Bombay High Court
S.V. Vasaikar, Presently Working As ... vs Union Of India (Uoi), Through The ... on 14 February, 2003
Equivalent citations: 2003(4)BOMCR79, 2003(2)MHLJ691
Author: C.K. Thakker
Bench: C.K. Thakker, D.Y. Chandrachud
JUDGMENT C.K. Thakker, C.J.
1. Both the above petitions have been filed by the petitioner for an appropriate writ, direction or order challenging the action of the respondents, adversely affecting the service conditions of the petitioners.
2. So far as the first petition, i.e., Writ Petition No. 5373 of 2002, is concerned, a declaration is sought that as there was breach of terms and conditions of absorption by Government of India because of disinvestment of its equity stake in Videsh Sanchar Nigam Ltd. (VSNL, for short) in favour of a private company, the petitioners and all similarly situated persons are entitled to re- opt to receive Government pensionary benefits by refunding the amounts received by them as pro-rata pension/lumpsum payment at the time of their absorption with VSNL. It was also prayed that the Government of India is liable to pay to the petitions and all similarly situated employees pensionary benefits as per Government Rules on their re-opting for Government pensionary benefits. Consequential reliefs were also sought.
3. In the second petition, i.e., Writ Petition No. 5374 of 2002, a prayer is made for declaring that the action of the respondent in not giving the petitioners and similarly situated employees, who had not completed ten years of service with the Government of India, the right to exercise option for retaining Government pensionary benefits on their absorption with VSNL is arbitrary, discriminatory and violative of Articles 14 and 16 of the Constitution. It was, therefore, prayed that appropriate direction be issued to the Government of India that the Petitioners and similarly situated employees, who had not completed ten years of service on their date of absorption in VSNL, are entitled to exercise option for retaining Government pensionary benefits by counting their service in Government of India along with their service with VSNL for such benefits.
4. The case of the petitioners is that in 1986, the Government of India created VSNL by converting VSNL as a wholly-owned Government Public Sector Company. Several employees were working with VSNL at that time. On December 11, 1989, notices were given to the employees working in VSNL on deputation asking them to exercise option either to be absorbed in the regular service of VSNL with effect from January, 1990 or to retain Government benefits in respect of pension and other benefits. According to the petitions, employees, who had not completed ten years in Government service, were not entitled to pensionary benefits, and hence, no option was given to them. VSNL has given certain terms and conditions in respect of pensionary benefits after exercising the option by the employees to be absorbed with it. It was mentioned that the permanent Government employees could give an option to retain pensionary benefits available to them in accordance with the Government Rules or they could opt for being governed by rules of VSNL. Such option was also made available to quasi-permanent as well as temporary employees. A copy of the memorandum is annexed to the petition. It is stated by the petitioners that several employees in various non-executive cadres opted for absorption with VSNL and to receive pro-rata pension/lumpsum amount.
5. The petitioners, however, stated that in 2000-01, the Government of India took a policy decision of disinvestment of VSNL shares, Petitioner No. 3, Federation of the Videsh Sanchar Nigam Employees Union, therefore, wrote a letter to the Hon'ble Minister for Communications, Government of India, on December 12, 2000, requesting him that sale of VSNL shares must ensure safeguards and guarantees for the employees of VSNL, including job security, proper employees of VSNL, including job security, proper emoluments, pensionary benefits, etc. Such letter was also written in January, 2001, reiterating what was stated in the earlier letter. The attention of the Minister was also invited to Sub-rules (25) and (26) of Rule 37-A of the Central Civil Services (Pension) Rules, which was introduced by amendment of 2000, which provided that the Government of India disinvesting its shares in any public sector undertaking to the extent of 50% or more must provide adequate safeguards for protecting interest of absorbed employees with such public sector undertaking. Such letters were addressed to the Hon'ble the Prime Minister also. They have been annexed to the petition. A request was also made to the Managing Director of VSNL, respondent No. 3 herein, so that the interest of the employees, who had been absorbed in VSNL, may not be prejudicially affected. It was stated that by the action of disinvestment by the Government of India, the employees would lose their status as Government Employees, and they would be put in precarious position. A subsequent step taken by the Government of India was, therefore, illegal and improper, and it was incumbent on the respondents to ensure the benefits, which otherwise the petitioners and similarly situated employees would have received.
