pay.
24. With regard to the excess rent paid, the petitioner is entitled to the House Rent Allowance and the same can be covered under House Rent Allowance provided by the LNA,J WPNo.40011 of 2017 21 respondent company. Therefore, the petitioner is not entitled to any excess rent paid.
25. With regard to the grade promotion, since it is specified in the Performance Management Policy that promotions are merit based and not time bound, the petitioner is not entitled to be placed himself in the grade and designation of Senior Vice- President in view of promotion every three years.
26. Thus, in view of the afore stated findings of this Court, this Writ Petition is disposed and the entitlement/disentitlement of the petitioner regarding the various benefits claimed by him are summarized as under:
a) The petitioner is entitled to compensation revision of 2014 in accordance with Circular dated 04.09.2014 and Corrigendum dated 08.09.2014;
b) The petitioner is entitled to annual increment for the years 2014 and 2017, as admitted by the respondents and is entitled for the difference amount of Rs. 6,26,625/-.
c) The petitioner is not entitled to any retention bonus as per the circulars of the respondent company;
LNA,J WPNo.40011 of 2017 22
d) The petitioner is not entitled to pay revision since it was revised with his promotion itself;
e) The petitioner is not entitled to performance pay;
f) The petitioner is not entitled to excess rent paid as it can be covered under House Rent Allowance;
g) The petitioner is not entitled to grade promotion as it is merit based and not time bound, as per the Performance Management Policy of the respondent company.
27. There shall be no order as to costs. As a sequel, pending Miscellaneous Applications, if any, shall stand closed.
___________________________________ LAXMI NARAYANA ALISHETTY, J Date: 31 .01.2025.
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