Central Administrative Tribunal - Delhi
Shri A S Talwar vs Indian Tourism Development ... on 5 November, 2009
Central Administrative Tribunal Principal Bench, New Delhi T.A.No.985/2009 This the 5th day of November 2009 Honble Shri Shanker Raju, Member (J) Honble Dr. Veena Chhotray, Member (A) 1. Shri A S Talwar s/o late Shri Harnam Singh r/o 3261, Ranjit Nagar New Delhi-8 2. Shri S K Gambhir s/o late Shri S L Gambhir I-147, Ashok Vihar, Phase I Delhi-52 3. Shri Tej Singh s/o Sh. Dayal Singh r/o B-4/67-B, Ashok Vihar Delhi-52 4. Shri B S Ahluwalia s/o late Shri Kulwant Singh r/o C-7/40A Keshav Puram Delhi-35 5. Shri D K Shah s/o Shri K C Lal Shah 175, Engineers Estate 21, IP Extension, Patparganj Delhi-92 6. Shri R C Singh S/O Shri Lalta Prasad Singh C 8/8335, Vasant Kunj New Delhi-70 ..Applicants (By Advocate: Shri R K Singh) Versus 1. Indian Tourism Development Corporation Ltd. Through its Chairman Core-8, Floor 6 Scope Complex, 7, Lodhi Road New Delhi 2. Union of India through its Secretary Ministry of Tourism Govt. of India Transport Bhawan, Sansad Marg New Delhi 3. Union of India through its Secretary Ministry of Heavy Industries & Public Enterprises Deptt. Of Public Enterprises Public Enterprises Bhawan Block No.14, CGO Complex Lodhi Road, New Delhi-3 4. Union of India through Cabinet Secretary South Block, New Delhi 5. Mrs. Asha Murthy Jt. Secretary C & M.D., ITDC Scope Complex Core 8, Floor 6 7, Lodhi Road, New Delhi-3 6. Shri M D Kapoor Functional Director (C&M) ITDC Core 8, Floor 6 7, Lodhi Road, New Delhi-3 ..Respondents (By Advocates: Shri Ajay Kapur and Shri Mareesh Sahay) O R D E R
Shri Shanker Raju:
Rolling back of age of retirement from 60 to 58 years by the Indian Tourism Development Corporation Ltd. (for short ITDC) on approval by the Department of Public Enterprises (for short DPE) vide several orders dated 8.9.2000 as well as the minutes of Boards meetings held on 19.6.2000 and 31.7.2000 is being challenged through this TA.
2. A brief factual matrix of this case transpires that ITDC is a public sector undertaking of the Central Government and is duly incorporated under the Companies Act being a viable and not a sick unit. The ITDC being an exception is financially sound corporation where during the last 10 years the equity capital has increased and the Reserve and Surplus have been enhanced, though certain losses were incurred. Applicants had been working in the Ministry of Tourism being an administrative Ministry. The decision of the Central Government to raise retirement age from 58 years to 60 years promulgated by DPE was issued on 19.5.1998 and the respondents-ITDC complied with it vide office orders dated 26.5.1998. However, DPE on 21.8.1998 conveyed the decision of Central Government that its enhancement of age is binding but if an undertaking does not want to increase the age of retirement on its non-viability and sick unit, may apply for a specific exemption from operation of the aforesaid decision. However, the decision was accepted by the ITDC and was to be applied to those retiring on 31.5.1998 and onwards. After receipt of OM dated 9.5.2000, ITDC sought information about its sickness and un-viability and such an information arrived as a follow-up action on the agenda regarding closure/winding up of PSUs where it is categorically stated that ITDC is neither a sick nor an unviable company. The minutes of Boards meeting were conveyed on 19.6.2000 where two written agenda items regarding the introduction and approval of voluntary retirement scheme in view of OM dated 5.5.2000, and for pay revision / wage settlement relating to employees of IDA pay pattern were incorporated. However, the non-agenda item of rolling back of retirement age from 60 years to 58 years was recorded to have discussed and deliberated at length. Memorandum of Settlement dated 15.6.2000 was arrived at, which is regarding rolling back and its consequences, which are contained in para 209.2.2 of Boards meeting and introduced by the C&MD, ITDC, respondent No.5. A detailed report in the news papers on 20.6.2000 and 21.6.2000 respectively appeared regarding rolling back of retirement age, led to challenge of the decision dated 19.6.2000 by filing CW No.3322/2000 before the High Court, which was withdrawn on 3.7.2000, as it was found that Ministry had not sent any proposal to the Cabinet. On 31.7.2000 in Boards meeting in para 210.1 further discussion was taken. One of the Directors, who did not agree in principle on rolling back the age of retirement, sent a letter on 3.7.2000, which was espoused by one of the Parliamentarians Shri Basudev Acharya. A letter written to Shri Basudev Acharya by the then Minister for Tourism & Culture Shri Ananth Kumar stated that in subsequent board meeting one of the Directors raised the issue of roll back of the retirement age etc. OM issued by the DPE on 8.9.2000 granted exemption to ITDC from operation of its OM dated 19.5.1998 and 30.5.1998, which implies that the age of retirement has been rolled back to 58 years from 60 years earlier adopted by them. A complaint by one of the Directors, C&MD, ITDC, respondent No.5 regarding misrepresentation of facts in Boards meeting dated 19.6.2000 is also on record.
