Delhi District Court
Vimal Goel vs Goods And Serrvices Tax Network on 30 November, 2023
IN THE COURT OF MR. SATYABRATA PANDA, ADJ-04,
PATIALA HOUSE COURTS, NEW DELHI
CS NO.357 OF 2017
Date of institution: 24.03.2017
Date of arguments:06.11.2023
Date of judgment: 30.11.2023
Vimal Goel
r/o A-1/602, Glaxo Apartments
Mayur Vihar-1 Extension
New Delhi-110091 .........Plaintiff
VS
Goods and Services Tax Network
through its CEO, Mr. Prakash Kumar
East Wingh, 4th Floor, World Mark-1
Aerocity, New Delhi-110037
PS-IGI Airport, New Delhi .........Defendant
JUDGMENT
1. The plaintiff has filed the present suit against the defendant seeking decree for sum of Rs. 17,48,879/- along with interest. The case of the plaintiff as pleaded in the plaint is as follows:
1.1. The defendant is a company registered under the Companies Act and is engaged inter alia in the business of promoting trade and commerce by providing easily accessible, quick and efficient information technology and communication related services to the public and government, to assist and engage with various stakeholders in preparing information technology and communications -related infrastructure for smooth rollout of CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.1 information technology driven initiatives and other e-governance initiatives of the government, specifically for the rollout of the Goods and Services Tax, to provide information technology and communications related infrastructure and services to the government for smooth transitioning of the indirect tax regime to the GST regime, and to provide information technology and communications related services to various stakeholders for implementation and management of various initiatives including e-
governance initiative like implementation of GST undertaken by the government.
1.2. The plaintiff pursuant to the defendant's advertisement applied for and was interviewed for the post of executive vice president (technology) in the defendant company in January 2015 and was selected. The plaintiff received the offer letter from the defendant vide email dated 11/02/2015 which stated that the plaintiff was recommended for the post of executive vice president (technology) by the interview board of the defendant. The defendant offered an annual gross salary of Rs. 65 lacs which was inclusive of all benefits/incentives for the said post. In terms of the offer letter, the plaintiff joined the defendant company on 23/02/2015 and on the same date, the appointment letter containing the contract of services was signed between the parties. The signed appointment letter dated 23/02/2015 was provided to the plaintiff on 25/02/2015.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.2 1.3. Although vide the offer letter dated 11/02/2015, the defendant company offered the plaintiff annual gross salary of Rs. 65 lacs but the contract of service/appointment letter dated 23/02/2015 provided that the CTC shall be Rs. 65 lacs per annum inclusive of the variable productivity linked incentives (PLI) which was in contradiction to the offer letter dated 11/02/2015. The offer letter did not make any part of the gross salary contingent to any performance appraisal. The appointment letter also did not provide any breakup of the salary and the same was done when the salary for March 2015 was released to the plaintiff.
1.4. The plaintiff resigned from the services of the defendant by way of his letter dated 29/01/2016 and the same was duly accepted by the defendant on 11/02/2016 and after completion of the formal NOC process the plaintiff was relieved on 02/03/2016 and after repeated reminders from the plaintiff, the part of the full and final settlement was done in April 2016. However, the plaintiff was not paid the PLI component amounting to Rs. 11,96,995/- and the gratuity component from the date of employment till the date of relieving.
1.5. As per the HR policy of the defendant, the plaintiff was entitled for receipt of the performance linked incentives and gratuity component, however, despite the plaintiff's repeated emails and letters to the defendant, the plaintiff was not paid the same. It is stated that there was no approved HR policy in the defendant company when the plaintiff had joined the defendant and the HR policy and manual was approved and came into effect from July CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.3 2015. The HR policy of the defendant stipulates that an employee would be covered under the performance management policy provided that he/she has: i) spent at least 6 months in the performance cycle i.e. has joined the defendant on or before 30 th September of the year, and ii) completed his/her probation period and has been confirmed as regular employee as of 31st March of the year (the performance cycle being the same as the financial year i.e. from 1st April to 31st March).
1.6. Under clause 6.3 of the performance measurement policy of the defendant, it is provided that the payment of annual performance linked incentives would be made on the basis of the performance score and the performance linked incentive will be paid out in the month of June following the close of the performance year.