6. The petitions stated that the third respondent, by his letter dated November 1, 2001 to respondent No. 1, stated that the options were exercised by the employees in 1989, and there was no question of giving re-option to those employees who had opted for the pro-rata pension/lumpsum amount, which was accepted by VSNL. Regarding Rule 37-A of the Rules, the petitions were not entitled to such benefits. It was, however, stated that the issue should be referred to the Ministry of Personnel, Public Grievances & Pension, respondent No. 2 herein, as to whether it would be feasible to provide re-option to such employees. According to the petitioners, no decision had been communicated by respondent Nos. 1 and 2 on the question of re-option, and hence, they were constrained to approach this Court. It was, therefore, submitted that a preliminary direction may be issued to the respondents to afford an opportunity of re-option to the petitions and similarly situated employees, who were working with the Government and absorbed with VSNL, and to allow pensionary and other benefits as if they were Government Employees.
7. An affidavit-in-reply is filed by VSNL, respondent No.3 herein. A preliminary objection has been raised in the counter-affidavit that the third respondent could not be said to be 'authority' within the meaning of Article 12 of the Constitution, and hence, it is not subject to the jurisdiction of this Court under Article 226 of the Constitution. It was stated that respondent No.3 no longer remained a Government Company, and the control and supervision of the Company was not with Government of India. The Government of India was holding 52.97% of the shares of the third respondent, but was divested of 25% of the shareholding to Tata Group of Companies by sale of such shares on February 6, 2002 in furtherance of its policy of disinvestment. It was, therefore, privatised, and the Government of India handed over management of VSNL to the Tata Group. At present, the Government of India is having only 26.12% of the shareholding, and the Tata Group owns nearly 45% of the shares of the third respondent. VSNL is, therefore, not amenable to Writ Jurisdiction of this Court.
8. It was also stated that the third respondent was set up as a wholly-owned Government Public Sector Company in 1986; but in 1989, options were offered to the petitions and similarly situated employees whether they were interested in getting themselves absorbed with the third respondent or would get themselves transferred to the Surplus Staff Cell for deployment against possible vacancies available in other Government Offices. The petitions and several other employees exercised the option for absorption with VSNL, and they cannot make grievance against such an action. They were thereafter governed by the terms and conditions of the option and absorption with VSNL. When it is not the case of the petitioners that there was any breach by the third respondent so far as the terms and conditions of the absorption are concerned, no prayer can be granted in their favour.
9. Referring to the decision of the Supreme Court in the affidavit-in-reply in Balco Employees Union (Regd.) v. Union of India and Ors., , it was submitted that when persons seek and get employment with a company registered under the Companies Act, it should be presumed that they accept the right of the Directors and Shareholders to conduct the company in accordance with law; and such employees have no vested right in the employer-company continuing to be a Government Company or 'other authority' for the purpose of Article 12 of the constitution.
10. The deponent has also stated;
"In any event the retirement benefits in VSNL remain the same after privatisation as they were before privatisation."
11. It was, therefore, submitted that the petitioners have no case; there was no right in their favour to seek re-option; nor there was corresponding duty on the third respondent to offer such re-option; and the petitions were liable to be dismissed.
12. An affidavit-in-reply is also filed by the Assistant General Manager (Legal) of respondent Nos. 1 and 2, wherein the facts stated and contentions raised on behalf of respondent No. 3 have been reiterated. It was stated that options were offered to the employees, who were taken on deemed deputation with VSNL, and such options were exercised by the employees. The terms and conditions of the options were also disclosed. They were also informed that if they would not favour absorption with VSNL, their names would be transferred to the Surplus Staff Cell for deployment against possible vacancies available in other Government Offices. It was expressly stated that option, once exercised, shall be final". The employees exercised their option to be absorbed by VSNL and for receiving retirement benefits available under VSNL. They also got pro-rata retirement benefits for services rendered under the Government in the form of being able to draw pro-rata monthly pension or a lumpsum amount in lieu of 100% pro-rata pension paid in 1995.
