Document Fragment View

Matching Fragments

"Supreme Court of India CASE NO.: Transfer Case (civil) 73 of 2002 PETITIONER: All India ITDC Workers Union & Ors.
RESPONDENT: ITDC & Ors.
DATE OF JUDGMENT: 31/10/2006 BENCH: Dr. AR. Lakshmanan & A.K. Mathur JUDGMENT:
Dr. AR. Lakshmanan, J.
The employees of Hotel Agra Ashok filed a writ petition being No. 41650 of 2001 in the Allahabad High Court questioning the action of the first respondent - India Tourism Development Corporation (hereinafter called 'the ITDC'), New Delhi to sell Hotel Agra Ashok outrightly to a private party as arbitrary and illegal. According to them, Hotel Agra Ashok is one of the biggest hotels at Agra and is a five star hotel having 58 centrally air-conditioned luxurious room and other facilities. It is also their case that non-implementation of voluntary retirement scheme in respect of the employees of the Hotel Agra Ashok is totally discriminatory, arbitrary, unjust and without any rhyme or reason. It is further submitted that because the Government of India introduced a disinvestment plan with the object to sell the hotel to a private party which is liable to affect the employees very seriously including their service conditions.

T.C. No. 76 of 2002 (Arising out of T.P.(C) No. 948 of 2001) Civil Writ Petition No. 7195 of 2001 was filed by one K.K.Gautham and 7 Ors. in the High Court of Delhi against ITDC, New Delhi and Hotel Yamuna View Pvt. Ltd. through its Director Mr. Arvind Mehta, New Delhi.

In the above writ petition, the petitioners sought to challenge the proposed action of respondent No.1 of transferring out the services of the petitioners, who are officers of respondent No.1 to respondent No.3, a newly incorporated company. It is stated that the petitioners are presently posted in Hotel Agra Ashok in pursuance of their policy of disinvestment and ITDC have proposed to sell the said Hotel to a private bidder. The grievance of the petitioners is that the officers of the ITDC form an All India Common Cadre in different disciplines and that All India seniority lists are maintained and career progress takes place on the basis of All India Seniority and that the officers are governed by common service conditions, pay-scales and rules. The petitioners questioned the proposed transfer to a new employer as illegal and arbitrary. The prayer in the above writ petition reads as follows:

In view of the above, it is submitted that the apprehension of the petitioners is baseless and liable to be rejected.

The Union of India filed its affidavit in reply through its Under Secretary and submitted that successive governments, both at the Centre and the States have been following the economic policy of disinvestment in Public Sector Enterprises due to various reasons and in August, 1996, the Central Government set up a Public Sector Disinvestment Commission to make recommendations on the identified Central Public Sector Undertakings which may be disinvested. It was further submitted that ITDC is a Government Company as defined under Section 617 of the Companies Act, set up in 1966 and at the relevant time the Government of India was holding about 89.97% shares in ITDC, which was running 33 hotels in all and that ITDC was running heavy losses and its occupancy rates were far below the market average despite the fact that its room rents were lower than other five star hotels. The Disinvestment Commission in its report recommended that ITDC falls in the non-core category and hence disinvestment can go up to 74% or more. The recommendation was accepted by the Government at the level of Cabinet Committee on Disinvestment and a decision was taken by Inter-Ministerial Group and at the level of the Cabinet Committee on Disinvestment to divest each property individually rather than altogether or in groups. Respondent Nos. 4 & 5 filed a separate counter affidavit in reply. According to them, the Government of India had taken a decision for disinvestment of the properties owned by respondent No.1 as majority of properties doing hotel business were running huge losses to the tune of crores of rupees and unnecessarily increasing the liabilities of the Corporation. It was submitted that there is no change in service conditions of the employees as per the terms of share purchase agreement. That after the creation of the new Company - Hotel Yamuna View Private Limited, all the employees working with Hotel Agra Ashok were shifted to the new company which was also a subsidiary company of respondent No.1. Class III and IV employees of the Hotel approached the High Court and agitated their transfer from ITDC to Hotel Yamuna View Private Limited by way of a Writ Petition No. 41650 of 2001. The High Court, by way of an interim order, maintained the status quo regarding service conditions of Class III and IV employees of the hotel and pursuant to the agreement the Management of the Hotel Agra Ashok was transferred to respondent Nos. 4 and 5 on 07.02.2002 and started abiding by each terms mentioned in the agreement. Accordingly, the service conditions of the employees working with Hotel Agra Ashok were maintained as before. Some of the other employees of Hotel Agra Ashok filed civil Writ Petition No. 7195 of 2001 before the High Court of Delhi and that the Government of India as per the report of the Disinvestment Commission accepted the same and transferred the hotel to the respondents and that the decision of the Government of India to sell its share in ITDC was a policy decision within the ambit of law on the Constitution of India. With regard to the VRS scheme, it was submitted that for the employees of Ashok Travels and Tours, VRS Scheme was introduced by circular dated 02.03.2001 but there was no policy for VRS regarding Hotel Agra Ashok. Also under clause 8 of the said circular regarding introduction of VRS, it is clearly stated that the schemes does not confer any right whatsoever on any employee to have his request for voluntary retirement accepted.

The employees have also challenged the non- implementation of VRS in respect of the employees of Hotel Agra Ashok. In our view, the petitioners/employees cannot claim parity in respect of other employees working under ITDC in different properties who have been granted benefits under VRS as the scheme was never made applicable to the employees working with the present property. No disclosure of any such introduction of VRS was given by ITDC at the time of sale, neither was any amount to be deposited by the purchaser. We are, therefore, of the opinion that respondent Nos. 4 and 5 is under no obligation to float the VRS scheme because in para 9(4), the VRS has to be given only when company retrenches its regular employees. But here the company is ready to continue with its employees with the same terms and conditions mentioned in the share purchase agreement. The employees are unwilling to continue on the same terms and, therefore, they cannot compel the management to introduce VRS scheme. When the share purchase agreement was executed with respondent No.5, then there was no scheme introduced for grant of VRS because prior to the sale the petitioners were employees of ITDC and not of Hotel Yamuna View Limited. They have already objected their transfer to Hotel Yamuna Private Limited. The petitioners are demanding VRS from ITDC because as per the orders dated 13.12.2001 and 05.03.2002 of the Allahabad High Court, the employees of Hotel Agra Ashok cannot be transferred to the new company Hotel Yamuna Private Limited. With intention to escape the liability of contempt, the ITDC specifically asked the buyer to maintain the service conditions of the employees on the same terms by entering into a share purchase agreement, however, no condition in this agreement was mentioned for offering VRS. In other words, a VRS scheme for employees of Ashok Travels & Tours was introduced by circular dated 02.03.2001 but there was no policy for VRS regarding Hotel Agra Ashok. Also under Clause 8 of the said circular regarding introduction of VRS, it is clearly stated that the scheme does not confer any right whatsoever on any employee to have their request for voluntary retirement accepted. The respondent has also no such obligation under para 94 (IV).