1.7. The plaintiff received the performance linked incentive for 37 days of service in 2014-2015. There was no formal performance management system in the defendant till the separation of the plaintiff in March 2016 and therefore, it is clear that the performance linked incentive was just an allocation of salary in different components to reduce the basic pay and in turn reduce the PF and gratuity contribution.
1.8. The plaintiff made repeated requests for release of the performance linked incentive by writing various letters, emails and voice calls from May 2016 and vide email dated 17/09/2016, the plaintiff received a response from the EVP (Support) who heads the HR CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.4 department of the defendant company giving reasons to the plaintiff as to why the performance linked incentive had not been paid to the plaintiff. In the email, it was stated as follows:
"You had resigned in January 2016 and were relieved from the services of GSTN on 2nd March 2016. PLI is permissible if an employee is on the rolls of the company on the date PLI is announced and he/she should not have submitted his/her resignation. Since you had resigned and were relieved from the services of the company before the date on which PLI was announced, you were not found to be eligible for payment of PLI".
1.9. The aforesaid reasoning given by the defendant was an afterthought and had been adopted for denying the legitimate dues of the plaintiff towards release of the performance linked incentive.
1.10. The reasoning given by the defendant for denying the performance linked incentive to the plaintiff did not resonate with the defendant's HR policy and was in violation of the decision of the board of directors taken in its 20th board meeting held on 30/11/2015 whereby the decision clearly mandates that performance linked incentive had to be paid to an employee as per the following criteria: i) Fixed component (50% of PLI): The fixed part of PLI will be paid to all the employees irrespective of their period of service in that year; ii) Variable component (50% of PLI):
The variable part of PLI will be paid as under: a) The employees, who have completed more than 6 months service will be paid on the basis of assessment of the performance as per the GSTN Rules;
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.5
b) The employees, who have not completed 6 months will be paid 50% of variable component without assessment of performance.
1.11. As per the aforesaid policy of the defendant company, the plaintiff was fully eligible to receive the full performance linked incentive for 11 months of the year 2015-2016 inasmuch as the plaintiff served the defendant company for more than 11 months in the financial year 2015-2016. The PLI was payable to the plaintiff as per the defendant's above-quoted policy. There is no HR policy or decision of the board of the defendant company which would disallow payment of PLI to the plaintiff. The non-payment of PLI to the plaintiff amounts to discriminatory non-adherence of the policy with regard to payment of PLI. The defendant cannot discriminate with respect to legitimate payment of PLI in terms of the defendant's own policy to the plaintiff.
1.12. The appointment letter of the plaintiff confirmed his total remuneration CTC (Cost to Company) by the defendant company including PLI component and non-payment of PLI component was in contravention of the committed CTC as per the defendant's offer of appointment and acceptance by the plaintiff.
1.13. The plaintiff had invoked provisions of the RTI Act to seek information on various questions and in response thereto, the plaintiff received a letter dated 03/08/2016 from the PIO and from the said reply, it came to light that in order to deny the legitimate dues of the plaintiff, the defendant was taking inconsistent and CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.6 contradictory stands which was only an afterthought and done with the sole object to deny the legitimate dues of the plaintiff.
1.14. The defendant is indulging in unfair and misleading HR practices which is unbecoming of an organisation particularly which was entrusted by the government for such serious assignment of managing the GST system.
1.15. The plaintiff has made claim of performance linked incentive component of Rs. 11,96,995/-. The plaintiff has also claimed amounts towards the provident fund and gratuity. The plaintiff issued legal notice dated 05/12/2016 to the defendant calling upon the defendant to release the payments along with interest @ 12% p.a. The legal notice was received by the defendant on 06/12/2016, but the defendant failed to respond to the notice and also failed to release the use of the plaintiff.
1.16. On the basis of the aforesaid pleadings, the plaintiff has sought the recovery of productivity linked incentives of amount of Rs. 11,96,995/- along with interest @ 12% p.a. w.e.f. April 2016 till the date of filing of the suit as well as pendente lite and future interest. The plaintiff has also sought the recovery of dues pertaining to the provident fund and gratuity.