13. The deponent then stated that the petitioners and other employees are now seeking to contend that at the time of exercising their option, they were not aware that the Government would disinvest its shareholding of respondent No. 3 or respondent No. 3 would be privatised; and, therefore, they should be allowed to re-opt for receiving Government pensionary benefits. When a policy decision has been taken by the Government, and the rights of the petitioners remained unaffected after exercise of option, they cannot contend that the action of the Government is illegal or contrary to law. Respondent Nos. 1 and 2 also placed reliance on Balco Employees' Union (Regd.). Regarding Rule 37-A, it was the case of the first and second respondents that the petitioners and other similarly situated employees are not entitled to the said benefit by going back on their options which were exercised in 1989, particularly when it was specifically stated that exercise of the option was final. The petitioners, in fact, wanted to approbate and reprobate, which could not be allowed. It was, therefore, prayed that the petitions be dismissed.
14. In affidavits-in-rejoinder, the petitioners have reiterated what was stated in the petitions and controverted all the facts stated and contentions raised in the affidavit-in-reply.
15. We have heard the learned counsel for the parties.
16. So far as the preliminary contention regarding maintainability of the petitions is concerned, the learned counsel for the third respondent drew our attention to an order passed by a Division Bench of this Court in Writ Petition No. 5233 of 2002 decided on October 22, 2002, wherein it was observed by the Division Bench that VSNL is no longer a Government Company; and the control and management of the company is not with the Government of India. "It is doubtful whether a writ petition would lie against VSNL."
17. The leaned counsel for the petitioners may be right in submitting that what was observed in the above order was that it is 'doubtful' whether a writ petition against VSNL would lie. It is, however, not finally concluded by a judgment that such a petition would not be maintainable. But from the facts, and particularly from the affidavit-in-reply of respondent No. 3, it is clear that the Tata Group owns nearly 45% of the shareholding of VSNL, and the Government owns only 26.12% of the shareholding. In the facts and circumstances, therefore, it cannot be said that the contention raised by the learned counsel for the respondents has no force.
18. But even otherwise, in our opinion, the petitioners are not entitled to any relief, and hence, without expressing final opinion as to maintainability or otherwise of the petitions, we have considered the case on merits.
19. It is undisputed fact that VSNL was a wholly-owned Government Company at one time. It is also not in dispute that the petitioners and similarly situated persons were working with VSNL.
20. On July 5, 1989, the Ministry of Personnel, Public Grievances & Pension, Department of Pension & Pensioners Welfare, Government of India, issued an office memorandum, which dealt with settlement of pensionary terms, etc., in respect of Government Employees transferred en masse to Central Public Sector Undertakings/Central Autonomous Bodies on the terms and conditions mentioned in the said memorandum. It dealt with Permanent Government Servants, who had opted to retain pensionary benefits available to them under the Government Rules or to be governed by rules of Public Sector Undertakings/Autonomous Bodies. It was also provided that the said option would be available to quasi-permanent and temporary employees after they would be confirmed in Public Sector Undertakings / Autonomous Bodies. It covered those Permanent Central Government Servants, who had completed ten years or more of service and opted for retirement benefits of Public Sector Undertakings / Autonomous Bodies. It dealt with those Permanent Government Servants with less than ten years of service, quasi-permanent and temporary employees, who opted for the Rules of Public Sector Undertakings / Autonomous Bodies. Thus, detailed provisions were made by the Government of India with regard to permanent Government Servants, who had completed ten years or more of service with the Government and opted for retirement benefits of Public Sector Undertakings / Autonomous Bodies. Similarly, provisions were made for Permanent Government Servants with less than ten years of services, quasi-permanent employees and temporary employees who have opted for rules of Public Sector Undertakings / Autonomous Bodies.