3. Learned counsel for applicants states that the condition precedent for rolling back the age is that the ITDC should be non-viable and sick unit, which is not otherwise from the statistics and figures, which shows 10 years financial statistics of 1990-99, as the company being viable and profit was done at the behest of certain interested person in the Ministry.
4. Learned counsel states that the minutes of the meeting dated 19.6.2000 are contrary to Sections 299 and 300 of the Companies Act and respondent No.5 misused her powers without making an agenda item to ratify the roll back of retirement age without any basis.
5. Learned counsel would also contend that the exercise of power in a policy decision is mala fide, unfair and is violative of Articles 14 & 16 of the Constitution of India and as the action of the respondents is illegal, it has to be set aside.
6. Learned counsel further states that the minutes recorded on 19.6.2000 regarding rolling back the age of retirement are fraudulent and the move is unreasonable. It is stated that till 31.7.2000 when the issue has not attained finality, subsequently on 16.10.2000 passing of such a minute and sending a proposal on 21.8.2000 when detailed information is not with the respondents, such a proposal having not attained any finality the approval of the Cabinet on the basis of a no decision of Board and when the conditions precedent are not met, the conditions of service of the applicants being altered to their disadvantage, it is stated that the entire action is to be declared as null and void.
7. Learned counsel has cited following decisions to substantiate his plea:
State of H.P. & others v. Ganesh Wood Products & others, (1995) 6 SCC 363, State of A.P. & others v. Anupama Minerals & others, 1995 Supp (2) SCC 117, State of Assam v. P.C. Mishra, IAS & others, 1995 Supp (4) SCC 139, Mahesh Chandra v. Regional Manager, U P Financial Corporation & others, (1993) 2 SCC 279, Kasinka Trading & another v. Union of India & another, (1995) 1 SCC 274, Common Cause, A Registered Society v. Union of India & others, (1996) 6 SCC 667, Bhagwan Parshu Ram College & another v. State of Haryana & others, (1999) 6 SCC 46; and Punjab Communications Ltd. V. Union of India & others, (1999) 4 SCC 727
8. On the other hand, learned counsel for respondents would vehemently oppose the contentions. According to him, not being viable, as the ITDC was not running successfully for number of years and the profits are going down year to year and it had incurred loans in two consecutive years, a conscious decision of the respondents by their Directors in the meeting held on 19.6.2000 on the basis of OM dated 9.5.2000 has been taken to roll back the age from 60 years to 58 years. It is also stated that introduction of VRS was sent to the Ministry of Tourism for its approval and while approving the proposal of rolling back the age of retirement, the Board of Directors of ITDC kept in mind the fact that in order to introduce VRS, due to the paucity of funds, the Company would have to take loans to the tune of approximately Rs.45 crores, which would add to the financial liability of the Corporation. It is also stated that in the current financial position prevailing in the ITDC, the roll back from 60 years to 58 years would lead to considerable saving by way of wage, overhead costs, etc., which are eating away the financial resources of the company.
9. Learned counsel would contend that in 1997-98, the financial performance of the Corporation had been declined from a profit of Rs.79.40 crores in the year 1996-97 to a profit of Rs.54.72 crores in the year 1997-98 and to Rs.12.02 crores in the year 1998-99. In 1999-2000, ITDC has incurred net loss of Rs.24.03 crores. Number of hotel units making losses in these years has also been increasing. In 2000-01, the Corporation has incurred a net loss of Rs.28.54 crores as compared to a net loss of Rs.18.67 crores during the same period last year. Accordingly, it is stated that the Director, who opposed for rolling back the retirement age, chose to wait for a good three weeks before lodging any protest. As such, it is stated that, no illegality has been committed by the respondents in their act.
10. Learned counsel has relied upon three-Judge decision of Apex Court in Balco Employees Union (Regd.) v. Union of India & others, (2002) 2 SCC 333 to contend that in case of policy decision regarding disinvestment in public sector undertaking, no pre-decisional hearing is required. Various decisions have also been relied upon by the learned counsel for respondents to buttress his plea, which read as follows.