2. It is pertinent to mention that during the course of the final arguments, the learned counsel for the plaintiff had submitted that the dues towards provident fund and gratuity had already been released to the plaintiff and CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.7 that as such the claim of the plaintiff in the suit was now only limited to the productivity linked incentive.
3. The defendant has filed its written statement in its defence. The case of the defendant is as follows:
3.1. All the dues of the plaintiff had been cleared on 02/03/2016 and that the perusal of the plaintiff's full and final settlement form would show that the same was acknowledged by the plaintiff himself. The full and final settlement to the plaintiff was made on 05/04/2016. The plaintiff for the first time requested for release of PLI vide his email dated 30/05/2016 which was much later after the full and final settlement was duly acknowledged by him which showed that the claim for PLI was raised as an afterthought. Had there been any dispute regarding the PLI payable to the plaintiff, the said issue would have been raised by the plaintiff during the full and final settlement which was admittedly not done.
3.2. There was no contradiction between the offer letter dated 11/02/2015 and the appointment letter dated 23/02/2015. The offer letter clearly stated that the annual gross salary was Rs. 65 lakh which was inclusive of all benefits/incentives for the said post and under paragraph 5(b) of the appointment letter it was clearly stipulated that Rs. 65 lakh per annum inclusive of a variable productivity linked incentive was payable to the plaintiff. Even otherwise, if the plaintiff had noticed any discrepancy in the terms of his offer letter and that stated in his appointment letter, it was for CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.8 him to raise the dispute at the time of joining itself which was not done and that the plaintiff was now estopped from raising any objection.
3.3. The defendant's HR policy was approved and came into effect from July 2015. The plaintiff was issued a corrigendum to the appointment letter dated 04/01/2016 in which it was specifically stated that the plaintiff would abide by the rules and regulations of the defendant as contained in the HR manual approved by the board in its 17th meeting and as revised/modified from time to time which was duly acknowledged and accepted by the plaintiff.
3.4. The performance linked incentive was a monetary incentive given to the employee based on his/her performance at the end of the performance cycle. It was an incentive to the employee to continue to perform well and serve the organisation. As per the defendant's policy, PLI is permissible if the employee is on the roles of the company on the date the PLI is announced and he/she has not submitted his/her resignation. This is more so because it is difficult to assess the employee's performance in case he/she has already left the organisation when the assessment is being done. Since the plaintiff had left before the PLI for 2015-16 was announced, the same was not payable to him.
4. The plaintiff has filed replication in which he has denied the averments made in the written statement and has reiterated the averments made in the plaint.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.9
5. Vide order dated 16/10/2018, the following issues were framed in the suit:
1) Whether this Court has the territorial jurisdiction to adjudicate upon the suit? OPP
2) Whether the full and final settlement took place on 02.03.2016 between the parties? OPD
3) Whether the plaintiff is entitled to the relief claimed?
4) Relief.
6. Both sides have led their respective evidence, both oral and documentary.
7. In support of his case, the plaintiff has examined himself as PW-1 and has tendered his affidavit in evidence as Ex.PW-1/A in which he has deposed on the lines of the plaint. He was cross-examined by the defendant. PW-1 has relied upon the following documents:
i) Job offer letter/email dated 11.02.2015 Ex.PW1/1.
ii) Original appointment letter dated 23.02.2015 Ex.PW1/2.
iii) Resignation email dated 29.01.2016 from the plaintiff Ex.PW1/3.
iv) Resignation acceptance from defendant dated 11.2.2016 Ex.PW1/4.
v) Experience and relieving letter dated 02.3.2016 of the defendant Ex.PW1/5.
vi) HR policy manual of the company Ex.PW1/6.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.10
vii) Emails starting May 2016 onwards exchanged between plaintiff and defendant Ex.PW1/7.
viii) Minutes of the Board Meeting dated 30.11.2015 Ex.PW1/8.
ix) RTI application form and its response from the defendant Ex.PW1/9.
x) Legal Notice dated 05.12.2016 alongwith postal receipts Ex.PW1/10.