21. Similarly, a memorandum had been issued by VSNL on December 11, 1989, giving notice to the employees working with VSNL on deputation calling for their options to be absorbed with VSNL or to remain with the Government. Such options were to be exercised on or before December 27, 1989. The terms and conditions of options were annexed to the memorandum. It was clarified that any employee who would not opt for absorption or would not intimate his or her intention of not becoming a regular employees of VSNL would be "deemed to have been absorbed" in VSNL with effect from January 1, 1990. The name of the person who would not opt in favour of absorption would be transferred to the Surplus Staff Cell for deployment against possible vacancies available in other Government Offices.
22. Clause 4 of the memorandum then stated-
"Option once exercised shall be final."
23. The terms and conditions of such absorption have been mentioned in Annexure-I, Clause 2 dealt with "Pensionary Benefits", and it provided that the permanent Government servants would have an option to retain pensionary benefits available to them under the Government rules or to be governed by the rules of VSNL. Such option would also be available to quasi-permanent or temporary employees after they would be confirmed in VSNL. It was also stated that permanent Government servants with less than ten years of service, quasi-permanent employees and temporary employees, who had opted for the rules of VSNL, would be entitled to certain benefits and permanent Government servants, who had completed ten years or more of service, and who would opt for retirement benefits of VSNL, would receive pro-rata retirement benefits for the service rendered under the Government.
24. From the above discussion, it is amply clear to us that in 1989, a policy decision was taken by the Central Government with regard to conferment of benefits to those employees who were working with the Government and who were en masse transferred to Central Public Sector Undertakings / Central Autonomous Bodies. They were asked to exercise their option by giving an opportunity for such benefits. It is also on record that a similar memorandum was issued by VSNL in December, 1989 to the employees who were working with the Government and en masse transferred to respondent No. 3. Regarding terms and conditions of retiral benefits, detailed provisions have been made in the annexure, which was supplied with the option form. The employees were expressly told that they were required to exercise such option within a stipulated period. Finally, they were informed that an option, once exercised, would be final. It is not even the case of the petitioners that options were not exercised by them.
25. In our opinion, the contention raised on behalf of the respondents is well-founded and must be upheld that once the option was exercised in 1989, and as per the terms and conditions of the option, such exercise of option was to be treated as final, it would be too late, after more than ten years, to contend that they would not be bound by exercise of option or that re-option should be allowed to them. That contention, therefore, cannot be upheld, and is hereby rejected.
26. Regarding the contention that employees, who had not completed ten years, were not allowed to exercise the option with regard to pensionary benefits, it may be stated that even when they were in the Government service, when VSNL was a Government Company, they were not entitled to such benefits. Reading the memorandum also, it becomes abundantly clear that the persons, who had not completed ten years of service with the Government, were not entitled to pensionary benefits. The option, which was allowed by the Government, and to be exercised by the employees, was in respect of those employees who had completed ten years or more of service and quasi-permanent employees and temporary employees, who would be entitled to such benefits after they would be confirmed in the Public Sector or Autonomous Bodies. Since the petitioners and similarly situated persons, who had not completed ten years of service, were not entitled to such benefits even under the Government they cannot make grievance for pensionary benefits. Moreover, as observed hereinabove, the third respondent has specifically stated in the affidavit-in-reply that retirement benefits in VSNL would remain the same after privatisation as they were before privatisation. Hence, even on that ground, the grievance of the petitioners is ill-founded and cannot be upheld.
27. Third ground, which was pressed in service in the petitions as well as at the time of hearing, was that when the options were sought from the petitioners and other similarly situated employees in 1989, they were of the view that the status of VSNL would remain the same. It was at a subsequent stage that the Government of India disinvested a part of share capital in VSNL in favour of a private party (the Tata Group), which affected several employees, and hence, the petitioners are entitled to re-opt Government benefits by refunding the amount received by them from the Government. It is also contended that the Government has not taken sufficient care to safeguard and protect interest of the employees, which would be contrary to Rule 37-A of the Rules.
