Himachal Pradesh High Court
Hpsidc Employees Union vs State Of H.P. & Anr on 20 May, 2015
Author: Rajiv Sharma
Bench: Rajiv Sharma
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
.
CWP No. 134 of 2009.
Reserved on: 13.5.2015.
Decided on: 20.5.2015.
HPSIDC Employees Union ......Petitioners.
Versus
State of H.P. & anr. .......Respondents.
Coram
The Hon'ble Mr. Justice Rajiv Sharma, Judge.
Whether approved for reporting? 1 Yes
For the petitioners: Mr. Ramakant Sharma, Advocate.
For the respondents: Mr. Parmod Thakur, Addl. AG with Mr. Neeraj
Sharma, Dy. AG for respondent No. 1.
Mr. Ajay Kumar, Sr. Advocate with Mr. Dheeraj K.
Vashistha, Advocate, for respondent N o. 2.
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Justice Rajiv Sharma, J.
The petitioner is a registered Union of the employees of the Himachal Pradesh State Industrial Development Corporation Ltd. (hereinafter referred to as the respondent-Corporation, in short). The Union of India has introduced Voluntary Retirement Scheme (VRS) for employees of the public enterprises as per memorandum dated 5.10.1988. The State Government also approved the scheme for implementation of all public sector 1 Whether reporters of the local papers may be allowed to see the judgment? Yes ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 2 undertakings in Himachal Pradesh. The proposal was placed before .
the Board of Directors of the respondent-Corporation. The same was adopted by the respondent-Corporation vide communication dated 3.2.1993 (Annexure P-2). Para (d) of the same reads as under:
"(d) In addition, an employee whose request for Voluntary Retirement is accepted would also be entitled to an ex-gratia payment equivalent to 1.5 months' emoluments (pay + DA) for each completed year of service of the monthly emoluments at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is less.
For example an employee, who has put in 24 years of service and has got only one year of service for normal retirement will get ex-gratia payment of only 12 months emoluments and not 36 months' emoluments."
2. The Scheme was also introduced by the Corporation in the year 2000. Thereafter, vide Circular dated 6.1.2005, Scheme was again introduced. This Scheme was further re-introduced vide Annexure P-7 dated 17.3.2007. The fact of the matter is that the respondent-Corporation vide Annexure P-9 has amended the Voluntary Retirement Scheme (VRS) by substituting following clause (d):
"(d) In addition, an employee whose request for Voluntary Retirement is accepted would also be entitled to an ex-gratia payment equivalent to one month's emoluments (Basic pay + DA) for each completed year of service or the monthly emolument at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is less.
For example an employee, who has put in 24 years of ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 3 service and has got only one year of service for normal .
retirement will get ex-gratia payment of only 12 months emoluments and not 24 months' emoluments."
3. This has been done as per the orders of the Principal Secretary (Fin.) to the Government of H.P., dated 2.9.2008. The petitioner-Union made a representation on 11.11.2008 before the Board of Directors of the respondent-Corporation. It was referred to the State Government on 7.1.2009. The same has been rejected vide Annexure R-2/II on 22.1.2009 by retaining amended clause
(d).
4. The Voluntary Retirement Scheme (VRS) was framed by the Government of India vide Office memorandum dated 5.10.1988 for the employees of the public enterprises. The same has been approved by the State Government, as noticed hereinabove, and adopted by the respondent-Corporation, w.e.f. 11.1.1993. It was re-
introduced in the year 2000, 2005 and 2007.