8. The plaintiff has also summoned and examined as PW-2, Sh. Raj Gaurav, who was formerly the head of the Human Resource Department of the defendant. He has deposed that the PLI of the defendant was governed by the 20th Board Resolution of the defendant passed on 30/11/2015 Ex.PW- 1/8. He was also cross-examined by the defendant.
9. In support of its case, the defendant has examined as DW-1 Dr. Abhishek Gupta, who is the Executive Vice President with the defendant. He has tendered his affidavit in evidence as Ex.DW-1/A in which he has deposed on the lines of the written statement. He was cross-examined by the plaintiff. He has relied upon the following documents:
i) Final settlement form dated 02.03.2016 as Ex.DW1/1,
ii) Offer letter dated 11.02.15 and letter of appointment dated 23.02.15 as Ex.DW1/2 and Ex. DW1/3,
iii) Corrigendum to appointment letter dated 04.01.2016 issued to plaintiff by defendants as ExDW1/4,
iv) Salary slips from September 2015 till January 2016 as Ex.DW1/5 (colly), CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.11
v) Form 3-A under the E.P.F scheme 1952 as Ex. DW1/6,
vi) Two emails exchanged between parties as Ex.DW1/7 (colly),
vii) Two more emails between parties dated 29.01.16 and 05.02.16 as Ex. DW1/8,
viii) Letter dated 11.02.16 issued by defendant accepting resignation as Ex.DW1/9,
ix) Experience and Relieving letter dated 02.03.2016 issued by defendant as Ex.DW1/10,
x) File noting dated 10.02.2016 of defendant as Ex.DW1/11,
xi) RTI applications dated 09.07.16 of plaintiff and its Reply dated 03.08.16 as Ex.DW1/12 and Ex.DW1/13
xii) Two emails dated 02.04.16 exchanged between parties as Ex.DW/14.
10. Ld. counsels for both the parties have made their respective submissions.
11. The learned counsel for the plaintiff has referred to the relevant pleadings and evidence in support of the plaintiff and has submitted that the plaintiff has been able to prove his case for payment of PLI (productivity linked incentive) component of the salary and that the decree ought to be passed in favour of the plaintiff. The learned counsel for the plaintiff has referred to the offer letter dated 11/02/2015 and the appointment letter dated 23/02/2015 and has submitted that the PLI component was part of the total CTC of Rs. 65 lacs which was payable to the plaintiff. It is submitted that the defendant had as an afterthought raised the defence that the PLI component of the salary was not payable to an employee if CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.12 he resigned from service. It is submitted that there is no such condition either in the offer letter dated 11/02/2015 or in the appointment letter dated 23/02/2015. The learned counsel for the plaintiff has also referred to the First HR Manual effective from 31/07/2015 which was brought out by the defendant. It is submitted that the board of the defendant company at its 20th board meeting held on 30/11/2015 had resolved that in respect of employees who joined before 31/07/2015, they would be paid the full amount of PLI for the period they have worked in the defendant company in respect of FY 2014-15 and FY 2015-16. It is submitted that it is the admitted position that the plaintiff had joined the defendant prior to 31/07/2015 and as per paragraph 2(i) of the resolution, such employees would be paid full amount of PLI for the period they had worked in both FY 2014-15 and 2015-16, which was also the intent of the offer letter and the appointment letter. It is submitted that the plaintiff had already been paid the PLI component for 37 days in FY 2014-15. It is submitted that the plaintiff was entitled for payment of PLI for 11 months and 2 days when the plaintiff remained in employment with the defendant in FY 2015-16. It is submitted that the proportionate value of PLI component for 11 months and 2 days would be calculated on the basis of PLI component as Rs. 13 lacs for 12 months. It is further submitted that there was no condition in the offer letter or appointment letter or in the board resolution dated 30/11/2015 that in case an employee had already resigned before the date of the declaration of the PLI, then such employee would not be entitled to the payment of PLI. It is further submitted that even if the PLI component was declared at a later date, but the employee had been in employment for the period for which the PLI was declared, then the employee would clearly be entitled for the PLI component for CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.13 the period of employment. It is reiterated that the defence taken by the defendant that the PLI component could not be paid as the plaintiff had already resigned was an afterthought and there was no stipulation to this effect either in the offer letter or appointment letter or even in the HR manual. On this basis, the learned counsel for the plaintiff has submitted that the plaintiff would be entitled to decree for the PLI component as well as interest thereon.