28. In this connection, in our view, the respondents were right in relying upon Balco Employees' Union (Regd.). Almost in similar circumstances, the Court held that in economic policy mattes, it is for the State to take appropriate decision, and the Court would not embark upon wisdom or otherwise of such policy. In that case, too, almost similar safeguards have been provided, and the Apex Court upheld the action of the authorities.
29. In paragraph 47, 48 and 49, the Court observed:-
"47. Process of disinvestment is a policy decision involving complex economic factors. The courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. There is no case made out by the petitioner that the decision to disinvest in BALCO is in any way capricious, arbitrary, illegal or uninformed. Even though the workers may have interest in the manner in which the Company is conducting its business, inasmuch as its policy decision may have an impact on the workers rights, nevertheless it is an incidence of service for an employee to accept a decision of the employer which has been honestly taken and which is not contrary to law. Even a government servant, having the protection of not only Articles 14 and 16 of the Constitution but also of Article 311, has no absolute right to remain in service. For example, apart from cases of disciplinary action, the services of government servants can be terminated if posts are abolished. If such employee cannot make a grievance based on Part III of the Constitution or Article 311 then it cannot stand to reason that like the petitioners, non-government employees working in a company which by reason of judicial pronouncement may be regarded as a State for the purpose of Part III of the Constitution, can claim a superior or a better right than a government servant and impugn its change of status. In taking of a policy decision in economic matters at length, the principles of natural justice have no role to play. While it is expected of a responsible employer to take all aspects into consideration including welfare of the labour before taking any policy decision that, by itself, will not entitle the employees to demand a right of hearing or consultation prior to the taking of the decision.
"48. Merely because the workmen may have protection of Articles 14 and 16 of the Constitution, by regarding BALCO as a State, it does not mean that the erstwhile sole shareholder viz. Government had to give the workers prior notice of hearing before deciding to disinvest. There is no principle of natural justice which requires prior notice and hearing to persons who are generally affected as a class by an economic policy decision of the Government. If the abolition of a post pursuant to a policy decision does not attract the provisions of Article 311 of the Constitution as held in State of Haryana v. Des Raj Sangar, on the same parity of reasoning, the policy of disinvestment cannot be faulted if as a result thereof the employees lose their rights or protection under Articles 14 and 16 of the Constitution. In other words, the existence of rights of protection under Articles 14 and 16 of the Constitution cannot possibly have the effect of vetoing the Government's right to disinvest. Nor can the employees claim a right of continuous consultation at different stages of the disinvestment process. If the disinvestment process is gone through without contravening any law, then the normal consequences as a result of disinvestment must follow.
"49. The Government could have run the industry departmentally or in any other form. When it chooses to run an industry by forming a company and it becomes its shareholder ten under the provisions of the Companies Act as a shareholder, it would have a right to transfer its shares. When persons seek and get employment with such a company registered under the Companies Act, it must be presumed tat they accept the right of the Directors and the shareholders to conduct the affairs of the company in accordance with law and at the same time they can exercise the right to sell their shares."
30. In our view, the cases on hand are similar to employees of Balco, and as held by the Supreme Court, such a decision cannot be said to be illegal, unlawful or otherwise unreasonable. Since the employees were allowed to exercise option in 1989, they exercised such option, which was to be treated as final, and as more than ten years have passed, they cannot ask for re-option on the ground that in 1989-90, they were under the impression that the status of VSNL would continue to remain as Government company; and as there was change at a subsequent stage, the petitioners would be entitled to re-option. As the action, which was taken before more than a decide, was legal and valid, no fault can be found, and the petitioners have no right to make grievance.
31. For the foregoing reasons, in our opinion, both the petitions deserve to be dismissed, and are accordingly dismissed. In the facts and circumstances, however, there shall be no order as to costs.
32. The learned counsel for the petitioners prayed that the Judgment and Order passed by us may be kept in abeyance so as to enable the petitioner to approach the Supreme Court. The Prayer has been strongly objected by the learned counsel for the respondents. In our opinion, no such prayer can be granted. Hence, prayer is rejected.