5. It is evident from clause (d) of the Scheme, as it existed before 2008, that the ex-gratia payment was equivalent to 1 ½ months' emoluments (pay + DA) for each completed year of service or the monthly emolument at the time of retirement multiplied by the balance months of service left before normal date of retirement, whichever is less. The respondent-Corporation has accorded benefit of granting the ex-gratia payment equivalent to 1 ½ months' ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 4 emoluments (pay + DA) for each completed year of service or the .
monthly emolument at the time of retirement multiplied by the balance months of service left before normal date of retirement to those employees who have sought voluntary retirement under Voluntarily Retirement Scheme. However, vide letter dated 2.9.2008 Annexure P-9, the ex-gratia payment has been reduced equivalent to one month's emoluments (pay + DA) for each completed year of service. This has been introduced as per the Circular dated 2.1.2009. All the employees who were in the service of respondent-Corporation have been given the benefit of ex-gratia payment equivalent to 1 ½ months' emoluments but the employees thereafter would only be paid ex-gratia payment equivalent to one month's emoluments (pay + DA), in case they seek voluntary retirement.
6. The purpose of Voluntary Retirement Scheme (VRS) is to offer golden hand shake and should have been applied uniformly to all the employees instead of creating artificial cutoff date i.e. 27.1.2009, whereby the benefits have been drastically reduced from 1 ½ months to 1 month for ex-gratia payment at the time of retirement. The cut-off date i.e. 2.9.2008 and 27.1.2009, has no nexus with the object sought to be achieved. All the employees of the respondent-Corporation constitute a homogeneous class. The ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 5 employees who have sought voluntary retirement before the cut-off .
date, as per letter dated 2.9.2008 and 27.1.2009 were released ex-
gratia payment equivalent to 1 ½ months' emoluments and employees who would seek voluntary retirement after these dates, would only get the benefit of ex-gratia payment equivalent to 1 month's emoluments (pay + DA).
7. The petitioners have made a detailed representation for not altering the ex-gratia payment from 1 ½ months to one month.
The Board of Directors of the respondent-Corporation have referred the matter to the State Government on 26.12.2008. However, surprisingly, the same has been rejected on 27.1.2009 without a speaking order. The petitioners have suffered civil and evil consequences on the basis of alteration of para (d), whereby the ex-
gratia payment has been reduced. The representation ought to have been decided by passing a speaking/detailed order, after taking into consideration all the pleas raised by the employees.
8. Their lordships of the Hon'ble Supreme Court in the case of D.S. Nakara & Others vs Union Of India, reported in AIR 1983 SC 130, have held that the date must have nexus with the object sought to be achieved and the State Government could not pick up the date arbitrarily. It has been held as follows:
::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 651 We repeatedly posed a question: what are those .
relevant and valid considerations and waited for the answer in vain. We say so because in the written submissions filed on behalf of the Union of India, we find not a single valid or relevant consideration much less any consideration relevant to selection of eligibility criteria. The tenor is "we select the date and it is unquestionable; either take it or leave it as a whole". The only submission was that the date is not severable and some submissions in support of it.
52. Having examined the matter on principle, let us turn to some precedents. In D. R. Nim v. Union of India, (1967) 2 SCR 325 : (AIR 1967 SC 1301) the appellant questioned his seniority which was to be determined in accordance with the provisions contained in Indian Police Service (Regulation of Seniority) Rules, 1954. These rules required first to ascertain the year of allotment of the person concerned for the determination of his seniority. In doing so the Government of India directed that. officers promoted to the Indian Police Service should be allowed the benefit of their continuous officiation with effect only from 19th May, 1951. The appellant challenged the order because the period of officiation from June, 1947 to May, 1951 was excluded for the purpose of fixation of his seniority. His grievance was that there was no rationale behind selecting this date. After taking into consideration affidavit in opposition, this Court held as under:
"It would be noticed that the date, May 19, 1951, to begin with had nothing to do with the finalisation of the Gradation List of the Indian Police Service because it was a date which had reference to the finalisation of the gradation list for the IAS Further this date does not seem to have much relevance to the question of avoiding the anomalous position mentioned in para 9 of the affidavit, reproduced above. This date was apparently chosen for the IAS because on this date the Gradation List for all the earlier persons required to the service had been finalised and issued in a somewhat stable stage. But why should this date be applied to the Indian Police Service has not been adequately explained. Mr, B. R. L. Iyengar. the learned counsel for ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 7 the appellant, strongly urges that selection of May 19, .