12. The learned counsel for the defendant has referred to the relevant pleadings and evidence and has submitted that the suit deserves to be dismissed. It is submitted that the PLI was a tool used by organisation to motivate its employees to perform their best and also a tool to retain employees. It is submitted that the plaintiff left the defendant company at an important juncture when his presence was most required and having left the defendant company, the plaintiff could not have asked for PLI which was announced when the plaintiff was no longer in the employment of the defendant company. It is submitted that the plaintiff had made the claim for PLI as an afterthought. It is further submitted that all the dues of the plaintiff had been cleared on 02/03/2016 which was clear from the plaintiff's full and final settlement which was duly acknowledged by him. It is further submitted that the full and final payment to the plaintiff was made on 05/04/2016. It is submitted that the plaintiff for the first time requested for the release of PLI in his email dated 30/05/2016 which was much later after the full and final settlement was duly acknowledged by him, which clearly shows that the claim for PLI had been raised as an afterthought. It is submitted that if the claim for PLI had been legitimate, the plaintiff would have raised the issue at the CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.14 time of the full and final settlement and not subsequently. It is further submitted by the learned counsel for the defendant that there was an appraisal process which was to be followed and that the PLI in itself was not a fixed component of the salary and depended upon the performance and that too when the employee was on the payrolls of the defendant. It is submitted that the PLI component was contingent upon the performance of the employee and the employee remaining in employment on the date when the PLI was announced. It is submitted that the plaintiff resigned from his services by way of his resignation letter dated 29/01/2016 and the same was accepted by the defendant company on 11/02/2016 and all payments due to the plaintiff had been paid on 02/03/2016 and the full and final payment to the plaintiff was made on 05/04/2016. It is reiterated that the plaintiff for the first time requested for release of PLI after nearly 2 months from the date of full and final settlement which clearly showed that the request was an afterthought. It is reiterated that PLI was a monetary incentive given to an employee based on his/her performance at the end of the performance cycle. It was an incentive to the employee continue to perform well and serve the organisation. As per the defendant's policy, PLI was permissible if the employee was on the rolls of the defendant company on the date when the PLI was announced and he/she should not have submitted his/her resignation. This is more so because it would be difficult to assess the employee performance in case the employee had already left the organisation when the assessment was being done. Therefore, since the plaintiff had already left before the PLI for 2015-16 was announced, the same was not payable to him. It is further submitted that the 20th board meeting resolution and the HR manual clearly reflected this position with respect to an employee CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.15 remaining in employment during an assessment cycle. The plaintiff was not an employee of the defendant at the time when the appraisals were carried out and as such the plaintiff was not entitled to any PLI. The plaintiff was not paid PLI for the FY 2015-16 as he was not on the rolls of the defendant company, whereas the plaintiff was paid PLI for the FY 2014-15 as he was on the rolls of the defendant as on 31/03/2015. It is submitted that PLI was envisaged as a retention tool/policy and the employee had to be on the rolls of the defendant as on 31 st March of the financial year in respect of which the PLI was to be paid. On this basis, it is submitted that the suit be dismissed.
13. Both parties have also filed their respective written submissions.
14. I have considered the submissions of the learned counsels for the parties and I have perused the record including the pleadings, evidence (both oral and documentary) and the written submissions.
15. My issue-wise findings are as follows:
Issue No.1- Whether this Court has the territorial jurisdiction to adjudicate upon the suit? OPP
16. During the course of arguments, the ld. counsel for the defendant did not address any arguments regarding lack of territorial jurisdiction of this court and as such it is deemed that the defendant is not raising any dispute as to the territorial jurisdiction of this court to adjudicate the present suit. In any case, the office of the defendant is located within the territorial CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.16 jurisdiction of this court and as such this court would have jurisdiction. The Issue No.1 is answered accordingly.