(i) All India ITDC Workers Union & others v. ITDC & others, (2006) 10 SCC 66,
(ii) D. Subba Raju & others v. Chief Secretary of Andhra Pradesh, (1985) 1 SCC 524,
(iii) N. Lakshmana Rao & others v. State of Karnataka & others, (1976) 2 SCC 502,
(iv) Osmania University v. V.S. Muthurangam & others, (1997) 10 SCC 741; and
(v) M.P. Vidyut Karamchari Sangh v. M.P. Electricity Board, (2004) 9 SCC 755.
11. We have carefully considered the rival contentions of the parties and perused the records.
12. On hearing the learned counsel appearing for the parties, we cannot go away from the legal position as to lifting the corporate veil but in such an approach we should be cautious and circumspect. It is not possible to evolve a rational, consistent and inflexible principle in such an exercise, as ruled by the Apex Court in P.C. Agarwala v. Payment of Wages Inspector, M.P. & others, (2005) 8 SCC 104.
13. We are also not oblivious of the fact that on confirmation of minutes of meeting at a subsequent meeting, the effect would be that decision taken in the earlier meeting should have to be given effect to and this non-confirmation of minutes of earlier meeting at subsequent meeting did not have any effect on the decision taken at the earlier meeting, as ruled by the Apex Court in Kerala State Electricity Board v. Hindustan Construction Co. Ltd. & others, (2006) 12 SCC 500. Though a non-agenda item on 19.6.2000 was taken with the permission of Chair as item No.209.4 for rolling back the age of retirement and discussion was made in para 209.2.2, this has a cumulative effect of introduction of VRS by the respondents on 5.5.2000 and also the age of retirement of below board level employees to be rolled back in case of condition precedents are met with. Accordingly, this has been decided to authorize C&MD to move to the Government for necessary permission and thereafter to get back to the Board. As a result thereof, certain objections were put forth by the Directions but on 31.7.2000 in Boards 210th meeting, what has not been objected to is the decision of the roll back of retirement age but further discussion on the issue and the details of number of employees likely to be affected were considered. However, on 8.9.2000, draft Cabinet note was considered by DPE and a decision was taken not to fill up the vacancies. A subsequent Boards meeting held on 16.10.2000 regarding roll back of the retirement age in para 212.5 acknowledges the detailed information placed before the Board and an objection of one M.D. Kapoor as to non-filling up of vacancies arisen out of roll back of retirement age, a cognizance to a pending litigation on this issue before the High Court was also taken into consideration. However, in Boards meeting dated 31.10.2000, confirmation was done to the meeting of the Board dated 16.7.2000 where the issue regarding roll back of the retirement age as discussed on 19.6.2000 and 31.7.2000 was deliberated. This leaves no doubt in our mind that a conscious decision as to roll back by the Board in its meeting dated 19.6.2000 has been ratified on confirmation by the Board on 31.10.2000. Even if it could not have been confirmed, yet the decision of the Board as a consequence to a liberty given by the DPE to roll back the age has to be understood in its legal parlance, as we do not find any fraud or misrepresentation in the action of the respondents. As such the power has been exercised within the jurisdiction and the challenge to Boards meeting dated 19.6.2000 and cannot be sustained in law.
14. Though we are not financial experts, yet taking a test of common reasonable prudent man, viability of a company is defined in the Oxford Dictionary as successfully running of an institution and feasible, practicable esp. from economic standpoint. The institution would not have to be adjudged successful only on the basis of capital but also the profits earned from year to year. It appears that right from 1997 to 1999 due to various reasons and factors, ITDC is running losses consistently, though it may not be subjected to BIFR for winding up but it cannot be treated to be a viable unit. The audit report of 2000-01 shown by applicants learned counsel clearly establishes that the ITDC is not a sick industrial unit but non-viable. It is also apparent from the figures given by both the applicants as well as respondents. However, in the matter of policy decision as to viability of PSU, the prerogative and domain of the Administration and Executive must not be ordinarily encroach upon on pragmatism, as ruled by the Apex Court in Common Cause, A Registered Society (supra) and reiterated in President, Panchayat Union Council v. P.K. Muthusamy & others, 2009 (10) SCALE 107.
15. We are of the considered view that ITDC was non-viable as it appears that subsequent VRS and disinvestment has already strengthened the finding arrived at on a conscious decision by the Board of ITDC to roll back the age of retirement. When power exists, it has to be exercised and unless it is capricious, mala fide and arbitrary, it cannot be interfered in judicial review.
16. Moreover, in the matter of age of retirement being a condition of service, rolling back within the prerogative of the ITDC, as authorized by the Government when meeting out the conditions precedent, the decision taken by the respondents to roll back the retirement age is neither irrational nor arbitrary in the circumstances.
17. Resultantly, we do not find any legal infirmity in the act of the respondents. TA is accordingly dismissed without any order as to costs.
( Dr. Veena Chhotray ) ( Shanker Raju ) Member (A) Member (J) /sunil/