1951, as a crucial date for classifying people is arbitrary and irrational. We agree with him in this respect. It further appears from the affidavit of Mr. D. K. Guha, Deputy Secretary to the Government of India, Ministry of Home Affairs, dated Dec. 9, 1966, that "the Government of India have recently decided in consultation with the Ministry of Law that the Ministry of Home Affairs Letter No. 2/32/51-AIS, dated the 25th Aug., 1955, will not be applicable to those SCS/SPS Officers, who were appointed to IAS/IPS prior to the promulgation of IAS/JPS (Regulation of Seniority) Rules, 1954, and the date of the issue of the above letter if their earlier continuous officiation was approved by the Ministry of Home Affairs and Union Public Service Commission". It further appears that 'in the case of Shri C. S. Prasad also, an IPS Officer of Bihar, a decision has been taken to give the benefit of full continuous officiation in senior posts and to revise his year of allotment accordingly'. But, it is stated that "as Shri Nim was appointed to IPS on the 22nd Oct., 1955, i.e. after the promulgation of IPS (Regulation of Seniority) Rules, 1954 and after the issue of letter dated 25-8-1955, his case does not fall even under this category". The above statement of the case of the Government further shows that the date, May 19, 1951 was an artificial and arbitrary date having nothing to do with the application of the first and the second provisos to Rule 3 (3). It appears to us that under the second proviso to Rule 3 (3) the period of officiation of a particular officer has to be considered and approved or disapproved by the Central Government in consulation with the Commission considering all the relevant facts.
The Central Government pick out a date from a hat --- and that is what it seems to have done in this case -- and say that a period prior to that date would not be deemed to be approved by the Central Government within the second proviso."
57. The learned Attorney General next referred to D.C. Gouse and Co. etc. v. State of Kerala & Anr. etc. (1) This Court while repelling the contention that the choice of April 1, 1973 as the date of imposition of the building tax is discriminatory with reference to Art. 14 ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 8 of the Constitution, approved the ratio in the case of .
M/s. Parameswaran Match Works etc. supra. Even while reaching this conclusion the Court observed that it is not shown how it could be said that the date (April 1, 1973) for the levy of the tax was wide of the reasonable mark. What appealed to the Court was that earlier an attempt was made to impose the building tax with effect from March 2, 1961 under the Kerala Building Tax Act, 1961 but the Act was finally struck down as unconstitutional by this Court as per its decision dated August 13, 1968. While delivering the budget speech, at the time of introduction of the 1970- 71 budget, the intention to introduce a fresh Bill for the levy of tax was made clear. The Bill was published in June 73 in which it was made clear that the Act would be brought into force from April 1, 1970. After recalling the various stages through which the Bill passed before being enacted as Act, this Court held that the choice of date April 1, 1973 was not wide of the reasonable mark. The decision proceeds on the facts of the case. But the principle that when a certain date or eligibility criteria is selected with reference to legislative or executive measure which has the pernicious tendency of dividing an otherwise homogeneous class and the choice of beneficiaries of the legislative/executive action becomes selective, the division or classification made by choice of date or eligibility criteria must have some relation to the objects sought to be achieved. And apart from the first test that the division must be referable to some rational principle, if the choice of the date or classification is wholly unrelated to the objects sought to be achieved, it cannot be upheld on the specious plea that was the choice of the Legislature."
9. Accordingly, the Writ petition is allowed. Newly substituted clause (d) of Annexure P-9 is struck down. Annexure R-2/II dated 27.1.2009 is quashed and set aside. It is declared that the employees of the respondent-Corporation shall get ex-gratia payment equivalent to 1 ½ months' emoluments (pay + DA) for each ::: Downloaded on - 15/04/2017 18:13:31 :::HCHP 9 completed year of service, as per memorandum(s) P-2 dated .
3.2.1993, P5 dated 6.1.2005 and P-7 dated 17.3.2007 at the time of their retirement under Voluntary Retirement Scheme. Pending application(s), if any, shall stand disposed of.
May 20, 2015, ( Rajiv Sharma ),
(karan) Judge.
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