Issue No.2- Whether the full and final settlement took place on 02.03.2016 between the parties? OPD
17. It is the case of the defendant that the full and final settlement had taken place between the parties under which the full and final payment was made to the plaintiff on 05/04/2016. It is the case of the defendant that the plaintiff had subsequently made request for the PLI vide his email dated 30/05/2016 which was an afterthought and in view of the full and final settlement, the plaintiff was not entitled to any amounts towards PLI. I have considered the submissions made in this regard on behalf of the defendant, however, I am unable to accept this submission. The plaintiff had resigned in January 2016 and he was relieved from service on 02/03/2016. The resignation had been accepted by the defendant vide communication dated 11/02/2016 Ex.PW-1/4. In this communication Ex.PW-1/4 it was stated that the resignation was accepted and the plaintiff would be relieved from duties from the close of business on 02/03/2016 subject to proper handover of charge. It was further stated that the settlement of the account would be processed only after receipt of company properties by the HR. It was further stated that a separate relieving letter and final settlement computation sheet would be issued upon clearance of outstanding dues, if any. The relieving letter dated 02/03/2016 Ex.PW-1/5 was thereafter issued to the plaintiff by the defendant. The parties had also executed the 'Clearance of dues form' Ex.DW-1/1 on 02/03/2016. The 'Clearance of dues form' Ex.DW-1/1 was only in respect of the items which were handed over by the plaintiff when CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.17 he was being relieved and which were received by the HR unit of the defendant. The last sentence of the 'Clearance of dues form' Ex.DW-1/1 states that: "To be forwarded to HR for computation of final settlement". Subsequently, the full and final settlement computation (also part of Ex.DW-1/1) was issued by the HR unit of the defendant to the plaintiff. Thus, it is seen that the full and final settlement computation was a unilateral document prepared by the HR unit of the defendant and was not a mutual full and final settlement executed between the plaintiff and the defendant. Thus, the defendant cannot seek to rely upon its own unilateral full and final settlement computation to claim a settlement between the parties.
18. Moreover, I also find from the correspondence between the parties which has been filed on the record that the defendant had never made any allegation that since there was a full and final settlement, hence the PLI was not payable. The only stand which was taken by the defendant was that the PLI was not payable as the plaintiff had already resigned and that he was not on the rolls of the defendant company when the PLI was announced. Hence, this also shows that even the defendant understood that the full and final settlement computation was unilateral and hence the defendant never took the stand in its correspondence with the plaintiff that the PLI was not payable due to a full and final settlement between the parties.
19. In the result, I would hold that there was no full and final settlement between the parties as alleged by the defendant. The Issue No.2 is answered accordingly.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.18 Issue No.3- Whether the plaintiff is entitled to the relief claimed?
20. The plaintiff was interviewed by the defendant on 28/01/2015. Thereafter, the defendant issued the letter dated 11/02/2015 Ex.PW-1/1 to the plaintiff asking the plaintiff to give his consent for employment. It is seen from the aforesaid letter dated 11/02/2015 Ex.PW-1/1 that the defendant had made an offer to the plaintiff for employment to the post of EVP- Technology at an "Annual Gross Salary (CTC) of Rs. 65,00,000/- (Sixty Five lakh only) which is inclusive of all benefits/incentives for the said post (G2)". In response to the letter dated 11/02/2015, the plaintiff gave his consent to the defendant.
21. Thereafter, the defendant issued another letter dated 23/02/2015 Ex.PW-
1/2 offering the position of Executive Vice President (Technology) to the plaintiff on the terms and conditions as stated in the letter. Clause 5(b) of the offer letter provided that: "b. Compensation: Your CTC shall be Rs. 65 lakh per annum, inclusive of a Variable Productivity linked Incentive". Clause 5(d) provided that either party was free to terminate the employment at will and at any time, with or without cause, upon 3 months prior written notice of termination or payment of equivalent salary in lieu thereof. The plaintiff gave his acceptance to the aforesaid offer letter dated 23/02/2015 and joined the employment of the defendant company.
22. The HR Manual Ex.PW-1/6 of the defendant came into effect in July 2015. The 20th Board Meeting of the defendant company took place on 30/11/2015 in which the board approved certain amendments in the HR CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.19 Manual. Both the parties have relied upon the HR Manual and the 20 th board meeting dated 30/11/2015 Ex.PW-1/8 amending the HR Manual in support of their case.
23. It would be appropriate to set out the relevant portion of the minutes of the 20th board meeting of 30/11/2015 amending the HR Manual with respect to payment of PLI, as under:
"Amendment of HR Manual with regard to coverage period for performance management.
1. The Board discussed the HR Committee's recommendation that the period of six months may be replaced by three months in sub-paragraph (i) under the heading "Cover" in Chapter 6:
Performance Management Policy of the HR Manual but did not agree for any changes in it.
2. After deliberations, the Board approved the following in this context:
i) The requirement of minimum period will not be applicable for the period 2014-15 and 2015-16 (up to 31st July 2015) to the employees who joined before 31.07.2015, the day HR Manual came into force. They will be paid full amount of PLI for the period they have worked in GSTN.
ii) From 1st of August 2015 onwards, the PLI of all the employees will be divided into 2 parts:-
Fixed Component (50% of PLI): The Fixed part of PLI will be paid to all the employees irrespective of their period of service in that year.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.20 Variable Component (50% of PLI)- The variable parts of PLI will be paid as under:-
a) The employees, who have completed more than 6 months service will be paid on the basis of assessment of their performance as per GSTN Rules.
b) The employees, who have not completed 6 months will be paid 50% of variable component without assessment of performance.
The components of PLI and its determination should form part of the Appointment Letter for all future employees.
iii) The Chairman was authorized to determine the quantum of PLI for various levels of performance."
24. It is seen from the aforesaid that the board meeting of 30/11/2015 had made amendments to the HR Manual with respect to payment of PLI.
25. It has been argued on behalf of the defendant that no PLI for 2015-16 was payable to the plaintiff since the plaintiff had already resigned prior to 31/03/2015 and since the plaintiff was not in employment at the time when the PLI was announced for 2015-16. However, I am unable to accept this submission. Ultimately, this is a case of a contractual employment and the terms of employment are to be found in the contract. I find that there is no clause in the employment contract/offer letter/appointment letter or in the HR manual which prohibits the payment of PLI in case the employee had resigned. Moreover, the CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.21 appointment letter in the present case clearly specified that the PLI was a part of the CTC. When the PLI has been made a part of the CTC, then the plaintiff would be entitled to the PLI component for the period he was in actual employment even if he had already resigned prior to the end of the financial year. In the absence of any express stipulation prohibiting PLI in case an employee had resigned prior to the end of the financial year, it would not be possible to read any such stipulation into the employment contract or the HR manual. Thus, only because the plaintiff had resigned prior to close of the financial year or before the announcement of the PLI that would not ipso facto mean that the plaintiff would not be entitled to PLI.
26. The only hurdle which would come in the way of the plaintiff was that in case the PLI was itself contingent on the performance assessment and the act of the plaintiff in resigning had itself disabled the performance assessment, in such case the PLI would not be payable due to absence of performance assessment which was disabled due to the plaintiff's own act of resigning for which the defendant was not to blame. However, a perusal of the minutes of the 20th board meeting of 30/11/2015 Ex.PW-1/8 shows that the PLI was not made completely variable or contingent on performance assessment, but only a portion thereof was made dependent on performance assessment.
27. It has been the submission of the learned counsel for the plaintiff that as per Clause 2(i) of the minutes of the 20 th board meeting of 30/11/2015 Ex.PW-1/8, since the plaintiff had joined before 31/07/2015, the plaintiff would be entitled for the full PLI for the entire period in which the CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.22 plaintiff had worked with the defendant. I have considered this submission, however, I am unable to agree with the same. As per Clause 2(i), it was only provided that the minimum period of requirement as provided for in Chapter 6 of the HR Manual providing for performance management policy would not be applicable for the period 2014-15 and 2015-16 up to 31/07/2015. Thus, what was provided was that for the period of 2014-15 and 2015-16 up to 31/07/2015 only, there was to be no performance assessment and for the said period the employees were entitled to full amount of PLI. This also becomes clear when one sees the next Clause 2(ii) which provides for payment of PLI from 01/08/2015 onwards and has provided for division of PLI into two components, i.e. 50% fixed and 50% variable based on performance assessment. It is also seen that in Clause 2(iv), the PLI to the plaintiff herein for the period 2014-15 was sanctioned for the period in which the plaintiff was in employment.
28. As per Clause 2(i) of the minutes dated 30/11/2015, the employees who had joined before 31/07/2015 were entitled to full amount of PLI for the period 2014-15 and 2015-16 (up to 31/07/2015). The plaintiff had already been paid the PLI for 2014-15 which was 20% of the CTC as evident from Clause 2(iv). Under Clause 2(i), the plaintiff was entitled for payment of full amount of PLI for the months from April 2015 to July 2015 (01/04/2015 to 31/07/2015). This was payable even without any performance assessment in terms of Clause 2(i) of the minutes dated 30/11/2015.
CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.23
29. Insofar as the PLI for the period from 01/08/2015 onwards is concerned, Clause 2(ii) of the minutes dated 30/11/2015 Ex.PW-1/8 had divided the PLI into two parts, i.e., a fixed component of 50% and a variable component of 50%.
30. As per Clause 2(ii), the fixed component of 50% was to be paid irrespective of the period of service of the employee in that year. The fixed component was also not made dependent on any performance assessment. Hence, for the months from August 2015 till February, 2016, the plaintiff was entitled to the fixed component of 50% of PLI, since he was actually employed during this period and the fixed component was not dependent on any performance assessment.
31. As per Clause 2(iii), the variable component of 50% in case of employees who had completed more than 6 months service was to be paid on the basis of their performance assessment. Since, in the present case, the plaintiff had already left the employment prior to 31/03/2015, this had disabled the yearly performance assessment of the plaintiff and no performance assessment of the plaintiff could have been made due to the own action of the plaintiff in resigning for which the defendant could not be blamed. Since the performance assessment could not take place due to the own act of the plaintiff in resigning prior to the performance assessment, hence, insofar as the variable component of 50% of PLI for the period from 01/08/2015 onwards is concerned, the same would not be payable to the plaintiff as this was a variable component which was contingent on the performance assessment and would not be payable without the performance assessment. The performance assessment was CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.24 disabled due to the own act of the plaintiff in resigning prior to the performance assessment taking place for which the defendant cannot be faulted.
32. In the result, I would hold that the plaintiff was entitled for the full amount of PLI for the months from April 2015 to July 2015. The plaintiff was also entitled for the fixed component of 50% of PLI for the months from August 2015 till February 2016. Insofar as the variable component of 50% of PLI for the months from August 2015 till February 2016 is concerned, the same would not be payable as the same was dependent upon the performance assessment which could not be done as the plaintiff had already left the employment prior to 31/03/2016.
33. The calculation of the PLI for the entire period of 12 months in 2015-16 was Rs. 13,00,000/- being 20% of Rs. 65,00,000/- (CTC). Calculated proportionately, the calculation of the PLI for the period of 4 months from April 2015 till July 2015 comes to Rs. 4,33,333.33. Similarly, the fixed component 50% of PLI for the period of 7 months from August 2015 till February 2016 comes to Rs. 3,79,166.66. Hence, the plaintiff would be entitled to total amount of Rs. 8,12,499.99 say Rs. 8,12,500/- towards PLI. It would also be reasonable to grant to the plaintiff interest @ 9% p.a. from 06/12/2016, i.e., the date of service of the legal notice, till the date of actual realisation. The Issue No.3 is answered accordingly.
34. Accordingly, decree is passed in favour of the plaintiff and against the defendant for sum of Rs. 8,12,500/- along with interest @ 9% p.a. from 06/12/2016 till actual realisation. Costs are decreed in favour of the CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.25 plaintiff. Pleader's fee is computed as Rs. 30,000/-. Let the decree sheet be drawn up accordingly.
Judgement pronounced in open court.
File be consigned to record.
(SATYABRATA PANDA) Additional District Judge-04 Judge Code- DL01057 PHC/New Delhi/30.11.2023 CS NO.357/17 VIMAL GOEL VS. GOODS AND SERVICES TAX NETWORK page no.26